The Blip Blop Blog (Team Entity)

The Misrepresentation Act 1967 also governs the law on misrepresentation. S2(1) of the act states that: - Where a person has entered into a contract after a misrepresentation has been made to him by another party thereto and as a result thereof he has suffered loss, then, if the person making the misrepresentation would be liable to damages in respect thereof had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that the misrepresentation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up to the time the contract was made the facts represented were true. Under s2 (2) of the act the court has a discretion to award damages instead of rescission. “Where a person has entered into a contract after a misrepresentation has been made to him otherwise than fraudulently, and he would be entitled, by reason of the misrepresentation, to rescind the contract, then, if it is claimed, in any proceedings

There are certain contracts which are known as contracts of good faith and the most common example of these type of contracts would be insurance policies whereby the party taking out or purchasing the policy is required to divulge personal details without concealing or hiding any facts. Failure to divulge the necessary information will allow the other party to rescind the contract without recourse to damages. The principle in Latin is called “Uberrimae Fidei”. In Carter v Boehm (1766) the governor of Fort Marlborough in Sumatra took out an insurance policy with Boehm in the eventuality that the fort was attacked. The fort was built by the British East India Co. At the time the policy was taken out there was a possibility that the fort may be attacked on two fronts – by the inhabitants of the island and the French who were keen to exert their authority in the area. Both conflicts revolved around different issues. The locals were trying to take back what was rightfully theirs and th

A mere statement of fact though it may sound like a misrepresentation does not in actual fact constituent or amount to a misrepresentation. In Bisset v Wilkinson (1927) the plaintiff purchased some land from the defendant for the purpose of sheep rearing. The land had never before been used for the intended purpose but during the negotiations the defendant had told the plaintiff that he thought that the land may be able to support up to 2,000 heads of sheep. As it turned out the land was unsuitable for sheep farming and the plaintiff sued. The court held that a misrepresentation must be distinguished from a mere statement of fact. With the sale of certain items, unless the defendant professes to have special knowledge in the area, as in the case of Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd (1965) – where the defendant professed to have specialized knowledge of Bentley cars, it is difficult for either party to know the outcome. It was decided that there was no misrep