Contract Law Exam Notes
Misrepresentation
Step 1. Determine whether the meaning of the representation is false or not – objective test
Step 2. Three possibilities of a misrepresentation:
1) It is a term of the contract;
2) It constitutes a collateral contract;
3) Does not acquire contractual status at all.
Step 3. Results:
1) Rescission of the contract;
2) Damages in tort (if the tort of deceit or the tort of negligence can be made out)
Smith v Lane & House Property Corp
This case deals with the situation that a statement of opinion leads to a misrepresentation.
Two possibilities:
1) If the facts are equally well known to both parties – expression of opinion;
2) If the facts are not equally known to both parties – could be misrepresentation (material fact).
Fitzpatrick v Michel
This case deals with the difference between the statement of existing facts and statement of future.
Edgington v Fitzmaurice
A statement of future intention can in some circumstances constitute a representation of fact.
Public Trustee v Taylor
Misrepresentation of law (distinction between law and fact is probably no longer supportable in Australia)
If the law is fraudulently misstated, the representor would be held liable. It would be unconscionable to permit the plaintiff to gain from a fraudulent misrepresentation of law.
The consequences and rights (results) should be the same between the making of fraudulent misrepresentation of law by which a party was induced to enter into a contract and from the making of a fraudulent misrepresentation of fact. (supported cases: West London Commercial Bank v Kitson)
Positive misrepresentation; Silence; duty of disclosure
General rule: A contracting party cannot claim relief for the failure of the other party to disclose a material fact. In other words, there is no duty of disclosure and silence is not a basis for relief.
Exceptions to this rule:
1) A statement is literally true but gives rise to a false
Step 1. Determine whether the meaning of the representation is false or not – objective test
Step 2. Three possibilities of a misrepresentation:
1) It is a term of the contract;
2) It constitutes a collateral contract;
3) Does not acquire contractual status at all.
Step 3. Results:
1) Rescission of the contract;
2) Damages in tort (if the tort of deceit or the tort of negligence can be made out)
Smith v Lane & House Property Corp
This case deals with the situation that a statement of opinion leads to a misrepresentation.
Two possibilities:
1) If the facts are equally well known to both parties – expression of opinion;
2) If the facts are not equally known to both parties – could be misrepresentation (material fact).
Fitzpatrick v Michel
This case deals with the difference between the statement of existing facts and statement of future.
Edgington v Fitzmaurice
A statement of future intention can in some circumstances constitute a representation of fact.
Public Trustee v Taylor
Misrepresentation of law (distinction between law and fact is probably no longer supportable in Australia)
If the law is fraudulently misstated, the representor would be held liable. It would be unconscionable to permit the plaintiff to gain from a fraudulent misrepresentation of law.
The consequences and rights (results) should be the same between the making of fraudulent misrepresentation of law by which a party was induced to enter into a contract and from the making of a fraudulent misrepresentation of fact. (supported cases: West London Commercial Bank v Kitson)
Positive misrepresentation; Silence; duty of disclosure
General rule: A contracting party cannot claim relief for the failure of the other party to disclose a material fact. In other words, there is no duty of disclosure and silence is not a basis for relief.
Exceptions to this rule:
1) A statement is literally true but gives rise to a false