Law Mispresentation

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  • Topic: Misrepresentation, Tort, Rescission
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  • Published : April 9, 2013
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Advise to Harry with regard to the law relating to misrepresentation Assignment 1
Company Law
Module 26313
Student Number: 201107210

The term misrepresentation stands brimming with timeless definitions, of which one of the most memorable ones is by Elliott (2011:186), ‘this is an untrue statement of fact by one part which has induced the other to enter into the contract.’ An actionable misrepresentation must be a false statement of fact, not an opinion or future intention or law. Where there has been a misrepresentation the contract is voidable and the innocent party may have a right to damages. In order to advise Harry it is necessary to consider the law of misrepresentation. It is submitted there are four statements to be considered.

Firstly, the statement “assured Harry that the system had a proven track record,” may be considered to be sales talk; Dimmerck v Hallet, or statement of opinion; Fitzpatrick v Michael, both of which are not actionable. It should not be imagined, however, that a statement of opinion can never constitute a representation of fact. Usually the opinion will be based upon facts; so the person making the representation states that facts are known which justify that opinion. “If it is shown that the representor (in our case Lewis) had no reasonable grounds for that opinion, or failed to investigate the facts which gave rise to it, there may well be an actionable misrepresentation” (Beatson 2002:329). It can be argued that it might be misrepresentation due to the fact that Lewis was a ‘representative of Micro Hard Ltd,’ therefore implying he must have had some knowledge that the system had a proven track record.

Secondly, the statement “a new micro chip that the company had been working on had been installed into the Macro 300 system,” is an untrue statement made by Lewis to Harry. It is most probable that as a sales man, Lewis, was given...
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