WJEC Eduqas A Level Law Book 2 sample

Misrepresentation and economic duress 23 Innocent misrepresentation Any misrepresentation not made fraudulently was historically classed as an innocent misrepresentation, regardless of how it was made. Since the emergence of the Hedley Byrne principle and the passing of the Misrepresentation Act 1967 , the only misrepresentations that can be claimed to be made innocently are those where a party makes a statement with an honest belief in its truth, for example, where the party merely repeats inaccurate information, the truth of which they are unaware. The main remedy for innocent misrepresentation is the equitable remedy of rescission. Damages are also available under s2(1) Misrepresentation Act 1967 . Consider what type of misrepresentation is involved in the following examples: 1. Mo is selling his motorcycle to Anisha. Anisha asks what capacity the engine is. Mo, after looking at the registration documents, tells her that it is a 600cc. Unknown to Mo, the documents are incorrect. 2. Sundus, a salesperson, tells Bryn that a carpet can be cleaned with bleach, without checking the manufacturer’s specification which would have revealed that it cannot. 3. Harry, who has no qualifications at all, tells prospective employers at an interview that he has a degree in marketing. 4. Michelle recently purchased ‘beefburgers’ from her local supermarket, only to later discover in the newspaper that that brand actually contained horsemeat. STRETCH AND CHALLENGE Misrepresentation under statute Section 2(1) Misrepresentation Act 1967 This states: ‘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 grounds to believe and did believe up to the time the contract was made that the facts represented were true.’ In other words, a party who has been a victim of a misrepresentation has an action available without having to prove either fraud or the existence of a special relationship under the Hedley Byrne criteria. The burden of proof is reversed, so that the person making the statement has to prove that they were not negligent.