BTF1010 Study Guide - Final Guide: Undue Influence, Rescission
6 Jun 2018
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• Types of misrepresentation
Innocent misrepresentation/Misleading conduct
• A false statement made believed to be true
• Made before or at the time of contract
• No damages, rescission only
Case: Redgrave v Hurd
• Made an untrue statement of fact which was intended to induce the other party to enter into the
contract
• He was entitled to rescind the contract as he relied on the statement.
Fraudulent misrepresentation
• Fraud exists “when it is shown that a false representation has been made (1) knowingly, or (2) without
belief in its truth, or (3) recklessly, careless whether it be true of false” Case: Derry v Peek
• It was a false statement
• The statement was made knowing it was false to induce other party to enter contract: The representor
is liable if they make the false statement when they have no knowledge whether it is true or false
• The other party entered the contract
• The party made a loss
• If no damage is suffered from the false representation, no action lies
Remedy: rescission if relevant and damages: tort of deceit
• Where fraud is present, the contract is voidable
Misrepresentation under ACL
Misleading or deceptive conduct: Section 18(1)
Misrepresentations made with the supply of goods/services: Section 29(1)
Misrepresentations made in relation to the sale/grant of interest in land: Section 30(1)
Negligent misrepresentation
• An innocent misrepresentation made negligent
• Negligent information/advice
• Has a duty of care
• Damages in tort for negligence and/or rescission (if relevant)
Step 1: Did representor owe a duty of care to the representee?
Step 2: Has the representor failed to exercise the required standard of care?
Step 3: Were the representee’s losses caused by the negligence and were the losses reasonably foreseeable?
• Case: Hedley Byrne & Co v Heller & Partners
Document Summary
Innocent misrepresentation/misleading conduct: a false statement made believed to be true, made before or at the time of contract, no damages, rescission only. Case: redgrave v hurd: made an untrue statement of fact which was intended to induce the other party to enter into the contract, he was entitled to rescind the contract as he relied on the statement. Fraudulent misrepresentation: fraud exists when it is shown that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true of false case: derry v peek. If no damage is suffered from the false representation, no action lies. Remedy: rescission if relevant and damages: tort of deceit: where fraud is present, the contract is voidable. Misrepresentations made with the supply of goods/services: section 29(1) Misrepresentations made in relation to the sale/grant of interest in land: section 30(1)
