FACULTY OF LAW
LAW OF CONTTRACT
: MISREPRESENTATION
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
STRUCTURE OF THE PRESENTATION
• Introduction
• Definition of Misrepresentation
• Types of Misrepresentation
• Remedies for Misrepresentation
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
Introduction
• Misrepresentation is one of the elements or factors
that may vitiate or invalidate the agreement between
the parties.
• The other facts are mistake, duress, undue influence,
and illegality.
• The consequence of a contract having been formed on
the basis of a misrepresentation is for the contract to
be voidable at the request of the party who is the
victim of the misrepresentation.
• It is not void because this denies that party the right
to continue with the contract if that is in their
interest.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
Definition of Misrepresentation
• Misrepresentation occurs when a false
statement or representation of fact is made by
one party to the other party before or at a time
of contract, which has the effect of inducing the
other to enter into a contract.
• The statement may be expressed in any form.
• It may be in writing, such as a company
prospectus containing details of the company’s
trading activities, or it can be verbal or implied
from the conduct.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
Definition of Misrepresentation
• There are a number of essential elements that
must be satisfied in order to claim the false
statement as an actionable misrepresentation.
• Misrepresentation can therefore be defined
according to these essential elements:
➢ a statement of material fact
➢ made by one party to a contract to the other
party to the contract
➢ during the negotiations leading up to the
formation of the contract
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
Definition of Misrepresentation
➢which was intended to operate and did
operate as an inducement to the other party
to enter the contract
➢but which was not intended to be a binding
obligation under the contract
➢and which was untrue or falsely or at least
incorrectly stated.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Statement alleged to be Misrepresentation
must be a Statement of Material Fact
• Misrepresentation must be a statement of fact. Therefore a statement
expressed as an opinion cannot become or amount to
misrepresentation.
• In Bisset v. Wilkinson [1927] AC 177: During the course of negotiation of
the sale of a farm the owner of the farm told a prospective purchaser that
he believed the farm would support 2,000 sheep.
• It was held that on the evidence the statement was merely a statement
of opinion which the vendor or seller honestly but mistakenly held, and
so it could neither be relied upon nor actionable as a misrepresentation.
• The evidence was that the owner was not in any better position than the
purchaser to know the farm’s true capacity since the land had not been
used as a sheep farm before.
• The purchaser was aware that the vendor could do no more than state his
belief. There was therefore no misrepresentation.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Statement alleged to be Misrepresentation
must be a Statement of Material Fact
• However, in Esso Petroleum Co. Ltd v. Mardon [1976] 2 All ER 5,
Mardon took a tenancy of a filling station owned by Esso, having
been given a forecast by an experienced Esso sales representative
of the quantity of the petrol the station could be expected to sell
annually. The quantity was never reached during the four years
Mardon remained as tenant and the business ran at a loss. Mardon
sued for misrepresentation.
• It was held that the company had made a misrepresentation,
since the sales representative’s knowledge of such matters made
the forecast a statement of fact rather than opinion, and the sales
representative was acting in the capacity of an agent of the
company. Mardon’s claim for damages for misrepresentation was
successful.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Statement alleged to be Misrepresentation
must be a Statement of Material Fact
• The above case demonstrates that it is not
possible to avoid liability for a statement
which is expressed as, or is subsequently
claimed to be an opinion, when the
knowledge and experience of the representor
in the matter is far greater than that of the
representee.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Statement alleged to be Misrepresentation
must be a Statement of Material Fact
• A statement of intention will not normally amount to a
misrepresentation because a representation is a
statement about existing facts or past events.
• However, if a person misrepresents what he intends to do
in the future, he may be liable for misrepresentation.
• In Edgington v. Fitzmaurice (1885) 29 ChD 459: the
directors of a company invited members of the public to
lend money to the company. The directors stated that the
money would be used to improve the company’s buildings
and extend the business. The director’s real intention was
to pay off the company’s existing debts.
• It was held that the directors’ statement was a fraudulent
misrepresentation.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Statement alleged to be Misrepresentation
must be a Statement of Material Fact
• Silence will generally not amount to a
misrepresentation since no statement has been
made. However, silence would in the following
circumstances amount to misrepresentation:
• (i) When a statement made in the course of
negotiations subsequently becomes false and is
not corrected.
• (ii) When silence distorts a literally true
statements.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Statement alleged to be Misrepresentation
must be a Statement of Material Fact
• In R v. Kylsant (1831) a company when inviting the public to
subscribe for its shares, stated that it had paid regular
dividend throughout the years of the depression. This
clearly implied that the company had made a profit during
those years. This was not the case since the dividends had
been paid out of the accumulated profits of the pre-
depression years.
• The company’s silence as to the source of the dividends
was held to be misrepresentation since it distorted the
true statement that the dividends had been paid.
• (iii) Where the contract is of utmost good faith (uberrimae
fidei)
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(b) The Statement alleged to be a Misrepresentation must
have been made by one party to the contract to the other
party
• There will be no misrepresentation where the statement is made
by a third party, unless that third party is the agent of the party
against whom the misrepresentation is alleged.
• In Peyman v. Lanjani [1985] 2 WLR 154: The defendant took the
lease of premises under an agreement requiring the landlord’s
permission. The defendant did not attend the meeting at which the
agreement was struck but sent an agent who he thought would
create a better impression with the landlord. He later decided to
sell the lease on to the claimant and again this would require the
landlord’s permission. Once more he sent his agent. The claimant
discovered the deception after he had paid over 10,000 pounds
under the agreement with the defendant. He then successfully
applied to rescind the contract.
• Using the agent was a misrepresentation of the legitimacy of the
lease which had never been agreed between the defendant and the
landlord.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(c) The Statement alleged to be a misrepresentation
must have been made before or at the time of the
contract
• In order to operate on the mind of the
representee and induce him to enter the
contract, the representation must have been
made either before or at the time that the
contract was formed.
• If the statement was made after the agreement
was reached then it cannot be actionable as a
misrepresentation because it had no effect on
the formation of the contract.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(c) The Statement alleged to be a misrepresentation must
have been made before or at the time of the contract
• In Roscorla v. Thomas (1842) 3 QBD 234: After
a deal had been struck for the sale and
purchase of a horse, the seller then
represented to the buyer that the horse was
‘sound and free from vice’.
• In fact, the horse was unruly and also had a
quite vicious character.
• However, the purchaser could not claim since
the promise was made after the agreement.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(d) The Statement alleged to be a misrepresentation
must be an inducement to enter into the contract
• An actionable misrepresentation is one that destroys
or vitiates the consent of the party who relied on it in
entering the contract.
• Therefore it must have been of material significance
to the making of the contract in order to have any
effect in law.
• In JEB Fasteners Ltd v. Marks Bloom & Co [1983] 1 All
ER 583: the claimant engaged in a take-over of another
company. This was done for the purpose of obtaining
the services of two of the directors of the other
company, rather than for any commercial advantage in
the take-over.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(d) The Statement alleged to be a misrepresentation
must be an inducement to enter into the contract
• In investigating the company prior to the take
over the claimant relied on the company’s
accounts which in fact had been negligently
prepared. There could be no claim of
misrepresentation since the purpose of taking
over the company was to secure the services of
the directors.
• The accounts therefore could not have acted as
an inducement. They were not material to the
real purpose of the contract.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(d) The Statement alleged to be a misrepresentation
must be an inducement to enter into the contract
• However, in contrast, it will not matter the representation would not
generally considered as an inducement, provided that it did in fact
induce the claimant to enter into the contract. In that case it will be
actionable.
• In Museprime Properties Ltd v. Adhill Properties Ltd [1990] EGLR 196:
Three properties were sold by auction. In advance of the auction there
was a misrepresentation concerning the existence of an outstanding rent
review which could result in increased rents and therefore increased
revenue, making it a more attractive proposition. The defendants
unsuccessfully challenged the claimants’ claim for rescission, arguing that
the statement could realistically induce nobody to enter the contract.
• The Court of Appeal rejected their defence and applied a subjective test.
It held that it was not important whether or not a reasonable bidder
would have been induced by the representation; the question was
merely whether or not the claimant in the case had been induced by the
representation to enter the contract.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(d) The Statement alleged to be a misrepresentation
must be an inducement to enter into the contract
• The misrepresentation must induce the person to enter into the
contract. There can be no inducement in cases where the other
party is unaware of the representation or does not believe the
statement, or has relied on his own skill and judgment.
• In Attwood v. Small [1838] 7 ER 684: During the course of
negotiations for the sale of a mine, the vendor made exaggerated
statements of its capacity. The buyers subsequently appointed their
own experts to investigate the mine, and the agents reported back
to the buyers that the vendor’s statements were true. As a result
the buyers purchased the mine, only to discover that the
statements were inaccurate.
• The House of Lords held that an action by the buyer to rescind the
contract must fail because the buyer had relied on his agent’s
report rather than the seller’s statements. There was therefore no
misrepresentation.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(e) The statement alleged to be a misrepresentation
must not have been intended to form part of the
contract
• If the statement were intended to be contractually binding then, if
anything, it would be a warranty of the contract rather than a
misrepresentation. The appropriate action in this case would be for
breach of contract, not for misrepresentation.
• In Couchman v. Hill [1947] KB 554: The claimant bought a heifer (a young
female cow) at an auction. The heifer was described in the catalogue as
being ‘unserved’ (in other words, that it had not mated with a bull). The
printed conditions also stated that ‘The lots are sold with all faults,
imperfections, and errors of descriptions, genuineness, or authenticity of,
or any fault or defect in any lot, and giving no warranty whatever’. The
heifer was in fact pregnant at the time of the auction and died two
months later through a miscarriage.
• The statement that the heifer was ‘unserved’ could not be a
misrepresentation because of the significance attached to it. It was a
term incorporated into the contract despite the attempted exemptions
applied to it.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(f) The Representation must have been falsely
made
• The overriding requirement for the statement
to be actionable is that it must have been
falsely made, whether or not this was
innocent or deliberate.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
TYPES OF MISREPRESENTATION
• There are three types of misrepresentation
namely:
• (1) Innocent Misrepresentation,
• (2) Fraudulent Misrepresentation, and
• (3) Negligent Misrepresentation.
• In each case the contract is not void but
voidable.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
INNOCENT MISREPRESENTATION
• An innocent misrepresentation is a false
statement made by one person who had
reasonable grounds to believe that it was
true, not only when it was made, but also
when the contract was entered into.
• The basic remedy is rescission of the contract
in equity.
• See Redgrave v. Hurd (1881) 20 Ch D 1
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
FRAUDULENT MISREPRESENTATION
• A fraudulent misrepresentation is one made
dishonestly, knowing it to be false.
• Fraudulent misrepresentation was defined in the case
of Derry v. Peek (1889) 14 App cas 337, by Lord
Herschell as a false statement “made knowingly or
without belief in its truth or recklessly, careless
whether it be true or false”.
• Thus according to Lord Herschell the requirements of
the action for fraud are that a false representation has
been made (i) knowingly; (ii) without belief in its
truth, or (iii) recklessly or carelessly as to whether it is
true or false.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
FRAUDULENT MISREPRESENTATION
• In Derry v. Peek, the Playmouth Devonport and District Tramways
Company was authorised to make certain tramways by special Act of
Parliament which provided that the carriages might be moved by animal
power and, with the consent of the Board of Trade, by steam or any
mechanical power for fixed periods and subject to the regulations of the
Board. The company issued a prospectus stating that ‘one great feature of
this undertaking, to which considerable importance should be attached, is
that by special Act of Parliament obtained, the company has the right to
use steam or mechanical motive power, instead of horses’. The plaintiff
bought shares on the faith of this statement but the Board of Trade
afterwards refused their consent to the use of steam power and the
company was wound up. At the time of issuing the prospectus the
company honestly believed that consent would be granted as a matter of
course.
• It was held that the plaintiff’s action in deceit must fail, as the statement
contained in the prospectus was not a fraudulent misrepresentation as
the company entertained an honest belief that it was true.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
FRAUDULENT MISREPRESENTATION
• In a fraudulent misrepresentation the injured party may rescind
the contract and also sue for damages for the tort of deceit.
• In Smith New Court Securities Ltd v. Scrimgeour Rickers [1996] 4 All
ER 769: The plaintiff, Smith New Court, was induced by a
fraudulent misrepresentation made by the defendants’ employee
to buy shares in Ferranti at 82.25 pound per share. At the time of
purchase, the shares were trading at about 78 pounds per share.
Unknown to either party, the shares were grossly overvalued
because Ferranti was the victim of a fraud totally unconnected with
the current case. When the fraud became known the shares
slumped. The question for the court was whether the plaintiff could
recover the difference between the price it had paid ( the contract
price) and the market price (4.25 pound per share) or the difference
between the contract price and the value of the shares had it
known the fraud (44 pounds per share).
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
FRAUDULENT MISREPRESENTATION
• The House of Lords held that the plaintiff was
entitled to recover for all the damage
resulting from the transaction. The loss
suffered by the plaintiff was 10,764,005
pounds, which represented the difference
between the contract price and the value of
the shares with knowledge of the fraud.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
NEGLIGENT MISREPRESENTATION
• A negligent misrepresentation is a false
statement made honestly, but without
reasonable grounds for belief in its truth.
• Damages may be awarded in tort for a
negligent misstatement under the principle
laid down in Hedley Berne & Co Ltd v. Heller
and Partners Ltd (1923) AC 465: (state the
facts)
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
NEGLIGENT MISREPRESENTATION
• In Esso Petroleum Co Ltd v. Marden [1976] 2 All ER 5: Marden
entered into a three year tenancy agreement with Esso in respect
of a newly developed petrol filling station. During the negotiations
an experienced dealer representative employed by Esso told
Marden that the station would have an annual throughout of
200,000 gallons by the third year. Despite Marden’s best efforts, the
throughout only reached 86,000 by the third year. Marden lost a
consideration sum of money and was unable to pay for petrol
supplied by Esso. Marden counterclaimed for rescission of the
tenancy agreement and damages for negligence.
• The Court of Appeal applied the principle established in Hedley
Byrne & Co Ltd v. Heller and Partners Ltd.
• When Esso’s representative forecast the station’s potential as part
of the pre-contractual negotiations, a duty of care arose. Esso was
in breach of the duty of care because of the error made by its
representative. Esso was liable in damages for negligence.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
NON DISCLOSURE
• Though the general rule is that silence is not a
misrepresentation, there is a duty in certain contracts,
discussed hereunder, to disclose relevant information.
(i) Contracts of Uberrimae Fidei
• Contracts of uberrimae fidei are those in which only one
party possesses full knowledge of all the material facts,
and the other being unable to obtain them from any other
source. The law therefore requires that uberrimae fidei
(utmost good faith) from the first party.
• The examples of uberrimae fides contracts are contracts of
insurance, contracts to take shares from companies and
family arrangements. A duty to disclose also arises in
fudiciary relationships such as principal and agent.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
NON DISCLOSURE
• In Locker and Woolf Ltd v. Western Australian
Insurance Co. Ltd (1936) 1 KB 408: When
proposing for fire insurance in respect of their
premises the plaintiffs failed to disclose that an
insurance on their motorcars had been declined
by another company on the grounds of
misrepresentation and non-disclosure.
• It was held that the non-disclosure of this
previous refusal was a material fact in the
proposal for fire insurance which entitled the
respondents to avoid the policy.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
NON DISCLOSURE
(ii) Contracts to take shares from Companies
• Under section 124 of the Companies Act,
Chapter 388 of the Laws of Zambia, an
omission of a fact from a company’s
prospectus may constitute a
misrepresentation.
• Section of 124 of the said Act states that a
prospectus must not contain any untrue or
misleading statement.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
NON DISCLOSURE
(iii) Family Arrangements
• This is explained by the case of Gordon v. Gordon
(1821) 3 Swan 400: Where an agreement between two
brothers, the elder of whom was believed to be
illegitimate, for the division of the family estates. It
turned out that the younger brother, who had obtained
an advantage because of his belief, had known all along
that his brother was legitimate.
• It was held that even after a lapse of 19 years, the
agreement should be rescinded, because family
arrangements of this sort are uberrimae fidei.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
NON DISCLOSURE
(iv) Fudiciary Relationships
• This is a relationship of trust which normally exists
between solicitor and client, doctor and patient,
principal and agent, religious superior and inferior,
trustee and beneficiary, parent and child, and
guardian and ward.
• If any party to a contract uses his influence, obtained
through confidence necessarily reposed in him or her
by the other, to obtain an advantage at the expense
of the confiding party, rescission will be allowed for
non-disclosure, or misrepresentation.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
NON DISCLOSURE
• In Tate v. Williamson (1886) 2 Ch App 55: Tate was a
spend thrift Oxford undergraduate. He relied upon
Williamson, his cousin, for financial advice as Tate
was estranged from his father because of his
extravagance. Williamson, who had been
recommended by Tate’s great-uncle, advised Tate to
sell his estate for 7500 pounds to Williamson, when
its true value was 20,000 pounds, and he duly sold it
as advised.
• It was held that Williamson’s non-disclosure was a
misrepresentation and so the sale was set aside.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
REMEDIES FOR MISREPRESENTATION
• There are two remedies available for misrepresentation, namely,
rescission, and damages.
(a) Rescission or Setting aside Contract
• Rescission or setting aside of a contract is the remedy that is
available for all types of misrepresentation namely innocent,
fraudulent, and negligent misrepresentation.
• The effect of rescission is to ‘wipe out’ the existence of the
contract entirely and return the parties to the positions they were
in before the contract was made.
• Rescission has been developed in equity decisions and is limited by
general principles common to all the equitable doctrines and
remedies namely rescission, rectification, injunction and decree or
order of specific performance.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Rescission
• Rescission, being a discretionary remedy, the
court may in certain circumstances refuse to
grant this remedy, for instance where the
plaintiff has been guilty of inequitable
conduct, such as dishonest.
• The remedy of rescission will lost or will not
be available to a party in the following
circumstances:
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Rescission
(i) Lapse of Time
• Where the plaintiff becomes aware of the misrepresentation, he
will be barred to rescind the contract if he unreasonably delays in
seeking rescission.
• In Leaf v. International Galleries (1950) 1 All ER 693: The plaintiff
bought an oil painting of salisbury cathedral for 85 pounds and
accepted it as a genuine constable on the representations of the
sellers, the defendants. Five years after the sale the plaintiff
discovered that the pianting was not by constable and he claimed
rescission on the grounds of innocent misrepresentation.
• It was held that this claim must fail as the action had not been
commenced within a reasonable time, and further the mistake in
question was not one which would entitled the plaintiff to avoid
the contract.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Rescission
(ii) Affirmation
• The representee or innocent party cannot rescind the contract
after expressly or impliedly affirming the contract with full
knowledge of the true facts.
• In Long v. Lloyd (1958) 2 All ER 402: The defendant advertised for
sale a motor lorry which he described as being in ‘exceptional
condition’ and told the plaintiff, who purchased it, that it was
capable of 40mph and did 11 miles to the galon. Two days later
certain defects appeared and the plaintiff accepted the defendant’s
offer to pay half the cost of a reconditioned dynamo. On the
following day the plaintiff’s brother set out to drive the lorry to
Middlesbrough but it broke down on the way and an expert found
that it was not in a roadworthy condition. The defendant’s
representations concerning the vehicle were untrue, although
honestly made, and the plaintiff sought to rescind the contract on
the ground of the defendant’s innocent misrepresentation.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Rescission
• It was held that (i) the representations as to
the condition of the lorry were innocent; (ii)
the journey to Rochester was not affirmation
because the plaintiff had to have an
opportunity to test the vehicle in a working
capacity; and (iii) the acceptance of the offer
to pay half of the cost of the dynamo, and
the subsequent journey to Middlesbrough,
did amount to affirmation and therefore
rescission could not be granted.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Rescission
(iii) Restitution in Integrum is Impossible
• If restoration of the parties to the pre-contract state of affairs is
impossible, because for example the subject matter of the
contract has ceased to exist or has changed its identity, rescission
cannot be granted.
• In Vigers v. Pike (1842) 3 CL & Fin 562: B had agreed in his lifetime
to let mines in return for 165,000 pounds. The mines were operated
and a part of the payment made. Pike, B’s executor, sued the
managing director of the company operating the mine for the rest
of the money. In defence it was claimed that a number of
misrepresentations had been made to induce the lease. It was held
that the lease could not be set aside since the mines had
substantially been worked and the parties could not be restored to
their original positions.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Rescission
(iv) Intervention of Third Party Rights
• In equity the rule has always been to protect a person
who has in good faith and for value acquired rights in
property.
• The effect of a misrepresentation of any kind is to make the
contract voidable at the option of the person or party
misled, and if he has transferred property under it to the
misrepresentation, the title to it will pass to the latter
under the voidable contract, and from him to any third
party who acquires it in good faith and value.
• This was the case in Phillips v. Brooks (1919) and Lewis v.
Averay (1971), discussed above.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(a) Rescission
(v) Damages in Liu of Rescission
• Under section 2(2) of the 1967 Misrepresentation
Act, the Court may declare the contract
subsisting, if it would be equitable to do so,
having regard to the nature of misrepresentation,
and the loss that would be caused by it if the
contract were upheld, as well as to the loss that
rescission would cause to the other party.
• Instead the court will award damages to the
victims of the innocent or negligent
misrepresentation.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(b) Damages
• Damages is another remedy that is available for misrepresentation
where the misrepresentation is fraudulent or negligent.
• Where misrepresentation is fraudulent the damages may be
recovered in the tort of deceit.
• The purpose of an award of damages in deceit is to put the claimant
to the position he would have been in had the tort not been
committed.
• The defendant is also liable for all the damage directly flowing from
the fraudulent inducement which was not rendered too remote by
the plaintiff’s own conduct, whether or not the defendant could
have foreseen such consequential loss.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
(b) Damages
• In case of negligent misrepresentation, the
misrepresetor has committed a tort and damages
can therefore be claimed. Like in the fraudulent
misrepresentation, the award of damages in
negligent misrepresentation.
• representation is to put the plaintiff in the
position which he would have been in had the
tort not been committed. The represento will be
liable for all loses which are reasonably
foreseeable consequence of the
misrepresentation.
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com
THANK YOU
Dr. Ernest Owusu-Dapaa-0574604820-
eodapaa@yahoo.com