Chapter 17 Self-test questions

. For an aggrieved party seeking a remedy for misrepresentation, which of the following might be important to determine before the claim is taken to court? Select all that apply

Whether the representation was put in writing or merely oral

Whether the representation is a statement of fact or merely of opinion

Whether the pre-contractual representation has been incorporated into the contract as a term

None of the options given are correct

. Which of the following types of statement clearly cannot give rise to a claim for misrepresentation? Select all that apply.

A promise

A statement of intention

A statement of opinion

A failure to disclose

. In which of the following cases is silence likely to be found equivalent to, or to amount to, a misrepresentation? Select all that apply.

Where it accompanies conduct which to some extent induces a mistake in the other party

When it accompanies a statement that is literally true but liable to mislead

Where it takes the form of silence and that silence is said to be dishonest

Where it accompanies a change in circumstances which renders the original statement inaccurate, to the knowledge of the maker of the statement

. When will the right to rescind a contract for misrepresentation be lost?

It is impossible to restore both parties to their pre-contractual position

The claimant cannot make restitution to the defendant for any benefit which the claimant has obtained under the contract

The claimant cannot restore to the defendant the very benefit which the claimant obtained from the defendant

The claimant delayed seeking rescission for a few weeks

. In which of the following cases are the courts likely to find an exercisable (or exercised) right to rescission of the contract? Select all that apply.

A sells a beach hut to B who has plans to turn it into a café. A tells B that the annual tourist influx in the area is around 300,000 and hands over a few brochures with figures from the local tourist board telling B that all the information is there. In fact A is mistaken and the figure is more like 30,000 but B has not bothered to look at the official brochures.

A sells an iPod over the Internet to B. The next day he discovers that B's cheque has bounced. A immediately goes to the police to inform them of the scam. A few weeks later B sells the iPod on to C at a jumble sale.

A sells a second-hand motorbike to rogue B. He later discovers that the cash handed over by B was counterfeit. By this time B has sold the motorbike on to C.

. What has been held by the courts to be the appropriate measure of damages in a case brought under section 2(1) of the Misrepresentation Act 1967?

Damages should put the claimant back in the position he would have been in had the representation not been made, including compensating him for any losses flowing directly from the representation

Damages should put the claimant back in the position he would have been in had the representation been true, including compensating him for any losses flowing directly from the representation

Damages should put the claimant back in the position he would have been in had the representation not been made, including compensating him for any reasonably foreseeable losses flowing from the representation

Damages should put the claimant back in the position he would have been in had the representation been true, including compensating him for any reasonably foreseeable losses flowing from the representation

. TRUE/FALSE A claimant who has lost the right to rescind a contract for misrepresentation may be entitled to recover damages under section 2(2) of the Misrepresentation Act 1967.

True

False

. In which of the following circumstances would a claimant find it preferable to bring a claim for misrepresentation at common law rather than under section 2(1) of the Misrepresentation Act 1967? Select all that apply.

Where the contract between A and B is void ab initio (for example, on the ground of non est factum)

Where A would prefer tortious 'reliance damages' to contractual 'expectation damages' from B

Where the misrepresentation was innocent

Where the misrepresentation is made by a third party, C, who is not party to the contract between A and B.

. Harbour Heights (estate agents) advertise for sale a large warehouse on the harbour. Mario hopes to buy the warehouse and make extensive changes so as to convert it into his own studio cum architectural exhibition centre. In an attempt to clinch the deal, an HH representative dishonestly tells him that there are no planning restrictions preventing a change of use or design of the warehouse. Mario buys the warehouse on the faith of this representation, and soon discovers that all changes to the present interior architectural features are forbidden. Mario wishes to bring a claim for misrepresentation but finds the following statement under clause 8 of the concluded contract: "No servant or agent of HH & Co has the authority to make any representation or warranty on behalf of HH & Co". Advise Mario as to the effect of HH's attempt to exclude liability for misrepresentation.

HH's attempt to exclude liability for misrepresentation is unlikely to be effective as under section 3 of the Misrepresentation Act 1967 it is unreasonable

HH's attempt to exclude liability for misrepresentation is likely to be effective because it does not fall within the scope of section 3 of the Misrepresentation Act 1967

HH's attempt to exclude liability for misrepresentation is likely to be effective because it is not unreasonable in the manner envisaged by section 3 of the Misrepresentation Act 1967

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