Misrepresentation

Quiz Content

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. The law of misrepresentation relates to the law concerning the effect on a contract (and hence the parties' positions) where that contract was entered into on the basis of a false statement made during the course of contractual negotiations.

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. Where a misstatement is made by A to B in the course of negotiations leading to a contract between A and B, it may be possible for B to bring a damages claim for breach of contract.

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. A is interested in buying B's house. During the pre-contractual negotiations, B refuses to answer any of A's questions. Subsequently, B is informed that the house is infested with death-watch beetle but fails to tell A of that fact. A thereupon buys the house but is told that it will need to be demolished within six months. Which one of the following statements most accurately summarizes the position between the parties?

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. A false representation is a representation that is untrue according to the construction put on it by the representee.

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. When making contracts uberrimae fidei (of utmost good faith), one or both parties may be under a duty to disclose all material facts.

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. A agrees to buy B's house. During the pre-contractual negotiations, B refuses to answer any of A's questions. In fact, local authority plans to build a motorway near B's house have recently been publicized. B realizes that the value of her house will plummet when the plans to build a motorway are given more widespread publicity but she also knows that, for the moment, A is unaware of the intended motorway construction. A buys the house and immediately discovers the motorway plan. Which one of the following statements most accurately summarizes the position between the parties?

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. Which one of the following misstatements is not likely to be a misstatement of fact?

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. A statement of intention always amounts to a misrepresentation if the representor subsequently alters his intention and fails to inform the representee of the change of intention.

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. A is hoping to sell his 15ft yacht to B. During the pre-contractual negotiations A says: 'I think you should get the boat surveyed. It's always been reliable but I recently had to pay for the mast to be repaired.' Unknown to B, A has used paint and other means to conceal other repaired parts of the yacht. B purchases the yacht without further inspection but then finds out that recent repairs to the yacht included the rudder, keel and hull. Which one of the following statements most accurately summarizes the position between the parties?

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. A misrepresentation that is not intended to be acted upon is not actionable, even if it has actually been relied upon by the representee.

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. Which of the following principles were recognised and applied by the Court of Appeal in Edgington v Fitzmaurice (1885) 24 ChD 459? [Please select all that apply.]

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. Where a misrepresentation is incorporated as a term of the contract, the misrepresentee may set the contract aside for misrepresentation and then claim damages for breach of contract.

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. Which of the following statements correctly describe the advantages for a party in bringing a claim alleging negligent misrepresentation under s. 2(1) of the Misrepresentation Act 1967 rather than at common law? [Please select all that apply.]

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. Section 2(1) of the Misrepresentation Act 1967 would have been applicable to the facts of Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 had the Act been in force at that time.

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. In which one of the following situations will the misrepresentee's right of rescission remain?

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. Which one of the following statements in relation to the three types of misrepresentation is true?

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. Damages for fraudulent misrepresentation will not be affected by any contributory negligence on the part of the misrepresentee.

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. A is considering buying B's bakery business as an investment. By a fraudulent misrepresentation, B induces A to buy the bakery for £180,000 although its actual value is only £120,000. When A discovers the fraud two weeks later, the value of the bakery has reduced to £80,000 due to serious damage caused by the collapse of a supporting wall at the bakery premises. At this point, a buyer offers £80,000 for the bakery. A does not sell until three months later, when A only gets £75,000 because of an economic downturn. A rescinds the contract with B for fraudulent misrepresentation and claims damages. Which one of the following statements most accurately calculates the damages to which A is entitled?

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. On the basis that the law will not accept the exclusion of liability for a person's own fraud, a clause that purports to exclude liability for all types of misrepresentation (fraudulent, negligent, and innocent) will automatically be unreasonable under s. 3 of the Misrepresentation Act 1967 because it could be an attempt to exclude liability for fraud.

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. Which one of the following statements relating to a claim for damages brought under s. 2(1) of the Misrepresentation Act 1967 is true?

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. Section 2(2) of the Misrepresentation Act 1967 gives the representee of an innocent misrepresentation a right to claim damages in lieu of rescission.

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. Where the parties have inserted a 'no reliance' clause into their contract, the effect of such a clause is to exclude the application of s. 3 of the Misrepresentation Act 1967.

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