Misrepresentation Act 1967 Essay Example

future conduct. Based on the language used, it may seem to the average person that Clarence's statement was one of opinion.

According to Bruce's letter, Clarence predicted that the car would achieve a fuel efficiency of 30mpg while driving on the open road, and 22mpg in the city. As a salesperson at a registered second-hand Mercedes dealer, Clarence likely possessed knowledge and expertise in this field. This situation is similar to the legal case of Smith v Land ; House Property Corp3, in which a statement claiming that the tenant of the house in question was a "very reliable person" was determined by the courts to be a statement of fact rather than mere opinion...

My opinion is that Clarence's statement should be viewed as a statement of fact by the courts, as he had the knowledge and authority to make it as a salesman of a registered Mercedes dealer. To determine if the statement induced the signing of the contract, four conditions laid down by previous cases must be considered. The first condition, established in Smith v Chadwick4 and Museprime Properties Ltd v Adhill Properties Ltd5, dictates that the representation must be material to the subject matter of the contract. If the courts follow this precedent, they are likely to view fuel consumption as material to the subject matter of the contract. Therefore, I would advise Bruce to proceed with caution.

To meet the conditions of effective representation, it must be known to the representee and intended to be acted on. In the case of Bruce, it is apparent that he knew about the representation as it arose from a conversation between them. Additionally, as Clarence is

a salesman, it is reasonable to assume that his representations are meant to be acted upon, as highlighted in the previous case of Peek v Gurney. Finally, based on the precedent set by Attwood v Small, the representation must be acted upon. Therefore, Bruce's purchase of the vehicle serves as evidence of his reliance on the representation.

Bruce's letter expresses that due to his limited budget, fuel consumption is a significant factor. If the Smith v Chadwick8 precedent were to be followed, it could be considered that the statement influenced Bruce's decision to sign the contract. The court ruled in the Smith case that if the plaintiff interpreted the statement as false, it would be considered proof of reliance on the statement. In such cases, it is necessary to determine whether the statement constitutes an actionable misrepresentation or a mere representation, which is not actionable.

Initially, Bruce needs to demonstrate the falsehood of the statement. In the letter he sent me, Bruce asserts that "various motoring magazines" indicate that Clarence's claim regarding the car's performance would have been unattainable even if the vehicle was new, let alone in its present state. I recommend that Bruce employ this evidence to establish the inaccuracy of the statement. Furthermore, a mere representation can only be considered a legally actionable misrepresentation if it has resulted in or has the potential to cause some form of harm.

To Bruce, I suggest that he proves how the statement about fuel consumption has negatively affected his finances. This means showing that the car is more expensive to run than Clarence previously claimed. Once Bruce has demonstrated that it is an actionable misrepresentation, I will

advise him on the type of misrepresentation based on the representor's mindset when making the statement.

There are two types of misrepresentation: fraudulent misrepresentation and negligent misstatement. The former entails a rigorous standard of proof, as the plaintiff must prove that the defendant deliberately made a false statement with dishonest intent. The latter requires the plaintiff to establish a special relationship between the parties and prove all elements of the tort of negligence.

It is a challenge to demonstrate that Clarence was aware that his representation would be acted upon, as the obligation of proof falls on the "wronged party." My suggestion to Bruce would be that proving Clarence's knowledge on the matter could be tough. Instead, he should try repudiating the contract through the doctrine of "Negligent Misrepresentation under the Misrepresentation Act 1967(The Act)." This is because section 2(1) of the Act alters the burden of proof, transferring it to Clarence who must demonstrate that he had "reasonable grounds to believe."

... and were convinced that the statement(s) were accurate...

According to the text, if Clarence fails to demonstrate that he believed a statement to be true, then Asbury Motors will face liability for damages or contract rescission (with some exceptions). The text advises Bruce that the decision in Howard Marine and Dredging Co v A Ogden ; Sons (Excavations) Ltd could be significant if followed by the courts in his own case. In Howard Marine, the courts stated that they must take reasonable steps to verify the truthfulness of a statement, such as consulting the manufacturer, and failure to do so could be a crucial element in Bruce's case since Clarence did not consult the car

manufacturer regarding fuel consumption.

There is a type of misrepresentation known as innocent, but it is improbable in this situation as Clarence would need to demonstrate reasonable attempts made to verify the truth of his statement. In the event that the court rules Clarence's statement was a negligent misrepresentation (as previously noted), two remedies are available. The first is the option to rescind the contract, which is available for all forms of misrepresentation mentioned. Rescission renders the contract voidable.

The contract will continue to exist until the 'wronged' party exercises their right to rescind, subject to four limitations. These limitations include the Affirmation of Contract, where failure to terminate the contract will forfeit the right to rescind (Clough v London ; North Western Railway Co11), as well as a lapse of time.

If the 'wronged' party waits too long after the contract is signed to take the case to court, they lose their right to rescind (Leaf v International Galleries12). An applicable bar to rescission exists if there is a right of a third party, and the final one being Restitutio in Integrum Impossible meaning if it's impossible to restore the parties to their original position. According to the facts in Bruce's letter, there doesn't seem to be any applicable bars to rescission since there is no mention of a lapse of time, no mention of any affirmation of the contract, and no third party rights. Advising Bruce, I would cite Spence v Crawford13 and state that Restitutio in Integrum is only impossible if the identity of the subject matter had been "substantially changed." In my opinion, there's no reason why the courts would decide that the car

had changed "substantially" from the time of the deal. However, if the courts did decide that Restitutio in Integrum was impossible, then damages may be awarded.

In summary, I recommend to Bruce that the courts may classify the statement regarding Clarence's fuel consumption as a Negligent Misrepresentation under the Misrepresentation Act 1967. In such a scenario, Bruce would be entitled to rescission and could recover his money along with any court-awarded damages.