Understanding Misrepresentation in Contracts

The Misrepresentation Act 1967, s2 provides that a plaintiff may claim rescission and/or damages if there was a misrepresentation, whether fraudulently or not. It amounts to a misrepresentation if there was a statement of fact, which entitles the plaintiff entitled to rescind the contract.

The question of whether misrepresentation would have induced a reasonable person to enter into a contract is applicable only to the onus of proof. There will be material misrepresentation if the inaccurate statements induced a party to enter into a contract. If a party holds the most information, he is more likely to be sued. In such as case, he becomes a representor and is considered to be in a better position to know the correct position. In fraudulent or negligent misrepresentation, the plaintiff, as an innocent party can sue for damages. If the representor made the misrepresentation knowingly, without belief in its truth, or made recklessly or carelessly, it is a proof of fraud.

The current case is a misrepresentation by Rex of an untrue statement of fact regarding the car. Brian was reassured by Rex’s comments upon which he relied in being induced to enter into the contract. The inaccurate statements induced Brian and therefore there was a material misrepresentation, which caused Brian to suffer the loss. In the current case, it concerns the case of negligent misrepresentation. Campervan would not have entered the contract if Rex, on behalf of Betterbuy, was careful and he did not make the statements about the car. He cannot be considered having a reasonable ground for believing that his representation of the car was true. He did not check the full records of car’s previous history. Even he did, he would not have made the statement. In this case, Campervan could claim for negligent misrepresentation under section 2 (1) of MA 1967. It could also seek rescission and/or damages. . According to the principle laid out in the case of Salt v Stratstone (2015), Campervan may seek damages in place of rescission for a possible breach of contract.

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