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Misrepresentation

Common Law Elements of Misrepresentation

In order for a misrepresentation to occur, the representee must show that the representor made:

• A false statement of past or existing fact;

• Addressed by one to another;

• Before or when the contract was made; and

• Which intended to induce, and in fact induced, the contract.

Statement of past or existing fact

In order for a false statement of past or existing fact to be made, a discrepancy between the facts as proven and the statements made the representor must exist.

It is possible for conduct such as a nod or wink, or the shake of head or a smile intended to induce to form a representation of act, particularly in response to a question: Walter v Morgan.

A statement of past and present fact must be distinguished from the following.

Statement of Future Intent

A representation about a person’s intention or a future state of affairs will generally not be a misrepresentation. For a statement of future intention to have any effect, it must be a term of the contract or part of a collateral contract.

The exception is where the intention was never held, misrepresentation will occur: Edgington v Fitzmaurice

Statement of Opinion

A statement of opinion cannot amount to a misrepresentation unless:

• The representor does not hold a genuine belief in the opinion (fraud).

• The representor has no facts to support such a position: Fitzpatrick v Michael.

• It is unreasonable for the representor to hold the opinion based on their knowledge of the subject matter: Bisset v Wilkinson

• The representor is in exclusive possession of the facts relevant to the opinion stated and, based upon those facts, a reasonable person would not hold that opinion: Smith v Land & House Property Corporation.

Statement of Law

Generally a statement of law is not a misrepresentation. One can only ever express an opinion as to the law on an issue until a court adjudicates on...