- If a seller of goods does some positive act to deliberately conceal defects
in goods, this may amount to misrepresentation. In Schneider v Heath
(1813) a boat which was being sold was partly submerged by the seller
to conceal a rotten hold. - A half-true statement which is accurate as far as it goes, but which
conveys a misleading impression by being incomplete may give rise to
misrepresentation. In Dimmock v Hallett (1866) a seller of land stated
that all the farms on an estate were let to tenants, but omitted to say add
that the tenants had all given notice to leave. - Changed circumstances may imply a duty to disclose facts, which would
not be misrepresentations at all if nothing had been said originally about
the matter. If a representor knows of a change in circumstances, and
thereby knows that his originally true statement is now false, this may
amount to a misrepresentation. This arose in With v O’Flanagan (1936)
when a doctor wanted to sell his practice. He told a prospective buyer the
current income, and then became ill. By the time the sale eventually took
place, many of the clients had transferred to another practice, and the
income was much less than originally stated. As the doctor did not revise his
original statement it was held to be a misrepresentation. A similar situation
arose in Esso v Mardon (see above) where the Esso representative did not
revise his sales forecasts in light of the new siting of the petrol pumps. - A fiduciary relationship may indicate that there is a duty to disclose
facts. All of the situations above involve people meeting on relatively
equal terms. In these situations there is only a duty to tell the truth, but
no general duty to disclose. So if something is said, it must be true, but
there is not a general duty to say anything at all. If a person sells a stereo
system to another, they can simply make no claims at all about it, letting
the buyer form their own opinion of whether it is good value. In some
circumstances, however, where one party is in a position of
responsibility towards the other, the law may consider there to be a
fiduciary relationship between the two. Some examples are: parent and
child, solicitor and client, trustee and beneficiary. In these situations
there is a greater duty to disclose relevant facts than in ordinary
relationships between average people. A failure to disclose relevant facts
in these circumstances may lead to misrepresentation. An example of a
fiduciary relationship is found in the following case, which, although it
failed on a technicality, shows how a misrepresentation could arise. You
may remember that in Esso v Mardon (page 168) the court found that the
Esso expert owed a duty of care to Mr. Mardon, therefore finding that
there had been a negligent misrepresentation.
172 Contract law
Hedley Byrne and Co v Heller & Partners Ltd (1964)
Heller bankers gave assurances of creditworthiness to Hedley Byrne
concerning a mutual client, Easipower. The bank were the only people