5 Supervening third-party rights
If someone else, a third party, now has the goods, rescission cannot take
place. This arose in White v Garden (1851) where iron bars had been
delivered but rescission was barred because the bars had already been sold
on to a third party.
Comparison with remedies for breach of contract
When a contract is breached the remedy is damages, or if the term breached
is serious, the right to repudiate. With misrepresentation the right to rescind
is wider, but subject to various bars.
When damages are awarded for breach it is on an expectation basis, and
when awarded for misrepresentation it is on a tortious, or reliant, basis.
This would have meant that someone claiming misrepresentation would not
have been compensated for lost profits, but now that these may also be
given the two remedies are very similar.
Summary
Definition
A misrepresentation is an untrue statement of fact, made by one party to a
contract to another, which, while not forming a term of a contract, has an
inducing effect on it.
Misrepresentation 181Remedies for misrepresentation(proved according to
Derry v Peek)Figure 11.2