11 Misrepresentation
A contract may be well formed, containing all the necessary elements to
make it valid, but could still be unfair because of something in its
formation. What if, for example, a person was encouraged into a contract
because someone lied before it was made? A person who has been misled
by this may well have bought items which are not satisfactory, just as they
would have done had there been a misleading term within the contract, so
a remedy for this situation may be just as important to the injured party as
a remedy for breach of contract.
Representations and terms
It was seen when examining incorporation of terms (Chapter 6) that
statements made prior to or during contractual negotiations are
representations. Some of these may later become terms of the contract,
whilst others remain mere representations. There are obviously remedies
available for breach of a term (see Chapter 7 on types of terms and Chapter
15 on remedies), but this chapter will examine the situation where someone
has been misled into making a contract by representations.
Where representations of facts prove to be untrue, and mislead a person
into entering into a contract, there may be a situation of misrepresentation.
Definition
A misrepresentation is an untrue statement of fact, made by one
party to a contract to another, which is not a term of the contract,
has an inducing effect on it.He said this was
‘a good little runner’
but it won’t go ...