about something does not normally amount to misrep-
resentation. In a recent case the seller of a house failed
to disclose that it been the scene of a gruesome murder
of a young girl, with the possibility that parts of the
victim’s body might still be hidden in the house. The
silence of the seller was held not to amount to a misrep-
resentation (SykesvTaylor-Rose(2004)).
Gestures, smiles and nods can amount to a statement.
A course of conduct can also amount to a representation.
There are certain situations where a failure to speak
will amount to an actionable misrepresentation:
■where there is a relationship of good faith between the
parties, e.g. between partners;
■where the contract is one of utmost good faith, e.g.
proposals for insurance cover;
■where a half-truth is offered. In one case a solicitor
stated that he was not aware of any restrictive coven-
ants on a piece of land, which was literally true, but, if
he had bothered to read relevant documents, he would
have discovered that there were indeed restrictive
covenants (Nottingham Patent Brick and Tile Cov
Butler(1886));
■where there has been a change in circumstances be-
tween the time of the negotiations and the conclusion
of the contract.Part 3Business transactions
236
Figure 7.2Remedies for false statements
Spice Girls Ltdv Aprilia World Service
BV(2000)
The claimant, SGL, was a company formed to promote
the Spice Girls pop group. At the beginning of May 1998,
SGL entered into a contract with the defendant, AWS, an
Italian company which manufactures motorcycles and
scooters, to film a TV commercial to be shown until March- When the contract was signed, the Spice Girls
consisted of five members. However, a month earlier Geri
Halliwell had announced to the other members of the
group and its management that she intended to leave the
group at the end of September 1998. It had been decided
to keep this information confidential and AWS was not
informed when the contract was signed. In an action by
SGL for money allegedly due under the agreement, the
High Court held that by participating in the ‘shoot’ of the
TV commercial, SGL represented by conduct that it did
not know or had no reasonable grounds to believe that
any of the members of the group intended to leave. As
the members of the group knew Ms Halliwell intended to
leave during the period when the commercial was to be
used, this amounted to a misrepresentation.
Withv O’Flanagan(1936)The defendant was a doctor who wished to sell his
medical practice. In January 1934, during the course of
negotiations with the claimant, he stated (correctly) that
the practice was worth £2,000 a year. Unfortunately, the
defendant then fell ill and the practice was run by other
doctors. By the time the contract of sale to the claimant
was signed in May, receipts had fallen to £5 per week.
It was held that the defendant’s failure to inform the
claimant of the change of circumstances between initial
negotiations and the conclusion of the contract was a
misrepresentation.The misrepresentation must involve a statement of
fact, opinion or intention. A statement of law may
amount to a misrepresentation.Pankhaniav London Borough of
Hackney(2002)
The claimant (P) bought a property in London at auction
from the defendants. The auction catalogue stated that
the tenant of the property had a licence whereas in fact
the tenant held a secure tenancy. The High Court held
that the principle that no action could lay for a misrepres-
entation as to law had not survived the House of Lords
decision in Kleinwort Benson LtdvLincoln City Council
(1998) (see further, p 260 ).A statement of intention will not normally amount to
a misrepresentation because a representation is a state-
ment about existing facts or past events. However, if a