Mistake vs. Misrepresentation

In brief steal vs dissimulation A slip ones mind is inadvertent and lonesome(prenominal) an error on the part of the person committing it while refutation is often wilful or intentional, done with the intention of gaining wrongfully. The main difference between Mistake and falsehood is that in the case of Mistake one or both parties to a contract or what was intended to be a contract incidentally or unknowingly made recitals non intended to mislead the other.thusly craft can non be implied from these statements or circumstances. At Common law, a fracture can affect the validity of a contract operative mistake, making it null and void. In the case of conjuring trick, false statements of facts are undeniable to be made which knowingly or unknowingly could amount to fraud and remedy or rescission may apply. In the modern law, misrepresentation is classed as fraudulent, negligent or solely innocent. Fraudulent misrepresentation definition Fraudulent in this sense was def ined by passkey Herschell in Derry v Peek (1889) 14 App Cas 337 as a false statement that is made (i) knowingly, or (ii) without popular opinion in its truth, or (iii) recklessly, careless as to whether it be true of false. The essence of fraud is the absence of honest belief in Derry v Peek , a share prospectus incorrectly stated that the company had the right to use mechanical power to throw up trams, without explaining that governmental consent was required for this. In fact, the directors honestly deald that obtaining consent was a pure formality, although it was ultimately refused.The House of Lords held that there had been no fraudulent misrepresentation. Lord Herschell however did point out that though unreasonableness of the grounds of belief is not deceitful, it is evidence from which deceit may be inferred. There are galore(postnominal) cases, where the fact that an alleged belief was destitute of all reasonable inception would suffice of itself to convince the cour t that it was not really entertained, and that the representation was a fraudulent one. On the other hand, there need be no intention to defraud. An intention to deceive (with no intention to cause the assignant loss) is sufficient. absorbed misrepresentation Negligent mis-statement at common law Until 1963, damages could only be claimed for misrepresentation where it was fraudulent. All non-fraudulent misrepresentations were classed as innocent and damages were not available for such innocent misrepresentations. In 1963, the House of Lords stated, obiter, in Hedley Byrne Co Ltd v Heller Partners Ltd 1964 AC 465 that in certain circumstances damages may be recoverable in tort for negligent mis-statement make financial loss. The liability depends on a duty of care arising from a special relationship between the parties.It is now clear that a political company can claim damages under the principle in Hedley Byrne where a negligent mis-statement has induced him to enter a contract Esso Petroleum Co Ltd v Mardon (1976) QB 801. Broadly speaking, the special relationship will only resurrect where the maker of the statement possesses knowledge or skill relevant to the case matter of the contract and can reasonably foresee that the other party will rely on the statement. Negligent misrepresentation under the Misrepresentation Act 1967 Section 2(1) of the Act of 1967 introduced, for the first time, a statutory claim for damages for non-fraudulent misrepresentation.Section 2(1) provides that where a person has entered a contract later on a misrepresentation has been made to him by another part to it and a result thereof he has suffered loss, then, if the person making the misrepresentation would be liable to damages in respect thereof had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that the misrepresentation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up t o the time the contract was made that the facts represented were true.It should be noted that the sub-section assumes all non-fraudulent statements to be negligent and puts the burden on the maker of the statement to disprove negligence. Wholly innocent misrepresentation We have seen that in the first place 1963, the word innocent was used to describe all misrepresentations that were not fraudulent. In the light of Hedley Byrne and s. 2(1) of the Act of 1967, the word innocent may now be used to refer to a statement made by a person who has reasonable grounds for believing in its truth. To avoid confusion, wholly innocent is a better description.