Is an honest but unreasonable belief a defence to fraud?

An honest belief in the truth of a statement defeats a claim in deceit. The belief need not be a reasonable one, although unreasonableness is evidence against honesty.

Which tort corresponds to fraudulent misrepresentation?

Fraudulent misrepresentation gives rise to the tort of deceit. Damages in deceit are available in addition to rescission.

How are damages for deceit measured?

Damages in deceit cover all losses flowing directly from the fraudulent statement. Doyle v Olby (Ironmongers) Ltd [1969] confirmed that remoteness is no bar in fraud.

Eduqas A-Level Law A150QS

Parliamentary and European Law Making

Topic overview Green Papers, White Papers and the making of a Bill The legislative process through Parliament The composition and role of Parliament Influences on Parliament and law making Parliamentary sovereignty The UK constitution, separation of powers and the rule of law The royal prerogative Law reform and the Law Commission European Union institutions and sources of law The impact of European Union law and withdrawal

Delegated Legislation

Topic overview Delegated legislation and enabling Acts Statutory instruments By-laws Orders in Council and Henry VIII powers Parliamentary controls on delegated legislation Judicial control and the ultra vires doctrine Reasons for the use of delegated legislation Advantages and disadvantages of delegated legislation Devolved legislatures

Statutory Interpretation

Topic overview The need for statutory interpretation and the presumptions The literal rule The golden rule The mischief rule The purposive approach The rules of language Intrinsic aids Extrinsic aids and the use of Hansard The Human Rights Act 1998, European Union law and interpretation

Judicial Precedent

Topic overview The doctrine of precedent and stare decisis Ratio decidendi and obiter dicta Binding, persuasive and original precedent The hierarchy of the courts The Supreme Court and the Practice Statement 1966 The Court of Appeal and the exceptions in Young v Bristol Aeroplane Overruling, reversing and distinguishing Law reporting and judicial law making Advantages and disadvantages of precedent

The Civil Courts and Civil Process

Topic overview The civil courts and their jurisdiction Starting a claim and the Civil Procedure Rules Allocation to track and case management Civil appeals and the appellate courts Tribunals: development, role and control Arbitration Mediation, conciliation and negotiation Trial, judgment and enforcement Justice, interests and barriers in the civil process

The Criminal Process

Topic overview Classification of offences and the criminal courts The magistrates' courts: powers and the role of lay magistrates The Crown Court, allocation and its powers Criminal appeals and miscarriages of justice The Crown Prosecution Service Bail Theories and objectives of sentencing Sentencing adults and young offenders Jury qualification, disqualification and selection Jury trial in operation, criticisms and alternatives Justice, interests and barriers in the criminal process

Legal Personnel

Topic overview Solicitors: education, training and role Barristers: education, training and role Structure of the legal professions, fusion and social background Regulation of the legal professions Legal executives and paralegal personnel The judiciary: hierarchy, composition and role Judicial selection, appointment and training Judicial independence and the rule of law The magistracy and district judges in the magistrates' courts

Access to Justice and Funding

Topic overview Access to justice and the Legal Aid Agency Civil legal aid: scope under LASPO Civil legal aid: means, merits and the statutory charge Criminal legal aid and the Public Defender Service Conditional fee agreements Damages-based agreements and other alternative funding Advice schemes and pro bono help Litigants in person and unmet legal need Barriers to justice and reform of funding

Contract: Rules and Theory of Contract LawContract

Topic overview Origins and definition of the law of contract The function of the law of contract Contract as a set of rules for freely made agreements Contract law and economic development Arguments for a European or global contract law system Human rights and the law of contract Freedom of contract and consumer protection The impact of judicial decisions and legislation on contract Contract law, justice and morality

Contract: Essential Requirements and FormationContract

Topic overview Offers and invitations to treat Communication, revocation and lapse of an offer The rules of acceptance Communication of acceptance and the postal rule The rules of consideration Existing duties and part payment of a debt Promissory estoppel Intention to create legal relations Privity of contract and third party rights

Contract: Express and Implied TermsContract

Topic overview Representations and terms Express terms and their incorporation The parol evidence rule Terms implied by fact and by custom Terms implied by statute in consumer contracts Consumer remedies and the Consumer Contracts Regulations 2013 Exclusion clauses at common law Statutory control of exclusion clauses and unfair terms Conditions, warranties and innominate terms

Contract: Misrepresentation and Economic DuressContract

Topic overview What counts as an actionable misrepresentation Statements of opinion, intention and expertise Silence, half-truths and changing circumstances Inducement and reliance Fraudulent misrepresentation Negligent misrepresentation Innocent misrepresentation and remedies under the Act Rescission and the bars to rescission Economic duress

Contract: Discharge of ContractContract

Topic overview Discharge by performance and the rule in Cutter v Powell Exceptions to the entire performance rule Time of performance and tender of performance Discharge by agreement Discharge by actual breach Anticipatory breach Frustration: impossibility, death and incapacity Frustration: illegality, sterility and radical change Limits on frustration and the Law Reform (Frustrated Contracts) Act 1943

Contract: RemediesContract

Topic overview The purpose and measure of compensatory damages Causation and remoteness of damage Mitigation of loss and contributory fault Cost of cure, difference in value and loss of amenity Damages for distress and disappointment Liquidated damages and penalty clauses Rescission and rectification Specific performance Injunctions and the limits of equitable remedies

Tort: Rules and Theory of Tort LawTort

Topic overview The origins and development of the law of tort Categories of tort and the interests they protect Defining a tort and its boundaries with crime and contract Fault liability and strict liability Corrective justice and the aims of tort law The economic justification of tort Retributive justice and deterrence in tort Criticisms of the tort system Reform of the tort system and no-fault alternatives

Tort: NegligenceTort

Topic overview Duty of care and the neighbour principle The Caparo test and the modern approach to duty Injury to people, damage to property and other kinds of loss Breach of duty and the reasonable man The standard of care for professionals and for children Risk factors in deciding breach Proving breach and res ipsa loquitur Factual causation and the but for test Legal causation, intervening acts and remoteness of damage

Tort: Occupiers' LiabilityTort

Topic overview Occupiers, premises and the meaning of control Lawful visitors under the Occupiers' Liability Act 1957 The common duty of care owed to visitors Child visitors and the principle of allurement Skilled visitors and persons exercising a calling Independent contractors and the occupier's position Warnings, exclusion of liability and defences to a visitor's claim Trespassers and the duty under the Occupiers' Liability Act 1984 The standard owed to trespassers and defences under the 1984 Act

Tort: Torts Connected to LandTort

Topic overview Trespass to land: unlawful entry and intention Defences to trespass to land and the remedies available Public nuisance and the class of persons affected Suing in public nuisance: special damage and the Attorney-General Private nuisance: the parties and the interference Unreasonable user: locality, duration and utility Abnormal sensitivity and the effect of malice Specific defences to nuisance: prescription and statutory authority Rylands v Fletcher: the elements of the rule Specific defences to Rylands v Fletcher

Tort: Vicarious LiabilityTort

Topic overview The nature of vicarious liability The purpose of vicarious liability and the arguments about it Tests for the status of employment: control and integration The economic reality test and the modern multiple test Relationships akin to employment Scope of employment: authorised acts done in an unauthorised way Frolic of his own, detours and journeys Intentional wrongdoing and the close connection test Independent contractors and unusually hazardous activities

Tort: Defences and RemediesTort

Topic overview Volenti non fit injuria: the elements of the defence Volenti, rescuers and employees Volenti in road traffic cases and the defence of illegality Contributory negligence and the Law Reform (Contributory Negligence) Act 1945 Applying contributory negligence: seat belts, children and emergencies Defences and remedies in claims connected to nuisance and Rylands v Fletcher Compensatory damages in tort Assessing personal injury damages and mitigation of loss Injunctions and other remedies in tort

Criminal Law: Rules and TheoryCriminal

Topic overview The definition of a crime and the purposes of criminal law Burden and standard of proof in criminal cases Criminal law, morality and justice Codification of the criminal law The Crown Prosecution Service and the decision to prosecute The Attorney-General and the Director of Public Prosecutions Bail and the presumption in favour of liberty Remand in custody and custody time limits The criminal trial process Youth justice

Criminal Law: General Elements of LiabilityCriminal

Topic overview Actus reus: conduct, consequences and states of affairs Voluntary and involuntary conduct Liability for omissions Factual causation Legal causation and intervening acts Intention: direct and oblique Recklessness, negligence and transferred malice Coincidence of actus reus and mens rea Strict liability and the Gammon tests

Criminal Law: Offences Against the PersonCriminal

Topic overview Murder: elements and malice aforethought Voluntary manslaughter: loss of control Voluntary manslaughter: diminished responsibility Unlawful act manslaughter Gross negligence manslaughter Assault Battery Actual bodily harm under section 47 Malicious wounding and grievous bodily harm under section 20 Wounding and grievous bodily harm with intent under section 18

Criminal Law: Property OffencesCriminal

Topic overview Theft: appropriation Theft: property Theft: belonging to another Theft: dishonesty Theft: intention permanently to deprive Robbery Burglary with intent under section 9(1)(a)Burglary by theft or grievous bodily harm under section 9(1)(b)Buildings, dwellings and trespass in burglary

Criminal Law: Capacity DefencesCriminal

Topic overview Insanity: the M'Naghten rules Disease of the mind and the internal cause test The special verdict and disposal after insanity Non-insane automatism Self-induced automatism Voluntary intoxication by alcohol Intoxication by drugs and involuntary intoxication Specific and basic intent offences Drunken mistake and criticism of the capacity defences

Criminal Law: Necessity Defences and Preliminary OffencesCriminal

Topic overview Mistake as a defence Self-defence and the prevention of crime Reasonable force and householder cases Duress by threats and the Graham test Limits on duress: murder, association and evasive action Duress of circumstances Necessity Consent Attempt: the actus reus and more than merely preparatory Attempt: mens rea and impossible attempts

Human Rights: Rules and TheoryHuman rights

Topic overview The meaning of a right Rights, liberties and the correlative duty Natural law and the origins of human rights theory Utilitarian and positivist objections to natural rights Absolute, limited and qualified rights Categories of rights and their international sources The role of Parliament in regulating rights The role of the courts in regulating rights Human rights, justice and the rule of law

Human Rights: Protection of Rights and Freedoms in the UKHuman rights

Topic overview Protection of rights in the UK constitution before 1998 The Council of Europe and the history of the Convention The scope of the Convention and its Protocols The European Court of Human Rights: composition and application Doctrines developed by the Strasbourg court The main provisions of the Human Rights Act 1998 The impact of the Human Rights Act 1998 in the courts Criticisms of human rights and a UK Bill of Rights The Human Rights Act and the devolution settlements

Human Rights: Convention ProvisionsHuman rights

Topic overview Article 5 and the right to liberty and security of the person Article 5 exceptions, safeguards and restrictions Article 6 and the right to a fair trial Article 6 and the nature of an absolute right Article 8 and the right to respect for private and family life Article 8 exceptions, restrictions and positive obligations Article 10 and freedom of expression Article 10 exceptions and restrictions Article 11 and freedom of peaceful assembly and association

Human Rights: Restrictions on Convention RightsHuman rights

Topic overview How a qualified right may lawfully be restricted Freedom of assembly and public order law Police powers of stop and search Police powers of arrest and detention Search of premises, terrorism powers and remedies Interception of communications and surveillance Confidentiality, official secrets and contempt of court Obscenity and the control of publication Defamation, trespass and harassment

Human Rights: EnforcementHuman rights

Topic overview The Human Rights Act and the domestic courts Interpretation and Strasbourg case law Declarations of incompatibility Public authorities and claims under the Act Judicial review: the grounds Judicial review: procedure, standing and remedies The European Court of Human Rights The effect and enforcement of Strasbourg judgments

Human Rights: ReformHuman rights

Topic overview Criticisms of the Human Rights Act The case for keeping the Human Rights Act The case for a UK Bill of Rights The case against a UK Bill of Rights The United Kingdom and the Convention system The Equality and Human Rights Commission Protection beyond the Human Rights Act The future of rights protection

The Nature of Law

Topic overview Legal rules, other norms and the sources of law Law and society: fault and competing interests Law and morality Law and justice: theories of justice

Contract: Misrepresentation and Economic Duress

Fraudulent misrepresentation

3 things to know
Components 2 and 3

Overview

Derry v Peek and the dishonest state of mind it requires, the tort of deceit, how damages for deceit are measured after Smith New Court, and why claimants often plead the 1967 Act instead.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Numbers

Define fraudulent misrepresentation.

Numbers

What were the facts of Derry v Peek (1889)?

Key term

What does recklessness mean in the context of fraud?

Questions from this subtopic

Each one with the model answer underneath.

1
Define fraudulent misrepresentation.
Model answer
Fraudulent misrepresentation is a false statement made knowingly, without belief in its truth, or recklessly. Derry v Peek (1889) laid down that definition.
2
What were the facts of Derry v Peek (1889)?
Model answer
Derry v Peek (1889) concerned a prospectus stating that a tramway company could use steam power. The directors honestly believed consent would be given, so the claim in deceit failed.
3
What does recklessness mean in the context of fraud?
Model answer
Recklessness means not caring whether the statement is true or false. Carelessness alone falls short of that standard.
4
Is an honest but unreasonable belief a defence to fraud?
Model answer
An honest belief in the truth of a statement defeats a claim in deceit. The belief need not be a reasonable one, although unreasonableness is evidence against honesty.
5
Which tort corresponds to fraudulent misrepresentation?
Model answer
Fraudulent misrepresentation gives rise to the tort of deceit. Damages in deceit are available in addition to rescission.
6
How are damages for deceit measured?
Model answer
Damages in deceit cover all losses flowing directly from the fraudulent statement. Doyle v Olby (Ironmongers) Ltd [1969] confirmed that remoteness is no bar in fraud.

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