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Contract: Misrepresentation and Economic Duress

What counts as an actionable misrepresentation

  • 3 things to know
  • Components 2 and 3

Overview

Actionable misrepresentation and burden of proof in a misrepresentation claim.

What you need to know

Answer each one before you reveal it.

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Key term

Set out what makes a misrepresentation actionable and its effect on the contract.

Key term

Define an actionable misrepresentation.

Key term

What is the effect of an actionable misrepresentation on the contract?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    Define an actionable misrepresentation.

    Model answer

    An actionable misrepresentation is an untrue statement of fact or law made by one party to the other. The statement must have induced the other party to enter the contract.

  2. 2

    What is the effect of an actionable misrepresentation on the contract?

    Model answer

    An actionable misrepresentation makes the contract voidable rather than void. The misled party may choose to rescind or to affirm the agreement.

  3. 3

    Must a misrepresentation be made by the other contracting party?

    Model answer

    A misrepresentation must generally be made by the other party or by that party's agent. A false statement by a stranger gives no remedy against the other contracting party.

  4. 4

    Can conduct alone amount to a misrepresentation?

    Model answer

    Conduct can amount to a misrepresentation where it conveys a false impression. Concealing a defect by physical means is treated as a positive false statement.

  5. 5

    Why must the statement be unambiguous?

    Model answer

    A statement capable of two meanings may not be a misrepresentation at all. The claimant must show the sense in which the words were understood was false.

  6. 6

    Is a statement about the future a misrepresentation?

    Model answer

    A promise about future conduct is not a statement of existing fact. Breach of such a promise gives a remedy only if the promise became a term.

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