How was fraudulent misrepresentation defined in Derry v Peek (1889)?

It is a false statement made knowingly, or without belief in its truth, or recklessly, careless whether it be true or false.

Why did the claim in Derry v Peek (1889) fail on the facts?

The directors honestly believed that permission to use steam power would be granted as a formality, and because they were merely careless rather than dishonest their statement was not fraudulent.

What does recklessness mean in the definition of fraud?

It means indifference to whether the statement is true or false, so a maker who simply does not care whether it is accurate is treated as dishonest even without knowing it is untrue.

Who bears the burden of proving fraudulent misrepresentation, and to what standard?

The claimant must prove it, on the balance of probabilities, but because an allegation of dishonesty is serious the court requires cogent evidence before finding it established.

In which tort is an action for fraudulent misrepresentation brought?

It is brought in the tort of deceit, which requires a false representation made dishonestly, intended to be acted on, and acted on to the claimant's loss.

What remedies are available for fraudulent misrepresentation?

The representee may rescind the contract, claim damages in the tort of deceit, or do both, and may also refuse to perform and rely on the fraud as a defence.

WJEC A-Level Law 603-1978-1

Law Making in Wales and the UK

Topic overview Legal rules, sources of law and the rule of law Parliamentary sovereignty, the separation of powers and the Royal Prerogative The composition and role of Parliament The legislative process at Westminster The Senedd and law making in Wales The devolution settlement and the role of the Supreme Court Influences on law making and law reform

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Contract: Rules and TheoryContract

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Contract: Misrepresentation and DuressContract

Topic overview Actionable misrepresentation and the elements of a claim Fraudulent misrepresentation Negligent misrepresentation and the Misrepresentation Act 1967 Innocent misrepresentation, rescission and its bars Economic duress Duress to the person and undue influence distinguished Evaluating misrepresentation and duress

Contract: DischargeContract

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Contract: Misrepresentation and Duress

Fraudulent misrepresentation

3 things to know
A2 Units 3 and 4

Overview

Recall questions on the definition in Derry v Peek and why that claim failed, what recklessness means, the measure of damages in deceit, mitigation, and whether fraud can be excluded.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

What measure of damages did Doyle v Olby (Ironmongers) (1969) establish for deceit?

Key term

What did Smith New Court Securities v Scrimgeour Vickers (1997) confirm about damages for deceit?

Key term

Why does fraud attract a wider measure of damages than negligence?

Questions from this subtopic

Each one with the model answer underneath.

1
How was fraudulent misrepresentation defined in Derry v Peek (1889)?
Model answer
It is a false statement made knowingly, or without belief in its truth, or recklessly, careless whether it be true or false.
2
Why did the claim in Derry v Peek (1889) fail on the facts?
Model answer
The directors honestly believed that permission to use steam power would be granted as a formality, and because they were merely careless rather than dishonest their statement was not fraudulent.
3
What does recklessness mean in the definition of fraud?
Model answer
It means indifference to whether the statement is true or false, so a maker who simply does not care whether it is accurate is treated as dishonest even without knowing it is untrue.
4
Who bears the burden of proving fraudulent misrepresentation, and to what standard?
Model answer
The claimant must prove it, on the balance of probabilities, but because an allegation of dishonesty is serious the court requires cogent evidence before finding it established.
5
In which tort is an action for fraudulent misrepresentation brought?
Model answer
It is brought in the tort of deceit, which requires a false representation made dishonestly, intended to be acted on, and acted on to the claimant's loss.
6
What remedies are available for fraudulent misrepresentation?
Model answer
The representee may rescind the contract, claim damages in the tort of deceit, or do both, and may also refuse to perform and rely on the fraud as a defence.

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Law Making in Wales and the UK

Delegated Legislation

Statutory Interpretation

Judicial Precedent

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Roles v Nathan ( ).

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AThe defendant owed the victim a duty of care and breached it.

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