Question on Misrepresentation - Contract Law PDF

Preview

Summary

Harriet is a trainee jockey. After a bad fall, she decides to sell her racehorse, Jacob. Kirstie offers to buy Jacob for her son, Nathan, who is learning to ride. Harriet reassures her that Jacob is a very mild horse which is calm in all situations and a good horse for learning to ride. She forgets ...

Description

Harriet is a trainee jockey. After a bad fall, she decides to sell her racehorse, Jacob. Kirstie offers to buy Jacob for her son, Nathan, who is learning to ride. Harriet reassures her that Jacob is a very mild horse which is calm in all situations and a good horse for learning to ride. She forgets to mention an incident when Jacob was frightened by a skateboard, as it occurred many years earlier. She also tells Kirstie that Jacob has an excellent parentage – its father was the famous horse, Moomin – and therefore worth £10,000. Kirstie agrees to buy Jacob for £5,000. Two days later, Nathan is thrown off Jacob when the horse rears up on seeing a child on a skateboard. Nathan is severely injured and Kirstie is faced with enormous medical bills. Kirstie has now also found out that Jacob was actually fathered by Troll and worth only £1,000. Advise Kirstie of any remedies she may have against Harriet.

Answers 







 

This question required candidates to analyse the given fact pattern, isolate the issues to be resolved and apply the relevant cases and legislation to resolve these issues and to advise Kirstie of any remedies she may have against Harriet. The basic problems presented by these facts are the effect of Harriet’s statements regarding Jacob. These are (a) that he is a mild horse and (b) that he was fathered by Moomin. The first issue presented is whether Harriet’s statements are representations or warranties. Candidates need to consider the relevant case law to decide this; on balance it is likely that the statements are, if anything, representations. This gives rise to the issue of whether they are actionable as misrepresentations. To determine this, candidates need to consider and apply those criteria established in the case law as to when a representation is actionable as a misrepresentation. There are difficulties in establishing each of these statements as a representation. Was it, for example, really a false statement to state that Jacob was a mild horse if his only display of excitable behaviour occurred once, years earlier, when he saw a skateboard? Did the statement that Jacob was fathered by Moomin really induce Kirstie to contract with Harriet? Many candidates wrote all they knew about misrepresentation here. This is not recommended because it generally prevented them from considering the allimportant issues of the remedies available to Kirstie and often led them to set out matters that were not necessary to discuss and were incorrectly referred to (for example, that there can be no misrepresentation of law – yet the decision in Pankhania v The London Borough of Hackney [2002] and its implications are specifically discussed on the VLE). If either, or both, statements are actionable misrepresentations, what type of misrepresentation can be established? This is important as it will determine the type of relief available. Kirstie can seek a rescission of the contract, although possible bars to rescission should be considered. She will, however, likely wish to seek damages for, among other things, the cost of Nathan’s care. Damages can be awarded for a negligent misstatement, a fraudulent statement or a statement actionable under s.2 (1) of the Misrepresentation Act 1967. Candidates need to consider what elements were required to prove each of these and which form of misrepresentation is preferable. It would appear that s.2(1) of the Misrepresentation Act is the most preferable claim for Kirstie to make because of the shifting burden of proof and because damages under the subsection are awarded as if for the tort of deceit following the decision in Royscot v Rogerson.

1

2...