Law of Contracts Lecture: Misrepresentation

Introduction

• Focus on the methods of ending contracts, specifically misrepresentation.
• Discussion includes basic terminology and case law.

Key Concepts

Void vs Voidable Contracts

• Void Contract:
  • Treated as if it never existed.
  • No legal effect from inception.
• Voidable Contract:
  • Can be voided at the discretion of an aggrieved party due to foul play.
  • Can choose to continue the contract with remedies for breach, instead of voiding.

Misrepresentation

Definitions

• Misrepresentation: False or misleading statements made before contract conclusion.
• Actionable Misrepresentation: Misleading statements that induce the other party to enter the contract.

Requirements for Actionable Misrepresentation

1. Statement of Material Fact: Must be relevant and significant to the contract.
2. False or Misleading: The statement must be incorrect or deceptive.
3. Inducement to Contract: The statement must lead the other party to enter the contract.

Case Law: Bisset v. Wilkinson (1927)

Case Summary

• Concerned whether a statement of opinion could be a statement of material fact.
• Claimant: Landowner; Defendant: Buyer for sheep farming.
• Claimant suggested land could support 2,000 sheep.
• Defendant refused payment arguing misrepresentation.

Court's Decision

• Held no misrepresentation occurred.
• Land was never used for sheep farming; thus, no factual basis for claimant's statement.
• Statement considered an opinion, not a material fact.
• Opinionated statements are not actionable misrepresentations.

Conclusion

• Distinction between opinions and facts is crucial for misrepresentation claims.
• Misrepresentation claims require careful analysis of statements and their bases.