IBL Lecture 8 - Autumn 2009

Thestatementwasfalsethecompanyhadappliedtousesteam

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Unformatted text preview: /dishonestly/carelessly, See: Derry –v­ Peek (1889) 14 AC 337 Derry v Peek (1889) 14 AC 337 Derry Facts: Facts: The defendants were directors of a tramway company who issued a prospectus stating that the company was entitled to use steam or other mechanical power to run its trams. The statement was false. The company had applied to use steam and mechanical means, but had not yet received approval. Relying on that statement in the prospects, Sir Henry Peek purchased shares in the company. Later, the company was would up, partly because the consents to use steam and other mechanical means was not granted. Peek sued the directors for fraudulent misrepresentation. The directors argued that they honestly believed that obtaining the consents was a mere formality. Held: The court finds in favour of the directors on the basis that the director’s honest belief did not amount to a fraud. Innocent Misrepresentation Innocent A misstatement of a material fact, not known to be false, made by one party to another, which induces the other to enter into a contract. Can rescind the contract (damages only if the statement is a term of the contract). Negligent Misrepresentation Negligent Negligent misrepresentation is relatively new to the law of contract and has only existed since 1964 after the...
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This note was uploaded on 04/21/2012 for the course LAW 101 taught by Professor Hicks during the Three '12 term at University of Technology, Sydney.

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