Unformatted text preview: have make mistake as to the recording of the content. CM20278 Regulatory Framework 15 Business 2011 - 2012
for Effect of Mistake Common law contract is void 'ab initio' i.e. from the beginning Equity rescission of the contract, compensation following affirmation of the contract (be brief for our purpose) CM20278 Regulatory Framework 16 Business 2011 - 2012
for 2. Misrepresentation A false representation of fact made orally, in writing or by conduct (Shum Kong & Others v Chui Ting Lin & Others). The purpose of the misrepresentation is to induce the person to whom the statement is being made to enterinto the contact (Peekay Intermark Limited, Harish Pawani v Australia and New Zealand Banking Group Limited (2005) EWHC 830 (Comm)) CM20278 Regulatory Framework 17 Business 2011 - 2012
for To prove misrepresentation, the following must be proved:
i) There was a representation of fact. This requires the representation relates to something that its truthfulness can be determined at the time when the statement is made, e.g. describing a flat size as 1900 square feet when it is only actually 1100 square feet. The purchaser would be able to rescind the contract because in deciding whether to buy the flat he has relied on the seller's false statement 1900 square feet, fact that can be determined at the time the statement is made. CM20278 Regulatory Framework 18 Business 2011 - 2012
for Note: Statements of future fact: these are not representations of an existing fact, e.g. a statement as to the state of the property a market in the future is mere speculation because its truthfulness cannot be determined at the time it is made. CM20278 Regulatory Framework 19 Business 2011 - 2012
for Statements of intention of future conduct. These are not representations of an existing fact if the person making the statement honestly believed what they were saying. However, a statement or promise will be a representation of an existing fact where there is no intention of doing what was represented. The underlying rationale is that although future conduct cannot be wholly control by you, you can control your intention and your intention can be determined at the time the statement is made. CM20278 Regulatory Framework 20 Business 2011 - 2012
for Statements of opinion this is not a statement of fact if the person making the statement honestly held the opinion (Bisset v Wilkinson). The underlying rationale is the same as the previous one.
A person who makes the opinion without any belief in it commits a fraud and the contract can be rescinded and damages claimed. CM20278 Regulatory Framework 21 Business 2011 - 2012
for Statement of law someone making a false statement about the law is not misrepresentation. This is because everyone is supposed to know the law. However, if a person makes a statement about the law knowing it to be untrue then the contract can be rescinded and damages claimed. For this one, the underlying rationale is also the same as the previous one. CM20278 Regulatory Framework 22 Business 2011 - 2012
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This note was uploaded on 04/01/2013 for the course ACCOUNTANC CM20249 taught by Professor Ta during the Spring '13 term at City University of Hong Kong.
- Spring '13