This blog is about Misrepresentation. Whole books have been written on the subject, and this post is not intended to replace independent bespoke legal advice on your individual issue and so you should seek such advice.

What is a representation in contract law?

Representations are made all the time by sellers of goods and services. Not all of them are misrepresentations of course. A representation in negotiations or the marketing of goods and services is simply a statement of fact about the product, for example:

• The battery lasts 12 hours
• It is red
• It has a 2 Litre petrol engine and 4×4
• It is brand new

You get the idea.

Unfortunately, for various reasons (the law has three: fraudulent, negligent or innocent) sometimes the seller may misrepresent the facts about the goods or services. If you rely upon the statement in making your decision to purchase, and subsequently find out the statement to be false, then you may have a claim in misrepresentation.

There are therefore three core aspects which make up any potential misrepresentation:

1. There needs to be a statement of fact and not merely of opinion or expected sales patter.
2. Reliance – you need to have relied upon the statement as part of your decision to enter into the contract
3. Loss – you need to have suffered loss.

What is a Statement?

Staying silent will not be a misrepresentation (although note that Consumer Protection Regulations could also bite if you do not provide full information).

However, statements can be implied by the Courts. It can be implied by the conduct of the parties. A statement could be partly true and change in nature and could result in a misrepresentation. Ultimately, it is usually about being honest about what you are selling.

Reliance

To claim misrepresentation, you will need to demonstrate that you relied upon the statement made and it was that statement which made you enter the contract. In other words, you took the sellers word for it, but more than that it was something said which encouraged or pursuaded you to enter into the contract itself.

Loss

You need to have suffered some kind of loss. Usually, the absence of the thing promised is a loss in itself – I was told it was a 4×4 and it isn’t and so my loss is having paid for a 4×4 and not having a 4×4.

The Three Types of Misrepresentation

The Law provides for three types of representation:

1. Fraudulent Misrepresentation – where the seller knowingly makes a false statement
2. Negligent Misrepresentation – where the seller makes a false statement without checking it is true
3. Innocent Misrepresentation – where there is no fault or blame, but it just so turned out that the statement made is no longer true.

What are the remedies for misrepresentation?

Recission – this is in effect an unravelling of the contract, putting both parties in the position they were before the contract commenced. Practically, that could mean a full refund.

Damages – you can be awarded damages by a court in place of recission. Damages seek to put the claimant in the financial position they would have been had there not be a misrepresentation. As set out above, this loss could be the value in the non-4×4 vehicle compared to the price paid for the 4×4 version.

What is affirmation of a misrepresentation?

An affirmation is something said or done, such as acknowledging the misrepresentation and saying “it’s fine”.

Once affirmed, you are no longer able to claim misrepresentation. So it is important not to affirm a contract.

You can also affirm a contract by conduct, in particular by letting it carry on and be performed without saying anything.

Practical Steps for Misrepresentation Claims

If a statement made is important to you, then before you agree the contract, get the seller to confirm the statement to you in writing. This will be good evidence if you need to rely upon it, rather than ‘he said she said’.

As soon as you realise a statement is untrue, contact the seller and state what was said and what the truth is. Ideally put this in writing as well.

If the seller is not prepared to resolve the matter on a customer service basis, then you made need to consider a formal complaint, instructing a lawyer and considering mediation as a precursor to issuing a County Court Claim against the other party.

Steven Mather

The Right Lawyer for You and Your Business

Email: steven@stevenmather.co.uk
Call: 0116 3667 900