The Misrepresentation Law - Essay Example

An advice to Peter and Anna in reference to the misrepresentation law Introduction Misrepresentation refers toa false statement of law or fact with the aim of inducing a person to enter a contract. When the statement made at the initial stages of negotiations turns out to be untrue, the aspect of misrepresentation is hence evident. There are three different types of misrepresentation. They include the fraudulent misrepresentation, negligent misrepresentation and innocent misrepresentation. The effect of finding out the misrepresentation aspect is because the contract is voidable. It simply means that the claimant can set aside the contract (Cartwright 2002, p.34). The available remedy depends on the misrepresentation. The remedies mainly entail either rescission or payment or both of the losses incurred by the claimant as a result of misrepresentation. The right of rescinding the contract may, however, get lost in some instances. The law dealing with misrepresentation is found mainly in the common law with misrepresentation Act of 1967. Peter and Anna have entered in a contract with Neil and misrepresentation aspect is revealed. The document analyzes the possible measures that Peter and Anna can take to make sure that justice on their side gets served (Stone 2009, p.54).  Discussion The misrepresentation act got developed to protect consumers from fraudulent or false claims that induce an individual into entering into a contract or buying something. It also gives a person who finds himself in such a situation to claim the damages or losses incurred in case of fraudulent misrepresentation. The misrepresentation law is a common law and statute’s amalgam. Fraudulent misrepresentation is one of the available misrepresentations. It incorporates any presentation that turns out to be untrue while the presenter gave the lie either knowingly, without its truth’s belief as well as just carelessly/recklessly. The plaintiff in return suffered some damages as a result of this presentation that was made by this presenter (Poole 2012, p.45).  The negligent misrepresentation, on the other hand, enables the claimant to claim against the defendant on the representation that the defendant had made. The claimant has to show that the negligent misstatement of the defendant had caused the claimant to incur some losses. The last misrepresentation is the innocent misrepresentation. It refers to a situation whereby a person may manage to offer reasonable grounds for believing that the defendant’s false statement was true. The innocent misrepresentation makes use of the following basic elements. The person must make a false representation and the misrepresentation must be the material to that transaction. The other person must, however, have relied on the lie and in return has suffered some losses. The loss then must have benefited the defendant (Cartwright 2002, p.36). Peter and Anna had incurred some losses as a result of the representation made by Neil. They have received obstructions from the noises and constant arguments made by their neighbors while Neil had assured them when they were making negotiations with Neil that the neighbors were always quit and they would barely recognize their neighbor’s presence. The fact, however, turns out to be untrue. Neil also lied to them that he had just installed a new gas heating system that was safe as well as efficient. However, this was untrue and Peter and Anna there was no new gas heating system while the system that was in existence was dangerous and required replacement. The replacement was at a cost of £6,000. Peter and Anna also incurred a loss of £600 since they had to move for a week to a hotel as the replacement of the heating system was taking place (Poole 2012, p.46). Finally, Neil had also lied that there was no further development in that area was to take place. It also happened to be untrue since while in the hotel the local authority granted permission of transformation of one house in that region into a public house. The fact hence disapproves Neil’s statement that there is no development meant to take place in that region. These three statements made by Neil are all misrepresentations. All the three misrepresentation are inclusive in the fraudulent misrepresentation. It is because two of them the issue of their neighbors and the region’s development shows either Neil did not know or he just said it recklessly. These two possibilities of causing this misrepresentation have their representation in the fraudulent misrepresentation. However, Neil gave false information of having installed new central gas heating system knowingly (Stone 2009, p.56). Peter and Anna had the right to claim compensation of the damage and the losses incurred. According to misrepresentation Act 1967, where a person had entered into any given contract and a misrepresentation got made to him or her and eventually he or she suffered a loss, a person who made that misrepresentation will be liable of the damages incurred by the representee. Any misrepresentation made fraudulently, the person who made the misrepresentation shall be very liable notwithstanding that the misrepresentation got made without an intention of making it fraud. On the other hand, any person who enters into a contract after a misrepresentation had been done to him of other forms other than a fraudulent misrepresentation he would get entitled to rescind the contract by reason of misrepresentation (MacIntyre 2007, p96).  If the contract may hence get claimed in the proceedings that the contract ought to be or got rescinded the arbitrator or court can declare the contract as subsisting and, therefore, award damages in rescission’ lieu. However, the arbitrators have to base their opinion concerning its equitability by regarding the misrepresentation’s nature and the possible loss that can get incurred in case of the upheld of the contract. The loss that the rescission would cause to the people receiving the presentation is also put into consideration. The case of Peter and Anna lies on the first cluster and since it was fraudulent misrepresentation they should sue Neil on court. It will enable them to be paid the incurred losses as per the misrepresentation act 1967 (Daniels 2000, p.124). There are available remedies stated in the misrepresentation act 1967 related to misrepresentation cases. The first possible remedy for misrepresentation is that the person, to which the misrepresentation got made to, may rescind the contract. It simply means that the contract may get taken back as if it has never existed. The misrepresentee can also receive compensation that would return him back to the initial position if the contract did not take place. Rescission differs from contract termination in that the breaching of the contract entails the cancellation of the contract’s future performance. In that, it just extinguishes the contract prospectively (Cartwright 2012, p.78). The rescission enables the claimant have a remedy of recovering all the enrichment that the defendant had received under that particular contract. The claimant may also possess a tort claim for all the losses that had arisen in the course of the contract. The rescission remedy is only available for the negligent and fraud misrepresentations as of right. On the innocent misrepresentation, however, the court offers discretion to award damages rather than the rescission if undue hardship to the defendant would result. The misinterpretee does not necessarily have to exercise the right of rescinding the contract and have it declared void. A contract is voidable always and it exists until the void option gets exercised. A person’s wish to rescind is clear and it will be effective with or without the consent of the person who misrepresented (McKendrick 2012, p.59).  If rescission gets claimed, it is impossible to claim damages expectation as if the contract was to get performed. Either rescission or damages that get claimed if the contract was still in force but for both would be inconsistent. Peter and Anna have a right to sue Neil since he has an offence of misrepresentation. He gave them untrue information partly knowingly and partly due to recklessness of lack of enough research concerning the validity of the information given. His misrepresentation is hence fraudulent misrepresentation class. His untrue information was just to entice Peter and Anna to enter in his contract. Eventually, they have received disturbances from their neighbors who were not their expectation (McDermott 2006, p.180).  They also incurred financial loss when they were forced to install a central heating system which Neil had cheated them to have already installed. They also incurred some financial losses when the relocated to a hotel as they wait the central gas heating system to get installed. Peter and Anna should sue Neil on court who will be guilty of misrepresentation under misrepresentation act 1967 of the common law. They should, will have a choice to choose from of either claiming damage or claim their contract’s rescission. Due to the aspect of the noises from the neighbors and the uncertainty of the house’s conversion to a public house, the contracts rescission is the best alternative (MacIntyre 2008, p.234).  Conclusion Peter and Anna had gotten into a misrepresentation contract. The condition of their contract, however, favors them to claim compensations fro Neil having given untrue information to them which contributed to the loss they incurred. The misrepresentation law will hence favor them in case they sue Neil and if they wish their contract rescinded, their wish will be granted and they will also receive the compensation of the incurred loss. References List Cartwright, J. (2002). Misrepresentation. London, Sweet & Maxwell. Pp.34-36 Cartwright, J. (2012). Misrepresentation, mistake and non-disclosure. London, Sweet and Maxwell. Pp.78 Daniels College of Business, Legal Studies. (2000). Business ethics. Needham Heights, Mass, Pearson Custom Pub. Pp.124 McKendrick, E. (2012). Contract law: Text, cases, and materials. Oxford, U.K, Oxford University Press. Pp.59 McDermott, P. A. (2006). Contract law. Haywards Heath, West Sussex [u.a., Tottel Publ. pp.180 MacIntyre, E. (2008). Business law. Harlow, England, Pearson Longman. Pp.234 MacIntyre, E. (2007). Essentials of business law. Harlow: Pearson Education. Pp.96 Poole, J. (2012). Textbook on contract law. Oxford, Oxford University Press. Pp.45-46 Stone, R. (2009). The modern law of contract. London, Routledge-Cavendish. Pp.54-56 Read More