Act of Parliament | |
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Long title | An Act to amend the law relating to innocent misrepresentations and to amend sections 11 and 35 of the Sale of Goods Act 1893. |
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Citation | 1967 c. 7 |
Territorial extent | England and Wales |
Dates | |
Royal assent | 22 March 1967 |
Commencement | 22 April 1967 |
Status: Amended | |
Text of statute as originally enacted | |
Revised text of statute as amended |
The Misrepresentation Act 1967 (c. 7) is a United Kingdom act of Parliament of the United Kingdom which amended the common law principles of misrepresentation. Prior to the Act, the common law deemed that there were two categories of misrepresentation: fraudulent and innocent. The effect of the act is primarily to create a new category by dividing innocent misrepresentation into two separate categories: negligent and "wholly" innocent; and it goes on to state the remedies in respect of each of the three categories.
Removal of certain bars to rescission for innocent misrepresentation.
Where a person has entered into a contract after a misrepresentation has been made to him, and—
- (a) the misrepresentation has become a term of the contract; or
- (b) the contract has been performed;
or both, then, if otherwise he would be entitled to rescind the contract without alleging fraud, he shall be so entitled, subject to the provisions of this Act, notwithstanding the matters mentioned in paragraphs (a) and (b) of this section.
Damages for misrepresentation. (1) Where a person has entered into a contract after a misrepresentation has been made to him by another party thereto and as a result thereof he has suffered loss, then, if the person making the misrepresentation would be liable to damages in respect thereof had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that the misrepresentation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up to the time the contract was made the facts represented were true.
Where a person has entered into a contract after a misrepresentation has been made to him otherwise than fraudulently, and he would be entitled, by reason of the misrepresentation, to rescind the contract, then, if it is claimed, in any proceedings arising out of the contract, that the contract ought to be or has been rescinded, the court or arbitrator may declare the contract subsisting and award damages in lieu of rescission, if of opinion that it would be equitable to do so, having regard to the nature of the misrepresentation and the loss that would be caused by it if the contract were upheld, as well as to the loss that rescission would cause to the other party.
Damages may be awarded against a person under subsection (2) of this section whether or not he is liable to damages under subsection (1) thereof, but where he is so liable any award under the said subsection (2) shall be taken into account in assessing his liability under the said subsection (1).
This section does not entitle a person to be paid damages in respect of a misrepresentation if the person has a right to redress under Part 4A of the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) in respect of the conduct constituting the misrepresentation. [commencement: October 1, 2014]
Subsection (4) does not prevent a debtor from bringing a claim under section 75(1) of the Consumer Credit Act 1974 against a creditor under a debtor-creditor-supplier agreement in a case where, but for subsection (4), the debtor would have a claim against the supplier in respect of a misrepresentation (and, where section 75 of that Act would otherwise apply, it accordingly applies as if the debtor had a claim against the supplier).” [commencement: October 1, 2014]
Avoidance of provision excluding liability for misrepresentation.
If a contract contains a term which would exclude or restrict— (a) any liability to which a party to a contract may be subject by reason of any misrepresentation made by him before the contract was made; or (b) any remedy available to another party to the contract by reason of such a misrepresentation,
that term shall be of no effect except in so far as it satisfies the requirement of reasonableness as stated in section 11(1) of the Unfair Contract Terms Act 1977; and it is for those claiming that the term satisfies that requirement to show that it does.
At common law, a misrepresentation is an untrue (or misleading) [1] statement of fact made by one party to another that induces the other to contract with him. The law of misrepresentation is a sui generis amalgam of the laws of contract, tort and unjust enrichment.
Although short and apparently succinct, the 1967 Act is widely regarded as being confusing and poorly drafted. [2] It was mildly amended by the Unfair Contract Terms Act 1977 and in 2012, but it escaped the attention of the consolidating Consumer Rights Act 2015.
The general position is that the Misrepresentation Act 1967 does not reach cases of misrepresentation by non-disclosure, [3] though this has been challenged.
The 1967 Act was introduced following the recommendations of the 10th Report of the Law Reform Committee. [4] [5]
A guarantee is a form of transaction in which one person, to obtain some trust, confidence or credit for another, agrees to be answerable for them. It may also designate a treaty through which claims, rights or possessions are secured. It is to be differentiated from the colloquial "personal guarantee" in that a guarantee is a legal concept which produces an economic effect. A personal guarantee, by contrast, is often used to refer to a promise made by an individual which is supported by, or assured through, the word of the individual. In the same way, a guarantee produces a legal effect wherein one party affirms the promise of another by promising to themselves pay if default occurs.
In common law jurisdictions, a misrepresentation is a false or misleading statement of fact made during negotiations by one party to another, the statement then inducing that other party to enter into a contract. The misled party may normally rescind the contract, and sometimes may be awarded damages as well.
In contract law, rescission is an equitable remedy which allows a contractual party to cancel the contract. Parties may rescind if they are the victims of a vitiating factor, such as misrepresentation, mistake, duress, or undue influence. Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract.
Heilbut, Symons & Co v Buckleton [1912] UKHL 2 is an English contract law case, given by the House of Lords on misrepresentation and contractual terms. It held that a non-fraudulent misrepresentation gave no right to damages. This was decided decades before Hedley Byrne v Heller, where damages for negligent misrepresentation were introduced in English law, and, thus, it would today be regarded as wrongly decided under the tort of negligent misrepresentation.
English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the Industrial Revolution, it shares a heritage with countries across the Commonwealth, from membership in the European Union, continuing membership in Unidroit, and to a lesser extent the United States. Any agreement that is enforceable in court is a contract. A contract is a voluntary obligation, contrasting to the duty to not violate others rights in tort or unjust enrichment. English law places a high value on ensuring people have truly consented to the deals that bind them in court, so long as they comply with statutory and human rights.
A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves the transfer of goods, services, money, or a promise to transfer any of those at a future date. The activities and intentions of the parties entering into a contract may be referred to as contracting. In the event of a breach of contract, the injured party may seek judicial remedies such as damages or equitable remedies such as specific performance or rescission. A binding agreement between actors in international law is known as a treaty.
Soden v British and Commonwealth Holdings plc [1998] AC 298 is a UK insolvency law case, decided in the House of Lords. It decided that damages for negligent misrepresentation inducing purchase of company shares are not "sums due" to shareholders for the purpose of the Insolvency Act 1986, s 74(2)(f), so that a claim for such damages is not subordinated to claims from other creditors.
Leaf v International Galleries [1950] 2 KB 86 is an English contract law case concerning misrepresentation, mistake and breach of contract, and the limits to the equitable remedy of rescission.
Royscot Trust Ltd v Rogerson[1991] EWCA Civ 12 is an English contract law case on misrepresentation. It examines the Misrepresentation Act 1967 and addresses the extent of damages available under s 2(1) for negligent misrepresentation.
Interpreting contracts in English law is an area of English contract law, which concerns how the courts decide what an agreement means. It is settled law that the process is based on the objective view of a reasonable person, given the context in which the contracting parties made their agreement. This approach marks a break with previous a more rigid modes of interpretation before the 1970s, where courts paid closer attention to the formal expression of the parties' intentions and took more of a literal view of what they had said.
Redgrave v Hurd (1881) 20 Ch D 1 is an English contract law case, concerning misrepresentation. It holds that a contract can be rescinded for innocent misrepresentation, even where the representee also had the chance to verify the false statement.
Whittington v Seale-Hayne (1900) 82 LT 49 is an English contract law case concerning misrepresentation. It holds that indemnities can be claimed under English law for any consequential costs of a contract not turning on an innocent misrepresentation.
Car and Universal Finance Co Ltd v Caldwell [1965] 1 QB 525 is an English contract law case concerning misrepresentation. It holds that an unequivocal act communicating the wish to rescind a contract can override third party rights. The communication does not need to go to the misrepresentor.
William Sindall plc v Cambridgeshire County Council [1993] EWCA Civ 14 is an English contract law case, concerning misrepresentation. It concerns the exercise of discretion under s 2(2) Misrepresentation Act 1967.
Government of Zanzibar v British Aerospace Ltd [2000] EWHC 221 (Comm) is an English contract law case, concerning misrepresentation.
Bankruptcy in Irish Law is a legal process, supervised by the High Court whereby the assets of a personal debtor are realised and distributed amongst his or her creditors in cases where the debtor is unable or unwilling to pay his debts.
South African contract law is "essentially a modernized version of the Roman-Dutch law of contract", and is rooted in canon and Roman laws. In the broadest definition, a contract is an agreement two or more parties enter into with the serious intention of creating a legal obligation. Contract law provides a legal framework within which persons can transact business and exchange resources, secure in the knowledge that the law will uphold their agreements and, if necessary, enforce them. The law of contract underpins private enterprise in South Africa and regulates it in the interest of fair dealing.
Civil procedure in South Africa is the formal rules and standards that courts follow in that country when adjudicating civil suits. The legal realm is divided broadly into substantive and procedural law. Substantive law is that law which defines the contents of rights and obligations between legal subjects; procedural law regulates how those rights and obligations are enforced. These rules govern how a lawsuit or case may be commenced, and what kind of service of process is required, along with the types of pleadings or statements of case, motions or applications, and orders allowed in civil cases, the timing and manner of depositions and discovery or disclosure, the conduct of trials, the process for judgment, various available remedies, and how the courts and clerks are to function.
Solle v Butcher [1950] 1 KB 671 is an English contract law case, concerning the right to have a contract declared voidable in equity. Denning LJ reaffirmed a class of "equitable mistakes" in his judgment, which enabled a claimant to avoid a contract. Denning LJ said,
... a contract will be set aside if the mistake of the one party has been induced by a material misrepresentation of the other, even though it was not fraudulent or fundamental; or if one party, knowing that the other is mistaken about the terms of an offer, or the identity of the person by whom it is made, lets him remain under his delusion and concludes a contract on the mistaken terms instead of pointing out the mistake.... A contract is also liable in equity to be set aside if the parties were under a common misapprehension either as to facts or as to their relative and respective rights, provided that the misapprehension was fundamental and that the party seeking to set it aside was not himself at fault.
In Bulgaria, the law of obligations is set out by the Obligations and Contracts Act (OCA). According to article 20a, OCA contracts shall have the force of law for the parties that conclude them.