Fraudulent Misrepresentation CASES

In English law, fraudulent misrepresentation occurs when one party knowingly makes a false statement, or recklessly disregards its truth, inducing another party to enter into a contract.

Definition and Principles

A fraudulent misrepresentation involves intentional deception or reckless disregard for the truth, causing the misled party to rely on false statements to their detriment.

Essential Elements

  • False Statement: A deliberate or recklessly false assertion of fact.
  • Intent to Deceive: Knowledge of falsehood or reckless disregard for truth.
  • Reliance: The other party must rely upon the misrepresentation when contracting.

Remedies

  • Rescission: Cancelling the contract, restoring parties to original positions.
  • Damages: Compensation for losses directly caused by reliance on the fraudulent statement.

Practical Importance

Fraudulent misrepresentation doctrine ensures integrity and fairness in transactions, deterring intentional deceit in commercial dealings.

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Wilkinson v Downton [1897] EWHC 1

Mr Downton falsely told Mrs Wilkinson, as a practical joke, that her husband had been badly injured, causing her severe nervous shock and physical illness. The court held that a wilful act calculated to cause physical harm, and actually causing it, is actionable. Facts The defendant, in what he considered...

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East v Maurer [1990] EWCA Civ 6 (28 September 1990)

The plaintiffs purchased a hairdressing salon after the defendant falsely represented he would not work at his nearby competing salon. When business declined due to the defendant's continued local practice, the plaintiffs claimed damages for fraudulent misrepresentation. The Court of Appeal confirmed that loss of profits is recoverable in deceit...

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Cundy v Lindsay (1878) 3 App Cas 459

A rogue named Blenkarn fraudulently posed as the reputable firm 'Blenkiron & Co' to obtain handkerchiefs from Lindsay & Co, then sold them to innocent purchaser Cundy. The House of Lords held the contract void for mistake as to identity, meaning title never passed and Cundy had to return the...