Tort of deceit CASES
In English law, the tort of deceit involves deliberately making false statements or misrepresentations, causing another party to suffer loss by relying on these falsehoods.
Definition and Principles
Deceit requires intentional or reckless false statements, reliance by the claimant on these statements, and resulting financial harm. Unlike negligence, deceit specifically involves deliberate dishonesty.
Essential Elements
- False Representation: Knowingly or recklessly made untrue statements.
- Intent to Deceive: The intention to mislead or recklessness regarding truth.
- Reliance: Claimant must have reasonably relied upon the false statement.
- Resulting Loss: Claimant must suffer actual financial harm or loss.
Remedies
Victims of deceit typically recover damages aiming to restore their financial position had the deceitful representation not been made, including consequential losses.
Practical Importance
The tort of deceit deters intentional dishonesty, promoting transparency and integrity in commercial dealings.
Home » Tort of deceit
A car dealer misrepresented a customer's deposit to a finance company. The customer defaulted. The court held the dealer was liable for all losses directly flowing from the misrepresentation, applying the tort of deceit measure of damages under the Misrepresentation Act 1967. Facts A customer, Mr Rogerson (the first defendant), wished to buy a car on hire-purchase from a car dealer (the second defendant). The total price was £7,600. The finance company, Royscot Trust Ltd (the plaintiff), had a policy requiring a minimum 20% deposit from the customer to approve finance. Mr Rogerson could only provide a £1,200 deposit, which
The seller of a hair salon fraudulently stated he would not work in a nearby rival salon. The buyers suffered losses after he did so. The Court held that damages for deceit could include the profits the buyers might have made had they bought a different, non-fraudulent business instead. Facts The plaintiffs, Mr and Mrs East, purchased one of two hairdressing salons owned by the defendant, Mr Maurer, for £20,000. During negotiations, the defendant fraudulently represented that he had no intention of working in his other salon in the same town and that he intended to move abroad. The plaintiffs
A buyer was induced to purchase a business by fraudulent misrepresentation. He suffered greater losses than anticipated. The court held that in cases of fraud, the plaintiff is entitled to recover all direct losses, even if unforeseeable, not just the contract-based measure. Facts Mr Doyle, the plaintiff, purchased an ironmonger’s business from the defendants, Olby (Ironmongers) Ltd, for £4,500, plus £5,000 for the stock. He was induced to make the purchase by a fraudulent misrepresentation from the company’s director that the business’s trade was ‘all over the counter’. In fact, a substantial portion of the trade came from a travelling
Company directors issued a prospectus stating they had the right to use steam power, honestly believing consent was a formality. This proved false. The House of Lords held that for an action in deceit, fraudulent intent must be proven, not mere carelessness. Facts The directors of the Plymouth, Devonport and District Tramways Company issued a prospectus to attract public investment. The prospectus stated that under its special Act, the company had the right to use steam or mechanical power for its trams, which would be a significant advantage over competitors using horse-drawn trams. In reality, the Act stipulated that the
