1. MISREPRESENTATION (I)
1. OVERALL SUMMARY/ EXAMINATION OUTLINE
1. Is there a misrepresentation? False
statement of fact?
Note: Don’t overcomplicate things in
this step
2. Reliance on it by the Plaintiff – Would
a reasonable person have relied on
the statement?
3. Remedies – Type of
Misrepresentation
4. Remedies – Rescission (Any bars to
rescission? Restitutio in integrum,
affirmation, lapse of time…)
5. Damages
Tips for doing well:
v Avoid being too short and too descriptive
regarding remedies
v Because remedies come at the end of the
answer it is common for this part of the
answer to be the shortest! Make sure you
give at least equal treatment to remedies
as for discussion of existence of
misrepresentation
v Answers on remedies tend to be too
descriptive with insufficient applications
on the facts – make a real effort to apply
the law to the fact.
Common Faults:
v Poor application.
v Overcomplicated discussion as to whether
there was a misrepresentation
v Rescission – either not discussed or a
statement it would be granted because of
lapse of time
Chloe T 1
, 2. DETERMINING MISREPRESENTATION
An actionable misrepresentation is a statement of material fact made prior to the contract by one party to the contract
to the other which is false or misleading and which induced the other party to enter into the contract.
In deciding this, the test is objective – the issue is not what the Plaintiff thought the statement meant, but what a
reasonable person in his position would have though the statement to have meant.
Yang Dan Dan v Hong Kong Resort (2016)
Facts The plaintiff bought a flat on the top floor of a building which was described as ‘high rise’, and behind a
block of flats (which were developing) described as ‘mid-rise’. According to her, a reasonable person would
have interpreted this as meaning that she would have an unobstructed sea view, as a ‘mid-rise’ building in
front of her ‘high-rise’ building would be shorter in height. Hence, the brochure with the statement
contained describing the height of the building constitutes a misrepresentation.
Issue Whether a reasonable person in the position of the plaintiff would have interpreted the brochure
statements as she did
Held There was no misrepresentation
Reason The plaintiff was an intelligent woman with a PHD, and a reasonable person in the same position would not
have taken the statement to mean that the sea view would not be obstructed. There was also no precise
meaning of high-rise and mid-rise, and whether they would block the view will be dependent upon the
position of the building.
Furthermore, puffs are not misrepresentations – statements that a reasonable person would not consider to produce
any legal consequences.
Chan Yeuk Yu v Church Body of Hong Kong Sheng Kung Hui
Facts Purchasers of a luxury apartment made a claim for misrepresentation because a spiral staircase inside the
apartment did not meet their expectations. The advertising brochure for the building enticed buyers with
the phrase ‘regal surroundings for the select few’.
Held Claim dismissed. “taken in its context, namely, on p4 of aa 27-page glossy and colourful sales brochure, I find
Reason it difficult to conclude that it is any more than a ‘mere puff’ or ‘sales pitch’ … it is vague promotional language”
2.1 STATEMENT OF INTENTION
A mere statement of intention is not a misrepresentation, but if you falsely state what your intention is (i.e. what you are
really thinking), this can be a misrepresentation.
Edgington v Fitzmaurice (1885)
Facts The directors of a business provided a prospectus which contained a range of debentures, in order to invite
subscriptions. The directors stated that the debentures were in order to enable the business to complete
alterations to the buildings of the company, to develop trade and to purchase vans and horses. However, it
was later discovered that the real reason for issuing the debentures was for the directors to pay off other
liabilities. The plaintiff forwarded money for the debentures that had been offered having relied upon the
statements contained in the prospectus. However, he also was mistaken as he thought the debenture was
to provide him a charge on the company’s property. The company later became insolvent and the plaintiff
claimed for the money he believed he was owed.
Issue The issue for the court was whether the statement that was made by the directors of the company would
qualify as a false misrepresentation.
If this was established by the court, it also had to be considered whether the reliance of the plaintiff on the
statement would enable him to claim for the money, despite the fact that the plaintiff had also erroneously
relied on the prospectus.
Held The court held that the misstatement of the reasoning behind issuing the debentures was a material
misstatement of fact and that the plaintiff had been influenced by this statement. On this basis, the directors
were found liable for an action of deceit, despite the fact that the plaintiff had also been influenced by his
own mistake regarding the debentures.
Reason Bowen LJ: “There must be a misstatement of existing fact: but the state of a man’s mind is as much a fact as
the state of his digestion. It is true that it is very difficult to prove what the state of a man’s mind at a particular
time is, but, if it can be ascertained, it is as much a fact as anything else. A misrepresentation as to the state
of a man’s mind is, therefore, a misstatement of fact.”
Chloe T 2
1. OVERALL SUMMARY/ EXAMINATION OUTLINE
1. Is there a misrepresentation? False
statement of fact?
Note: Don’t overcomplicate things in
this step
2. Reliance on it by the Plaintiff – Would
a reasonable person have relied on
the statement?
3. Remedies – Type of
Misrepresentation
4. Remedies – Rescission (Any bars to
rescission? Restitutio in integrum,
affirmation, lapse of time…)
5. Damages
Tips for doing well:
v Avoid being too short and too descriptive
regarding remedies
v Because remedies come at the end of the
answer it is common for this part of the
answer to be the shortest! Make sure you
give at least equal treatment to remedies
as for discussion of existence of
misrepresentation
v Answers on remedies tend to be too
descriptive with insufficient applications
on the facts – make a real effort to apply
the law to the fact.
Common Faults:
v Poor application.
v Overcomplicated discussion as to whether
there was a misrepresentation
v Rescission – either not discussed or a
statement it would be granted because of
lapse of time
Chloe T 1
, 2. DETERMINING MISREPRESENTATION
An actionable misrepresentation is a statement of material fact made prior to the contract by one party to the contract
to the other which is false or misleading and which induced the other party to enter into the contract.
In deciding this, the test is objective – the issue is not what the Plaintiff thought the statement meant, but what a
reasonable person in his position would have though the statement to have meant.
Yang Dan Dan v Hong Kong Resort (2016)
Facts The plaintiff bought a flat on the top floor of a building which was described as ‘high rise’, and behind a
block of flats (which were developing) described as ‘mid-rise’. According to her, a reasonable person would
have interpreted this as meaning that she would have an unobstructed sea view, as a ‘mid-rise’ building in
front of her ‘high-rise’ building would be shorter in height. Hence, the brochure with the statement
contained describing the height of the building constitutes a misrepresentation.
Issue Whether a reasonable person in the position of the plaintiff would have interpreted the brochure
statements as she did
Held There was no misrepresentation
Reason The plaintiff was an intelligent woman with a PHD, and a reasonable person in the same position would not
have taken the statement to mean that the sea view would not be obstructed. There was also no precise
meaning of high-rise and mid-rise, and whether they would block the view will be dependent upon the
position of the building.
Furthermore, puffs are not misrepresentations – statements that a reasonable person would not consider to produce
any legal consequences.
Chan Yeuk Yu v Church Body of Hong Kong Sheng Kung Hui
Facts Purchasers of a luxury apartment made a claim for misrepresentation because a spiral staircase inside the
apartment did not meet their expectations. The advertising brochure for the building enticed buyers with
the phrase ‘regal surroundings for the select few’.
Held Claim dismissed. “taken in its context, namely, on p4 of aa 27-page glossy and colourful sales brochure, I find
Reason it difficult to conclude that it is any more than a ‘mere puff’ or ‘sales pitch’ … it is vague promotional language”
2.1 STATEMENT OF INTENTION
A mere statement of intention is not a misrepresentation, but if you falsely state what your intention is (i.e. what you are
really thinking), this can be a misrepresentation.
Edgington v Fitzmaurice (1885)
Facts The directors of a business provided a prospectus which contained a range of debentures, in order to invite
subscriptions. The directors stated that the debentures were in order to enable the business to complete
alterations to the buildings of the company, to develop trade and to purchase vans and horses. However, it
was later discovered that the real reason for issuing the debentures was for the directors to pay off other
liabilities. The plaintiff forwarded money for the debentures that had been offered having relied upon the
statements contained in the prospectus. However, he also was mistaken as he thought the debenture was
to provide him a charge on the company’s property. The company later became insolvent and the plaintiff
claimed for the money he believed he was owed.
Issue The issue for the court was whether the statement that was made by the directors of the company would
qualify as a false misrepresentation.
If this was established by the court, it also had to be considered whether the reliance of the plaintiff on the
statement would enable him to claim for the money, despite the fact that the plaintiff had also erroneously
relied on the prospectus.
Held The court held that the misstatement of the reasoning behind issuing the debentures was a material
misstatement of fact and that the plaintiff had been influenced by this statement. On this basis, the directors
were found liable for an action of deceit, despite the fact that the plaintiff had also been influenced by his
own mistake regarding the debentures.
Reason Bowen LJ: “There must be a misstatement of existing fact: but the state of a man’s mind is as much a fact as
the state of his digestion. It is true that it is very difficult to prove what the state of a man’s mind at a particular
time is, but, if it can be ascertained, it is as much a fact as anything else. A misrepresentation as to the state
of a man’s mind is, therefore, a misstatement of fact.”
Chloe T 2
