1. Introduction
1.1. The purpose of this essay is to advice Dennis on whether the statements made by Ratner
were misrepresentation. And if they were in fact misrepresentation, what type of
misrepresentation were they and the possible remedies Dennis might be entitled to. In
doing so, few issues are required to be dealt with.
1.1.1. The first issue is whether the representation could amount to an actionable
misrepresentation; if yes
1.1.2. Then it is required to identify the type of misrepresentation; and
1.1.3. Lastly the possible remedies which Dennis might be entitled to.
2. In dealing with the first issue on whether the representation made by Ratner could amount to
an actionable misrepresentation.
2.1. Misrepresentation is a false statement of fact made by the representor to the representee
which induces the representee to enter into the contract. the effect of an actionable
misrepresentation makes the contract voidable, giving the innocent party the right to
rescind the contract and/ or claim damages. In establishing an actionable
misrepresentation, three elements must be proven:
2.1.1. The representation must be an untrue statement of fact;
2.1.2. The representation must be induced the representee to enter into the contract; and
2.1.3. The representation must be relied by the representee.
2.2. In dealing with the first element of untrue statement of fact, the case of Bisset v
Wilkinson provides that there must be a false statement of fact or law, the statement
must not be of an opinion or estimation of future events. However in Smith v Land and
House Property Corp an exception was provided for the general rule which states that a
, statement of opinion can be regarded as statement of facts if it contradicts with other
facts already known by the representor. In addition, the case of Esso Petroleum v
Mardon too provides for the exception for the general which states that statement made
as to estimation of future could amount to misrepresentation if the representor had
knowledge and expertise. In addition, in terms of the factor of silence, the general rule of
silence is that it does not amount to misrepresentation this rule was made clear in Smith
v Hughes. However the case of With v O’ Flanagan an exception was provided which
states that statements which later become false due to later changes of circumstances can
amount to misrepresentation if the representor had failed his obligation to disclose the
change of circumstances.
2.2.1. On the facts, two statements were made. In relation to the first statement which
Ratner stated that the firm has made a hefty profit of 35000 pounds, while in fact the
firm’s net annual profit had never exceeded 10000 pounds, therefore the first
statement made by Ratner was an untrue statement of fact. In addition, as a director
of the firm, Ratner would have known about the false nature of the statement while
he stated that the firm has made a profit of 35000 pounds.
2.2.2. In relation to the second statement which Ratner foresees that the firm has great
potential for future expansion in the locality, which later became untrue due to the
failure to disclose that the fact that a third party competitor had opened up in the
vicinity of Ratner and Co. This statement is a statement of estimation of future
which according to the general rule, it will not amount to misrepresentation.
However Ratner, as a director of the frim, it is assumed that he had the expertise and
has made proper considerations on all relevant circumstances before making the
1.1. The purpose of this essay is to advice Dennis on whether the statements made by Ratner
were misrepresentation. And if they were in fact misrepresentation, what type of
misrepresentation were they and the possible remedies Dennis might be entitled to. In
doing so, few issues are required to be dealt with.
1.1.1. The first issue is whether the representation could amount to an actionable
misrepresentation; if yes
1.1.2. Then it is required to identify the type of misrepresentation; and
1.1.3. Lastly the possible remedies which Dennis might be entitled to.
2. In dealing with the first issue on whether the representation made by Ratner could amount to
an actionable misrepresentation.
2.1. Misrepresentation is a false statement of fact made by the representor to the representee
which induces the representee to enter into the contract. the effect of an actionable
misrepresentation makes the contract voidable, giving the innocent party the right to
rescind the contract and/ or claim damages. In establishing an actionable
misrepresentation, three elements must be proven:
2.1.1. The representation must be an untrue statement of fact;
2.1.2. The representation must be induced the representee to enter into the contract; and
2.1.3. The representation must be relied by the representee.
2.2. In dealing with the first element of untrue statement of fact, the case of Bisset v
Wilkinson provides that there must be a false statement of fact or law, the statement
must not be of an opinion or estimation of future events. However in Smith v Land and
House Property Corp an exception was provided for the general rule which states that a
, statement of opinion can be regarded as statement of facts if it contradicts with other
facts already known by the representor. In addition, the case of Esso Petroleum v
Mardon too provides for the exception for the general which states that statement made
as to estimation of future could amount to misrepresentation if the representor had
knowledge and expertise. In addition, in terms of the factor of silence, the general rule of
silence is that it does not amount to misrepresentation this rule was made clear in Smith
v Hughes. However the case of With v O’ Flanagan an exception was provided which
states that statements which later become false due to later changes of circumstances can
amount to misrepresentation if the representor had failed his obligation to disclose the
change of circumstances.
2.2.1. On the facts, two statements were made. In relation to the first statement which
Ratner stated that the firm has made a hefty profit of 35000 pounds, while in fact the
firm’s net annual profit had never exceeded 10000 pounds, therefore the first
statement made by Ratner was an untrue statement of fact. In addition, as a director
of the firm, Ratner would have known about the false nature of the statement while
he stated that the firm has made a profit of 35000 pounds.
2.2.2. In relation to the second statement which Ratner foresees that the firm has great
potential for future expansion in the locality, which later became untrue due to the
failure to disclose that the fact that a third party competitor had opened up in the
vicinity of Ratner and Co. This statement is a statement of estimation of future
which according to the general rule, it will not amount to misrepresentation.
However Ratner, as a director of the frim, it is assumed that he had the expertise and
has made proper considerations on all relevant circumstances before making the
