Misrepresentation in British contract law: Kyle's Concert Hall case

Misrepresentation in a Contract

First, we must define misrepresentation and what it means under British law. Misrepresentation is a concept in contract law. This means a false statement presented as fact as made by one party to another party. This has the effect of fraudulently inducing the defrauded party into a contract. An example can be seen when under certain given circumstances, false promises or statements by a seller of goods with regard to the quality or nature of the product could constitute misrepresentation. When a finding of misrepresentation is rendered, this allows for remedy of rescission and possibly damages according to the type of misrepresentation involved.1 As we shall see, the case law provides great breadth for claims against misrepresentation in contracts and Kyle has a broad base for a claim.

Analysis

In such a situation, Kyle Jerome, would have a case. During negotiations, the Concert Hall manager, Liam, had told Kyle that the Concert Hall would hold 5,000 people and that it had good acoustics for all music types. However, the hall will actually only seat 4,000. The concerts sell out and turn away 1,000 ticket holders per night. Also, the acoustics are so bad that a large number of audience members demand their money back after the concert.

Misrepresentation Act of 1967

The Misrepresentation Act of 1967 allows a contract to be undone on grounds of misrepresentation. Both parties are then put back into the positions they had before their agreement was made. It is possible that the misrepresentation had been incorporated as a part of a new contract. The undermining of the deceptive contract allows for a claim for a loss in expectations. In such a case, the misrepresentee can sue for damages. The misrepresentee may also sue for losses that resulted from the reliance upon the misrepresentation. In addition to the Act, we will examine legal cases that frame the boundaries of the case law.

Edgington v Fitzmaurice (1885)-

In this case, the court held that a statement of present intentions can be counted as actionable misrepresentation. Additionally, the court held that a misrepresentation need not be the sole cause of entering a contract as long as it involved an influence. In this case, company directors sent shareholders a prospectus that invited subscriptions for some debenture bonds. It was claimed that the funds would be used to alter buildings, buy vans and horses and to expand the business into supplying fish as well. Unfortunately, the real purpose pf the sale was to pay off liabilities due to financial troubles the company was experiencing. Once he found this out, Edgington sought to recover money due to deceit.3

Pankhania v Hackney LBC [2002] is another important case in misrepresentation. The claimants bought property due to a representation that the current people on the property were contractual licensees and that their occupation of the property could be terminated by giving 3 months notice. In truth, the current occupant was a tenant protected under the Landlord and Tenant Act of 1954. The High court here held that the actions were based upon amisrepresentation of law and were therefor actionable. The claim of misrepresentation was therefore successful.4

Conclusion

To sum up, Kyle has a broad case for a claim, especially because deceit was afoot. Even if it was not intentional, the tort claim would surely be successful with little chance of failure.