Type of Misrepresentation

If the statement maker has a reasonable grounds to believe that the facts he presented was true, what type of misrepresentation is present?

What Act introduced the law on negligent misrepresentation?

What type of misrepresentation is made knowingly or without belief in its truth, or recklessly, careless whether it be true or false?

A company decides to sponsor a pop group's world tour in August. In march of the same year, the pop group, with all five group members, participate in promotional activities for a company's product in respect of a forthcoming tour. All members of the pop group know that the fifth member of the group is pregnant and probably not planning to participate in the tour but they say nothing. In June, the company discovers that the fifth member of the group will not be on the tour, and as a result the company decides not to pay the sponsorship fee and wishes to get out of the contract.

What type of misrepresentation is there likely to be here?

• Fraudulent Misrepresentation

• Negligent Misrepresentation

• Innocent Misrepresentation

Answer explanation

In taking part in the promotional activities, the members have undertaken an action which amounts to a misrepresentation. As the members did not have a reasonable ground to believe that the pregnant member of the group would participate in the tour, there representation cannot be innocent. It is however unlikely to hit the high standard of Fraudulent Misrepresentation as the members were not deliberately dishonest. The representation would therefore be negligent - see Spice Girls v Aprilla

A Woman runs an art gallery. A man who is an art dealer enters the art gallery and admires a painting. The woman tells the man that the painting is by a famous artist because the woman wants to sell the painting for a very high price. In fact, the painting was created by the woman’s baby daughter. The man takes a photograph of the painting ans asks an art expert to confirm whether it is by the famous artist. The expert confirms that, in his view, the painting is by the famous artist. The man buys the painting and later finds out the truth.

Is there an actionable misrepresentation here?

• No, because making his own investigations will undermine the man’s argument that he relied on the representation

• Yes, because the woman was dishonest and so the man’s investigations do not undermine his ability to claim

• Yes provided the man can show that he relied to some degree on the woman’s statement about the famous artist

Answer explanation

A representee’s investigations do not impact his ability to claim if the misrepresentation was fraudulent as it was in this scenario. Equally, a representees investigations do not impact a representee’s ability to claim a remedy in the case of fraudulent misrepresentation as in this scenario.