Explain the key rules and cases that are relevant to an aspect of contract law

Assignment Brief

2000 - 2500 word assignment: A case of Misrepresentation

Learning Outcomes	Assessment Criteria
The student should be able to:	The student has achieved this outcome because s/he can:
1.   Understand the rules and cases governing at least one aspect of contract law	1.1      Explain the key rules and cases that are relevant to an aspect of contract law
	1.2    Illustrate a logical understanding of the rules using relevant statutes and/or case law
2.   Demonstrate an understanding of the way in which the rules of at least one area of contract law are applied by the courts	2.1    Show how the courts apply the rules of an area of contract law in order to decide breach of contract
	2.2   Analyse any relevant case law and statutes that apply to the area of law
	2.3   Describe any vitiating factors that may have an invalidating effect on an otherwise well-informed contract
3.  Demonstrate an understanding of the effectiveness of an area of contract law	3.1    Evaluate the advantages and disadvantages of the area of law
	3.2  Analyse any suggestions for reform of the area of law

Learning Outcomes	Assessment Criteria	Achieved Y / N
The student should be able to:	The student has achieved this outcome because s/he can:
1.   Understand the rules and cases governing at least one aspect of contract law	1.1      Explain the key rules and cases that are relevant to an aspect of contract law
	1.2    Illustrate a logical understanding of the rules using relevant statutes and/or case law
2.   Demonstrate an understanding of the way in which the rules of at least one area of contract law are applied by the courts	2.1    Show how the courts apply the rules of an area of contract law in order to decide breach of contract
	2.2   Analyse any relevant case law and statutes that apply to the area of law
	2.3   Describe any vitiating factors that may have an invalidating effect on an otherwise well-informed contract
3.  Demonstrate an understanding of the effectiveness of an area of contract law	3.1    Evaluate the advantages and disadvantages of the area of law
	3.2  Analyse any suggestions for reform of the area of law

Sample Answer

A Case of Misrepresentation in Contract Law

Introduction

Contracts are a crucial part of everyday life, from buying a house to signing up for a mobile phone. The law of contract makes sure that agreements are fair and legally binding. However, sometimes contracts are made based on false information. This is called misrepresentation. When someone enters into a contract based on a false statement, the law can allow them to cancel the agreement or even claim damages. This essay focuses on misrepresentation as an aspect of contract law, looking at the rules, types, and how courts apply the law. Real case examples and suggestions for improving the law will also be explored.

1. Understanding Misrepresentation

1.1 Key Rules and Types

Misrepresentation happens when one party makes a false statement of fact which encourages the other party to enter into a contract. It does not include opinion or future intentions unless those are dishonest. For a statement to be a misrepresentation, it must be:

• False

• Material (important to the decision)

• Relied on by the innocent party

There are three types of misrepresentation in English law:

1. Fraudulent Misrepresentation
   This is when a false statement is made knowingly, without belief in its truth, or recklessly.
   Case: Derry v Peek (1889). The company falsely stated it had the right to use steam-powered trams. The court found that since the statement was made recklessly, it was fraudulent.

2. Negligent Misrepresentation
   This happens when a party makes a statement without taking reasonable care to check if it is true.
   Case: Hedley Byrne v Heller (1964). Although there was no contract, the court said there could be a duty of care in giving advice, and damages could be claimed if the advice was given negligently.

3. Innocent Misrepresentation
   This is when a false statement is made with reasonable belief that it is true. Remedies are more limited here, usually only rescission (cancelling the contract).
   Example: Leaf v International Galleries (1950). A painting was sold as a Constable but turned out not to be. The court ruled it was innocent misrepresentation, but too much time had passed to cancel the contract.

1.2 Relevant Statutes

The Misrepresentation Act 1967 plays a key role in modern contract law. Important sections include:

• Section 2(1): Allows the innocent party to claim damages for negligent misrepresentation.

• Section 2(2): Gives the court the choice to award damages instead of rescission for innocent misrepresentation.

• Section 3: Prevents the use of contract terms to exclude liability for misrepresentation unless it is fair.

The Consumer Protection from Unfair Trading Regulations 2008 also helps protect consumers from misleading actions and omissions.

Continued...