Misrepresentation Case. After a few days use, Bianca discovered the Adventurer ZX was totally unsuitable for her busy bar and restaurant.

Advise Bianca whether she has any contractual rights and remedies for misrepresentation.

This question is concerned with misrepresentation. A misrepresentation is defined as a false statement of fact that induces another party into entering a contract. This question requires advice to be given to Bianca as to whether she has any contractual rights and remedies for misrepresentation.

The first point that needs to be addressed is the review that Miles gave for the Adventurer ZX player. Miles had told Bianca that the system was ‘sophisticated, yet very user friendly’ and that the sound system of the system is ‘superb even at a high volume’. Miles had only said this as he believed that the sound system was like that but he had never had the chance to listen to it as it was new and had just been delivered to the store. In order to amount to an actionable misrepresentation, there are certain criteria’s that must be met. One of the criteria is a false statement and in this scenario, Miles has made a false statement. In the case Bisset v Wilkinson [1927], the claimant had purchased a piece of farm land to use as a sheep farm. The defendant was asked how many sheep the land would hold but as the defendant had never used it for sheep; he estimated that it would carry 2000 sheep. The estimate turned out to be wrong and the claimant brought an action for misrepresentation. It was held that the statement given by the defendant was only a statement of opinion and not a statement of fact and therefore it was not an actionable misrepresentation.

A statement of fact is any written or oral declarations of facts in a court case whereas a statement on opinion is a statement of a belief based on grounds incapable of actual proof. A statement of fact cannot amount to a misrepresentation as there is a presumption that everyone knows the law and therefore it cannot be falsely stated. Applying the law from the case Bisset v Wilkinson and applying it to the facts of this scenario, the statement that Miles had given cannot amount to misrepresentation as his statement was merely a statement of opinion which he had honestly held.

The second point that needs to be addressed is that fact that Miles had given Bianca the opportunity to listen to the system but she had rejected it. Once it has been established that a false statement had been made, it is then necessary for the claimant to demonstrate that the false statement is what induced them to enter the contract. Although we have already established that the statement that Miles had given was a statement of opinion, Bianca thinks of it as a false statement. If the claimant has been given the opportunity to check out the statement but does not in fact check it out, they are still able to demonstrate reliance. In the case Redgrave v Hurd (1881), a solicitor had purchased into the partnership in the solicitors firm. He was told that the partnership had an income of £300 per year and he was given the opportunity to look at the accounts. He declined the offer to check the accounts and took them at their word. The income was actually £200 a year. It was held that he was entitled to rescind the contract as he relied on the statement that was given. The fact that he had declined the offer to check the books reinforced rather than negated that reliance. Applying the law from this case, Bianca will not be able to claim misrepresentation as that can only happen if she knew that the statement that Miles had given was untrue. For a misrepresentation to be actionable, it must have acted on the mind of the representee. If the representee is unaware of the misrepresentation then he cannot take action on the basis of it. In this scenario, the representee is Bianca. She in unaware of the misrepresentation and therefore cannot take action on the basis of it.

As Miles made a statement not knowing if it was true or not, it will lie under negligent misrepresentation. Negligent misrepresentation is a statement made without reasonable grounds for belief in its truth. In negligent misrepresentation, the burden of proof will be on the representee to demonstrate that they had reasonable grounds for believing the statement given to be true. In this scenario, Bianca believed the statement as Miles was a salesman and she thought that he will have knowledge of the system.

In conclusion, Bianca does have contractual rights and she will be able to claim for damages for negligent misrepresentation under s2(1) of the Misrepresentation Act 1967.