innocent misrepresentation

It held that an innocent misrepresentation gave no right to damages.

But damages could not normally be obtained for an innocent misrepresentation.

An engagement may also be rescinded on the ground of innocent misrepresentation.

A completely innocent misrepresentation is one made by someone who genuinely and on reasonable grounds believes it to be true.

This is judged on both the nature of the innocent misrepresentation and the losses suffered by the claimant from it.

The passage of the judicature Act tempted some people to think that damages might now be obtained for innocent misrepresentation.

At common law, as for all forms of misrepresentation, innocent misrepresentation gave rise to the right to rescind a contract.

Innocent misrepresentation occurs when the representor had reasonable grounds for believing that his or her false statement was true.

It holds that a contract can be rescinded for innocent misrepresentation, even where the representee also had the chance to verify the false statement.

Nevertheless, Fry J's decision was reversed, and the contract was rescinded on grounds of innocent misrepresentation.

However, the Law Reform Committee in 1962 recommended that courts should be permitted to award damages, at their discretion, in all cases involving innocent misrepresentation.

But it is possible to exclude liability for negligent misrepresentation, liability under MA 1967 s 2(1) or innocent misrepresentation.

In the case of an innocent misrepresentation, s2(2) of the 1967 Act gives the court discretion to award damages in lieu of rescission.

In the case, Mr Redgrave's mistake was referred to as innocent misrepresentation, though it is very arguable that it was at least negligent.

Leaf v International Galleries [1950] 2 KB 86 is an English contract law case concerning rescission for mistake and innocent misrepresentation.

For innocent misrepresentation, however, MA 1967 s 2(2) gives the court discretion to award damages instead of rescission if undue hardship to the defandant would result.

It holds that Indemnities can be claimed under English Law for any consequential costs of a contract not turning on an Innocent Misrepresentation (in this case rent and similar).

But obiter, negligent misrepresentation and non-disclosure were excluded effectively (even though Canada would say it is not, given liability for innocent misrepresentation and non-disclosure was also a possibility).

If the discretion can be exercised where there has been a fraudulent misrepresentation, as in the present case, it must be exercisable also where a merely innocent misrepresentation has been made.

The Courts had also power to rescind contracts of many kinds *955 obtained by an innocent misrepresentation, so long at least as the contract had not been superseded by being carried into effect.

And while brokers in Connecticut can be held responsible for "innocent misrepresentations" made to buyers if such misrepresentations amount to negligence, the extent of the broker's liability is limited to the actual damages sustained.

Before the 1967 Act, the company acquiring the computer would have no remedy for this innocent misrepresentation, unless it was deemed to be a contractual term, as it would be too late to have the contract set aside.

Professor David Vaver suggests generally that "[t]he basic theory of the tort is to prevent the disruption of economic relations by deliberate or innocent misrepresentations that deceive or confuse consumers in their marketplace decisions."

In cases of fraudulent misrepresentation, the time limit runs until when the misrepresentation ought to have been discovered, whereas in innocent misrepresentation, the right to rescission may lapse even before the representee can reasonably be expected to know about it.

The common law refused to grant damages for innocent misrepresentation but would do so in the tort of deceit if the representation was fraudulent, although this is notoriously difficult to prove (Derry v Peek (1889) 14 App Cas 337).