Conclusion
A lot is banded about by lay people as to the effectiveness of a misrepresentation claim or defence; I therefore hope that those issues are fully explained herein. That said it can be used very powerfully if your set of circumstance fit. That said it is always worth bringing the claim into proceeding as an alternative claim in pleading.
As determined in the early English case of Smith v Hughes [1871]. It is important to note that where an offer specifies a particular mode of acceptance, only an acceptance communicated via that method will be valid.
A bilateral contract is an agreement in which each of the parties to the contract makes a promise or set of promises to each other. For example, in a contract for the sale of a Timeshare, the buyer promises to pay the seller £10,000 in exchange for the seller’s promise to deliver title of time for a property. These common contracts take place in the daily flow of commerce transactions, and in cases with sophisticated or expensive promises may involve extensive negotiation and various condition precedent requirements, which are requirements that must be met for the contract to be fulfilled.
However, legislation, rather than judicial development, has been touted as the only way to remove this entrenched common law doctrine. Lord Justice Denning famously stated that “The doctrine of consideration is too firmly fixed to be overthrown by a side-wind.”
For instance, agreeing to sell a car for a penny may constitute a binding contract if a party desires the penny. This is known as the peppercorn rule, but in some jurisdictions, the penny may constitute legally insufficient nominal consideration.
Parties may do this for tax purposes, attempting to disguise gift transactions as contracts. Transferring money may be sufficient, particularly if there is accord and satisfaction. For example, in the early English case of Eastwood v. Kenyon [1840], the guardian of a young girl took out a loan to educate her. After she was married, her husband promised to pay the debt but the loan was determined to be past consideration. The insufficiency of past consideration is related to the pre-existing duty rule. In the early English case of Stilk v. Myrick [1809], a captain promised to divide the wages of two deserters among the remaining crew if they agreed to sail home short-handed; however, this promise was found unenforceable as the crew were already contracted to sail the ship. The pre-existing duty rule also extends to general legal duties; for example, a promise to refrain from committing a tort or crime is not sufficient.
The United Kingdom has since replaced the original Statute of Frauds, but written contracts are still required for various circumstances such as land (through the Law of Property Act 1925).
The Carbolic Smoke Ball offer In Carlill, a medical firm, advertised a smoke ball marketed as a wonder drug that would, according to the instructions, protect users from catching the flu. If it did not work, buyers would receive £100 and the company said that they had deposited £1,000 in the bank to show their good faith. When sued, Carbolic argued the ad was not to be taken as a serious, legally binding offer. It was merely an invitation to treat, and a gimmick (a “mere puff”). But the court of appeal held that it would appear to a reasonable man that Carbolic had made a serious offer, and determined that the reward was a contractual promise. A contractual term is “an/any provision forming part of a contract”. Each term gives rise to a contractual obligation, breach of which can give rise to litigation. Not all terms are stated expressly and some terms carry less legal weight as they are peripheral to the objectives of the contract. Standard timeshare forms of contracts contain “boilerplate”, which is a set of “one size fits all” contract provisions. However, the term(s) may also narrowly refer to conditions at the end of the contract which specify the governing law provision, venue, assignment and delegation and Force majeure.
Restrictive provisions in contracts where the consumer has little negotiating power (“contracts of adhesion”) attract consumer protection scrutiny. For example, an actress’ obligation to perform the opening night of a theatrical production is a condition, but a singer’s obligation to rehearse may be a warranty. Statute may also declare a term or nature of term to be a condition or warranty; for example the Sale of Goods Act 1979s15a provides terms as to title, description, quality and sample are generally conditions. The United Kingdom has also contrived the concept of an “intermediate term” (also called innominate), first established in Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962].
In the English case of Bannerman v. White the court upheld a rejection by a buyer of hops which had been treated with sulphur since the buyer explicitly expressed the importance of this requirement. The relative knowledge of the parties may also be a factor, as in English case of Bissett v. Wilkinson where the court did not find misrepresentation when a seller said that farmland being sold would carry 2000 sheep if worked by one team; the buyer was considered sufficiently knowledgeable to accept or reject the seller’s opinion.
According to Gordon v Selico [1986] it is possible to misrepresent either by words or conduct. Generally, statements of opinion or intention are not statements of fact in the context of misrepresentation. If one party claims specialist knowledge on the topic discussed, then it is more likely for the courts to hold a statement of opinion by that party as a statement of fact.
An example is in Barton v Armstrong [1976] in a person was threatened with death if they did not sign the contract. An innocent party wishing to set aside a contract for duress to the person need only to prove that the threat was made and that it was a reason for entry into the contract; the burden of proof then shifts to the other party to prove that the threat had no effect in causing the party to enter into the contract. There can also be duress to goods and sometimes, ‘economic duress’.
Undue influence is an equitable doctrine that involves one person taking advantage of a position of power over another person through a special relationship such as between parent and child or solicitor and client. As an equitable doctrine, the court has discretion. When no special relationship exists, the question is whether there was a relationship of such trust and confidence that it should give rise to such a presumption. See Odorizzi v. Bloomfield School District.
In the 1996 Canadian case of Royal Bank of Canada v. Newell a woman forged her husband’s signature, and her husband signed agreed to assume “all liability and responsibility” for the forged checks. However, the agreement was unenforceable as it was intended to “stifle a criminal prosecution”, and the bank was forced to return the payments made by the husband.
A test for determining which category a clause falls into was established by the English House of Lords in Dunlop Pneumatic Tyre Co. Ltd v. New Garage & Motor Co. Ltd, however, Professor Michael Furmston has argued that “it is wrong to express (the mitigation) rule by stating that the plaintiff is under a duty to mitigate his loss”, citing Sotiros Shipping Inc v. Sameiet, The Solholt.
If a party provides notice that the contract will not be completed, an anticipatory breach occurs.To recover damages, a claimant must show that the breach of contract caused foreseeable loss. Hadley v. Baxendale established that the test of foreseeability is both objective and/or subjective. In other words, is it foreseeable to the objective bystander, and/or to the contracting parties, who may have special knowledge?
On the facts of this case, where a miller lost production because a carrier delayed taking broken mill parts for repair, the court held that no damages were payable since the loss was foreseeable neither by the “reasonable man” nor by the carrier, both of whom would have expected the miller to have a spare part in store.
A claim for fraudulent misrepresentation is an action based upon a fraud for the purposes of section 32 Limitation Act 1980; see Regent Leisure time Limited v Nat-west Finance Ltd (2003) EWCA Civ 391, paragraph 100.see Barclays Bank plc v O’Brien (1994) 1 AC 180.
I take this from the seller’s warranty included on the contract, which warrants that “the owner” holds the property in the occupation rights and not the property itself, which is owned by another company; Sociedade de Empreendimentos Imobiliarios do Sul.
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk