PLS I Week 3 Defective Agreements - Part II Error and Misrepresentation PDF

Remember to Check-In ([email protected]) On-campus attendance & engagement Open the app / Your device will find the Click the ‘Check-In’ icon Wait until it turns solid calendar beacon gree...

Remember to Check-In ([email protected]) On-campus attendance & engagement Open the app / Your device will find the Click the ‘Check-In’ icon Wait until it turns solid calendar beacon green Online attendance & engagement Open the app / Click the Watch link Close the confirmation View your lesson on your calendar screen normal device Defective Agreements- Part II How do I get out of this transaction? Error An error as to one of the essential aspects of the contract. bilateral or unilateral  Mutual error (parties at cross purposes on an essential of the contract) may render contract void. Raffles v Wichelhaus (1864) 2H&C 906, Stuart & Co v Kennedy (1885) 13 R 221 (W&B 6- Bilateral 17) error: 2 Common error (both parties make the same types mistake on an essential) has the same effect. Hamilton v Western Bank of Scotland (1861) 23 D. 1033, McLaughlin v The New Housing Association Ltd 2008 SLT (Sh Ct) 137 Case Law Bilateral error Raffles Mutual error as to ship - one leaving in October, one in December. Stuart No consensus but there was performance………. (remedy?) Common error Hamilton McLaughlin Both parties at error as to price. Both had missed a statutory provision (for calculating the price) Induced unilateral error “It appears clear that Scots law recognises, as indicated by Bell, that when misrepresentation by a party is alleged inducing error in the other in regard to some matter, that matter need not be an essential of the contract, but it must be material and of such a nature that not only the contracting party, but any reasonable man might be moved to enter into the contract, or put the other way, if the misrepresentation had not been made, would have refrained from entering into the contract.” per Lord Carmont, Ritchie v Glass 1936 SLT 591, 593-594 Misrepresentation Misrepresentation arises where one of the parties has said or done something to persuade the other to enter into a contract under a mistaken belief. A misrepresentation must be an inaccurate statement of fact. If it is merely a statement of opinion that does not count – e.g. to say a van is in good running order, Flynn v Scott 1949 SC 442 Where the misrepresentation induces essential error, the contract is void. Otherwise, it is merely voidable. To have this effect a misrepresentation must be made to the innocent party by the other party to the contract. Three forms of Misrepresentation Fraudulen Innocent Negligent t Note: They all provide the right to avoid contract, but only fraudulent and negligent misrepresentation give rise to the right to sue for damages. Misrepresentation Innocent: Fraudulent: Negligent: Boyd & Forrest v “Fraud is proved where Cramasco LLP v Ogilvie- Glasgow & South it is shown that a false Grant, Earl of Seafield Western Railway Co representation has been UKSC 9 (W&B 6- 1915 SC (HL) 20 (W&B 6- made knowingly, or 38) 36) without belief in its truth, or recklessly, Law Reform careless whether it be (Miscellaneous true or false.” per Lord Provisions) (Scotland) Herschell, Derry v Peek Act 1985 s.10 (1889) 14 App Cas 337, 334 Smith v Sim 1954 SC 357 Uninduced unilateral errors Normally of no effect: Stewart v Kennedy (1890) 17R (HL) 25; Menzies v Menzies (1893) 1 SLT 60. (W&B 6-19) Contract or transaction may be challenged where there is “error plus”… Snatching at a bargain: Steuart’s Trustees v Hart (1875) 3 R 192; Followed in: Angus v Bryden 1992 SLT 884 (W&B 6-25); Wills v Strategic Procurement (UK) Ltd CSOH 26 (W&B 6-26); see also Chwee Kin Keong v Digilandmall.com 2 SLR 594 Gratuitous transactions: Hunter v Bradford Property Trust Ltd 1970 SLT 173; Edgar v Edgar CSOH 60 A has good title. On transfer B acquires good title. A has no title. Transfer of On transfer B’s title is void (nemo dat ownership quod non habet) ? A has title but contract for transfer is void. B’s title is void.