Summary
The Misrepresentation Act 1967 reformed the law relating to misrepresentation in contract formation. Before this Act, a party who had been induced to enter a contract by a misrepresentation had limited remedies unless the misrepresentation was fraudulent. The Act introduced a right to damages for negligent misrepresentation (s.2(1)) and gave courts discretion to award damages in lieu of rescission for non-fraudulent misrepresentation (s.2(2)). It also restricted the ability of parties to exclude liability for misrepresentation by contract (s.3).
Key Points
- Damages available for negligent misrepresentation without proving a duty of care in tort (s.2(1))
- Reverses the burden of proof: the representor must prove they had reasonable grounds to believe the statement was true (s.2(1))
- Court may award damages in lieu of rescission for innocent misrepresentation (s.2(2))
- Contract terms excluding liability for misrepresentation are subject to the reasonableness test (s.3, as amended by UCTA)
- Rescission remains available as a remedy for all types of misrepresentation
Parts & Sections
Amendments History
1977 — Unfair Contract Terms Act 1977
Section 8 of UCTA amended s.3 of the Misrepresentation Act to make exclusion clauses subject to the UCTA reasonableness test.