Fraudulent Misrepresentation in UK Law

Leading Cases
  • Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd and Another
    • House of Lords
    • 21 Noviembre 1996

    First, that the measure of damages where a contract has been induced by fraudulent misrepresentation is reparation for all the actual damage directly flowing from (i.e. caused by) entering into the transaction. First, that the measure of damages where a contract has been induced by fraudulent misrepresentation is reparation for all the actual damage directly flowing from (i.e. caused by) entering into the transaction.

    But in cases where property has been acquired in reliance on a fraudulent misrepresentation there are likely to be many cases where the general rule has to be departed from in order to give adequate compensation for the wrong done to the plaintiff, in particular where the fraud continues to influence the conduct of the plaintiff after the transaction is complete or where the result of the transaction induced by fraud is to lock the plaintiff into continuing to hold the asset acquired. But in cases where property has been acquired in reliance on a fraudulent misrepresentation there are likely to be many cases where the general rule has to be departed from in order to give adequate compensation for the wrong done to the plaintiff, in particular where the fraud continues to influence the conduct of the plaintiff after the transaction is complete or where the result of the transaction induced by fraud is to lock the plaintiff into continuing to hold the asset acquired.

  • Spence v Crawford
    • House of Lords
    • 18 Mayo 1939

    Its application is discretionary and where the remedy is applied it must be moulded in accordance with the exigencies of the particular case. The Court will be less ready to pull a transaction to pieces where the defendant is innocent, whereas in the case of fraud the Court will exercise its jurisdiction to the full in order, if possible, to prevent the defendant from enjoying the benefit of his fraud at the expense of the innocent plaintiff.

  • Doyle v Olby (Ironmongers) Ltd
    • Court of Appeal (Civil Division)
    • 31 Enero 1969

    In contract, the damages are limited to what may reasonably be supposed to have been in this contemplation of the parties. The defendant is bound to make reparation for all the actual damages directly flowing from the fraudulent inducement. All such damages can be recovered: and it does not lie in the mouth of the fraudulent person to say that they could not reasonably have been foreseen.

  • Hayward v Zurich Insurance Company Plc
    • Supreme Court
    • 27 Julio 2016

    It must be shown that the defendant made a materially false representation which was intended to, and did, induce the representee to act to its detriment. To my mind it is not necessary, as a matter of law, to prove that the representee believed that the representation was true. For example, if the representee does not believe that the representation is true, he may have serious difficulty in establishing that he was induced to enter into the contract or that he has suffered loss as a result.

  • Diamond v Bank of London and Montreal Ltd
    • Court of Appeal (Civil Division)
    • 07 Noviembre 1978

    The truth is that each tort has to be considered on its own to see where it is committed. Such as in Distillers Co. (Biochemicals) Ltd. v. Laura Anne Thompson. In the case of fraudulent misrepresentation it seems to me that the tort is committed at the place where the representation is received and acted upon; and not the place from which it was sent. Logically, it seems to me, the same applies to a negligentmisrepresentation by telephone or by telex.

  • Downs v Chappell
    • Court of Appeal (Civil Division)
    • 03 Abril 1996

    They were told lies in order to induce them to enter into the contract The lies were material and successful; they induced the Plaintiffs to act to their detriment and contract with Mr Chappell. The Judge should have concluded that the Plaintiffs had proved their case on causation and that the only remaining question was what loss the Plaintiffs had suffered as a result of entering into the contract with Mr Chappell to buy his business and shop.

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Legislation
  • Companies Act 1867
    • UK Non-devolved
    • 1 de Enero de 1867
    ...... aids or abets in or is privy to any such Concealment or Misrepresentation as aforesaid, every such Director, Manager, or Officer shall be guilty of ... Prospectus or Notice not specifying the same shall be deemed fraudulent on the Part of the Promoters, Directors, and Officers of the Company ......
  • National Insurance (Industrial Injuries) Act 1946
    • UK Non-devolved
    • 1 de Enero de 1946
    ......in consequence of the non-disclosure or misrepresentation by the. claimant or any other person of a material fact (whether the. disclosure or misrepresentation was or was not fraudulent). . (2) Any assessment of the extent of the disablement resulting. from ......
  • Sale of Goods Act 1979
    • UK Non-devolved
    • 1 de Enero de 1979
    ......as fraudulent by the buyer. . (6) Where, in respect of a sale by auction, a right to ...and agent and the effect of fraud, misrepresentation, duress. or coercion, mistake, or other invalidating cause, apply to. ......
  • The Consumer Protection from Unfair Trading Regulations 2008
    • UK Non-devolved
    • 1 de Enero de 2008
    ......"port") omit the words from "Provided that" to the end. . Fraudulent Mediums Act 1951 . 3. The Fraudulent Mediums Act 1951.  14 shall cease ...  26 (misrepresentation) shall cease to have effect. . Airports Act 1986 . 32. In section 74 of ......
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Books & Journal Articles
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Forms
  • Chapter EM5106
    • HMRC Guidance manuals
    • Formularios de Derecho Civil, Mercantil y Registral
    ......, from Halsbury’s Laws of England, under the heading ‘Misrepresentation and Fraud’. Only one of the extensive footnotes has been reproduced. 757 What Constitutes Fraud. Not only is a misrepresentation fraudulent if it was known or believed by the representor to be false when made, but ......
  • Chapter CBTM05080
    • HMRC Guidance manuals
    • Formularios de Derecho Civil, Mercantil y Registral
    • HM Revenue & Customs
    ......Where as a result of any person’s misrepresentation or failure to disclose any materialfact a payment of Child Benefit or ... matter whether the misrepresentation or failure to disclose is fraudulent orwholly innocent. ......
  • Chapter PTM153000
    • HMRC Guidance manuals
    • Formularios de Derecho Civil, Mercantil y Registral
    • HM Revenue & Customs
    ...... involved in tax fraud, abuse of tax repayment systems or other fraudulent behaviour including misrepresentation and/or identity theft;. has a ......
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