Fraudulent Misrepresentation in UK Law

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.

In many cases, even in deceit, it will be appropriate to value the asset acquired as at the transaction date if that truly reflects the value of what the plaintiff has obtained. In many cases, even in deceit, it will be appropriate to value the asset acquired as at the transaction date if that truly reflects the value of what the plaintiff has obtained.

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.

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.

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.

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.

The Judge was wrong to ask how they would have acted if they had been told the truth. 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.