Innocent Misrepresentation in UK Law

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.

Looking at the cases once more, as we have done so often, it seems to me that if a representation is made in the course of dealings for a contract for the very purpose of inducing the other party to act upon it, and actually inducing him to act upon it, by entering into the contract, that is prima facie ground for inferring that it was intended as a warranty. Suffice it that it was intended to be acted upon and was in fact acted on.

This may well depend upon the nature of the vitiating factor. We know from Dietz that innocent misrepresentation as to a material fact is a vitiating factor. The court set aside the order because the misrepresentation had induced the defendants to agree to the settlement. We know from Livesey that in matrimonial cases innocent non-disclosure of a material fact is a vitiating factor.

Although not strictly applicable in matrimonial cases, the analogy of the remedies for misrepresentation and non-disclosure in contract may be instructive. At common law, the general effect of any misrepresentation, whether fraudulent, negligent or innocent, or of non-disclosure where there was a duty to disclose, was to render a contract voidable at the instance of a party who had thereby been induced to enter into it.

As was held in Smith v Kay (1859) VII HLC 749, a party who has practised deception with a view to a particular end, which has been attained by it, cannot be allowed to deny its materiality. Furthermore, the court is in no position to protect the victim from the deception, or to conduct its statutory duties properly, because the court too has been deceived.

He thought that, in order to be binding, the initial conversation oughtto be contemporaneous; and that here it was too reacts in point of time from the actual transport. But even in respect of promises is as to the future, we have a different approach nowadays to collateral contracts. When a person gives a promise, or an assurance to another, intending that he should act off it by entering into a contract, and he does act on it by entering into the contract, we hold that it is binding.

If it were otherwise, then an applicant whose false representation was in no way dishonest would not only suffer mandatory refusal but would also be barred from re-entry for ten years if he was removed or deported. That might not in itself be so very severe a rule, if only because the applicant always has the option of voluntary departure. If, however, he has to be assisted at the expense of the Secretary of State, then the ban is for five years.