chapter  11
37 Pages

CONTRACTUAL TERMS

The common law refused to grant damages for innocent misrepresentation,2 but would do so in the tort of deceit if the representation were fraudulent (see para 17.17), or in contract if the representation became a term of a contract between the parties.3 Whilst deceit required the plaintiff to discharge the heavy burden of proving that the defendant did not honestly believe his statement to be true (always a difficult matter), liability in contract was strict, and fraud need not be proved (see para 17.18). This relative attractiveness of the contractual action led litigants to frame actions based on misrepresentation in contract rather than tort, so that the vital question was frequently whether the representation had attained contractual status (see para 11.02). However, modern reform has widened the scope of actions for innocent misrepresentation: not only are more such actions now available, either in tort (see para 17.19) or under the Misrepresentation Act 1967 (see para 17.10); but the list of potential defendants extends beyond the scope of the doctrine of privity of contract, either by suing in tort (see above) or under s 56 of the CCA (see para 16.08). Attempts to exclude liability for misrepresentation may be both unfair (UTCC, reg 5: see para 11.15) and unreasonable (Misrepresentation Act 1967, s 3: see para 18.17).