ABSTRACT
So, a fraudulent misrepresentation will render a contract merely voidable where that misrepresentation was made with an intention that it should be acted upon by the person to whom it was made (Peek v Gurney (1873)). The type of fraud required for a fraudulent misrepresentation is a misrepresentation made knowingly, or without belief in its truth, or with recklessness as to whether or not it was true (Redgrave v Hurd (1881)). The rationale for permitting rescission of contracts made on the basis of a fraudulent misrepresentation is that it would be inequitable to permit a person with such a fraudulent motive to profit from their common law rights. As such, it is a principle which is easy to reconcile with the underlying tenets of equity. Even where a person makes an innocent misrepresentation it will be sufficient to give the other party to the contract a good defence to an action for specific performance of that contract (Walker v Boyle (1982)). The court has power to order that a contract continues in existence in cases of innocent misrepresentation where it would be equitable to do so (Misrepresentation Act 1967, s 2(2)).
