OCR A2 Law - The Law of Contract - Misrepresentation (2)

2. Fact - Not an Opinion: The courts must distinguish between statements of fact, which can be a misrep and statements of pure opinion, which cannot.

CASE: "Bisset v Wilkinson". In this case a farmer was selling his farm and he made an opinion stating the farm might hold up to 2000 sheep even though he didn't use the land for sheep. HELD: This was an opinion ... Not fact ... No MISREP.

However, if an opinion implies a fact then this WILL amount to a MISREP.

CASE: "Esso v Mardon". In this case the senior manager of Esso made a statement saying the site would sell 200,000 gallons of petrol. HELD: This was a misrep as he had 40 years experience and there was an element of reliance and he was in a position of trust.

3. False statement must induce the party to enter the contract: ... the statement must be the reason the contract was made. 2nd opinions or no belief in the statement cannot amount to inducement.

CASE: "Attwood v Small". In this case a statement was made regarding the reserves of a mine which was false. The buyer sent his own experts to expect the mine and then the contract was made. HELD: The party wasn't induced by the 1st statement ... No MISREP.