Commercial Law: Non-Reliance

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What is a non-reliance clause?
A non-reliance clause is a term that parties include in their contract stating that they have not relied on any representations other than the ones set out in the contract itself
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Why do parties use non-reliance clauses?
To protect themselves from being sued on pre-contractual statements, to insulate themselves from what they have said outside of the contract
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What statutes are relevant in non-reliance?
The Misrepresentation Act 1967 and the Unfair Contract Terms 1977
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What is a misrepresentation?
A false statement of fact
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What types of misrepresentation exist?
Negligent, fraudulent, innocent
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What is the Financial Crisis 2008?
Lots of institutions such as banks faced liability for pre-contractual statements or advice that they had given, since then there has been a movement to using non-reliance clauses
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What is the courts' attitude in English Law?
The courts' attitude is hands-off, strict interpretation
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What is an estoppel?
An obstruction precluding/prevent a person from asserting a fact/a right or prevents someone from denying a fact (it stops something happening.)
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What is a contractual estoppel?
Prevention via contract, no need to show reliance, just the term in the contract
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What is a case concerning a faulty car?
Lowe v Lombank: seller sold a faulty car but included a term acknowledging that he did not know the purpose for what the car was bought, therefore trying to avoid being sued
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What was held in Lowe v Lombank?
The seller could not raise an estoppel because he knew that the car was bought to be driven. Buyer was entitled to damages
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What is a case concerning a banks' bad advice?
Peekay v New Zealand: party claimed it had been mis-sold an investment product, pre-contractual communications misrepresented the nature although a contract contained the accurate version
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What was held in Peekay v Australia?
The earlier misrepresentation was not corrected by the correct version in the contract. Dismissed as the party should have read the risk disclosure/terms of the contract
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What is a case concerning an important bank brand?
Springwell v JP Morgan
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What happened Lowe v Lombank?
Seller sold a car to a buyer including a term that he did not know what the car was being bought for, estoppel could not be relied on because the seller KNEW what the car was being bought for: it was obvious,
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Why is Lowe v Lombank important?
Diplock J set out requirements to raise an evidentiary estoppel
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What part of Diplock J's commentary is important referring to what a term has to be?
A term has to be a promise to do something/a commitment, it cannot be a negative, for example stating that something has not happened: this is not a contractual obligation
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What was held in Peekay v Australia?
The earlier misrepresentation was not corrected by the correct version in the contract. Dismissed as the party should have read the risk disclosure/terms of the contract
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What is different in Peekay to Lowe?
In Peekay, it meant that there could be estoppel without requirements being satisfied
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What is the position towards contractual estoppel?
Court of Appeal is in favour of the moment towards contractual estoppel
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What case included important commentary?
Springwell v JP Morgan
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What was said in Springwell v JP Morgan?
Essentially, unless there is a principle or statute contrary, parties are allowed to agree whatever they like in a contract
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Card 2

Front

Why do parties use non-reliance clauses?

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To protect themselves from being sued on pre-contractual statements, to insulate themselves from what they have said outside of the contract

Card 3

Front

What statutes are relevant in non-reliance?

Back

Preview of the front of card 3

Card 4

Front

What is a misrepresentation?

Back

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Card 5

Front

What types of misrepresentation exist?

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