Auction Law in the United Kingdom

The legal information presented in these pages offers some insight into the law in different jurisdictions but should not be acted upon without having consulted your own legal advisor.

Misrepresentation Act 1967

Misrepresentation Act 1967, section 1 states that where a person has entered a contract on the basis of a misrepresentation, where the contract has been performed or the term is part of a contract, then that individual would be entitled to rescind the contract.

Misrepresentation Act 1967, section 2 regulates damages that might be available following a misrepresentation. Section 2 (1) states that where a fraudulent misrepresentation creates loss for the claimant, then that individual would be able to claim for damages unless the party that made the representation had reasonable grounds to believe that this statement or representation was true at the time of making the contract.

Misrepresentation Act 1967, section 2 (2) states that the individual would be able to rescind the contract if the representation that had been made was anything other than fraudulent. This would have the effect of putting the parties into the same position as if the contract had not been agreed. However, section 2 (3) does state that damages may also be available for those claiming for non-fraudulent misrepresentations.

Misrepresentation Act 1967, section 3 states that if a contract contains a term which excludes or limits liability arising out of a misrepresentation, then that term shall no longer have an effect. This prevents parties from contracting out of the Act and therefore adds a greater level of protection to the parties. This is an understandable provision as one that wishes to contract out of this Act might have questionable motives in terms of the representations that they have made.

Misrepresentation Act 1967, section 5 states that the Act shall not apply to misrepresentation in sales contracts which were created before the Act had been passed.