Innocent Misrepresentation Case Study

Innocent misrepresentation is a misrepresentation made by someone where a person got reasonable grounds for making someone to believe that his false statement is right.According to Hedley Barney all misrepresenatation which are not considered to be fraudulent will be considered as innocent misrepresentation.

When someone had commited innocent misrepresentation,certain remedies are available for them. Commonly rescission is used for all the type of misrepresentation including for innocent misrepresentation.Rescission means the court willl go back to the original act,where they will act as in the contract had never exist before. As for in rescision, court will normally refer to section 2 (2) Misrepresentation Act 1967 for rescission.

Rescission

And if they refuse to enforce such, they can direct it to be rescinded and delivered up accordingly.

And lastly according to section 37 of the Specific Perfomance Act 1950, the court may grant the party to make any compensation on considering the rescission of the contract.

There certain cases which are available to show the remedy of rescission. Firstly is the Malaysian case of Chuah Tong Yeong v Kuala Lumpur Golf and Country Club Bhd , where in this case,its about the misrepresentation and the issues which arose from this case are firstly, whether plaintiff induced by misrepresentation or not? Secondly is that whether is there any real loss or damages that had been proven or not? Thirdly,whether plaintiff suffered hardship caused by the misrepresentation and lastly whether is this case is suitable case to warrant an order of rescission? In this case, the judge had held that

The innocent misrepresentation of model year constituting warranty .Purchasers not entitled to rescission where impossible to put parties into their original positions and where plaintiffs damaging boat while in their possession. In this case the purchasers entitled to damages under s. 52(1)(b) of Sale of Goods Act . In this case the court had held,

“The actions were allowed. The model year misdescription constituted an innocent misrepresentation amounting to a warranty under s. 2(1)(n) of the Sale of Goods Act. The plaintiffs were, therefore, entitled to damages under s. 52(1) (b) of the Act, which damages were the difference in price between a 1967 and a 1972 model. Rescission could not be granted where the parties could not be placed in their original positions, particularly where the vessel may have been damaged while in the plaintiffs' possession. For the foregoing reasons, the third party claim was also