Misrepresentation—damages as a remedy
Produced in partnership with Charles Spragge of Druces
Misrepresentation—damages as a remedy

The following Dispute Resolution practice note Produced in partnership with Charles Spragge of Druces provides comprehensive and up to date legal information covering:

  • Misrepresentation—damages as a remedy
  • When can you claim damages as a remedy for misrepresentation?
  • Damages for fraudulent or negligent misrepresentation
  • The guiding principle
  • Comparing damages for misrepresentation with damages for breach of contract and negligent misstatement
  • Date for assessing the loss in awarding damages for misrepresentation
  • Uncertainties and practical considerations of assessing damages in misrepresentation claims
  • Practical points on damages for misrepresentation claims
  • Assessing damages awarded in lieu of rescission—Misrepresentation Act 1967, s 2(2)
  • Claiming damages for claims in deceit

This Practice Note considers when damages are available as a remedy for a misrepresentation claim with reference to the Misrepresentation Act 1967 (MA 1967).

For consideration of when the courts will rescind a contract for misrepresentation and when parties can validly exclude or limit liability for misrepresentation, see Practice Notes:

  1. Misrepresentation—rescission as a remedy

  2. Misrepresentations—excluding and limiting liability for them

When can you claim damages as a remedy for misrepresentation?

If the representee suffered loss as a result of having been induced to enter into the contract by the misrepresentation, they may have a claim for damages in the following circumstances:

  1. where the misrepresentation was fraudulent

  2. where the misrepresentation was not fraudulent, but the representor is unable to show that they had reasonable grounds to believe the facts stated were true

  3. where the misrepresentation was not fraudulent, but the court decides in its discretion to award damages in lieu of rescission

Damages may be awarded in lieu of rescission whether or not the representee was entitled to damages in any event.

But if the representee was entitled damages anyway, they will be adjusted to take account of any damages awarded in lieu of rescission.

Damages for fraudulent or negligent misrepresentation

Damages for negligent misrepresentation are assessed in the same way as they are for fraudulent misrepresentation (MA 1967, s 2(1)).

In assessing damages for both fraudulent and negligent misrepresentation, the principles applicable

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