Misrepresentation—what is inducement?
Produced in partnership with Charles Spragge of Druces
Misrepresentation—what is inducement?

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

  • Misrepresentation—what is inducement?
  • The main elements of inducement in misrepresentation claims
  • Real and substantial cause—'but for' the representation the contract would not have been formed
  • Fraudulent misrepresentation and the 'but for test'
  • The 'but for the representation' test in practice
  • Challenges for the claimant
  • Challenges for the defendant
  • Intention to induce is a requirement of a misrepresentation claim
  • Inducement distinct from causation

This Practice Note considers the requirement for the representor both to have intended to and actually to have induced the representee, by their misrepresentation, to enter into the contract. For details of the other key elements of an actionable misrepresentation, see Practice Notes:

  1. Misrepresentation—what statements will establish a claim?

  2. Misrepresentation—falsity (fraudulent, innocent or negligent misrepresentation)

The main elements of inducement in misrepresentation claims

The claimant must show that they were induced by the representation to enter into the contract.

The main elements of inducement were summarised by the Court of Appeal in Dadourian v Simms:

  1. whether the representee was induced to enter a transaction by a material misrepresentation is a question of fact (Barton v County NatWest)

  2. inducement will be presumed if the misrepresentation was of a nature likely to have played a part in the decision of a reasonable person to enter into a contract

  3. the misrepresentation need not have been the sole inducement, ie it is sufficient that the misrepresentation was 'present to his mind' or 'influenced' the misrepresentee (Edgington v Fitzmaurice as applied in Century Financial v Jamtoff Trading)

  4. it is enough if it played a real and substantial part, even if not a decisive one, in inducing the representee to act. It is not enough that the representation merely supported or encouraged the taking of the decision (Dadourian v Simms)

  5. for the misrepresentation

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