Misrepresentation and Mis-selling

We are a specialist in misrepresentation and mis-selling claims, acknowledged as the experts and one of the leading practitioners in the areas of civil fraud, complex contract disputes, classic cars and supercars, finance, construction projects and luxury goods.

We have significant experience in dealing with complex contract disputes and consumer law cases on behalf of businesses and private clients, domestically and internationally.

Misrepresentation and the tort of deceit is a wide and complex area of law, which deals with elements of deceit, fraud, and confidence tricks as well as misleading advertising, misdescription and mis-selling.

Misrepresentation claims can be difficult and have possible defences, such as a statement, description or advert was not intended to be relied on; or that the buyer would have entered into the contract anyway.

What Is Misrepresentation?

Misrepresentation is often defined as a false statement of fact or law made by a party which is relied on by another when entering into a contract.

Importantly, it must be a material misrepresentation which when viewed objectively would influence a reasonable person entering a contract.

This may be, for example in the case of a mis-sold car, where the seller falsely advertises its provenance in promoting it to be brand new when it is not,  or having full-service history, or one owner or having no faults, which the buyer relies on when agreeing to buy the car.

A seller of dangerous or unsafe goods who states they are safe and sound when they know they are not, maybe liable for mis-selling or misrepresentation, although liability will also likely arise under the Consumer Rights Act or Sale of Goods Act 1979.

Misrepresentation in Building Work

In building work, it may be the contractor has misled the customer regarding the skills or qualifications of the tradespeople being used or a particular brand of materials supplied. This may include ‘greenwashing’ where a business or organisation leads consumers into believing that its products are environmentally friendly or have a greater positive environmental impact than they actually do.

Representations can be:

• made verbally or
• in writing or
• be implied by words or by conduct or
• can be implied by half-truths, partial disclosure and concealment.

As a rule, failing to disclose information does not amount to misrepresentation; but misrepresentation and mis-selling claims are rarely black and white and can involve creating a false impression and partial disclosure. There are exceptions to the rule such as in claims involving mis-sold car finance.

Innocent misrepresentation

This is where the representor can show that they had reasonable grounds to believe their statement(s) was true.

Negligent misrepresentation

As the name suggests, negligent misrepresentation is one which is made carelessly or without reasonable grounds for believing it to be true.

Fraudulent misrepresentation

Fraudulent misrepresentation is when the representation is made knowing it was false, recklessly or without an honest belief in its truth. It is this which is often referred to as mis-selling- where there is no honest belief in the truth in the representation. Importantly, the person making the false representation must have intended it to be relied on.

This is distinguished from deceit, where the false statement is made with the express intention of defrauding someone and which subsequently resulted in loss.

Misrepresentation Act

The Misrepresentation Act 1967 sets out the remedies available to person who entered a contract in reliance upon a false statement and has suffered loss as a result.

The usual way to deal with it is to rescind or unwind the contract and reject the goods. However, a court may determine it to be fairer not to unwind the deal and to award damages, or compensation instead.

If you are a consumer affected by mis-selling, our consumer law team can assist with consumer rights misrepresentation claims. Contact us today to find out more.