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Silence With Regard to a Material Fact

Last updated: 21-Jun-2015

In Peek v Gurney (1873) 8 LR 6 HL 377, Lord Chancellor Chelmsford stated at pp. 392-392 that:

It is said that the prospectus is true as far as it goes, but half a truth will sometimes amount to a real falsehood; and I go farther and say, that to my mind it contains a positive misrepresentation.

Bowen LJ in Edgington v Fitzmaurice (1885) 29 Ch D 459 stated that:

A mere suggestion of possible purposes to which a portion of the money might be applied would not have formed a basis for an action of deceit. There must be a misstatement of an existing fact: but the state of a man’s mind is as much a fact as the state of his digestion. It is true that it is very difficult to prove what the state of a man’s mind at a particular time is, but if it can be ascertained it is as much a fact as anything else. A misrepresentation as to the state of a man’s mind is, therefore, a misstatement of fact.

Curtis v Chemical Cleaning and Dyeing Co Ltd [1951] 1 KB 805, per Denning LJ:

In my opinion, any behaviour by words or conduct is sufficient to be a misrepresentation if it is such as to mislead the other party about the existence or extent of the exemption. If it conveys a false impression, that is enough. If the false impression is created knowingly, it is a fraudulent misrepresentation; if it is created unwittingly, it is an innocent misrepresentation. But either is sufficient to disentitle the creator of it to the benefit of the exemption.

In Howard Marine and Dredging Co Ltd v A Ogden & Sons (Excavations) Ltd [1978] QB 574 Bridge LJ considered the liability of the representor under the Misrepresentation Act 1967 and stated that:

… the liability of the representor does not depend upon his being under a duty of care the extent of which may vary according to the circumstances in which the representation is made. In the course of negotiations leading to a contract the statute imposes an absolute obligation not to state facts which the representor cannot prove he had reasonable ground to believe.

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