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Representation Addressed to Another

Silence With Regard to a Material Fact


Law and Sea.
Repudiatory Breach

Generally, any breach which goes to the root of the contract and gives a right to the aggrieved party to exercise his option to terminate the contract, or in the other words to repudiate the contract, is a repudiatory breach.

Last updated: 21-Jun-2015

By Williams J in Behn v Burness (1863) 3 B & S 751 at p.753:

Properly speaking, a representation is a statement, or assertion, made by one party to the other, before or at the time of the contract, of some matter or circumstances relating to it. Though it is sometimes contained in the written instrument, it is not an integral part of the contract; and, consequently the contract is not broken though the representation proves to be untrue; nor, (with the exception of the case of policies of insurance, at a11 events marine policies, which stand on a peculiar anomalous footing) is such untruth any cause of action, nor has it any efficacy whatever, unless the representation was made fraudulently.

Jessel MR in Redgrave v Hurd (1881) 20 Ch D 1:

…the man who makes that representation must know that it is a material inducement to the other to enter into the partnership, and you cannot investigate as to whether it was more or less probable that the inducement would operate on the mind of the party to whom the representation was made. Where you have neither evidence that he knew facts to shew that the statement was untrue, or that he said or did anything to shew that he did not actually rely upon the statement, the inference remains that he did so rely, and the statement being a material statement, its being untrue is a sufficient ground for rescinding the contract.

Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965] 1 WLR 623, Court of Appeal, per Lord Denning MR:

…it seems to me that if a representation is made in the course of dealings for a contract for the very purpose of inducing the other party to act on it, and actually inducing him to act upon it, by entering into the contract, that is prima facie ground for inferring that it was intended as a warranty. It is not necessary to speak of it as being collateral. Suffice it that it was intended to be acted upon and was in fact acted on. But the maker of the representation can rebut this inference if he can show that it really was an innocent misrepresentation, in that he was in fact innocent of fault in making it, and that it would not be reasonable in the circumstances for him to be bound by it.

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