Misrepresentation Act 1967

The Misrepresentation Act

Section 1

Removal of certain bars to rescission for innocent misrepresentation.
Where a person has entered into a contract after a misrepresentation has been made to him, and—
or both, then, if otherwise he would be entitled to rescind the contract without alleging fraud, he shall be so entitled, subject to the provisions of this Act, notwithstanding the matters mentioned in paragraphs and of this section.

Section 2(1)

Damages for misrepresentation.
Where a person has entered into a contract after a misrepresentation has been made to him by another party thereto and as a result thereof he has suffered loss, then, if the person making the misrepresentation would be liable to damages in respect thereof had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that the misrepresentation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up to the time the contract was made the facts represented were true.

Section 2(2)

Where a person has entered into a contract after a misrepresentation has been made to him otherwise than fraudulently, and he would be entitled, by reason of the misrepresentation, to rescind the contract, then, if it is claimed, in any proceedings arising out of the contract, that the contract ought to be or has been rescinded, the court or arbitrator may declare the contract subsisting and award damages in lieu of rescission, if of opinion that it would be equitable to do so, having regard to the nature of the misrepresentation and the loss that would be caused by it if the contract were upheld, as well as to the loss that rescission would cause to the other party.

Section 2(3)

Damages may be awarded against a person under subsection of this section whether or not he is liable to damages under subsection thereof, but where he is so liable any award under the said subsection shall be taken into account in assessing his liability under the said subsection.

Section 2(4)

This section does not entitle a person to be paid damages in respect of a misrepresentation if the person has a right to redress under Part 4A of the Consumer Protection from Unfair Trading Regulations 2008 in respect of the conduct constituting the misrepresentation.

Section 2(5)

Subsection does not prevent a debtor from bringing a claim under section 75 of the against a creditor under a debtor-creditor-supplier agreement in a case where, but for subsection, the debtor would have a claim against the supplier in respect of a misrepresentation.”

Section 3

Avoidance of provision excluding liability for misrepresentation.
If a contract contains a term which would exclude or restrict—
any liability to which a party to a contract may be subject by reason of any misrepresentation made by him before the contract was made; or
any remedy available to another party to the contract by reason of such a misrepresentation,
that term shall be of no effect except in so far as it satisfies the requirement of reasonableness as stated in section 11 of the Unfair Contract Terms Act 1977; and it is for those claiming that the term satisfies that requirement to show that it does.

Summary