MISREPRESENTATION ACT 1972 - SECT 7

MISREPRESENTATION ACT 1972 - SECT 7

7—Damages for misrepresentation

        (1)         Where a contracting party is induced to enter into a contract by a misrepresentation made—

            (a)         by another party to the contract; or

            (b)         by a person acting for, or on behalf of, another party to the contract; or

            (c)         by a person who receives any direct or indirect consideration or material advantage as a result of the formation of the contract,

and any person (whether or not he or she is the person by whom the misrepresentation was made) would, if the misrepresentation had been made fraudulently, be liable for damages in tort to the contracting party subjected to the misrepresentation in respect of loss suffered by him or her as a result of the formation of the contract, that person is, subject to subsection (2), so liable to that contracting party, in all respects as if the misrepresentation had been made fraudulently and were actionable in tort.

        (2)         It is a defence to an action under subsection (1)—

            (a)         that the person by whom the representation was made had reasonable grounds to believe, and did believe, that the representation was true; or

            (b)         that the defendant was not the person by whom the representation was made and did not know, and could not reasonably be expected to have known, that the representation had been made, or that it was untrue.

        (3)         Where in any proceedings before a court, it is proved that a party to a contract has rescinded, or is entitled to rescind, the contract on the ground of misrepresentation, the court after consideration of the consequences of rescission, and the consequences of a declaration under this section, in the circumstances of the case, may, if it considers it just and equitable to do so, declare the contract to be subsisting and award such damages as it considers fair and reasonable in view of the misrepresentation.

        (4)         A declaration under subsection (3) has effect according to its terms and is a bar to rescission.

        (5)         Where a contract has been rescinded but is subsequently declared to be subsisting under subsection (3), the respective rights and liabilities of the contracting parties will be determined in all respects as if the contract had never been rescinded.

        (6)         In assessing any damages under this section, a court must take into consideration any award of damages under any other provision of this section, or of damages or compensation under any other law, and in assessing damages or compensation in any proceedings under any other law relating to a contract, a court must take into consideration any award of damages under this section.