Last amended by Unfair Contract Terms Act 1977 in 1977. Section 8 of UCTA amended s.3 of the Misrepresentation Act to make exclusion clauses subject to the UCTA reasonableness test.
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
Summary
The Misrepresentation Act 1967 reformed the law relating to misrepresentation in contract formation. Before this Act, a party who had been induced to enter a contract by a misrepresentation had limited remedies unless the misrepresentation was fraudulent. The Act introduced a right to damages for negligent misrepresentation (s.2(1)) and gave courts discretion to award damages in lieu of rescission for non-fraudulent misrepresentation (s.2(2)). It also restricted the ability of parties to exclude liability for misrepresentation by contract (s.3).
Key Points
- Damages available for negligent misrepresentation without proving a duty of care in tort (s.2(1))
- Reverses the burden of proof: the representor must prove they had reasonable grounds to believe the statement was true (s.2(1))
- Court may award damages in lieu of rescission for innocent misrepresentation (s.2(2))
- Contract terms excluding liability for misrepresentation are subject to the reasonableness test (s.3, as amended by UCTA)
- Rescission remains available as a remedy for all types of misrepresentation
Parts & Sections
Amendments History
1977 — Unfair Contract Terms Act 1977
Section 8 of UCTA amended s.3 of the Misrepresentation Act to make exclusion clauses subject to the UCTA reasonableness test.
Frequently asked questions
- Can a court award money instead of cancelling a contract for misrepresentation?
- The Misrepresentation Act 1967 allows a court to award damages instead of rescission for non-fraudulent misrepresentation. This gives judges discretion to compensate the injured party financially rather than unwinding the contract entirely. Rescission remains available as a remedy for all types of misrepresentation, but the Act provides this alternative where appropriate.
- Does performing the contract stop me from rescinding it due to misrepresentation?
- No, rescission is not barred merely because the misrepresentation has become a term of the contract or because the contract has already been performed. The Act specifically removes these traditional bars, allowing the injured party to seek to unwind the contract even in these circumstances.
- What changed in the law regarding misrepresentation when this Act was passed?
- Before the Act, remedies were limited unless the misrepresentation was fraudulent. The 1967 Act introduced a right to damages for negligent misrepresentation and gave courts discretion to award damages in lieu of rescission for non-fraudulent cases. It also restricted the ability of parties to exclude liability for misrepresentation through contract terms.