B. The Elements of Misrepresentation

• Author: John D. McCamus
• Profession: Professor of Law. Osgoode Hall Law School, York University
• Pages: 326-331

Contenidos

• 1) Sales Talk.
• 2) Opinion.
• 3) Intention.
• 4) Law.
• 5) Materiality.
• 6) Inducement.

Page 326

In order to provide a basis for rescissionary relief, the misrepresentation must be a statement of present or past fact that is false. For these purposes, statements of fact are distinguished from mere "sales talk," from statements of opinion or belief, from statements of intention or promises and, under traditional doctrine at least, from statements of law. Further, the fact that is misstated must be material to the decision of the misrepresentee to enter the agreement and the misstatement must serve as an inducement to the making of that decision.

Page 327

1) Sales Talk

Vague and imprecise expressions or statements puffing or aggrandizing the virtues of, for example, a seller’s product are not relied upon by a reasonable purchaser. Such statements are mere sales talk, "puff-ery" or "dealer’s talk" and not statements of fact that, if false, provide a foundation for legal remedies. Thus, statements by a seller of land that the land is "improved"⁶or is an "uncommonly rich" water meadow⁷or "fertile and improvable at moderate cost"⁸or an exaggerated estimate of the value of a crop produced by the land to be sold⁹

have all been held to be mere sales talk that affords no ground for relief. In some cases, however, vague commendatory language from a seller who has privileged information concerning the subject matter of the sale may be taken to include an implicit statement of fact. Thus, the statement by a seller of a used car that it was a "good little bus" was characterized as an implicit statement of fact that the vehicle met a minimum standard of roadworthiness.¹⁰Similarly, the seller of a house who had acted as his own contractor in building the home and who was aware of serious defects in the construction was held to have made a misrepresentation when describing the house as "well built."¹¹

2) Opinion

The distinction between statements of fact and statements of opinion is similarly intended to exclude, as a basis for relief, statements upon which the misrepresentee would not reasonably rely. Thus, where an opinion is offered by someone who has no particular expertise in the matter in question, the statement would be considered to be one of opinion rather than one of fact. A reasonable person would not rely on such an opinion. Thus, an estimate by a vendor of land who estimated the sheep-bearing capacity of the land was held to have been a mere opinion on the matter.¹²Similarly, estimates of the value of assets by

Page 328

non-experts are classified as matters of opinion.¹³If an opinion concerns matters over which the representor obviously has no control, it is unlikely that the statement would be characterized as one of fact.¹⁴

However, one who possesses superior knowledge or expertise with respect to the opinion offered may be held to have made an implicit statement concerning the nature of the information upon which the opinion is based. Thus, where the seller of a hotel indicated that the current lessee was "a most desirable tenant," it was held that this amounted to a tacit assertion "that the facts peculiarly within his knowledge are such as to render that opinion reasonable."¹⁵Similarly, an oil company that induced a tenant to enter a lease of a service station on the basis of an inaccurate estimate of the likely volume of business at a particular intersection was held to have tacitly asserted that the study had been carefully executed.¹⁶

3) Intention

A representation that something will occur in the future is simply not a statement of fact. Promises are thus distinguishable from statements of fact and, if they are to bind the promisor, must meet the requirements for the enforceability of undertakings.¹⁷Accordingly, one who seeks to rely on a promise with respect to the future must seek a contractual undertaking in order to do so. On the other hand, a promise with respect to the future may be characterized as an implicit statement of fact concerning one’s present intention. If a false statement of present intention is made, the statement is fraudulently false, and therefore gives rise to the normal remedies for fraudulent misstatement.¹⁸

Page 329

4) Law

Under traditional doctrine, statements of fact are distinguished from statements of law. This may, in part, be an application to the legal context of the distinction between statements of fact and statements of opinion. If so, one would expect that a statement of opinion as to law by one who has no expertise in the subject may, in appropriate circumstances, constitute an opinion on which one ought not to reasonably rely. Thus, a vendor of a land warrant who misrepresented the legal effect of the document because he was unaware of recent legislative change was held to have made a statement of law rather than fact.¹⁹The distinction between statements of fact and law, however, is not...