Lloyd's Maritime and Commercial Law Quarterly
Non-disclosure and the Misrepresentation Act 1967: a new framework
Fred Halbhuber *
It has become generally accepted that use of the phrase “misrepresentation … made” in the Misrepresentation Act 1967 excludes from the scope of s.2(1) certain cases of misrepresentation by non-disclosure. This article challenges this orthodox interpretation. It will be argued that, rather than importing a narrow definition of the word “made”, the applicability of s.2(1) in cases of misrepresentation by non-disclosure can, and should, be delimited by reference to the requirements of the tort of deceit. This alternative approach introduces much needed certainty to the scope of s.2(1); avoids an undesirable disconnect between the scope of s.2(1) and the tort of deceit; and unburdens the other sections of the 1967 Act from the restrictive and unintended effects of the orthodox interpretation.
I. INTRODUCTION
English law recognises no general duty of disclosure in pre-contractual negotiations.1 Mere “[t]acit acquiescence in another’s self-deception” does not of itself constitute a misrepresentation.2 In some cases, however, courts have recognised that a failure to speak may be just as deserving of sanction as a positive misstatement. In these situations, the law carves out an exception to the general rule and imposes on one or both of the contracting parties a duty to disclose material information to the other.
This article considers how the Misrepresentation Act 1967 (“MA 1967”) applies to such cases of pre-contractual misrepresentation by non-disclosure. In particular, this article analyses whether—and, if so, when—cases of misrepresentation by non-disclosure give rise to a claim in damages under MA 1967, s.2(1). The leading authority on this
* JD Candidate, Yale Law School. I am very grateful to Sarah Worthington for comments on earlier drafts and helpful discussions. All errors that remain are my own.
The following abbreviations are used:
Anson: J Beatson, A Burrows and J Cartwright, Anson’s Law of Contract, 31st edn (Oxford, 2020);
Cartwright: John Cartwright, Misrepresentation, Mistake and Non-Disclosure, 5th edn (London, 2019);
Cheshire, Fifoot & Furmston: M Furmston, Cheshire, Fifoot and Furmston’s Law of Contract, 17th edn (Oxford, 2017);
Chitty: H Beale (ed), Chitty on Contracts, 34th edn (London, 2021);
LRC, Innocent Misrepresentation: Law Reform Committee, Innocent Misrepresentation (Cmnd 1782, 1962);
MA 1967: Misrepresentation Act 1967;
Treitel: E Peel (ed), Treitel: The Law of Contract, 15th edn (London, 2020).
1. Keates v Cadogan (1851) 10 CB 591, 601; Smith v Hughes (1867) LR 6 QB 597, 607.
2. Donegal International Ltd v Zambia [2007] EWHC 197 (Comm); [2007] 1 Lloyd’s Rep 397, [465].
Non-disclosure and the Misrepresentation Act 1967
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