Legal Principle: 1. ‘Misrepresentation’means and includes -the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;any breach of duty which, without an intentto deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him;causing, however innocently, a party to an agreement, to make a mistakeas to the substance of the thing which is the subject of the agreement. 2. The tort of negligent misstatement is defined as an inaccurate statement made honestly but carelessly usually in the form of advice given by a party with special skill/knowledgeto a party that doesn’t possess this skill or knowledge. Factual Situation : The plaintiff, Mr. Madan, entered into a tenancy agreement with the defendant, Esso Petroleum, in respect of a petrol station owned by the latter. During the course of the negotiation of the agreement, ‘expert’ advisers employed by the defendant had provided an estimate of the sales which the petrol station could expect which was based on inaccurate information and consequently was significantly inflated. The value of the rent on the agreement had been calculated based on this inflated figure. As a result, it was impossible for the plaintiff to operate the petrol station profitably. Whether the plaintiff could have any action for negligent misrepresentation ?

Question

Legal Principle:   1. ‘Misrepresentation’means and includes -the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;any breach of duty which, without an intentto deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him;causing, however innocently, a party to an agreement, to make a mistakeas to the substance of the thing which is the subject of the agreement.   2. The tort of negligent misstatement is defined as an inaccurate statement made honestly but carelessly usually in the form of advice given by a party with special skill/knowledgeto a party that doesn’t possess this skill or knowledge.   Factual Situation : The plaintiff, Mr. Madan, entered into a tenancy agreement with the defendant, Esso Petroleum, in respect of a petrol station owned by the latter. During the course of the negotiation of the agreement, ‘expert’ advisers employed by the defendant had provided an estimate of the sales which the petrol station could expect which was based on inaccurate information and consequently was significantly inflated. The value of the rent on the agreement had been calculated based on this inflated figure. As a result, it was impossible for the plaintiff to operate the petrol station profitably. Whether the plaintiff could have any action for negligent misrepresentation ?

Examsnet · Accepted Answer

Correct Answer is : Both (a) and (c)

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