Change of Circumstances Creates Misrepresentation


For a statement to be deceitful, it must be a statement claimed to be fact when the person making it does not believe it to be true (or has no belief either way as to its veracity) or is reckless as to its truth or falsity.
For a deceitful statement to give rise to a successful claim for damages, it is also necessary that the person to whom it is made relies on it and by virtue of relying on it suffers a detriment.
Recently, a case was brought for damages based in deceit when the statements made had originally not been untrue, but became so because circumstances changed before the relevant transaction was completed.
The court ruled that in such situations, there is a duty to inform the other party of the change in circumstances and that failing to do so created a fraudulent misrepresentation.
Says <<CONTACT DETAILS>>, “Recent decisions have emphasised the need for parties to contracts to inform the other side of relevant changes in circumstances. Merely acting in accordance with the facts as they were at the beginning may well not be enough to meet your obligations under a contract. For advice on all contractual matters, contact us.”
Partner Note
Belfairs Management Ltd. v Sutherland and another [2010] EWHC (Ch) 2276.

Share this article