According to Section 2(1) of the Misrepresentation Act (MA) 1967

question 2

Multiple Choice

According to section 2(1) of the Misrepresentation Act (MA) 1967: 'Where a person has entered into a contract after a misrepresentation …, then, if the person making the misrepresentation would be liable to damages in respect thereof had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that the misrepresentation was not made fraudulently ...'. This is known as the 'fiction of fraud'. A number of advantages flow from this fiction for the representee when compared to the action for damages for negligence at common law. Which of the following statements is false?

• A) The basic measure of damages recoverable for misrepresentation is the tortious or reliance measure. Damages awarded on the fiction of fraud also include loss of opportunity to make other profitable contracts.
• B) While damages for common law negligent misrepresentation are limited to that which was foreseeable by the other party, damages awarded on the fiction of fraud are not limited by remoteness. All losses flowing from the misrepresentation are recoverable, even if they were not foreseeable by the representor.
• C) While damages for negligent misrepresentation can be reduced if the loss was partly the representee's fault, damages awarded on the fiction of fraud are completely immune to contributory negligence.
• D) Where the representee is induced to buy property through misrepresentation, the starting point for an award is the difference between the price paid and the market value of the property at the time the contract was made. Damages awarded on the fiction of fraud can also take into account the fall in the value of the property after the time of the contract was made.

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