After an initially expansive interpretation of s2(1) of the Misrep Act 1967, courts have now adopted a restrictive interpretation

of s2(2) of the Act Discuss Intro: we discuss the main problem briefly surrounding misrep before the act it was difficult to distinguish btw mistake and misrep no damages for neg misrep until hedley byrne and the act and also innocent misrep had no propa definition we discuss how the act has diversified remedies as argued by Poole what s2(1) says and how it relates to negligent misrep and the how the damages are assessed in the tort of deceit royscott v rogerson the case shows an exapnsive use of s 2 (1) because the defendants were treated as if they had been fraudulent and so the damages are of those that flow from the breach and also lost opportunity losses - east v maurer and that shows how the Act has expanded the ambit of misrep to diversify remedies we talk about what the policy implications have been as in a party who is negligent cannot be assessed in the same way that a party who fraudulently makes a misrep there is a greater deegree of awareness in a fraudulent misrep derry v peek criteria well it would be really brief just contrast the two definitions to show that the damages should not really be the same and thats y it is argued that 2(1) has an expansive interpretation S2(2) Definiton Restrictions: Damages in lieu of rescission. you can argue that the reason why s2 (2) is restricted is not in principle due to an expansive construction under s2 (1) but because s2 (2) is generally harder to prove, because there are third party rights and judicial discretion involved i.e. damages in LIEU of rescission so equitable relief which is generally more restrictive and also how the language is ambigious so the two sections b=vary in wording and drafting not becauseof an initially expansive view

and so thomas witter says that compensation in innocent should be restricted to an indemnity its restrictive because the damages are very limited in an indemnity as compared to s2(1) also linkin to the point bout hard to prove 2(2) also links it wid innocent misrep definiton dick bentley or oscar chess zanzibar says how the right to claim damages rests on havin a right to rescind here you can talk bout the limits on rescission as well as the rite to damages is seen as an alternative to rescission which makes 2(2) more restrictive becoz u have to prove that you still have a right to rescind to claim damages and the burden of proof thing is harder with s2 (2) whereas it is easier to claim under s2 (1) as the D has to prove that they reasonably belived the statement to be true at the time right? ohh we shud use the howard marine case that applied s2(1) and the defence of honest belief wasnt accepted we should metion the diif types of misrep and apply them to the two sections and then discuss remedies coz its not a right in that sense as 2(1) is a right its at courts discretion to award the damages equitable rememdy

in smith new court the court sed that the loose wording of the section compels the court to treat a person who was morally innocent as if he was guilty of fraud when it comes to the measure of damages... hence this gives a really wide view to 2(1) and the fact that damages are not based on reasonable forseeability which is the test for negligence they are based on direct consequence flowin from the misrep which essentially refers to fraudulent and thus the claim for damages becomes more like to succeed as well as being a substantial award

according to zanzibar the right to claim damages under 2(2) is onli valid if there is a right to rescind alongside it which gives 2(2) a more restrictive view because u have to prove that the claimant had the right to rescind in order to claim damages

okay since this is a 'discuss' question, my tutor said that it is always a good idea to mention reforem proposals, and in the context of misrep, perhaps tighter wording of the Act could make a greater distinction between the remedies and it could reduce the degree of ambiguity between innocent, neg and fraudulent misrep tighter wording of the Act to ensure greater consistency and uniformity in the law, since s2 (2) is at judicial discretion and thus does not always occur and hence reform would ensure uniformity in application across both subsections