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Part VI Other Bars, 28 Disproportionate Effect: Section 2(2) of the Misrepresentation Act 1967

Dominic O’Sullivan

From: The Law of Rescission (3rd Edition)

Dominic O'Sullivan KC, Steven Elliott KC, Rafal Zakrzewski

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 19 April 2024

Damages and contract — Interpretation of contract — Termination/unwinding of contract — Calculation of damages

This chapter examines Section 2(2) of the Misrepresentation Act 1967. As rescission is claimed for non-fraudulent misrepresentation, Section 2(2) of the Misrepresentation Act 1967 provide judges and arbitrators the discretionary power to declare the contract subsisting and award damages in lieu of rescission. The legislation had been introduced for instances wherein the situation of the defendant of rescission would be disproportionately hard compared to the injury suffered. The chapter then expounds on the conditions and grounds for the exercise of the power to award damages instead of rescission. It also looks into the measurement of damages. Additionally, courts have asserted an undoubted discretion to refuse rescission when it had been deemed disproportionate under the general law and requirements of the fair dealing rule.

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