Banks, Agency and Misrepresentation

Abstract

A plaintiff-investor has been induced by pre-contractual misrepresentations to enter into an investment contract with a defendant-bank. This article discusses some of the issues which must be addressed in such cases. Although triggered by recent litigation between investors and banks, the discussion draws on basic commercial law principles which are of general application. Apart from the novel doctrine of ‘contractual estoppel’, there are alternative orthodox tools of the trade readily deployable by a commercial lawyer. These alternative means of reasoning include basic and well-established contract law principles of misrepresentation and traditional agency principles of authority, which have been overlooked because they have been overshadowed by contractual estoppel in current discourse. The point of this article is simply to take us back to basics by bringing these alternate analyses back into focus.