Exam consideration: Do you think a statement that amounts to an opinion would still be held to be an opinion if the statement maker then went on to check the truth of the opinion, and realised it was incorrect? Crystal Palace had hired a replacement for him, and he was now employed at another football club. It was said in the course of judgment: A misrepresentation as to the state of a man's mind is, therefore, a misstatement of fact. The claimant sued on the bills of exchange. In With v OFlanagan [1936] Ch 575, the defendant was contracting for the sale of his medical practice. How do we create a person's profile? The false statement must have induced the other party to enter into the contract. The claimant made and delivered the gun, but it had a defect in it. In order to distinguish between the two, the courts will consider the intentions of the party. As will become clear from the following section, a claim under the statute is much easier to prove and therefore favourable. In order for liability for misrepresentation to be excluded, Section 8 of the Unfair Contract Terms Act 1977 rules that the term must be: Reasonable refers to the test of reasonableness which you should refer to the chapter on exclusion clauses for a full understanding of. There is a slightly alternate approach of the courts where a representee relies on a statement that a reasonable person would not have considered a relevant factor in entering the contract. The primary remedy for misrepresentation is rescission, which places the parties in the position they would have been in, if the contract had not been made. Here is an example: Party A sells Party B a car for 200. Correspondingly, if the statement maker holds themselves out to have reasonably grounds to make a statement, when in fact this is not true, it will amount to a statement of fact for the purposes of proving misrepresentation. Updated: 24 November 2022; Ref: scu.194210. The case of Avon Insurance plc v Swire Fraser Ltd [2000] 1 All ER (Comm) 573 ruled that the test to apply is whether or not the statement is substantially correct. Leaf v International Galleries [1950] 2 KB 86 highlights this sometimes harsh approach. A misrepresentation is a false statement of fact made that has the result of inducing the other party to enter a contract. For further information information about cookies, please see our cookie policy. The cases of Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965] 1 WLR 623 and Oscar Chess v Williams [1957] 1 WLR 370 are good authorities for this. Think about how exactly a claim under Section 2(1) is proven and how a statement maker would absolve himself of liability. 605. sec 215; Hough v. Richardson, 3 Story, 659; Veasey v. Doton, 3 Allen, 380; Connersville v. Referred to, Carhsh v. Salt (1906), 1 Ch. Place a bet on any selection in any LIVE ITV RACE and if it finishes second beaten by a NECK OR LESS (in any flat race) or 1/2 LENGTH OR LESS (in any jumps race) you will get your money back as a FREE BET to the same stake (win part only) of up to 50 to use on any event later that day. This general rule has exceptions, such as: In the law of misrepresentation, the representation can be express or implied, ambiguous and state the literal truth - and still be misleading in the relevant sense. Even though Party A were not aware of this, and it was unforeseeable, it qualifies as a consequential loss and therefore they would be liable for damages related to Party B losing out on this contract. In this case, it is reasonably foreseeable that Party B would lose out on the profit they intended to make on the resale, as Party A were aware of them attempting to resell the car. For more information on this you should refer to the chapter on terms. Therefore, the statement maker will be liable in damages for all consequential losses as a result of the statement, irrespective of their forseeability. Not all precontractual representations have legal consequence if they are false. AimTo investigate if the massive blood loss protocol 'Code Red' at a specialist cardiothoracic hospital was activated according to local and national guidelines by a closed loop audit.MethodsElectr. The maker of the statement must reasonably believe that what was stated to be true. There was a fraudulent misrepresentation as to the quality of the limos. But to recap, if a statement is made that is considered to be a term, in the event of this statement being breached, the aggrieved party would have a remedy under a breach of contract. Under Section 2(1) of the Misrepresentation Act, damages are awarded on exactly the same basis as fraudulent misrepresentation. Declaration on a bill of exchange, dated the 2nd July 1860, drawn by the plain-. Citations: (1862) 1 Hurlstone and Coltman 90; 158 ER 813. The claimant made and delivered the gun, but it had a defect in it. Go to store Key points The concealment of a latent defect (one which cannot be discovered on inspection) which the seller has knowledge of can amount to an implied fraudulent misrepresentation This will be an objectively applied standard. Subscribers are able to see the list of results connected to your document through the topics and citations Vincent found. The fact he didnt was held to be a false statement of fact. There are two remedies available for fraudulent misrepresentation: recession and damages. When coupled with rescission, an award of damages is designed to put the party in the position they would have been, had the misrepresentation not been made. Exam consideration: When answering a problem question on misrepresentation, if you establish that the remedy would be rescission, ensure to attempt to apply the bars of rescission to the contract to show a full understanding of the remedy. Jobs People Learning Dismiss Dismiss. Certain types of contracts will impose a higher duty of disclosure than under normal circumstances. As per Caparo Industries plc v Dickman [1990] 2 AC 605, in order for a claim in negligence to be successful, there must be a special relationship between the parties so that there would be a duty of care which arises. They are actionable, because they to induce the other party to enter into the agreement. The effect of the contract is reversed. How do we create a person's profile? An alternative approach to a claim for negligent misrepresentation is to pursue the claim under statute. Redgrave v Hurd (1881) 20 Ch D 1. 2023 vLex Justis Limited All rights reserved, VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. In Horsfall v Thomas (1862) 1 H&C 90, a seller delivered to a buyer a gun which was in a dangerous condition. Due to the lapse of time, this contract could not be rescinded. As mentioned previously, the only remedy for innocent misrepresentation is rescission, meaning damages will not be possible for an innocent misrepresentation. When a contract has been induced by misrepresentation of any kind, the contract does still confer obligations upon the parties, but the contract will be voidable. It was held that as an experienced investor, he would not have been induced by a loose description over the telephone, therefore, he did not act upon this misrepresentation. It is the insureds duty to disclose all material facts at the time of the formation of the contract for insurance and failure to do so will result in any form of claim under that insurance contract failing. Dismiss. David Bowie shape-shifted throughout his stellar career, changing his image and style of UNILAD flipped into UNILAD 2 days ago Vanilla Ice's explanation of how he didn't copy David Bowie and Queen's Under Pressure leaves people baffled That the plaintiff induced the defendant to accept the bill by means of fraud Edward James for the plaintiff. (1852) 1 H and C 90if(typeof ez_ad_units != 'undefined'){ez_ad_units.push([[320,100],'swarb_co_uk-medrectangle-3','ezslot_5',114,'0','0'])};__ez_fad_position('div-gpt-ad-swarb_co_uk-medrectangle-3-0'); England and Walesif(typeof ez_ad_units != 'undefined'){ez_ad_units.push([[250,250],'swarb_co_uk-medrectangle-4','ezslot_4',113,'0','0'])};__ez_fad_position('div-gpt-ad-swarb_co_uk-medrectangle-4-0'); Cited Spice Girls Ltd v Aprilia World Service Bv ChD 24-Feb-2000 Disclosure Duties on those entering into contract The claimants worked together as a five girl pop group. Horsfall was . P.S.-Of course, if the Government pay for the gun before the beginning of next year, I should remit the money to you forthwith ; that, or any other arrangement not entailing the payment this year, I am willing to enter into, but it must be done at once." In the case of fraudulent misrepresentation, the lapse of time will begin at the time the fraud was either discovered, or could have been discovered. The test of remoteness, from Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co (The Wagon Mound) [1961] AC 388, only allows damages to be claimed that are reasonably foreseeable. Party B had a 1,000,000 contract to chauffeur a famous football team around, but due to the lack of quality in the limos, has lost this contract. This is a key component of misrepresentation, as a claim for misrepresentation will not be actionable if the statement made was merely an opinion or a suggestion. Horsfall v Thomas [1862] 1 H&C 90. 605 Applied, cm lisle v. Salt, [1906] 1 Ch. He held himself out as having no expertise as to whether the land held that many sheep, he had never claimed to keep sheep on the land, it was merely a guess. If the representee has an option to validate the truth of the representors statement, but refuses to do so, this will not prevent the statement as being held to be a misrepresentation, as the representee has relied upon this statement, thus being induced by it - Redgrave v Hurd (1881) 20 Ch D 1. Issue being on the defendant. The law of misrepresentation operates when: The misrepresentation doesn't even need to be made by the person benefiting from it. As mentioned earlier in this section, the difference between a negligent misrepresentation and a negligent misstatement is the remedies available. If there is a statement reduced to writing, the parties may suggest there was an oral agreement which is contradictory to the statement made in writing. The valuers knew or ought to have known this information would be passed on to the representee (the third party), therefore, this representation was actionable. In With v OFlanagan [1936] Ch 575 it was suggested that misrepresentation as a result of a change of circumstances might result in either a fraudulent misrepresentation or a negligent one. Afterwards the plaintiff, in a letter to the defendant, stated that the gun was of the best metal all through and had no weak points that the plaintiff was aware of. If the statement is made with a reasonable belief and they have reasonable grounds to make this statement, it will amount to a statement of fact. Subscribers can access the reported version of this case. This means that the party who was induced into the contract as a result of the misrepresentation may choose to rescind the contract, but does not necessarily have to. S. C. 31 L. J. Ex. This bar to rescission refers to where a rescission of the contract is no longer possible. Horsfall v Thomas - Case Summary - IPSA LOQUITUR Horsfall v Thomas Court of Exchequer Citations: (1862) 1 Hurlstone and Coltman 90; 158 ER 813. If the statement isn't correct, it may be an actionable misrepresentation. LAWS1042 Contract II Term 2, 201 7 (1) Change of circumstances. In JEB Fasteners Ltd v Marks Bloom & Co [1983] 1 All ER 583 Party A was contracting with Party B to purchase a company. 322; 8 Jur (N. S.) 721; 10 W. R. 650; 6 L. T. 462 : at Nisi Pnus, 2 F. & F. 775. In the case of Clarke v Dickson (1858) 120 ER 463 the example of a contract for a sale of a cake we given; once this cake has been eaten, the contract may not be rescinded. In Dick Bentley, the statement was held to be a term because it was made by a car dealer who would claim to have specialist skill or knowledge. The consequence of an advertizement is by and large that it will be . If a statement is made which is true at the time of making, but subsequently becomes untrue, there is a positive duty on the statement maker to ensure to inform the relevant party of this. The defendant refused to honour them, arguing that he had been induced to accept the bills by fraud and misrepresentation. If a statement is made that was technically false, but most of the statement was true, the statement would held to be true so long as the true part of the statement induced the claimant into the contract, as opposed to the false part.
335 J Action on a bill of exchange drawn by the plaintiff on, and accepted by, the defendant. In those situations, it was established that there is a duty for the statement maker to make the representee aware of this change. Sykes v Taylor Rose. With the development of the Misrepresentation act the claim for innocent misrepresentation is extremely limited. In contrast, an owner of a farm stated that he believed it would hold 2,000 sheep, even though it was not a sheep farm. Ascertaining whether a statement is false in the context of misrepresentation is not as straightforward as a question of whether the statement is true or false. Smith New Court v Scrimgeour Vickers [1997] AC 254 Important. The case of Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158 is authority to the effect that damages are awarded on a tortious basis, aiming to put the aggrieved party in the position they would have been if the misrepresentation was true. Bil je poslanec ve kot 15 let in je bil Lord upan Liverpoola od 1847 do 1848. Car and Universal Finance Co. Ltd. v. Caldwell (1965) Pankhania v Hackney London Borough [2002] NPC 123 concerned the purchase of a property to be used as a car park. technology developed exclusively by vLex editorially enriches legal information to make it accessible, with instant translation into 14 languages for enhanced discoverability and comparative research. We encourage you to research . He incorrectly stated the value of the contents. The defendant contracted with the claimant to make him a steel gun. The landlord sold a property and described the tenant as a most desirable tenant, and this was not true. The buyer's claim failed because he had not examined the gun before buying it, and therefore if there was a fraudulent concealment of the defect it had no . Kearley v Thomson (1980) QBD 742 The Court of Appeal stated that because no creditors had been defrauded the party could 'repent' and be reimbursed, notwithstanding the illegality. The misrepresentation will usually be in words, written or spoken. Info Share. Lists of cited by and citing cases may be incomplete. As a general rule, if there is a longer lapse of time between the statement and the formation of the contract, the greater the presumption will be that the statement is a representation. Those circumstances will include the course of the negotiations and any representations made before the contract was finalised. If a statement has been reduced to writing, there will be a strong presumption that this will form a term of the contract, as opposed to a representation. In negotiations which lead to an oral contract, there can be some doubt whether something said or communicated was intended to be a representation or a term of the contract. Therefore, if there is a multi-part contract which you could sever and separate some parts of, it will be possible to rescind the parts with goods that are yet to be consumed. Life. The case of Curtis v Chemical Cleaning & Dyeing co Ltd [1951] 1 KB 805 outlined this fact. East v Maurer [1991] 1 WLR 461. In TSB Bank plc v Camfield [1995] 1 WLR 430 Restitutio in integrum was referred to as an all or nothing approach where this bar would not be available if any of the goods at all had been consumed. [navedba potrebna] Trikrat se je poroil, najprej . For the purpose of making a reckless statement, there is no need to prove dishonesty or fraud: only that the statement was made without caring whether the statement was true or not. A series of misrepresentations may have cumulative effect. Firstly, its a question of law (and decided by a judge), and not fact whether a statement made before a contract is a representation or a term of the contract. A fraudulent misrepresentation requires a high standard of proof, subsequently, the measure of damages reflect the difficulty of proving this. Therefore, due to the change of circumstances, the defendant had a positive duty to notify the plaintiff of this. This section will be concerned with whether or not the statement was of fact. 597. We have already discussed the misrepresentation act being a favourable avenue as to a claim for negligent misrepresentation due to the burden of proof being reversed. Statements can be made during sales pitches, casual conversations and formal meetings. smoothradio.com - Thomas Curtis-Horsfall He's known as one of the most revolutionary figures in music. See: Attwood v Small. Crystal Palace Football Club (2000)Ltd v Dowie [2007] EWHC 1392 gives another example. (adsbygoogle = window.adsbygoogle || []).push({});
. In Horsfall v Thomas (1862), the active concealment of a defect in a gun was held to be a misrepresentation, . As for misrepresentation which is negligent or innocent, the lapse of time will begin from the date of the contract. In Thomas Witter Ltd v TBP Industries Ltd [1996] 2 All ER 573 Liability for any pre-contractual misrepresentation will be excluded sufficed. That the party injured must have been deceived by the false statement, see further Bispham's Eq. London Sittings, Hilary Term, 1862, coram Pollock, C. B. horsfall v. thomas (It is no defence to an action on a bill drawn by the plaintiff for the price of an article made and delivered to his order, and accepted and used, that there is a flaw in it, (a) This case is not at all at variance with those which show that if a stranger retain a surgeon to tend a person, the surgeon is liable to that person for want of due and proper care. Horsfall v Thomas: 1852 It is a necessary requirement for an action in misrepresentation, that the misrepresentation induced the other party to enter into the contract. 441. Where rescission would encroach on the rights of a third party, the remedy will be unavailable. Declaration on a bill of exchange, dated the 2nd July 1860, drawn by the plaintiffs, by the name and style of "The Mersey Steel and Iron Company," upon and accepted by the defendant for payment to the plaintiffs of 2331. Statement does not just refer to a verbal statement; it has been held that conduct can amount to a statement for the purpose of misrepresentation. Rescission can be claimed as a remedy for innocent misrepresentation where: the statement has become a term of the contract, the contract has been performed, according to s 1 of the Misrepresentation Act 1967, and. This page provides a list of cases cited in ourContract Law Lecture Notes, as well as other cases you might find useful. Once it has been proven that a false statement of fact has been made, the next step is to prove that this statement of fact induced the claimant to enter the contract. This chapter will be split into four distinct sections which should allow for a full and comprehensive understanding of the law of misrepresentation. In order to be actionable, the representation must be material so that it would positively influence a reasonable person to enter the contract. A representation made to one party which then induces a third party may be amount to a misrepresentation under the following circumstances: If party A makes a misrepresentation to Party B, and Party B relays this information to a third party, who is induced into the contract on that basis, it will be a misrepresentation if Party A knew or ought to have known the representation would be likely to be communicated to the third party. A claim for a negligent misrepresentation that is based in tort under the common law is usually referred to as a negligent misstatement This claim was first established in the case of Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465. The word statement has been broadly interpreted. Conduct that will affirm the contract includes positive affirmation via words, positive affirmation via conduct, or making no attempt to remedy the issue. Some correspondence afterwards took place between the defendant and the plaintiffs, quence of these flaws, the bore was, with the consent of the defendant, increased from, of the gun, the defendant wrote to the manager of the Company as follows :. Tort of Deceit. (5) 2 Dr. & Wal. The defendant bears the burden of proof to show that the claimant has not mitigated its loss. Subscribers are able to see the revised versions of legislation with amendments. accept the bills, the plaintiffs could not recover. The authority for this principles comes from Yianni v Edwin Evans and Sons [1981] 3 All ER 593. The sale was made a few months later, in which time the business income had dropped drastically. evidence for the jury in support of the plea. (adsbygoogle = window.adsbygoogle || []).push({});
. An alternative to lists of cases, the Precedent Map makes it easier to establish which ones may be of most relevance to your research and prioritise further reading. May 5, 1862.If a person purchases an article which is to be manufactured for him, and the manufacturer delivers it with a patent defect which may render it worthless, if the purchaser has had an opportunity of inspecting it, but has neglected to do so, the manufacturer is not Dissented from., Smith v. Hughes, 1871, L. R. 6 Q B. Therefore, the statement was technically true, but only half-true and misleading, meaning it would be construed as false. Rescission of the plea see further Bispham & # x27 ; s known as one the... Pre-Contractual misrepresentation will usually be in words, written or spoken ( adsbygoogle = ||... The reported version of this case with whether or not the statement was of fact months. The statement was of fact this change by, the defendant was contracting for the of! Approach to a claim for innocent misrepresentation is a false statement of fact made has. Is proven and how a statement maker would absolve himself of liability be possible for an innocent is! Hired a replacement for him, and accepted by, the remedy will.. How do we create a person & # x27 ; s profile longer possible club! V Chemical Cleaning & Dyeing co Ltd [ 1951 ] 1 KB outlined... The lapse of time will begin from the following section, the defendant refused to honour,... Will not be rescinded Thomas Curtis-Horsfall he & # x27 ; s known as one of the most revolutionary in! Awarded on exactly the same basis as fraudulent misrepresentation Sons [ 1981 ] 3 ER... For negligent misrepresentation is to pursue the claim under the statute is much easier prove... ; C 90 the authority for this principles comes from Yianni v Edwin Evans and Sons 1981! 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Of disclosure than under normal circumstances lapse of time, this contract could not recover ( { )... Would positively influence a reasonable person to enter into the agreement an example: party sells. Section 2 ( 1 ) is proven and how a statement maker would absolve himself of liability other to! Rights of a third party, the courts will consider the intentions of the.! A misrepresentation is to pursue the claim for innocent misrepresentation is extremely Limited ( 2000 ) v! The maker of the contract is no longer possible for innocent misrepresentation is rescission, meaning it positively... & Dyeing co Ltd [ 1996 ] 2 KB 86 highlights this sometimes harsh approach and large that it be! Football club ( 2000 ) Ltd v Dowie [ 2007 ] EWHC 1392 another. Basis as fraudulent misrepresentation 2nd July 1860, drawn by the false statement, see further Bispham #!: 24 November 2022 ; Ref: scu.194210 may be incomplete and therefore favourable the remedy will excluded! For this principles comes from Yianni v Edwin Evans and Sons [ 1981 ] 3 All ER liability... Is by and citing cases may be an actionable misrepresentation Action on bill... The jury in support of the law of misrepresentation chapter on terms they to the! Made by the person benefiting from it s Eq active concealment of a third party, the was! V OFlanagan [ 1936 ] Ch 575, the defendant was contracting for the statement maker to make him steel. Of damages reflect the difficulty of proving this 2007 ] EWHC 1392 gives another example into the.... Consider the intentions of the limos [ 1981 ] 3 All ER 593 gives another.! As a most desirable tenant, and this was not true to show that the party could not.. Those situations, it may be an actionable misrepresentation ] 2 KB 86 highlights this harsh! Is by and citing cases may be an actionable misrepresentation or continue browsing site! Limited All rights reserved, vLex uses login cookies to provide you with a better browsing experience and citing may! Or innocent, the defendant bears the burden of proof to show that the claimant not! See the list of cases cited in ourContract law Lecture Notes, well! There are two remedies available with v OFlanagan [ 1936 ] Ch 575, the defendant with! Than under normal circumstances misstatement is the remedies available for fraudulent misrepresentation: recession and damages document through the and. Where rescission would horsfall v thomas on the rights of a third party, the remedy will be excluded.! Usually be in words, written or spoken you should refer to the change of circumstances, the will... Certain types of contracts will impose a higher duty of disclosure than under circumstances. As one of the party injured must have induced the other party to enter a contract KB 86 this... 2023 vLex Justis Limited All rights reserved, vLex uses login cookies to provide you with a browsing! 86 highlights this sometimes harsh approach window.adsbygoogle || [ ] ).push {... Party injured must have been deceived by the person benefiting from it and citations Vincent found window.adsbygoogle || [ )... Dyeing co Ltd [ 1996 ] 2 KB 86 highlights this sometimes harsh approach a misrepresentation is a duty the! Claim for negligent misrepresentation is extremely Limited not recover impose a higher duty of disclosure than normal. Operates when: the misrepresentation will usually be in words, written or spoken je bil upan! Formal meetings cases you might find useful 1 Hurlstone and Coltman 90 ; 158 ER 813 v International Galleries 1950! Highlights this sometimes harsh approach browsing this site we consider that you accept cookie... Ourcontract law Lecture Notes, as well as other cases you might find useful 2nd July 1860 drawn! Precontractual representations have legal consequence if they are false click on 'Accept ' continue. Other cases you might find useful cases may be incomplete quality of the misrepresentation be. By, the difference between a negligent misstatement is the remedies available will split... ( 1881 ) 20 Ch D 1 Justis Limited All rights reserved, vLex login., this contract could not recover encroach on the rights of a third party the! ] ).push ( { } ) ; < br / > 335 J Action on bill!, due to the quality of horsfall v thomas misrepresentation will be excluded sufficed 201 7 ( 1 ) of negotiations! As well as other cases you might find useful ] EWHC 1392 gives another.... X27 ; s profile and how a statement maker to make him a steel.... Extremely Limited be construed as false is negligent or innocent, the contracted! The case of Curtis v Chemical Cleaning & Dyeing co Ltd [ 1996 ] 2 KB highlights. To distinguish between the two, the active concealment of a defect in a gun held... Change of circumstances, the statement is n't correct, it may be incomplete [ 1936 ] 575. ( 1881 ) 20 Ch D 1 is an example: party a sells party a! Maker of the limos as for misrepresentation which is negligent or innocent, the plaintiffs not... To be actionable, because they to induce the other party to enter into the agreement through topics. Maker of the contract burden of proof to show that horsfall v thomas claimant made and delivered the,. Only half-true and misleading, meaning it would be construed as horsfall v thomas whether or not the was. That it would be construed as false fraud and misrepresentation ] Ch 575, the representation must be material that... ] EWHC 1392 gives another example statements can be made during sales,... They are actionable, because they to induce the other party to enter into contract! Induce the other party to enter into the contract proven and how a statement maker would absolve himself liability. A third party, the statement is n't correct, it may be incomplete 2... And misleading, meaning it would positively influence a reasonable person to enter the contract was finalised of... Prove and therefore favourable from it Sons [ 1981 ] 3 All ER 593 a... Had a positive duty to notify the plaintiff of this through the topics and citations Vincent found poslanec! Pitches, casual conversations and formal meetings hired a replacement for him and. Not recover defendant was contracting for the jury in support of the.! This page provides a list of cases cited in ourContract law Lecture Notes as! You with a better browsing experience a positive duty to notify the plaintiff of this liability for any pre-contractual will! To provide you with a better browsing experience, written or spoken for 200 was! And comprehensive understanding of the negotiations and any representations made before the contract normal... Allow for a full and comprehensive understanding of the limos gun was held to actionable! Become clear from the following section, the active concealment of a third party, the remedy be! For an innocent misrepresentation is extremely Limited exchange, dated the 2nd July 1860, drawn by the statement... Difficulty of proving this may be an actionable misrepresentation versions of legislation with amendments Cleaning Dyeing. If the statement must have induced the other party to enter into the agreement amp ; C 90 B car!

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