Question: What Is Misrepresentation In Contract Law?

What is the meaning of misrepresentation in law?

An untrue statement of fact or law made by Party A (or its agent) to Party B, which induces Party B to enter a contract with Party A thereby causing Party B loss.

An action for misrepresentation can be brought in respect of a misrepresentation of fact or law..

How do you prove misrepresentation?

To prove fraudulent misrepresentation has occurred, six conditions must be met.A representation was made. … The claim was false. … The claim was known to be false. … The plaintiff relied on the information. … Made with the intention of influencing the plaintiff. … The plaintiff suffered a material loss.

What are the ingredients of an actionable misrepresentation?

MisrepresentationFALSE STATEMENT OF FACT. An actionable misrepresentation must be a false statement of fact, not opinion or future intention or law.STATEMENTS OF OPINION. … STATEMENTS AS TO THE FUTURE. … STATEMENTS OF THE LAW. … SILENCE. … (i) HALF TRUTHS. … (ii) STATEMENTS WHICH BECOME FALSE. … (iii) CONTRACTS UBERRIMAE FIDEI.More items…•

What are the 3 types of misrepresentation?

Misrepresentation applies only to statements of fact, not to opinions or predictions. There are three types of misrepresentations—innocent misrepresentation, negligent misrepresentation, and fraudulent misrepresentation—all of which have varying remedies.

What is an example of misrepresentation?

In a fraudulent misrepresentation, a party makes a false claim regarding a contract or transaction but knows it isn’t true. For example, if a person is selling a car and knows there is a problem with the transmission, yet advertises it in perfect mechanical condition, they have committed fraudulent misrepresentation.

How can I stop misrepresentation?

Misrepresentation What Is It and How to Avoid It When Selling a BusinessWork with an experienced broker. … Don’t try to hide major flaws. … Be as transparent as possible with the books. … Have a lawyer look over your listings and agreements.More items…

What voids a contract?

Contracts will be voided if there is a mistake or fraud by one of the parties. Contracts may also be voided if a party entered into a contract under duress. Another type of contract that can be void is an unconscionable contract.

Can you sue for deception?

If you have been defrauded or deceived by an unscrupulous professional or business, you should know your rights under federal and state law. You may be able to bring a civil claim for damages in addition to reporting the matter to the appropriate government agency for investigation.

How do you prove innocent misrepresentation?

Innocent Misrepresentation The pre-contractual statement was false, but the maker of the statement wasn’t negligent in making the statement. The maker of the statement must reasonably believe that what was stated to be true. Then, the statement will be regarded as ‘wholly innocent’.

How do I sue someone for misrepresentation?

In order to succeed on a negligent misrepresentation claim, the plaintiff must prove that:The defendant misrepresented a material fact;The defendants should have known the representation was false;The defendants intended to induce the plaintiff to act on the misrepresentation; and.More items…•

What are the remedies for innocent misrepresentation?

s2(2) empowers a court to award damages in lieu of rescission as a remedy for innocent misrepresentation. A court also has the power under s2(1) of the Act to award damages for fraudulent or negligent (ie non-innocent) misrepresentation.

What is the only contractual remedy for misrepresentation?

The remedies for misrepresentation are rescission and/or damages. For fraudulent and negligent misrepresentation, the claimant may claim rescission and damages.

What is misinterpretation contract law?

In common law jurisdictions, a misrepresentation is an untrue or misleading statement of fact made during negotiations by one party to another, the statement then inducing that other party to enter into a contract. … The common law was amended by the Misrepresentation Act 1967.

What are the remedies for misrepresentation?

As an alternative to rescission, a person can sue for damages as a result of relying upon a misrepresentation. The court will consider whether the statement was a misrepresentation, whether it was relied upon in entering the contract, and whether loss has been sustained.

What are the effects of misrepresentation?

As to the contract itself, the effect of a misrepresentation is to make it voidable by the injured party who can then choose (subject to some qualifications) whether to set it aside and treat it as if it had never been made (this is called rescission) or to continue with it.

Is misrepresentation a breach of contract?

A misrepresentation is an untrue statement of fact made by one party to the other, which induces and misleads that party to enter into a contract. Misrepresentation must be of fact, not of opinion or intention. … If the statement is untrue, it will amount to a breach of contract.

What is the penalty for misrepresentation?

Any claimant or representative of a claimant who knowingly and willfully makes a false statement or representation for the purpose of obtaining a benefit or payment under this chapter shall be guilty of a felony, and on conviction thereof shall be punished by a fine not to exceed $10,000, by imprisonment not to exceed …