Misrepresentation

Misrepresentation is a concept in contract law referring to a false statement of fact made by one party to another party, which has the effect of inducing that party into the contract. Misrepresentation can be a serious matter in both legal and ethical terms, not only because it can invalidate a contract, but also because it can lead to criminal charges if it is done intentionally and causes significant harm.

Types of Misrepresentation

There are three types of misrepresentation: innocent misrepresentation, negligent misrepresentation, and fraudulent misrepresentation.

• Innocent Misrepresentation: This occurs when the misrepresentor makes a false statement of fact without any intention to deceive the other party. The misrepresentor may be liable for any losses suffered by the other party as a result of the misrepresentation.

• Negligent Misrepresentation: This occurs when the misrepresentor makes a false statement of fact while having no reasonable ground for believing it to be true. The misrepresentor may be liable for any losses suffered by the other party as a result of the misrepresentation.

• Fraudulent Misrepresentation: This occurs when the misrepresentor makes a false statement of fact knowingly, or without belief in its truth, or recklessly as to its truth. The misrepresentor may be liable for any losses suffered by the other party as a result of the misrepresentation.

Legal Remedies

The remedies for misrepresentation are rescission and damages.

• Rescission: This is the unwinding of the contract, which puts the parties back into the position they were in before the contract was made.

• Damages: This is a monetary award to compensate the innocent party for any loss suffered as a result of the misrepresentation.

See Also

• Contract Law
• Fraud
• Negligence

References

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