What is misrepresentation in contract law?
Asked by: Mitchell Wolf Sr. | Last update: February 4, 2026Score: 4.2/5 (58 votes)
In contract law, misrepresentation is a false statement of fact made by one party to another that induces them to enter a contract, making the contract voidable and allowing the misled party to seek remedies like rescission or damages. It can be fraudulent (intentional), negligent (careless), or innocent (believed to be true), with different consequences depending on the type.
What is a misrepresentation in a contract?
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.
What are the three types of misrepresentation?
Misrepresentation in Contract Law: negligent, innocent and fraudulent statements (and the remedies)
What is an example of misrepresentation in law?
The buyer of land asked the seller's solicitor if there were any restrictive covenants on the land and the solicitor said he did not know of any. He did not say that he had not bothered to read the documents. The court held that even though the statement was literally true it was a misrepresentation.
What is misrepresentation under contract law?
Misrepresentation is the giving of false information by one party (or their agent) to the other before the contract is made, which induces them to make the contract. If a person makes a contract in reliance on a misrepresentation and suffer loss as a result, they can cancel the contract or claim damages.
What is a Misrepresentation Under Contract Law?
What are four types of mistakes that can invalidate a contract?
However, being aware of the four vices that can void a contract — duress, undue influence, misrepresentation, and mistake — is crucial for ensuring that your agreements are legally enforceable and that your rights are protected.
Can you terminate a contract for misrepresentation?
In some circumstances a party's silence will amount to a misrepresentation, for example, where it gives only half the truth which has the effect of misleading the other party. If this is the case the contract can be rescinded for misrepresentation as above.
What is proof of misrepresentation?
To prove fraudulent misrepresentation, you must show that the statement was false, made knowingly or recklessly, and intended to deceive. Evidence such as internal communications or inconsistencies can support the claim.
Does misrepresentation make a contract void?
A misrepresentation is a false statement which induces a person to enter into a contract. A misrepresentation renders a contract voidable. This means that the contract is valid, until the innocent party takes steps to avoid (cancel) it. The innocent party may also be able to claim recission and damages.
What are the 4 types of contract breaches?
“Some contract breaches are more serious than others. The law distinguishes between material (or total) breaches and immaterial (trivial or minor) breaches of contract.” In this comprehensive guide, we'll explore all four main types of breach of contract: minor, material, fundamental, and anticipatory.
How do you prove misrepresentation?
To identify misrepresentation, you need to carefully review all communications, documents and actions involved in the contract or transaction. You should look for statements that are untrue, incomplete or misleading, as well as any omissions of material facts.
What are the requirements for misrepresentation in contract law?
In order for a representation to become a misrepresentation, it must be first proven that it was an unambiguous, false statement of fact. In order to prove this misrepresentation is actionable, it must be shown that this representation induced the claimant to enter the contract.
What is the most serious form of misrepresentation?
Fraudulent misrepresentation
Fraud is the most severe form of misrepresentation and occurs when a party knowingly makes a false statement or engages in dishonest conduct with full intent to harm and/or deceive the other party.
Can you sue for a misleading contract?
Under California law, you can file a claim against the party who presented misleading information that led you to enter into a contract. However, to prevail in a fraudulent misrepresentation lawsuit, the plaintiff must prove that: A representation was made. The particular representation was false.
What is misrepresentation under Section 18 of the contract Act?
Section 18: Misrepresentation
Section 18 defines misrepresentation as a false statement of fact made innocently or without knowledge of its falsehood, which induces one party to enter into a contract. It occurs when a party makes a statement believing it to be true, without any intention to deceive.
How do courts determine damages for misrepresentation?
As far as damages go, most courts allow the plaintiff to recover the value of the property contracted for had the representation been true minus the actual value of the property. This is known as the "benefit of the bargain".
Who is liable for misrepresentation?
If the claimant is successful in bringing an action for misrepresentation, the defendant will be liable for all losses flowing from the inducement, whether or not they were foreseeable. The claimant is also entitled to rescission of the contract, unless the court orders damages in lieu of this.
What are three things that can cause a contract to be void?
Now that you have a grasp of what makes a contract valid, let's delve into what can make one void.
- Lack of Capacity.
- Illegality of Contract's Purpose.
- Absence of Mutual Assent.
What damages can you claim for misrepresentation?
The level of damages will depend on the type of misrepresentation. Generally, the rule is that the damages should compensate the claimant for the loss which has been suffered. As such, each case is dealt with on a case-by-case basis, and it is unlikely for any two cases to be the same.
What are the 4 elements of misrepresentation?
Misrepresentation involves a false statement of fact that affects a contract or legal agreement. The four elements of misrepresentation are a representation, its falsity, its material impact, and reliance causing a loss.
Is it difficult to prove misrepresentation?
This can be difficult to prove but, it is a good first step to speak with neighbours to ask them of any prior flooding and to get advice from an expert who can determine signs of previous flooding. You must also be able to show that you would not have entered into the contract without relying on the seller's statement.
How do you win a misrepresentation case?
If you are bringing a fraudulent misrepresentation claim, you will need to demonstrate the following:
- A false representation was made to you;
- The person who made the statement either: ...
- The person who made the statement intended that you should rely on it.
- You relied on the statement.
What is the time limit for misrepresentation?
Is there a time limit? After selling a house, the statute of limitations (the length of time within which a claim can be made) is six years for fraudulent misrepresentation claims.
Is misrepresentation a felony?
Penalties
Willful misrepresentation of a charge for service is a misdemeanor level offense. Those convicted of this offense can be sentenced to serve up to a year in jail in addition to substantial fines.
On what grounds can a contract be rescinded?
It includes the effect of rescission, the main grounds for rescinding a contract (misrepresentation, mistake, Undue influence, duress, non-disclosure, fiduciary misdealing and bribery) and the main bars to seeking rescission as a remedy of affirmation, intervention of third party rights and impossibility of restitution ...