What is the usual remedy for a contract entered into because of an innocent misrepresentation?
Asked by: Johathan Rau | Last update: February 14, 2026Score: 4.5/5 (20 votes)
The usual remedy for a contract entered into due to innocent misrepresentation is rescission, which cancels the contract and aims to return both parties to their original positions before the contract was made, often involving returning money or property. While damages aren't typically awarded for innocent misrepresentation (unlike negligent or fraudulent ones), an indemnity might cover expenses incurred in reliance on the false statement, though rescission is the primary goal.
What are the remedies available for innocent misrepresentation?
Innocent misrepresentation: a representation that is neither fraudulent nor negligent. The remedies for misrepresentation are rescission and/or damages. For fraudulent and negligent misrepresentation, the claimant may claim rescission and damages.
What is the remedy for misrepresentation in a contract?
The primary remedy is rescission (restore the parties to their original status before the contract was made). If representation was fraudulent or negligent misstatement, the representee can pursue remedies in the tort of deceit.
What is a contract entered into because of misrepresentation?
A misrepresentation is a false statement of a material fact made by one party which affects the other party's decision in agreeing to a contract. If the misrepresentation is discovered, the contract can be declared void.
Does innocent misrepresentation make a contract void?
Each type of misrepresentation can make a legal contract voidable. The aggrieved party can choose to cancel the contract and claim damages. In cases of innocent misrepresentation, the remedy is usually limited to cancellation of the contract without damages.
The 4 Key Elements of Misrepresentation in Contract Law
What is the burden of proof for innocent misrepresentation?
The burden of proof is significant here. Under section 2(1) of the Misrepresentation Act 1967, once a representee proves a misrepresentation was made, the representor must prove they had reasonable grounds to believe, and did believe up to the time the contract was made, that the facts represented were true.
What are common defenses against misrepresentation?
No Knowing Misrepresentation
If you made the statements in your takedown notice or counter-notice in good faith, believing they were true, then you didn't know you were making a misrepresentation, and the claimant doesn't have a claim. An unknowing mistake is a defense to a misrepresentation claim.
Can you rescind a contract for misrepresentation?
Where the contract is set aside and the parties are put back into the position in which they were before the contract was made. It is one of the remedies available for misrepresentation.
Can you get punitive damages for misrepresentation?
“Fraud” for purposes of a punitive damages award means “an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Civ.
What is an example of innocent misrepresentation?
Innocent misrepresentation examples include a seller unknowingly offering defective merchandise, or if a person on Craigslist sells a used TV but does not know it's broken. Misrepresentation is a legal term meaning a false statement that has an impact on a contract.
What are the three remedies?
There are three type of remedies which the plaintiff (person who brings an action in a court) which are damages, specific performance and injunction. These remedies will be given to the plaintiff according to the losses that he or she had faced.
Can you void a contract for misrepresentation?
Misrepresentation and Fraud
Similar to the mistake defense, if one party to a contract has lied or intentionally led the other to believe that they were contracting for something other than they have represented, the contract can be voided.
What are the five remedies?
Five essential legal remedies for contract breaches
- Compensatory damages. ...
- Liquidated damages. ...
- Specific performance. ...
- Punitive damages. ...
- Nominal damages.
What are the remedies available for a contract induced by misrepresentation?
What are the remedies for Misrepresentation? The innocent party may seek to have the contract rescinded or set aside, essentially undoing the agreement and returning both parties to the position they would have been in had the contract not been concluded.
What remedies are available to an innocent party when a breach of contract occurs?
The main remedies for breach of contract include compensatory damages, liquidated damages, restitution, rescission, specific performance, and reformation. Each remedy serves a different purpose, from recovering financial losses to requiring a party to fulfill their obligations.
What are the remedies for misleading and deceptive conduct?
Misleading or deceptive conduct may lead to civil remedies, including:
- injunctions.
- damages.
- compensatory orders.
- orders for non-party consumers.
- non-punitive orders.
What is the maximum 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 ...
How much should I ask for in punitive damages?
There is no formula to calculate punitive damages. A judge or jury will award an amount that it determines is sufficient to punish the defendant and deter the defendant and others from similar conduct. This will be based on the following factors: How much the defendant profited from the misconduct.
How to prove innocent misrepresentation?
Innocent Misrepresentation
The maker of the statement must reasonably believe that what was stated to be true. Then, the statement will be regarded as 'wholly innocent'. Rescission can be claimed as a remedy for innocent misrepresentation where: the statement has become a term of the contract.
What are the 4 bars to rescission?
Common bars to rescission include affirmation (confirming the contract), impossibility of restoring both sides to their previous positions, the involvement of innocent third-party rights, and undue delay.
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 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.
What remedy is generally granted by innocent misrepresentation?
The main legal remedy for innocent misrepresentation is rescission of the contract, which aims to restore both parties to their pre-contractual positions. In most jurisdictions, monetary damages are not awarded unless the misrepresentation becomes negligent or fraudulent.
What is the best remedy for misrepresentation?
Rescinding a contract
It is important to attempt to rescind the contract as promptly as possible once a misrepresentation is discovered. The right to rescind may be lost if a person waits too long to seek to rescind it.
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.