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KembaraXtra – Legal Terms – Misrepresentation
A misrepresentation is a false statement of fact made by one party to another during negotiations that encourages the other party to enter into a contract. The person making the statement is known as the representor, while the person relying on it is called the representee. For a statement to amount to misrepresentation, it must have influenced the decision to contract, although it does not need to be the only reason for entering into the agreement.
Not every false statement qualifies as misrepresentation. Statements of law, personal opinion, or future intention are generally excluded. However, an opinion may amount to misrepresentation if the speaker had no reasonable basis for holding that opinion, and a statement of intention may qualify if it is proven that the speaker never intended to carry it out. Furthermore, if the representee already knew that the statement was false, or did not rely upon it, no actionable misrepresentation arises.
The remedies available depend on the seriousness of the representor’s conduct. Fraudulent misrepresentation occurs where the representor did not honestly believe the statement to be true, allowing the representee to rescind the contract and claim damages. Negligent misrepresentation arises where there were no reasonable grounds for believing the statement, while innocent misrepresentation applies when the statement was made honestly and reasonably. In cases of innocent misrepresentation, the court may allow rescission or award damages instead under the Misrepresentation Act 1967.
A party entitled to rescind the contract may instead choose to affirm it and continue with the agreement. The law therefore provides flexibility depending on the wishes of the injured party and the seriousness of the misrepresentation.
Misrepresentation is closely connected with related legal concepts such as misdescription and nondisclosure. Together, these rules aim to ensure fairness and honesty during contractual negotiations.
A misrepresentation is a false statement of fact made by one party to another during negotiations that encourages the other party to enter into a contract. The person making the statement is known as the representor, while the person relying on it is called the representee. For a statement to amount to misrepresentation, it must have influenced the decision to contract, although it does not need to be the only reason for entering into the agreement.
Not every false statement qualifies as misrepresentation. Statements of law, personal opinion, or future intention are generally excluded. However, an opinion may amount to misrepresentation if the speaker had no reasonable basis for holding that opinion, and a statement of intention may qualify if it is proven that the speaker never intended to carry it out. Furthermore, if the representee already knew that the statement was false, or did not rely upon it, no actionable misrepresentation arises.
The remedies available depend on the seriousness of the representor’s conduct. Fraudulent misrepresentation occurs where the representor did not honestly believe the statement to be true, allowing the representee to rescind the contract and claim damages. Negligent misrepresentation arises where there were no reasonable grounds for believing the statement, while innocent misrepresentation applies when the statement was made honestly and reasonably. In cases of innocent misrepresentation, the court may allow rescission or award damages instead under the Misrepresentation Act 1967.
A party entitled to rescind the contract may instead choose to affirm it and continue with the agreement. The law therefore provides flexibility depending on the wishes of the injured party and the seriousness of the misrepresentation.
Misrepresentation is closely connected with related legal concepts such as misdescription and nondisclosure. Together, these rules aim to ensure fairness and honesty during contractual negotiations.
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