Misrepresentation - CONTRACT LAW

Misrepresentation occurs when one party makes a false statement of fact which induces the other party to enter into a contract.

The false statement can be made knowingly, recklessly, or negligently.

Types of Misrepresentation:

1. Innocent Misrepresentation

- Occurs when the party making the false statement believed it to be true at the time.

Example: A seller mistakenly states that a painting is an original when it is actually a copy.

2. Negligent Misrepresentation

- Occurs when the party making the false statement did not take reasonable care in verifying its accuracy.

Example: A real estate agent incorrectly states that a property has planning permission when it does not.

3. Fraudulent Misrepresentation

- Occurs when the party making the false statement knows it to be false or makes it with reckless disregard for its truth.

Example: A car salesman knowingly conceals the fact that a car has been in a major accident.

II. Elements of Misrepresentation

A. Statement of Fact

1. The misrepresentation must be a statement of fact, not opinion or law.

Example: A statement that "this car is in good condition" would be considered a statement of fact.

B. False Statement

1. The statement must be false or misleading.

Example: A seller states that a car has only had one previous owner when it actually had three.

C. Inducement

1. The false statement must have induced the other party to enter...