Misrepresentation occurs when a false statement of fact is made by one party to another party, inducing the other party to enter into a contract. This can have significant legal consequences.
We have dealt with many cases where misrepresentation is in issue. For a claim to be successful the untruthful statement must be relied upon by the other party and they then must act to their detriment. It must have, in reality cost them money.
Misrepresentation claims are often brought in parallel or as an alternative to breach of contract claims.
Types of Misrepresentation
There are different types of misrepresentations. The legal consequences and evidence needed to prove misrepresentation differ between the different types :-
- Fraudulent Misrepresentation – this is where a deliberate lie is made with the intention of deceiving the other party. It is the most serious type of misrepresentation.
- Negligent Misrepresentation – occurs when a party makes a careless statement that is untrue, even if they did not intend to deceive.
- Innocent Misrepresentation – a false statement made without any intention to deceive and without negligence.
Examples of Misrepresentation
- False statements about a property – claiming a property is in a better condition than it actually is or that there have been no disputes with neighbours, when there have been.
- Misleading information about a business – overstating a company’s profits or understating its debts.
- Incorrect statements about a product or service – providing false information about a product’s features or benefits
We have acted for claimants and also for defendants in many of these types of cases and many other scenarios. It is of vital importance that the Claimant is specific and consistent in their evidence about the representations made and how he/she/they then relied upon the representations.
Legal consequences and remedies for Misrepresentation
The remedies available for misrepresentation depend on the type of misrepresentation:
- Fraudulent Misrepresentation – the innocent party can rescind the contract (cancel it) and claim damages for any losses suffered.
- Negligent Misrepresentation – the innocent party can rescind the contract and claim damages.
- Innocent Misrepresentation – the innocent party can rescind the contract but cannot claim damages unless the contract is deemed voidable for another reason.
The most common result is usually compensation – damages, to put the claimant back in the position they would have been but for the misrepresentation.
Key Points to note
- False Statement of Fact – the statement must be a false statement of fact, not an opinion or prediction.
- Materiality – the misrepresentation must be material, meaning it must have influenced the other party’s decision to enter into the contract.
- Inducement – the misrepresentation must have induced the other party to enter into the contract.
- Innocent Party – the innocent party must have relied on the misrepresentation to their detriment.
The evidential burden is demanding and there are considerable risks when bringing a court claim for misrepresentation, so it is important to seek legal advice promptly. A qualified lawyer can help you assess your options and protect your rights.
Our team here are well placed to provide you with all the advice you would need and to take the matter forwards. We have very substantial experience of such claims and have the benefit of the practical experience of dealing with them at Court.
