misrepresentation

Misrepresentation is a false statement of fact made by one party, without intention to deceive, which the maker believes to be true, and which induces the other party to enter the contract. It also includes a breach of duty that gives the maker an advantage by misleading the other party, and innocently causing a mistake about the subject matter.

The contract is voidable at the option of the misled party, who may rescind it or insist on performance. The defence under the Indian Contract Act is that the party could have discovered the truth with ordinary diligence. It differs from fraud, where the statement is made knowingly or recklessly with intent to deceive and damages are also available.

Example

The seller honestly but wrongly said the land was free of encumbrances; this was misrepresentation, and the buyer could rescind the sale.

In Indian law

• Sections 18 and 19, Indian Contract Act, 1872

See also

fraud · free consent · voidable contract · rescission

Read more in the study notes

• Phases of negotiation, qualities of a negotiator and power to negotiate (Alternative Dispute Resolution Systems)
• Abetment (Bharatiya Nyaya Sanhita)
• Skills of argument and logical inference (Business Communications)
• Pleadings: fundamental rules, verification and amendment (Order VI) (Civil Procedure Code and Limitation Act)
• Promoters: position, duties and liabilities (Company Law)
• Constructive notice and the doctrine of indoor management (Company Law)