Misrepresentation :A representation means statement of fact made by one party to the other, either before or at the time of contract, relating to some matter, essential to the formation of the contract, with an intention to induce the other party to enter into the contract. It may be expressed by words spoken or written or implied from the acts or conducts of the parties (e.g., by any half statement of truth).
A representation when wrongly made, either innocently or indecently , is termed as a mi-representation. To put in differently, misrepresent- may be either innocent or intentional or deliberate with an intent to deceive the other party. In law, for the former kind, the term ‘misrepresen-tation’ and for the latter the term ‘fraud’ is used.
Definition :According to Section 18 ‘Misrepresentation’ means and includes:
(a) The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; or
(b) Any breach of duty which, without an intent to deceive, gains an advantage to the person committing it, or anyone Claiming under-him, by misleading another to the prejudice or to the prejudice of any one claiming under him; or
(c) Causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.
Thus, as per Section 18, there is misrepresentation in the following three cases:
(a) Positive assertion of unwarranted statements of material facts believing them to be true. If a person makes an explicit statement of fact not warranted by his information (i.e., without any reasonable ground), under an honest belief as to its truth though it is not true, there is misrepresentation.
Illustration. A says to B who intends to purchase his land, “My land produces 10 quintals of wheat per acre. A, believes the statement to be true, although he did not have sufficient grounds for the belief later on, it transpires! that the land produces only 7 quintals of wheat, ‘per are. This is ‘a misrepresentation.
It may be noted that a mere expression of opinion or words of commen-dation for example in a sale of land a mere general statement that the land is fertile, cannot be held to amount to a positive assertion.
(b) Breach of duty which ‘brings an advantage to the person committing it by misleading the other to his prejudice. This clause comes those cases where a statement when made was true but subsequently before it was acted upon, it became false to the knowledge of the person making it. In such a case, the person making the statement comes under an obligation to disclose the change in circumstances to the other party, Otherwise he will be guilty of misrepresentation.
Illustration
A before signing a contract with B for the sale of business, correctly states that the monthly sales are Rs. 50,000. Negotiations lasted for five months, when the contract of sale was signed. During this period the sales dwindled to Rs.5,000 a month. A, unintentionally keeps quite. It was held that there was misrepresentation and B was entitled to rescind the contract ( With vs O’Flanagan).
Note, that a partial non-disclosure may also constitute a misrepresentation, for instance, where a vendor of land told a purchaser that all the farms on the land were fully let, but inadvertently omitted to inform him that the tenants had given notice to quit, he was held guilty of misrepresen-tation (Dimmock vs Hallett). .
(c) Causing mistake about subject-matter innocently If one of the parties induces the other, though innocently, to commit a mistake as to the quality or nature of the thing bargained, there is misrepresentation.
Illustration. in a contract of sale of 500 bags of wheat , the seller made a representation that no sulphur has been used in the cultivation of wheat. Sulphur, however, had been used in 5 out of 200 acres of land. The buyer would not have purchased the wheat but for the representation. There is a misrepresentation.
A representation when wrongly made, either innocently or indecently , is termed as a mi-representation. To put in differently, misrepresent- may be either innocent or intentional or deliberate with an intent to deceive the other party. In law, for the former kind, the term ‘misrepresen-tation’ and for the latter the term ‘fraud’ is used.
Definition :According to Section 18 ‘Misrepresentation’ means and includes:
(a) The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; or
(b) Any breach of duty which, without an intent to deceive, gains an advantage to the person committing it, or anyone Claiming under-him, by misleading another to the prejudice or to the prejudice of any one claiming under him; or
(c) Causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.
Thus, as per Section 18, there is misrepresentation in the following three cases:
(a) Positive assertion of unwarranted statements of material facts believing them to be true. If a person makes an explicit statement of fact not warranted by his information (i.e., without any reasonable ground), under an honest belief as to its truth though it is not true, there is misrepresentation.
Illustration. A says to B who intends to purchase his land, “My land produces 10 quintals of wheat per acre. A, believes the statement to be true, although he did not have sufficient grounds for the belief later on, it transpires! that the land produces only 7 quintals of wheat, ‘per are. This is ‘a misrepresentation.
It may be noted that a mere expression of opinion or words of commen-dation for example in a sale of land a mere general statement that the land is fertile, cannot be held to amount to a positive assertion.
(b) Breach of duty which ‘brings an advantage to the person committing it by misleading the other to his prejudice. This clause comes those cases where a statement when made was true but subsequently before it was acted upon, it became false to the knowledge of the person making it. In such a case, the person making the statement comes under an obligation to disclose the change in circumstances to the other party, Otherwise he will be guilty of misrepresentation.
Illustration
A before signing a contract with B for the sale of business, correctly states that the monthly sales are Rs. 50,000. Negotiations lasted for five months, when the contract of sale was signed. During this period the sales dwindled to Rs.5,000 a month. A, unintentionally keeps quite. It was held that there was misrepresentation and B was entitled to rescind the contract ( With vs O’Flanagan).
Note, that a partial non-disclosure may also constitute a misrepresentation, for instance, where a vendor of land told a purchaser that all the farms on the land were fully let, but inadvertently omitted to inform him that the tenants had given notice to quit, he was held guilty of misrepresen-tation (Dimmock vs Hallett). .
(c) Causing mistake about subject-matter innocently If one of the parties induces the other, though innocently, to commit a mistake as to the quality or nature of the thing bargained, there is misrepresentation.
Illustration. in a contract of sale of 500 bags of wheat , the seller made a representation that no sulphur has been used in the cultivation of wheat. Sulphur, however, had been used in 5 out of 200 acres of land. The buyer would not have purchased the wheat but for the representation. There is a misrepresentation.
What is Misrepresentation?
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