Misrepresentation Claims

During the negotiations leading to the formation of a contract, many things are said. Some will be mere sales pitches which have no legal effect and others will be representations. Some can be a statement of opinion which may not become terms of the contract, or statements made by one party which may have induced the other party to enter into the contract. Others will become terms of the contract. The distinction between representations and terms is important because each gives rise to different remedies for breach. Misrepresentation misleads a party into signing a contract when they otherwise might not have.

The law of misrepresentation operates when:

• A pre-contractual statement of fact is made to a party intending to enter a contract, and the statement is relied on to enter the contract, and the statement is false.
• The misrepresentation doesn't even need to be made by the person benefiting from it.

Representations become misrepresentations when they're false.

Here are the three types of misrepresentation:

• Innocent misrepresentation
• Negligent misrepresentation
• Fraudulent misrepresentation

Just because a false statement has been made is not enough to succeed in a claim for misrepresentation and there are conditions which need to be satisfied for there to have been an inducement.

The primary consequence for misrepresentation is rescission – placing the parties in the position they would have been in if the contract had not been made.

Depending on the type of misrepresentation, damages can be claimed to put the party in the position they would have been had the misrepresentation not been made.

At Fishers, we have been helping clients settle disputes in and out of court. If you are after legal advice you can either make an enquiry, request a call back, or call us on 01530 412167.