Coupon Accepted Successfully!


Essentials elements and legal rules for misrepresentation

  • The misrepresentation must be of material facts: It is an important and essential element of misrepresentation that the false statement must be of material facts. A mere expression of one’s opinion generally made by businessman about the subject matter is not a statement of fact.
Description: 26203.jpg
  • The misrepresentation must be false, but the person making it honestly must believe it to be true: The person making the false representation must honestly believe it to be true. Though the representation is false but the person making it believes it to be true even though he may not have a ground to substantiate his belief.

    Example: X believed the engine of his motor cycle to be in an excellent condition. At the time of sale of this motor cycle, X without getting it checked in a workshop, told Y that the motor cycle was in an excellent condition. Based on this statement, Y bought the motor cycle, whose engine proved to be defective. Here, X’s statement is misrepresentation as the statement turned out to be false.

  • The misrepresentation must have been addressed by one party to the party misled: The false statement which amounts to misrepresentation must have been addressed by a party to the contract to the party who is misled by it. If it is not addressed to the party who is misled, then it is not misrepresentation and the contract is not voidable. Misrepresentation made to a third person does not award a chance to the party to the contract to avoid such a contract.
Description: 26297.jpg
  • Induce the other party: the idea behind making innocent false representation is to induce the other party and receive his consent to the contract. Though the party does not intend to deceive the other with such a false representation of facts.
  • Actually acted: a misrepresentation is said to have been made only when a party to whom it is made actually is induced into the contract on the basis of such a false representation. In other words the representation must have been instrumental in influencing the other party into the contract. If a party is not affected by the representation made and such has not influenced his decision then he cannot rescind the contract.
  • Change of circumstances: Sometimes, a representation may be true when it is made, but due to change of circumstances, it may become untrue before the contract is concluded. In such cases, it is the duty of the person who made the earlier statement to communicate the change of circumstances to the other party. If he fails to do so, then the other party can set the contract aside on the ground of misrepresentation.

    Example: X, a medical practitioner, wanted to sell his medical practice to Y. X stated to Y that his practice was worth ₹ 20,000 per annum and he had a sufficient number of patients on his panel. This fact was true when X represented it to Y. The negotiations lasted for five months, and then the contract was signed. During this period, X became ill and could not attend to his practice. This resulted in a serious loss of patients. These facts were not disclosed to Y. The court emphasised that the change of circumstances should have been brought to the notice of the purchaser. Held, Y was entitled to set the contract aside.

Remedies available on account of misrepresentation

The aggrieved party, i.e., the party whose consent was obtained by misrepresentation has the following two remedies (or rights)
  • He may rescind (i.e., revoke or put an end to) the contract
  • He may affirm (i.e., accept) the contract

Note: Incase of misrepresentation, the aggrieved party cannot claim the damages from the other party

Test Your Skills Now!
Take a Quiz now
Reviewer Name