Misrepresentation
The term "misrepresentation" means a false representation of fact made innocently or non-disclosure of a material fact without any intention to deceive the other party. Section 18 defines the term "misrepresentation" as follows
"Misrepresentation" means and includes-
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;
Any breach of duly which, without an intent to deceive, gains an advantage to the person committing it, or anyone claiming under him, by misleading an other to his prejudice or to the prejudice of anyone claiming under him;
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.
Effect of misrepresentation[section 19]
The effects of misrepresentation are as follows:
Right to rescind the contract The party whose consent was caused by misrepresentation can rescind (cancel) the contract but he cannot do so in the following cases:
where the party whose consent was caused by misrepresentation had the means of discovering the truth with ordinary diligence;
where the party gave the consent in ignorance of misrepresentation;
where the party after becoming aware of the misrepresentation, takes a benefit under the contract;
where an innocent third party, before the contract is rescinded, acquires for consideration some interest in the property passing under the contract;
where the parties cannot be restored to their original position.
(b) Right to insist upon performance The party whose consent was caused by misrepresentation may if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representation made had been true.
Comparison between fraud and misrepresentation
Similarities: There are basically two similarities in case of fraud and misrepresentation as follows:
In both the cases, a false representation is made by a party;
In both the cases, the contract is voidable at the option of the party whose consent is obtained by fraud or misrepresentation.
The term "misrepresentation" means a false representation of fact made innocently or non-disclosure of a material fact without any intention to deceive the other party. Section 18 defines the term "misrepresentation" as follows
"Misrepresentation" means and includes-
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;
Any breach of duly which, without an intent to deceive, gains an advantage to the person committing it, or anyone claiming under him, by misleading an other to his prejudice or to the prejudice of anyone claiming under him;
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.
Effect of misrepresentation[section 19]
The effects of misrepresentation are as follows:
Right to rescind the contract The party whose consent was caused by misrepresentation can rescind (cancel) the contract but he cannot do so in the following cases:
where the party whose consent was caused by misrepresentation had the means of discovering the truth with ordinary diligence;
where the party gave the consent in ignorance of misrepresentation;
where the party after becoming aware of the misrepresentation, takes a benefit under the contract;
where an innocent third party, before the contract is rescinded, acquires for consideration some interest in the property passing under the contract;
where the parties cannot be restored to their original position.
(b) Right to insist upon performance The party whose consent was caused by misrepresentation may if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representation made had been true.
Comparison between fraud and misrepresentation
Similarities: There are basically two similarities in case of fraud and misrepresentation as follows:
In both the cases, a false representation is made by a party;
In both the cases, the contract is voidable at the option of the party whose consent is obtained by fraud or misrepresentation.
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