How can misrepresentation invalidate a contract?

A misrepresentation is a false statement of a material fact made by one party which affects the other party's decision in agreeing to a contract. 1 If the misrepresentation is discovered, the contract can be declared void and, depending on the situation, the adversely impacted party may seek damages.

How does misrepresentation influence an agreement?

Misrepresentation is the giving of false information by one party (or their agent) to the other before the contract is made, which induces them to make the contract. If a person makes a contract in reliance on a misrepresentation and suffer loss as a result, they can cancel the contract or claim damages.

What are the 3 elements for a misrepresentation to be voidable?

(1) The defendant made a false representation of a past or existing material fact susceptible of knowledge. (2) The defendant did so knowing the representation was false, or without knowing whether it was true or false. (3) The defendant intended to induce the plaintiff to act in reliance on that representation.

Does material misrepresentation void a contract?

Misrepresentation can invalidate a contract, but it's not always straightforward. In order for the contract to be invalidated, the misrepresentation must be material.

How do you invalidate a contract?

A party was coercing or threatening the other party into signing the agreement. A party was under undue influence (one party dominated the will of another) Mistakes are present in the contract that affect whether one or both parties can carry out their obligations. A party breaches the terms of the contract.

Contract Law - Misrepresentation

What are the elements that invalidates a contract?

Vitiating factors in a contract are those factors the existence of (any of) which will cripple or invalidate the contract. The vitiating elements to be considered are mistake, misrepresentation, duress, undue influence and illegality.

What are the factors that can invalidate acceptance?

There are five vitiating factors, misrepresentation, mistake, duress, undue influence, and illegality.

What are the consequences of misrepresentation?

If the misrepresentation is identified, the contract can be declared void and depending on the situation, the unfavourably impacted party may seek damages. In such a contract dispute, the party who made the misrepresentation becomes the defendant and the aggrieved party is the plaintiff.

When can a misrepresentation void a policy?

The entire policy will be void if, whether before or after a loss, an “insured” has: Intentionally concealed or misrepresented any material fact or circumstance; Engaged in fraudulent conduct; or. Made false statements; relating to this insurance.

Is misrepresentation a breach of contract?

Fraudulent misrepresentation

A fraudulent representation makes a contract voidable. The party who has been misled may avoid the contract and sue for damages. This claim will not be in breach of the contract, but as a claim in fraud.

Why is misrepresentation voidable?

—When consent to an agreement is caused by coercion, 1[***] fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused." A party to contract, whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be ...

What is the effect of negligent misrepresentation on a contract?

A negligent misrepresentation may be constituted by an omission, provided the defendant breaches a legal duty, established by policy considerations, to act positively in order to prevent the plaintiff's suffering loss.

What kinds of mistakes can make a contract void or voidable?

Under the common law, it is generally accepted to be of three types: Common Mistake. Mutual Mistake. Unilateral Mistake.

What makes a misrepresentation actionable?

Required element of a misrepresentation claim—statements

For a pre-contractual statement to be an actionable representation it must have been a statement of fact. Such a statement can be made expressly in writing or orally or may be implied from words or conduct.

What do you mean by misrepresentation in contract law?

Definition: Getting into a contract with a person or a company on false grounds by making statements that are not in accordance with the facts is known as misrepresentation.

What are the 3 types of misrepresentation?

There are three types of misrepresentations—innocent misrepresentation, negligent misrepresentation, and fraudulent misrepresentation—all of which have varying remedies.

Can the insurer cancel the policy due to misrepresentation?

Treating the Customer Fairly While insurers are able to cancel or void contracts of insurance due to wilful misrepresentation on the party of the policy holder, it is important to note that insurers must act in a manner that is fair and considers the rights of the public.

Which of the following is considered to be an act of misrepresentation?

An actionable misrepresentation must be a false statement of fact, not opinion or future intention or law. A false statement of opinion is not a misrepresentation of fact.

In which conditions contract is invalid?

A contract may be deemed void if the agreement is not enforceable as it was originally written. In such instances, void contracts (also referred to as "void agreements"), involve agreements that are either illegal in nature or in violation of fairness or public policy.

What makes a contract null and void?

A null and void contract is an illegitimate agreement, making it unenforceable by the law. Null and void contracts are never actually executed because they are missing one or more of the required elements of a legal agreement.

What is an example of negligent misrepresentation?

Negligent misrepresentation occurs when someone makes a statement without regard to the true facts. For instance, if you tell a person that a stereo system is brand new when it is four-years-old and has been used heavily, then this can be considered negligent misrepresentation.

Does misrepresentation render a contract void or voidable?

Most defects in contract formations, such as those caused by misrepresentation and misstate cause them the contract to be voidable.

What are reasons to void a contract?

Is misrepresentation a contract or tort?

A claim for misrepresentation commonly arises where one party to a contract (“Representor”) makes a false statement of past or present fact (or law) to another (“Representee”) with an intention to induce another to enter into a contract and does induce.

Can you sue for misrepresentation and breach of contract?

Because of the written agreement, the misrepresentation may also be a condition of the contract and, in this case, the claimant may elect to claim for breach of contract and damages, as an alternative to a claim for misrepresentation.