Misrepresentation

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Misrepresentation

Misrepresentations

During the negotiations before a contract, statements are usually made to induce the other party to enter the contract.

If such a statement is false, then the contract may be voidable for fraudulent misrepresentation.

What is Misrepresentation and CAN result in the contract being voidable:

  • If a false statement is made when a contract has been signed and a deposit has been paid. In this situation, the contract can be voidable and the money can be returned.

What is NOT Misrepresentation and CANNOT result in the contract being voidable:

  • Silence cannot amount to misrepresentation and there is no duty to disclose facts.

  • If a false statement is made AFTER the contract.

Where a misrepresentation is found:

  • A claim for damages can be made

  • The misrepresentation may give rise to criminal liability

  • A contract term which is reasonable can be used to exclude liability for misrepresentation

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