CIMA BA4 Syllabus C. CONTRACT AND EMPLOYMENT LAW - Misrepresentation - Notes ^{9 / 13}

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