Indian Contract Act, 1872

1. MIS-
REPRESENTATION
BUSINESS LAW
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES,
NMCC, MARTHANDAM

2. MIS-REPRESENTATION ?
• A misrepresentation is an untrue statement of a material fact made by one party
which affects the other party’s decision in corresponding to a contract.
• Unverified statement by a party made to make the other party enter into the
contract.
• Made innocently without the intent to deceive the other party.
• If the misrepresentation is identified, the contract can be declared void and
depending on the situation, the aggrieved party may seek damages.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM

3. MIS-REPRESENTATION - DEFINITION
• According to Sec18. “Misrepresentation” means and includes:
(1) 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;
(2) any breach of duty which, without an intent to deceive, gains an advantage of
the person committing it, or any one claiming under him, by misleading another to
his prejudice, or to the prejudice of any one claiming under him;
(3) 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.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM

4. TYPES OF MIS-REPRESENTATION
1) Fraudulent misrepresentation
• Fraudulent misrepresentation will happen when a false representation is made and the party
making the representation, knew it was false or was reckless as to whether it was correct or
incorrect.
2) Negligent misrepresentation
• Negligent misrepresentation befalls where a declaration is made by one contracting party to
another negligently or without reasonable grounds for believing its truth.
3) Innocent misrepresentation
• Misrepresentation made completely without fault can be described as an innocent
misrepresentation.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM

5. ESSENTIALS OF MIS-REPRESENTATION
1. There must be a representation of a material fact.
2. It must be made without any intention to deceive the other party
to the contract.
3. It may be made to a third party with the direction to communicate
it to the other party.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM

6. REMEDIES OF MIS-REPRESENTATION
1. Rescind:
• Rescind means to cancel.
• When the aggrieved party wants, he can claim for cancellation of the contract and/or damages.
• Under contract law, rescission is defined as the unmaking of a contract between the parties.
• Rescission is the unwinding of a transaction.
• This is made to bring the parties, as far as possible, back to the position in which they were
before they entered into a contract (the status quo ante).
2. Insist upon the performance:
• The aggrieved party can claim to the first party, who have committed misrepresentation, to get
the object in the manner as perceived by the aggrieved party earlier.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM

7. S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC,
MARTHANDAM