Misrepresentation

 

Hello everyone! Next, we move on to discuss misrepresentation. Misrepresentation is defined as the representation which was false in fact when it was being made by one party to another, which, whilst not being a term of the contract, induces the other party to enter the contract. Section18 of Contract Act 1950 provides that Misrepresentation includes:

(a) the positive assertion, in a manner not warranted by the information of the person making it, if that which is not true, though he believes it to be true;(commonly used)

(b) any breach of duty, which, without an intent to deceive, gives an advantage to the person committing it, or anyone claiming under him, by misleading to his prejudice, or to the prejudice of any one claiming under him; and

(c) 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.

The exception to section 19:

If such consent was caused by misrepresentation or by silence, fraudulent within the meaning of section 17, the contract, nevertheless, is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence.

Conditions to be fulfilled before misrepresentation can be actionable:

• First condition: a false statement of fact where an actionable misrepresentation must be a false statement of fact, not opinion or future intention or law.
• Second condition: inducement where the false statement must have induced the representee to enter into the contract
• Requirements:-

    (a) the misrepresentation must be material and

    (b) it must have been relied on.

• Note: these are the requirements under English Law.

There are three types of misrepresentation under English Law:

(i) fraudulent,

(ii) negligent and

(iii)wholly innocent.

Note: This classification is also applicable in Malaysia [Case: Sim Thong Realty Sdn Bhd v Teh Kim Dar (2003) ]