Nielsen sued Adams for fraudulent misrepresentation and sought damages in court. During the trial, Adams admitted to withholding information about past basement flooding in Nielsen, but she said it wouldn`t have been relevant to tell her anything about it because she believed someone had solved the problem. Nielsen knew best, however, because when he removed the siding, he discovered enough damage to prove that the basement had been suffering from water problems for years. In the case of an innocent misrepresentation, a false statement occurred that led a party to enter into a contract, but the person who made the misrepresentation had reasonable grounds to believe that it was true at the time of the statement. A plaintiff who has been the victim of an innocent misrepresentation can still claim damages, but he cannot ask for his resignation. Again, in order to claim damages, it must be proved that the plaintiff suffered harm as a result of the misrepresentation. From: Misrepresentation in a dictionary of finance and banking ยป In order to establish the responsibility of the creator of the statement, the auditor or reader must rely on a false statement. In addition, the speaker should be aware that the auditor is relying on the factual accuracy of the statement. Finally, the auditor`s reliance on the statement must have been reasonable and justified, and the misrepresentation must have resulted in financial loss to the auditor. Omission that induces misleading statements may also constitute misrepresentation. For example, the appeals division of the New York Supreme Court ruled in Striker v. Graham Pest Control Co. that the representative of a vendor who did not disclose the carpenter ant infestation made false statements to buyers because “disclosure of a material fact amounts to corroborating misrepresentation when a party is required to disclose relevant information.” Significant omissions in the marketing of a product can also be misrepresentation.

For example, in Drew v. Sylvan Learning Center, Corp., a New York State court found that the fact that a tutoring service did not disclose that it measured “grade level” against its own standards in its brochures, contrary to the usual connotation of grade levels in the public school system, constituted a false statement by omission. However, before discussing the three types of misrepresentation, it is important to first define what misrepresentation means in the context of contract law. A misrepresentation is a false statement of fact that leads a party to enter into a contract. In addition, to bring an action against the person who made the misrepresentation, the plaintiff must prove that he relied on the false factual allegation when he decided to enter into the contract and that the false statement caused prejudice to the plaintiff. An opinion to be considered, even if it is considered false, is not the same as a fact and generally plays no role in cases of misrepresentation. With that in mind, it`s time to look at the three types of misrepresentation. In the legal term, the term “misrepresentation” refers to a statement that someone is making a false statement to encourage someone else to sign a contract. For example, a false statement occurs when one person signs a contract and then suffers harm because they follow the advice of the other person.

A false statement by the insured in an insurance policy may give the insurer the right to cancel the policy or deny a claim. An insurer can only do this if the misrepresentation was material to the insured risk and would have influenced the insurer`s decision whether or not to issue a policy. For example, if a person applying for auto insurance indicates that they do not have a critical chronic illness, it is unlikely that the insurer`s subsequent discovery that the claimant had an incurable condition at the time of completing the insurance form would give the insurer the right to cancel the auto insurance policy. However, if the person has applied for health insurance, such misrepresentation may justify cancellation of the policy or denial of coverage. In general, cancellation or denial of insurance coverage due to misrepresentation can only take place if the insurance applicant was aware of the inaccuracy of the statement. A false statement is information that is false, but that convinces someone to enter into a contract. For a better understanding, consider the following example of misrepresentation: A false statement does not have to be intentionally false to give rise to liability. A statement made with willful ignorance or reckless disregard for the truth can result in liability. Failure by a trustee or expert to disclose material or material facts, such as: A doctor, lawyer or accountant may be liable. If the speaker sells products, any statement, no matter how innocent, may give rise to liability if the statement concerns the character or quality of a product and the statement is not true.

In such a case, it must be a statement of fact. This does not include the so-called puffs or glowing opinions of a salesperson during a sales pitch (statements such as “You`ll love this car” or “It`s a good deal”). In this case, the aggrieved party can then sue for misrepresentation, and the court can order damages or punitive damages, or both. To examine this concept, consider the following definition of misrepresentation. POOR REPRESENTATION, contracts. The declaration by a Contracting Party that something related to it is indeed in some way if it knows that it is not. 2. The misrepresentation must be both false and fraudulent in order to hold the party making it liable to the other for any damage. 3 R. Com. 413; 10 Mass.

R. 197; 1 Rep. Const. Court, 328, 475, Yelv. 21 a, footnote L; Peake`s Cas. 115; 3 campb. 154; Swamp. B. 1, c. 10, s.

1. And see representation. Not all misrepresentations hold a party accountable; where a mere distortion of a fact has been made in error, without fraud, in a casual and reckless communication which relates to a matter in which the person to whom the communication was addressed and who had an interest in it should not have given confidence, but is obliged to inquire for himself and who had the means to establish the truth, there would be no liability; 5 Maule & Selw. 380; 1 puppy. Pr. 836; 1 Sim. R. 13, 63; And if the informant had no legal promise or obligation as to the exact accuracy and veracity of his testimony, the other party cannot take legal action for the consequences of that statement that he could not rely on.

12 East, 638; see also 2 Cox, R. 134; 13 ves. 133; 3 Bos. & Shoot. 370; 2 East, 103; 3 R. T, 56, 61; 3 Bulstr. 93; 6 ves. 183; 3 ves. & Bea.

110; 4 Dall. A. 250. Obfuscation of video; Representation; Suggestio falsi; Suppressio veri. A misrepresentation is a false or misleading statement or material omission that misleads other statements with intent to deceive. Misrepresentation is one element of common law fraud and other fraud pleas, such as securities fraud. Negligent misrepresentation occurs when a party does not pay sufficient attention to verifying the information before passing it on to those they encourage to sign a contract. As a result, other parties suffer a loss because they believe his misinformation. If he had verified the information correctly, he would have realized that it had been falsified before transmitting it and harming others.

Victims of negligent misrepresentation can also sue for damages and seek annulment in court. A misrepresentation in a contract may give a party the right to terminate the contract. A termination of a contract returns the parties to the positions they held before the contract was concluded. A party may terminate a contract for misrepresentation only if the statement was material or decisive for the agreement. A party makes an innocent false statement if it has no reason to believe that the information before it is false. He then shares this information with those who sign the contract, and they all suffer damage as a result. Victims can sue for damages, but they cannot ask the court for a reversal. To succeed in an action for damages, victims must be able to prove that they were harmed by believing that they made a false statement. A party attempting to induce another party is required to ensure that reasonable care is taken with respect to the accuracy of statements of fact that may lead that party to enter into the contract.