Essentials and legal rules for misrepresentation are explained below:
Essentials and Legal Rules
1. The misrepresentation must be of material facts:
It is an important and essential element of misrepresentation that the false statement must be of material facts.
A mere expression of one’s opinion is not a statement of facts. It will be interesting to know that there is a lot of difference when the seller states that his property is worth one lakh of rupees, and when he states that he paid one lakh of rupees for the property.
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The first is the opinion which the buyer may adopt if he so wishes. And the second is a statement of fact, which if false, makes the contract voidable.
2. The misrepresentation must be false, but the person making it honestly believes it to be true:
The statement of facts which amounts to misrepresentation must be a false statement. But the person making it should believe it to be true.
3. The misrepresentations must induce the other party to enter into contract:
The person making false representation must have the intention to induce the other party. Moreover, the second party must enter into a contract believing the representation to be true.
4. The misrepresentation must have been addressed by one party to the party misled:
The false statement which amounts to misrepresentation must have been addressed by the person making it to the party who is misled by it. If it is not addressed to the party who is misled, then it is not misrepresentation and the contract is not voidable at his option.
5. Change of circumstances, may amount to misrepresentation:
Sometimes, a representation of fact is made, and the circumstances change before the conclusion of the contract. In such cases, the change of circumstances which affect the facts already represented must be brought to the knowledge of the other party.
If the change is not brought to the knowledge of the other party, then the contract can be set aside on the ground of misrepresentation.