Misrepresentation is an innocent, unintentional misstatement of fact. The party making the statement believes it is true, though it is actually false. It is defined under Section 18 of the Act.
1. Statutory Definition (Section 18)
Misrepresentation includes:
- The positive assertion of a fact which is not true, though the person making it believes it to be true.
- Any breach of duty which, without an intent to deceive, gains an advantage to the person committing it by misleading another.
- 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.
2. Fraud vs. Misrepresentation (SEO Goldmine Comparison)
| Basis | Fraud (Section 17) | Misrepresentation (Section 18) |
|---|---|---|
| Intent | Deliberate intention to deceive the other party. | No intention to deceive; statement made innocently. |
| Belief in Truth | The speaker knows the statement is false. | The speaker believes the statement is true. |
| Remedies | The victim can rescind the contract and sue for damages in tort. | The victim can rescind the contract, but cannot sue for damages. |