misrepresentation


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Related to misrepresentation: Innocent misrepresentation

Misrepresentation

An assertion or manifestation by words or conduct that is not in accord with the facts.

Misrepresentation is a tort, or a civil wrong. This means that a misrepresentation can create civil liability if it results in a pecuniary loss. For example, assume that a real estate speculator owns swampland but advertises it as valuable commercially zoned land. This is a misrepresentation. If someone buys the land relying on the speculator's statement that it is commercially valuable, the buyer may sue the speculator for monetary losses resulting from the purchase.

To create liability for the maker of the statement, a misrepresentation must be relied on by the listener or reader. Also, the speaker must know that the listener is relying on the factual correctness of the statement. Finally, the listener's reliance on the statement must have been reasonable and justified, and the misrepresentation must have resulted in a pecuniary loss to the listener.

A misrepresentation need not be intentionally false to create liability. A statement made with conscious ignorance or a reckless disregard for the truth can create liability. Nondisclosure of material or important facts by a fiduciary or an expert, such as a doctor, lawyer, or accountant, can result in liability. If the speaker is engaged in the business of selling products, any statement, no matter how innocent, may create liability if the statement concerns the character or quality of a product and the statement is not true. In such a case, the statement must be one of fact. This does not include so-called puffing, or the glowing opinions of a seller in the course of a sales pitch (such statements as "you'll love this car," or "it's a great deal").

A misrepresentation in a contract can give a party the right to rescind the contract. A Rescission of a contract returns the parties to the positions they held before the contract was made. A party can rescind a contract for misrepresentation only if the statement was material, or critical, to the agreement.

A misrepresentation on the part of the insured in an insurance policy can give the insurer the right to cancel the policy or refuse a claim. An insurer may do this only if the misrepresentation was material to the risk insured against and would have influenced the insurer in determining whether to issue a policy. For example, if a person seeking auto insurance states that she has no major chronic illnesses, the insurer's subsequent discovery that the applicant had an incurable disease at the time she completed the insurance form probably will not give the insurer the right to cancel the auto policy. However, if the person was seeking Health Insurance, such a misrepresentation may justify cancellation of the policy or a denial of coverage. Generally, cancellation or denial of insurance coverage for a misrepresentation can occur only if the insurance applicant was aware of the inaccuracy of the statement.

Further readings

Kionka, Edward J. 1988. Torts. St. Paul, Minn.: West.

Cross-references

Consumer Protection; Product Liability; Sales Law; Tort Law.

misrepresentation

n. the crime of misstating facts to obtain money, goods, or benefits of another to which the accused is not entitled. Examples: a person 1) falsely claims to represent a charity to obtain a donation which he/she keeps; 2) says a painting is a genuine Jackson Pollock when it is a fake, and is thus able to sell it for a price much greater than its true value. Misrepresentation is also called "false pretenses." (See: false pretenses)

misrepresentation

noun deceitfulness, deception, deceptive statement, deceptiveness, distortion, fabrication, false representation, false statement, falsehood, falsification, falsity, fraud, inaccuracy, incorrect assertion, intentional misstatement, lie, misapplication, misconstruction, misguidance, misquotation, misreport, misstatement, misstatement of fact, overstatement, untrue statement, untruth, untruthfulness, unveracity
Associated concepts: actionable misrepresentation, deceit, false misrepresentation, fraudulent misrepresentation, innooent misrepresentation, material misrepresentation, misreppesentation of a material fact, negligent misrepresentation
See also: abuse, artifice, bad faith, catachresis, color, deceit, deception, distortion, evasion, false pretense, falsehood, falsification, forgery, fraud, hoax, lie, misstatement, overstatement, perjury, pretense, pretext, sham, sophistry, story, subreption, understatement

misrepresentation

representing something incorrectly. A misrepresentation is distinct from a statement of opinion. It may have the effect of making an otherwise valid contract void or at least voidable. A distinction is made between innocent, negligent and fraudulent misrepresentations. At best, an innocent misrepresentation may affect a contract, a negligent misrepresentation may attract in addition liability for negligence and a fraudulent misrepresentation may attract damages for the fraud and deceit. See also MISTAKE.

MISREPRESENTATION, contracts. The statement made by a party to a contract, that a thing relating to it is in fact in a particular way, when he knows it is not so.
     2. The misrepresentation must be both false and fraudulent, in order to make the party making it, responsible to the other for damages. 3 Com. R. 413; 10 Mass. R. 197; 1 Rep. Const. Court, 328, 475, Yelv. 21 a, note l; Peake's Cas. 115; 3 Campb. 154; Marsh. Ins. B. 1, c. 10, s. 1. And see Representation. It is not every misrepresentation which will make a party liable; when a mere misstatement of a fact has been erroneously made, without fraud, in a casual, improvident communication, respecting a matter which the person to whom the communication was made, and who had an interest in it, should not have taken upon trust, but is bound to inquire himself, and had the means of ascertaining the truth, there would be no responsibility; 5 Maule & Selw. 380; 1 Chit. Pr. 836; 1 Sim. R. 13, 63; and when the informant was under no legal pledge or obligation as to the precise accuracy and correctness of his statement, the other party can maintain no action for the consequences of that statement, upon which it was his indiscretion to place reliance. 12 East, 638; see also, 2 Cox, R. 134; 13 Ves. 133; 3 Bos. & Pull. 370; 2 East, 103; 3 T. R, 56, 61; 3 Bulstr. 93; 6 Ves. 183; 3 Ves. & Bea. 110; 4 Dall. R. 250. Vide Concealment; Representation; Suggestio falsi; Suppressio veri.

References in periodicals archive ?
Backstrand and Nurse Hughes alleging, inter alia, wrongful death by medical malpractice, breach of contract, mishandling of a dead body, outrage, involving intentional infliction of emotional distress, invasion of privacy, and intentional misrepresentation.
The lower courts found, however, that contractor's statutory liability for misrepresentation could exist even without any intent to deceive.
Targteded to students and professors, the book's chapters also cover: the distinction between misrepresentation and express warranty, the parties involved, manufacturers, design, warning, causation, additional proof problems, defenses and damages.
In such situations, the characterization of a defect as either patent or latent is significant in terms of liability for misrepresentation and the remedies available to a purchaser.
Particularly in times of unstable property prices, a transaction that doesn't go the way one party expects can result in claims against the real estate agent that include misrepresentation, negligence, failure to disclose and breach of fiduciary duty.
However, I did watch the show and was angered by the gross misrepresentation of the church and was greatly concerned about the potential negative impact that misrepresentation could have on the health and future of all churches and Christians.
Misrepresentation is always dangerous, but never more so than when selling expensive property.
The Court began its analysis by noting the resemblance between the 10b-5 cause of action and common-law actions for deceit and misrepresentation, stressing the requirement that a plaintiff suffer "actual damages.
The act also prohibits misrepresentation of the organization's purpose and misrepresentation of the purpose or beneficiary of the solicitation.
Under contract law, if agents acting on a seller's behalf make the contract without disclosing the name or existence of the real sellers, they will have personal liability under the contract if the car is stolen, does not meet its description or for any misrepresentation they make.
One addition to Stacey Giulianti's fine article on dealing with an insurance misrepresentation defense (April) is to consider if the insurer promptly refunded the premium upon learning of the alleged misrepresentation (some cases even involve accepting additional premium payments).