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 ?
Under Section 6 of Presidential Decree 902-A, or the SEC Reorganization Act, the SEC can suspend, or revoke, after proper notice and hearing, the franchise or certificate of registration or corporations, partnerships or associations, on the ground of serious misrepresentation as to what the corporation can do or is doing to the great prejudice of or damage to the general public.
Even assuming that the use of CEM cells instead of PBMCs violated Southern's promise to use state-of-the-art testing technology, a contractual promise cannot be the basis for a negligent misrepresentation as a matter of law.
Furthermore, immigration professionals who counsel their clients to commit misrepresentation are also subject to severe penalties.
The appeals court noted that negligent misrepresentation requires: "(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another's reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage." Unlike fraud, negligent misrepresentation does not require knowledge of falsity.
Even if an insurer is investigating possible evidence of fraud, "the insurer must make prompt payment on a claim where there is no proof of an actual misrepresentation or that such misrepresentation is material," officials say.
Second, it is difficult to justify the insistence of lower courts applying Halliburton II that while some disclosures, in addition to the actual disclosure containing the alleged misrepresentation, can be examined in determining whether there is price impact for class certification purposes, other additional disclosures cannot be so considered.
Poe's legal counsel George Garcia, is referring to defeated senatorial candidate Rizalito David's complaint accusing the senator of "material misrepresentation" in the certificate of candidacy (COC) she filed in 2013 in the Comelec.
Global Banking News-November 4, 2015--Nigerian central bank does not see misrepresentation in Stanbic IBTC accounts
Fidelity only needed to prove that there was a misrepresentation or concealment of a material fact in connection with an application for insurance.
To recover in a private suit under Section 10(b) and Rule 10b-5(b), a plaintiff must prove: 1) a material misrepresentation or omission by the defendant; 2) the defendant acted with scienter; 3) a connection between the misrepresentation or omission and the purchase or sale of a security; 4) the plaintiffs reliance upon the misrepresentation or omission; 5) economic loss; and 6) loss causation, according to Dura Pharms.
As we have seen, plaintiffs recently achieved some success by framing their data breach claims in common law misrepresentation and related legal theories.