Can misrepresentation void a contract?

 

Misrepresentation cannot void a contract but it may be able to make the contract voidable.

The difference is an important one at law: a void contract is treated as though it never existed whilst a voidable contract continues to exist unless the party with the right to bring it to an end (known as ‘rescinding the contract’) does so. Thus, to bring a contract to an end due to misrepresentation, you need to speak to a contract lawyer about how this can be done.

In addition, or as an alternative, to a contract being voidable, the innocent party may be able to claim damages. What remedies are available to the innocent depends on the type of misrepresentation.

Misrepresentation

There are three different types of misrepresentation:

  • Innocent misrepresentation
  • Negligent misrepresentation
  • Fraudulent misrepresentation

Fraudulent misrepresentation occurs when a false representation is made knowingly, or without belief in its truth, or recklessly as to its truth. A negligent misrepresentation occurs when a statement is made carelessly or without reasonable grounds for believing its truth. An innocent misrepresentation is a misrepresentation made entirely without fault.

A contract lawyer can advise you on what type of misrepresentation occurred in your situation. Your contract lawyer can then advise you accordingly what the most appropriate type of remedy is to seek.

Remedies

The most typical remedies for misrepresentation are rescission and/or damages.

For fraudulent and negligent misrepresentation, the claimant may claim both rescission and damages. For innocent misrepresentation, the court can only award either rescission or damages – it does not have the power to award both. The standard remedy for innocent representation is rescission, but the court has discretion to award damages in lieu of rescission.

It is important to seek legal advice from a commercial solicitor as soon as you realise that there has been misrepresentation. Your commercial solicitor may advise you to negotiate with the other party to resolve the issue.

The important thing is not to continue to carry out your promises under the contract without raising the issue, as you may then have difficulty seeking a remedy of rescission of the contract.

If you would like to obtain legal advice on misrepresentation, Contact Law can put you in touch with a local specialist commercial solicitor free of charge. So, if you have any questions or would like our help in finding local commercial solicitors please call us on 0800 1777 162 or complete the web-form above.

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