Fraudulent Misrepresentation - What you need to know
Expert Commercial Law have a panel of Fraudulent Misrepresentation solicitors on hand to assist clients. Arrange a consultationIn the realm of contractual relationships, parties often rely on the representations made during negotiations to strike fair deals. However, when one party knowingly or recklessly makes false statements to induce the other into a contract without belief in its truth, it constitutes fraudulent misrepresentation. All of the legislation protecting people from fraudulent misrepresentation can be found in the Misrepresentation Act 1967.
Fraudulent misrepresentation is an untrue statement of fact or law with the intention to deceive and induce another party into a contract. The misrepresentation must be a statement of fact, not a mere expression of opinion, and it must be a material factor influencing the victim’s decision to enter into the agreement. This deceitful conduct can have severe consequences, resulting in reputational damage and a loss suffered for the misled party.
At Expert Commercial Law, we can put you in touch with an expert in fraudulent misrepresentation claims, they can provide you with the relevant legal advice and assist you in making a claim. Please do not hesitate to get in touch with our team today to find out more.
What is fraudulent misrepresentation?
Fraudulent misrepresentation refers to a deliberate and dishonest act where one party makes false statements, conceals facts, or provides misleading information to induce another party to enter into a contract or agreement. It is a form of deceit and is considered a serious legal offense.
To constitute fraudulent misrepresentation, several key elements must be present:
False Representation:
The party accused of fraudulent misrepresentation must have made a false statement of fact. Mere opinions or statements of future intentions are not sufficient to qualify as misrepresentation unless they are made dishonestly.
Knowledge of Falsity:
The party making the false representation must have known that the statement was untrue or, at the very least, acted recklessly without caring whether it statement was true or false.
Intent to Deceive:
The false representation must have been made with the intention of inducing the other party to rely on it and enter into the contract.
Reliance:
The party claiming fraudulent misrepresentation must have reasonably relied on the false statement when entering into the contract.
Materiality:
The misrepresented fact must be material, meaning it must have been significant enough to influence the decision of the deceived party to enter into the contract.
Damages:
The party claiming fraudulent misrepresentation must have suffered actual financial losses or damages as a result of relying on the false statement.
Types of misrepresentation can occur in various forms, including oral statements, written documents, or even through the omission of material facts. Additionally, a contract which explicitly ‘excludes liability’ or limits liability for fraudulent misrepresentation is ineffective. It is essential to differentiate fraudulent misrepresentation from other forms of misrepresentation, such as negligent or innocent misrepresentation.
If fraudulent misrepresentation is established, the innocent party typically has the right to rescind the contract and, in some cases, claim damages to compensate for any financial losses incurred due to the deception. Legal action can be taken to seek redress against the party responsible for the fraudulent misrepresentation and to restore the misled party to their pre-contractual position.
How to make a claim for fraudulent misrepresentation
Before proceeding with a claim, it is crucial to consult with an experienced solicitor who specialises in contract law and fraudulent misrepresentation. A legal expert will assess the strength of your claim, advise you on the available legal options, and guide you through the process. Expert Commercial Law can put you in touch with the most relevant legal professional for your case.
It would then be helpful and necessary to collect all relevant evidence that supports your claim of fraudulent misrepresentation. This may include:
- Contractual Documents: Obtain copies of the contract and any related agreements or documents.
- Communications: Preserve all written and electronic communications (emails, letters, texts, etc.) related to the negotiation and formation of the contract.
- Witnesses: Identify any witnesses who can support your claim and be willing to testify in court, if necessary.
- Expert Opinions: If applicable, seek expert opinions to demonstrate the materiality of the misrepresentation and its impact on the contract.
A specialist solicitor in this area of the law can then advise you on the merits of your case and your chances of being successful in making a claim. They can then initiate proceedings on your behalf.
Other types of misrepresentation
Besides fraudulent misrepresentation, there are two other main types of misrepresentation:
Negligent Misrepresentation:
This occurs when a false statement is made by a person who had no reasonable grounds to believe it was true. Essentially, the person making the statement failed to exercise reasonable care or competence in obtaining or communicating the information.
Negligent misrepresentation can be actionable under common law and under the Misrepresentation Act 1967. Under common law, it arises from the tort of negligence. Under the Misrepresentation Act 1967, if a party enters into a contract after a negligent misrepresentation, they can claim damages unless the representor can prove they had reasonable grounds to believe the statement was true.
The primary remedies include rescission of the contract (returning both parties to their pre-contractual position) and/or damages.
Innocent Misrepresentation:
This occurs when a false statement is made by a person who had reasonable grounds to believe it was true at the time it was made. There is no intent to deceive and no negligence involved.
Innocent misrepresentation is also covered under the Misrepresentation Act 1967. It applies when a statement is made honestly, without any intention to deceive and with reasonable grounds for belief in its truth.
The primary remedy is rescission of the contract. In some cases, the court may award damages in lieu of rescission under the Misrepresentation Act 1967. This means the misled party can receive compensation for any losses suffered instead of having the contract rescinded.
How can Expert Commercial Law assist?
Expert Commercial Law have a panel of fraudulent misrepresentation solicitors on hand to assist in your case. Our panel firms understand the importance of fair business deals and can help you get justice for untrue statements of fact.
Our solicitors also help with commercial claims, such as breach of contract, partnership disputes, fraud claims, professional negligence and CCJ removal.
If you are interested in bringing a claim for misrepresentation, please contact us today and we will put you in touch with a solicitor from our panel.
Please note, we are not a firm of solicitors; however, we maintain a panel of trusted and regulated high profile legal experts. If you contact us in relation to a commercial law case, we will pass your case onto a panel firm in return for a fee from our panel firms. We will never charge you for passing on your case to a panel firm.
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Please note, we are not a firm of solicitors; however, we maintain a panel of trusted and regulated legal experts. If you contact us in relation to a commercial law case, we will pass your case onto a panel firm in return for a fee from our panel firms. We will never charge you for passing on your case to a panel firm.