Misrepresentaion | Indian Contract Act in Tamil | CA CMA CS Foundation Law Classes in Tamil

Video Content
MISREPRESENTATION: [Sec. 18]
A statement of fact which one party makes in the course of negotiation with a view to inducing
the other party to enter into a contract is known as misrepresentation. It must relate to some fact
which is material to the contract. It may be expressed by words spoken or written or implied from
the acts and conduct of the parties.
A representation when wrongly made either innocently or intentionally is a misrepresentation.
When it is made innocently or unintentionally it is misrepresentation and when made intentionally
or willfully it is fraud.
Misrepresentation has been defined in section 18 of the Act as under:
“Misrepresentation” means and includes—
(1) The positive assertion, in a manner not warranted by the information of the person making it, of
that which is not true, though he believes it to be true;
(2) Any breach of duty which, without an intent to deceive, gains an advantage to the person
committing it, or any one claiming under him, by misleading another to his prejudice or to the
prejudice of anyone claiming under him ;
(3) 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.
From the above definition of the term Misrepresentation, the following two types of misrepresentations
are noticed:
Unwarranted statements: When a person positively asserts, makes an absolute and explicit
statement of facts, that fact is true, though he has no reliable source to form this opinion, but he
believe it to be true. This is one type of misrepresentation.
Breach of duty: Any breach of duty which brings advantages to the person committing it by
misleading the other to his prejudice is a misrepresentation.
Effect of Misrepresentation:
As per section 19 when consent to an agreement is caused by misrepresentation, the agreement
is a contract avoidable at the option of the party whose consent was so caused. A party to a
contract, whose consent was caused by misrepresentation, may, if he thinks fit, insist that the
contract shall be performed, and that he shall be put in the position in which he would have
been, if the representations made had been true.
Fundamentals of Laws and Ethics

Exception: If such consent was caused by misrepresentation or by silence, fraudulent within the
meaning of section 17, the contract, nevertheless, is not voidable, if the party whose consent
was so caused had the means of discovering the truth with ordinary diligence. This is also called
‘doctrine of constructive notice’.