• According to Section 18, there is misrepresentation:
• (1) statement of fact, which of false, would constitute misrepresentation if the maker believes it to be true but which is not justified by the information he possesses.
• (2) When there is a breach of duty by a person without any intention to deceive which brings an advantage to him.
• (3) When a party causes, even though done innocently, the other party to the agreement to make a mistake as to the subject matter.
• a) Misrepresentation does not involve deception but is only an assertion of something by a person which is not true, though he believes it to be true. Misrepresentation could arise because of innocence of the person making it or because he lacks sufficient or reasonable ground to make it.
• b) A contract which is hit by misrepresentation can be avoided by the person who has been misled.
• Misrepresentation is often caused when there is no free consent by the aggrieved parties.
Acts that constitute Misrepresentation:-
a) Unwarranted Statement: An innocent false statement of material fact, not warranted by information (Trustworthy source), is considered as misrepresentation.
For example: A makes a positive statement to B that C will be the director of a company. A makes the statement on information derived, not directly from C but from M. B applies for shares on the faith of the statement which turns out to be false. The statement amounts to misrepresentation, because the information received (second-hand) did not warrant A to make the positive statement to B.
b) Breach of Duty: There are certain cases where the party is under duty to disclose certain facts and he does not disclose these facts and thereby misleads the other party. Under English law it is called “Constructive fraud”. For Example: Under a contract of insurance, the assured person had a duty to disclose his age correctly. If an assured person honestly states his age as 20 years whereas he is actually 25 and thereby induces the LIC to charge a lower premium, it will be a case of misrepresentation. If he makes this misstatement intentionally then it is fraud.
c) Inducing mistake about subject matter: When one party misleads the other, however innocently regarding the nature and quality of subject matter, a misrepresentation is said to be made.
• Example 1: A makes a positive statement to B that C will be made the director of a company. A makes the statement on information derived, not directly from C but from M. B applies for shares on the faith of the statement which turns out to be false. The statement amounts to misrepresentation, because the information received second-hand did not warrant A to make the positive statement to B.
• Example 2: ‘A’ believed the engine of his motor cycle to be in an excellent condition. ‘A’ without getting it checked in a workshop, told to ‘B’ that the motor cycle was in excellent condition. On this statement, ‘B’ bought the motor cycle, whose engine proved to be defective. Here, ‘A’s statement is misrepresentation as the statement turns out to be false.
• Example 3: A while selling his mare to B, tells him that the mare is thoroughly sound. A genuinely believes the mare to be sound although he has no sufficient ground for the belief. Later on, B finds the mare to be unsound. The representation made by A is a misrepresentation.
• Example 4: A buy an article thinking that it is worth ` 1000 when in fact it is worth only ` 500. There has been no misrepresentation on the part of the seller. The contract is valid.
I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.
If you are interested in participating in the same, do let me know.
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