The Consequences of Making a Misrepresentation

Many statements can be made in the course of trying to win work and there can be a temptation to overstate facts. Whether this could result in a misrepresentation is explained below together with the possible consequences.

Representations are statements of fact – not opinions or intentions. Misrepresentations are untrue representations. In order to be able to sue in respect of a misrepresentation, the injured party must show the statement induced it to enter into a contract and that it would not have done so but for the misrepresentation. If it knew the statement was untrue or only learned about the statement after making the contract, no action could be taken.

Misrepresentations can be fraudulent, negligent or innocent. A fraudulent misrepresentation is made when the person making it knows or believes it to be untrue. A...