|Fraudulent Misrepresentation in Law|
Fraudulent misrepresentation in Law
Fraudulent misrepresentation in law is nothing but a civil tort arising out of contract law. Generally, the meaning of fraud and misrepresentation can be defined as “It is a false statement of fact made by the defendant to the aggrieved party that causes or induces someone to enter into a contract.
Simply, fraud by misrepresentation is when at the time of forming the contract, the defendant misrepresents, suppresses or lies an important fact in order to cause or induce the other party to enter into a contract with the defendant.
When one of the contracting parties to the contract makes fraud by misrepresentation then the aggrieved party has the right to sue for fraudulent misrepresentation against the wrongdoer and can be entitled to claim compensation from the wrongdoer.
For Example – A want to purchase the bike from B, but B knowingly that there are some internal damages to the engine of the bike and hide this fact from A and sold out his bike. This is a fraudulent misrepresentation examples in contract law.
Fraudulent Misrepresentation in Contract Law
Under the Law of Contracts, the aggrieved party can claim compensatory damages against the defendant when the court finds that the defendant has committed fraud by misrepresentation.
The court can find whether the defendant has committed fraud by misrepresentation or not when the six factors or elements of fraudulent misrepresentation have been met and these are;
- There should be a representation by the defendant,
- Such representation made by the defendant should be false,
- At the time of making a contract, the defendant knew that the representation made by him was false or that the defendant made the statement recklessly and without knowledge of its truth,
- It should be made with the intention that the plaintiff must rely on it or believe it.
- That the plaintiff did rely on the fraud by a misrepresentation made by the defendant,
- That the plaintiff must suffer from harm or damage as a result of the fraudulent misrepresentation.
Remedies for Fraudulent Misrepresentation
The plaintiff is liable to avail of the remedies only when the plaintiff must suffer measurable harm as a result of a fraudulent statement made by the defendant because the court will formulate its remedies based on the harm or damage caused to the plaintiff.
The remedies for fraudulent misrepresentation are rescission of the contract. In this, the aggrieved party has avail right to cancel the existing contract agreed between them.
The remedy available for the fraudulent misrepresentation is in the form of monetary damages or compensation. When the defendant misrepresents the existing contract and due to which is the other party suffers loss or damage, then the court will be made liable for the defendant to compensate for the damages caused to the claimant in the form of monetary compensation/damages.
The Burden of Proof and Standard of Proof
The universal rule is that the burden of proof always lies on the plaintiff/claimant to prove all his allegations made to the defendant.
In fraud and misrepresentation, the burden of proof lies on the plaintiff or aggrieved party to prove the existence of such facts. When the claimant proves all the existing facts then the evidential burden of proof lies on the defendant.
Defences Available for Fraudulent Misrepresentation
There are many defences available to an individual person who is being charged with fraudulent misrepresentation. Some common defences are;
Lack of Evidence
As mentioned, the essential elements of it must all be met in order to prove an individual person to be liable. If there is not enough primary evidence to prove a particular element, the defendant might not be held liable for it. This is one of the most common defences against it.
For instance, if there is no evidence to show that the defendant actually made it, it may serve as a defence. Another example is if the plaintiff didn’t actually suffer any damages.
If the plaintiff waited too long to file their misrepresentation claim, it may serve as a defence under a laches theory of law. Most claims are associated with a statute of limitations (i.e. a filing deadline). Thus it’s important to bring a lawsuit as soon as you suspect you have a claim.
It may serve as a defence if the defendant was forced to make the fraudulent statement under threat of harm or under conditions of duress (for instance, being threatened that they will be fired if they don’t make the fraudulent statement). This is a somewhat rare defence as conditions such as these are not all that common.
Various other defences may apply. These will all depend on state laws and the attorney’s ability to research local laws and craft an appropriate legal strategy.
Fraudulent misrepresentation is nothing but a civil tort arising out of contract law. Fraud by misrepresentation is when at the time of forming the contract, the defendant misrepresents, suppresses or lies an important fact in order to cause or induce the other party to enter into a contract with the defendant.