PPT: Free Consent-2 | Civil Law for Judiciary Exams PDF Download

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Misrepresentation in 
Contract Law
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Misrepresentation in 
Contract Law
Misrepresentation in Contract Law
Definition
A representation is a statement that influences contract formation but 
isn't a contractual term.
False Information
Occurs when one party provides inaccurate information without 
malicious intent.
Legal Rights
Affected parties can rescind the contract or seek compensation for 
damages.
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Misrepresentation in 
Contract Law
Misrepresentation in Contract Law
Definition
A representation is a statement that influences contract formation but 
isn't a contractual term.
False Information
Occurs when one party provides inaccurate information without 
malicious intent.
Legal Rights
Affected parties can rescind the contract or seek compensation for 
damages.
Importance of Misrepresentation
Business Impact
Crucial in transactions involving significant 
money and frequent business dealings.
False statements about value or risk can 
cause substantial financial losses.
Legal Consequences
Contracts with misrepresentation can be 
invalidated.
The affected party becomes plaintiff, while 
the party making false statements becomes 
defendant.
Page 4


Misrepresentation in 
Contract Law
Misrepresentation in Contract Law
Definition
A representation is a statement that influences contract formation but 
isn't a contractual term.
False Information
Occurs when one party provides inaccurate information without 
malicious intent.
Legal Rights
Affected parties can rescind the contract or seek compensation for 
damages.
Importance of Misrepresentation
Business Impact
Crucial in transactions involving significant 
money and frequent business dealings.
False statements about value or risk can 
cause substantial financial losses.
Legal Consequences
Contracts with misrepresentation can be 
invalidated.
The affected party becomes plaintiff, while 
the party making false statements becomes 
defendant.
Example of 
Misrepresentation
Real Estate Scenario
A seller falsely claims 
a house has never 
experienced flooding 
to entice a buyer.
Discovery
Later, it's revealed the 
property is prone to 
flooding.
Legal Recourse
The buyer may rescind the contract or seek 
compensation for misrepresentation.
Page 5


Misrepresentation in 
Contract Law
Misrepresentation in Contract Law
Definition
A representation is a statement that influences contract formation but 
isn't a contractual term.
False Information
Occurs when one party provides inaccurate information without 
malicious intent.
Legal Rights
Affected parties can rescind the contract or seek compensation for 
damages.
Importance of Misrepresentation
Business Impact
Crucial in transactions involving significant 
money and frequent business dealings.
False statements about value or risk can 
cause substantial financial losses.
Legal Consequences
Contracts with misrepresentation can be 
invalidated.
The affected party becomes plaintiff, while 
the party making false statements becomes 
defendant.
Example of 
Misrepresentation
Real Estate Scenario
A seller falsely claims 
a house has never 
experienced flooding 
to entice a buyer.
Discovery
Later, it's revealed the 
property is prone to 
flooding.
Legal Recourse
The buyer may rescind the contract or seek 
compensation for misrepresentation.
Understanding Misrepresentation in the 
Indian Contract Act
Legal Definition
Section 18 describes misrepresentation as a statement made prior to contract finalization.
Statement Types
Statements can either form part of the contract or be considered representations.
Contract Validity
Misrepresentation doesn't automatically invalidate contracts under specific conditions.