Requirement for Misrepresentation

The following is a requirement for misrepresentation to exist:

a) Misrepresentation should relate to a material fact
- Misrepresentation must be made in relation to a material fact, which is a fact that is important and relevant to the subject matter of the contract. This means that the misrepresentation must have influenced the decision of the other party to enter into the contract.

Example: A car salesman tells a customer that a car has never been in an accident when in fact it has been. This is a material fact as it could affect the customer's decision to purchase the car.

b) The person making a misrepresentation should not believe it to be true
- For misrepresentation to exist, the person making the statement must know that it is false or must be reckless as to whether it is true or false. In other words, the person making the statement must have the intention to deceive.

Example: A seller tells a buyer that a painting is an original when they know it is a fake. This is misrepresentation because the seller knows the statement is false and has the intention to deceive the buyer.

c) It must be made with an intention to deceive the other party
- Misrepresentation must be made with an intention to deceive the other party. This means that the person making the statement must know that it is false or must be reckless as to whether it is true or false. In other words, the person making the statement must have the intention to deceive.

Example: A seller tells a buyer that a painting is an original when they know it is a fake. This is misrepresentation because the seller knows the statement is false and has the intention to deceive the buyer.

d) All of the above
- This option is incorrect as only option 'a' is a requirement for misrepresentation to exist. The other options may contribute to misrepresentation but are not necessary for it to exist.

Conclusion

Misrepresentation is a false statement of fact that induces another to enter into a contract. For misrepresentation to exist, it must relate to a material fact, the person making the statement should not believe it to be true, and it must be made with an intention to deceive the other party.

A misrepresentation is a false statement of a material fact made by one party which affects the other party's decision in agreeing to a contract. If the misrepresentation is discovered, the contract can be declared void. Depending on the situation, the adversely impacted party may seek damages.