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There are three main types of misrepresentation: Fraudulent misrepresentation. Negligent misrepresentation. Innocent misrepresentation.
Misrepresentation in a contract ? an untrue statement of fact. A misrepresentation is when an untrue statement of fact or law is made by Party A (or its agent) to Party B, which induces Party B to enter a contract with Party A thereby causing Party B loss.
The law of misrepresentation applies to representations ? that is, statements ? made before a contract is formed where the representation: is false, and. is relied upon by a party, and. induces the other party to enter the contract.
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.
If a representation is not true it is "inaccurate." If a warranty is not true it is "breached." In financing documents (such as loan agreements) representations and warranties are given by the borrower to induce the lenders to make loans.