Agreement Is False
If, in the example above, a car dealer makes a statement that it knew was false to induce the other party to buy a car and the other party relied on that misrepresentation, this could form the basis of fraudulent misrepresentation. The court should also show that the applicant relied on the misrepresentation and caused him harm (e.g.B. overpaid for the car). Fraudulent misrepresentation can be defined as any type of lie or false testimony used to induce a person to enter into a deal. Misrepresentation can occur in many ways, including written words, words, gestures, or body movements (such as a nod) or through silence or inaction. If the claimant merely invokes the declaration without verifying its validity (even if he would be able to do so) and assigns the contract, this constitutes an incentive. If the other party makes a factual check, but nevertheless withdraws the contract, there is no incentive, because it is not possible to say that it relied on the false statement. Anyone running a business understands that most transactions and agreements are sealed by a contract, even if it`s just a handshake. In essence, contract law governs the transfer of rights from one party to another and requires each party to account for the agreed terms.
It is of the utmost importance in any treaty that both parties are on the same side and act in good faith. However, if a party makes a false or misleading statement to induce another party to enter into a contract that causes any harm, the aggrieved party may take legal action for fraudulent misrepresentation. If you enter into a contract with another person or organization, each party must be truthful in its negotiations and in all statements made prior to the conclusion of a contract. If false statements or misrepresentations are made and a contract follows, the aggrieved party may be able to break the contract because it touches the heart of what is needed before and during the contact. In attwood v Small, the seller made false claims about the capabilities of its mines and steel mills. The buyer, Attwood, said it would verify claims before the purchase, and it employed agents who stated Small`s claims were true. The House of Lords decided that Attwood could not make the contract, as he did not count on Small, but on his agents.