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What Is Misrepresentation?

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  • Written By: Charity Delich
  • Edited By: Bronwyn Harris
  • Last Modified Date: 14 October 2014
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Misrepresentation is a type of tort that a defendant can be charged with in a civil action. It typically occurs when a person makes a false statement of material fact for the purpose of persuading another person to enter into a contract or other arrangement. For example, if a real estate agent tells a potential buyer that a house has new plumbing, when the plumbing is in fact 30 years old, the agent could be liable for misrepresentation. Misrepresentation commonly happens in cases involving false advertising, insurance claims, and real estate contract suits. When misrepresentation occurs in a contract case, the contract is generally voided, and the injured party may be awarded monetary or equitable damages.

In general, a plaintiff must prove five elements in order to be successful in a misrepresentation suit. First, the plaintiff must show that the defendant made a false statement of material fact. Statements that are merely expressing an opinion usually are not considered false statements of fact. There are some exceptions to this rule, however. For instance, an opinion given by an expert to a non-expert or by a fiduciary may be considered a false representation of fact.

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Next, the plaintiff must show that the misrepresentation was intentional or negligent. An intentional, or fraudulent, misrepresentation occurs when a defendant knows that he or she is making a false statement of material fact. A negligent misstatement takes place when a defendant fails to use reasonable care when making a statement. In other words, the defendant is negligent if he should have known that his statement was untrue.

The third element that must be demonstrated is that the defendant intended for the plaintiff to rely on the false statement. For instance, suppose that an insurance company tells a potential customer something untrue in order to get the customer to take out an insurance policy. Intent would be present in this situation because the insurance company made the representation in order to sell the policy.

For the fourth element, the plaintiff ordinarily needs to prove that he or she justifiably relied on the defendant’s statement. The factual circumstances surrounding the case as well as the plaintiff’s personal qualities and characteristics may both be taken into consideration when determining justifiable reliance. A mentally incompetent plaintiff would likely have a lower threshold than a savvier plaintiff. Finally, the plaintiff must show that he or she was injured as a result of the misrepresentation.

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anon343740
Post 4

A Just Energy representative (door-to-door) got a 70-plus year old to sign a contract for their service to "protect the supply rate" on electricity on the implied "savings" on electric bill.

Is there any way to stop this contract and void so-called termination fees, when the contract was signed under the pretense that it was to find out if person was "eligible" for the service? The only recourse I can think of is to call the MA Attorney General.

anon329505
Post 3

What about if I just found out that the man I married two months ago was not divorced from his first wife?

GreenWeaver
Post 2

@Latte31 - I have heard of those cases. It is really sad because when you buy a brand new home you expect to be able to live in it and not have it make you sick.

I remember years ago there was a case about a condo development in which the board was sued for negligent misrepresentation because they were not using the association fees to maintain property and keep up with the necessary maintenance of the building. Instead they were keeping the money for themselves.

They were doing this for so long that the building went into a state of disrepair and the county deemed that the building was not up to code and unsafe to live in. The condo owners not only had to continue paying their mortgage and association fees, but in addition had to pay rent for another apartment. To add insult to injury, the condo owners received an assessment of $40,000 each because the building needed to make multimillion dollar repairs quickly.

This is incredible that something like this can happen, so if you do buy a condo make sure that you check out the condo financial documents and try to learn as much as you can before signing on the dotted line. This complex was in a really expensive area on the beach, so people that lived there could not even enjoy the beach for years.

latte31
Post 1

I just want to say that there were many cases in which lawsuits were filed for legal misrepresentation because of homes that were built with Chinese drywall. Many people in South Florida and probably all over the country as well, bought homes that were built with bad drywall. This material not only smelled bad, but it made many of the homeowners sick.

There were a lot of misrepresentation complaints because now the people that bought these homes could no longer live in them until they are repaired. Many builders offer a one year warranty for the home, and will repair the damage, but many homeowners were still not satisfied. This is why there are so many misrepresentation lawsuits pending for a lot of these builders.

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