Misrepresentation
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Written by Elaine Obika
21st February 2026
Misrepresentation is traditionally defined as a false statement made by one party to another, relating to an existing fact or law, which is intended to and does induce entry into a contract. This definition reflects the doctrine’s central purpose: regulating pre‑contractual reliance and preventing parties from being misled during negotiations. Yet it also exposes a tension between protecting reliance and preserving the autonomy of parties to negotiate freely.
Each element has generated significant litigation, and the doctrine requires careful unpacking.
Firstly, there must be a statement, meaning some positive act by the representor. Silence will not usually suffice, although representations may be made by conduct, which can create difficulties in determining meaning. The representation must be communicated to the claimant and intended, objectively, to influence their decision. This requirement reflects the law’s reluctance to police all pre‑contractual speech; only statements directed at the contracting party fall within the doctrine. Critics argue that this preserves commercial certainty but may leave gaps where misinformation circulates indirectly.
Secondly, the statement must be unambiguous. Ambiguous statements generally do not give rise to liability unless the maker intends the false meaning and the recipient reasonably understands it that way. Although the requirement of an unambiguous statement typically refers to verbal or written assertions, English law recognises that representations may also be made through conduct, silence in the context of half‑truths, or other forms of communication that convey a clear factual meaning.
Thirdly, the representation must be false or misleading in substance. While a purely true statement cannot found a claim, falsity may arise not only from express words but also from conduct, half‑truths, omissions that distort an otherwise accurate statement, or any behaviour that creates a misleading factual impression.
Fourthly, the statement must be one of fact or law. The boundary between fact, opinion, intention, and law has softened: misstatements of law can be actionable, opinions may amount to misrepresentations where special skill is involved and statements of intention are actionable if the stated intention is not genuinely held. The statement must concern the state of affairs at the time it is made, distinguishing misrepresentation from contractual promises about future performance. This boundary is conceptually important but often difficult to maintain in practice, particularly where statements blur fact, opinion, and intention. The courts’ struggle to police this line reveals the artificiality of the distinction in modern commercial contexts.
Fifthly, the statement must be addressed to the claimant, either directly or indirectly through an intermediary, provided the maker intends the information to reach the claimant.
Sixthly, there is debate over materiality and foreseeability of reliance. A material statement is one capable of influencing a reasonable person. Courts often use materiality to infer inducement: if a reasonable person would have been influenced, inducement is presumed unless rebutted. If the statement would not influence a reasonable person, the claimant must prove actual inducement. In cases of fraud reasonable reliance does not need to be shown. However, the “reasonable person” standard has been criticised for under‑protecting vulnerable or inexperienced parties whose reliance may be foreseeable but not objectively reasonable. Moreover, the courts’ willingness to infer reliance in some contexts demonstrates a broader concern with substantive fairness
Finally, the misrepresentation must induce the contract. The representee must have been aware of the statement and influenced by it, though it need not be the sole cause. The “but for” test must be met for the requirement of inducement to be met – though courts may relax it in cases of fraud. The law’s refusal to impose a duty of verification, affirmed in Redgrave v Hurd (1881) 20 Ch D 1, reflects a policy choice to place responsibility on the representor rather than the representee. This promotes fairness but arguably weakens incentives for due diligence in commercial settings
STATEMENT OF FACT
The concept of a “statement of fact” in misrepresentation has undergone a striking doctrinal evolution. What began as a narrow, literal requirement rooted in nineteenth‑century formalism has developed into a far more nuanced inquiry into how meaning is conveyed and relied upon in commercial dealings. Early courts treated misrepresentation as a tightly confined category: a false, express assertion of existing fact that induced the contract. Anything outside this—opinions, silence, conduct—fell beyond the doctrine’s reach. Yet as markets grew more complex and informational asymmetries more pronounced, the courts were forced to confront the inadequacy of this rigid framework. Over time, they expanded the notion of “fact” to encompass conduct, half‑truths, implied assertions, and statements whose meaning derives as much from context as from literal wording. The modern law reflects this gradual shift from formal categories to a more functional, reliance‑based understanding of how parties communicate and how contracts are formed.
DOCTRINAL EVOLUTION OF STATEMENT OF FACT
The modern breadth of what constitutes a “statement of fact” in misrepresentation is the product of a long judicial evolution from rigid nineteenth‑century categories to a more flexible, reliance‑based approach. Traditionally, misrepresentation required a false statement of existing fact inducing a contract, whether made expressly or by conduct. Early cases such as Horsfall v Thomas illustrate this narrow focus: the seller’s concealment of a defect was not actionable because the buyer had not relied on it. This reflects the early emphasis on literal falsity and the representee’s awareness.
Yet even in the nineteenth century, the courts began recognising that factual meaning could arise from conduct and half‑truths. In Dimmock v Hallett, a “half‑truth” was treated as misleading, while Walters v Morgan confirmed that conduct may amount to a representation where it creates a false impression. These decisions mark the first cracks in the rigid fact/opinion divide.
By the mid‑twentieth century, the boundary softened further as courts increasingly treated opinions as implied assertions of fact where the representor possessed superior knowledge. Brown v Raphael and McInerny v Lloyds Bank demonstrate that statements of belief or expectation may carry factual implications about the representor’s knowledge or investigation. This shift reflects a growing judicial concern with informational asymmetry.
Modern commercial cases have expanded the concept still further. In Redgrave v Hurd, the court held that a representee need not verify a statement even where an opportunity to do so exists, while JEB Fasteners v Marks Bloom confirmed that inducement requires only a “real and substantial” influence. More recent decisions such as Flack v Pattinson and Peekay Intermark v ANZ illustrate the courts’ willingness to infer reliance even where conflicting information is available, emphasising the representor’s responsibility for accuracy.
This historical trajectory reveals a broader policy commitment to protecting reasonable reliance in increasingly complex markets, while still grappling with the need for commercial certainty.
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Misrepresentation in Contract Law: An Overview
An understanding of the legal implications of misrepresentation is essential when entering into commercial agreements. Awareness of the relevant principles not only assists parties in avoiding inadvertent misstatements but also ensures that information provided during contractual negotiations is accurate and not misleading. A sound grasp of the law also enables parties to identify when they may have been induced into a contract by misrepresentation and to pursue appropriate remedies, including rescission or damages.
It is important to recognise that a false or misleading statement is not only confined to the terms of a formal written contract. Misrepresentation may arise from statements made during pre‑contractual discussions, business meetings, sales presentations, or through promotional materials. Where a party believes they have been induced into a contract by such a statement, or where they face an allegation of misrepresentation, obtaining specialist legal advice is essential to understanding the available options and protecting their position.
The law recognises three principal categories of misrepresentation:
Innocent misrepresentation
Negligent misrepresentation
Fraudulent misrepresentation
Where misrepresentation is established, the primary remedy is rescission of the contract. In appropriate cases, the court may also award damages, particularly where the claimant has suffered financial loss.
Innocent Misrepresentation
A misrepresentation is considered innocent where the representor can demonstrate both that:
They had reasonable grounds for believing the statement to be true; and
They continued to hold that belief up to the point at which the contract was concluded.
If innocent misrepresentation is established, the court may order rescission. In some circumstances, the court has discretion to award damages in lieu of rescission.
Negligent Misrepresentation
Negligent misrepresentation arises where a statement is made carelessly or without reasonable grounds for believing it to be true. To avoid liability, the representor must show that they had reasonable grounds for their belief.
Under section 2(1) of the Misrepresentation Act 1967, once negligent misrepresentation is proven, rescission is ordinarily available. However, the court may instead award damages, including compensation for losses flowing from the misrepresentation.
Fraudulent Misrepresentation
Fraudulent misrepresentation falls within the tort of deceit. It is established where a false representation is made:
Knowingly,
Without belief in its truth, or
Recklessly, without caring whether it is true or false.
The court must be satisfied that the misrepresentation was deliberate or dishonest, rather than the result of inadvertence or misunderstanding. The claimant must also demonstrate reliance — that they were induced to enter the contract by the false statement and would not have contracted on the same terms but for the misrepresentation.
Where fraudulent misrepresentation is proven, the claimant is entitled to rescission and damages for all losses directly resulting from the deceit.
Establishing a Misrepresentation Claim
A claimant bears the burden of proving several key elements:
False statement of fact: The claimant must show that the representor made a false statement of fact. This may be written, oral, or inferred from conduct. Statements of opinion or intention generally do not qualify unless made fraudulently.
Materiality: The statement must be sufficiently material to influence a reasonable person’s decision to enter the contract.
Reliance: The claimant must demonstrate that they relied on the false statement when contracting, and that such reliance was reasonable in the circumstances.
Inducement: It must be shown that the misrepresentation induced the claimant to enter the contract, or that they would have contracted on different terms had the statement not been made.
Loss (where damages are sought): If the claimant seeks damages, they must establish that they suffered loss directly attributable to the misrepresentation.
Sources
Rob Stokes Commercial Law: Textbook Series (Sweet & Maxwell 2022) 121
Ewan McKendrick Contract Law: Texts, Cases and Materials (Tenth edition, Oxford University Press 2022) 563, 17.2
Peek v Guerney (1873) LR 6 HL 377
Bisset v Wilkinson (1927) AC 177
Avon Insurance plc v Swire Fraser Ltd [2000] 1 All ER (Comm) 573
Pankhania v Hackney [2002] EWHC 2441 (Ch).
Esso v Marden [1978] QB 801.
Edgington v Fitzmaurice (1885) 29 Ch D 459.
Museprime Properties Ltd v Adhill Properties Ltd (1991) 61 P & CR 111, 124.
Dadourian Group International Inc v Simms [2009] 1 Lloyds Rep 601 [99] – [101].
Ross River Ltd v Cambridge City Football Club Ltd [2007] EWHC 2115 Ch.
Horsfall v Thomas (1862) 1 H&C 90.
JEB Fasteners Ltd v Marks Bloom [1983] 1 All ER 583 [590]
Dimmock v Hallett (1866–67) LR 2 Ch App 21
Walters v Morgan (1861) 3 DF & J 718
Brown v Raphael and McInerny v Lloyds Bank 1 Lloyds Rep 246
Redgrave v Hurd (1881) 20 Ch D 1
Pattinson v Flack [2002] All ER (D) 31
Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd [2006] EWCA Civ 386
