Definition - What does Misrepresentation mean?

Misrepresentation is when a party involved in a contract presents false facts in order to induce the other party to agree to the contract. In other words, it is when lies are told in order to create a legally binding business deal that would be otherwise likely to fall through.

Misrepresentations are grounds for lawsuits.

Justipedia explains Misrepresentation

Misrepresentations can be very costly to the party who is lied to in the contract. For example, if one party agrees to buy an expensive machine from another party because the other party says that the machine is in perfect working order, the purchasing party can lose a lot of money if the machine turns out to be broken. A lawsuit could then ensue, where the swindled party seeks damages from the party who committed the misrepresentation.

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