Legal Definitions - false representation

A false representation occurs when one person makes a statement of fact to another person that is untrue, and this untrue statement influences the second person to make a decision or enter into an agreement. This concept is often central to contract law and can lead to a contract being voided or damages being awarded.

Here are some examples illustrating false representation:

• Example 1: Purchase of Property

  A homeowner is selling their house and tells a prospective buyer that the basement has "never had any water issues, even during heavy rains." Relying on this assurance, the buyer proceeds with the purchase. After moving in, the buyer discovers significant water damage in the basement during the first major storm, indicating a long-standing problem that was clearly visible upon closer inspection before the sale.

  Explanation: The homeowner's statement about the basement having "never had any water issues" was a false representation of a material fact. The buyer relied on this untrue statement when deciding to buy the house, and it directly influenced their decision.

• Example 2: Investment Opportunity

  An investment advisor presents a new fund to a client, claiming it has "consistently delivered returns of over 15% annually for the past five years." Based on this impressive track record, the client decides to invest a substantial sum. Later, the client discovers that the fund's actual average annual return over the past five years was closer to 5%, and the 15% figure was only achieved in a single, exceptional year.

  Explanation: The investment advisor's claim about the fund's "consistently delivered returns of over 15% annually" was a false representation. The client relied on this inaccurate information to make their investment decision.

• Example 3: Employment Application

  During a job interview for a senior management position, a candidate states on their resume and verbally confirms that they hold a Master's degree from a prestigious university. The company, impressed by this qualification, offers the candidate the job. Several months into the role, a routine background check reveals that the candidate never actually completed the Master's degree and only attended a few courses.

  Explanation: The candidate's assertion of holding a Master's degree was a false representation of their qualifications. The company relied on this untrue statement when deciding to hire the individual for a position where such a degree was considered highly desirable.