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Fraudulent Misrepresentation Act

Updated on July 18, 2010

Fraudulent Misrepresentation is a commonly asked question and the common law action of deceit does in some ways provide for this, it can also be couched in other terms such as deceitful statements or fraudulent inducement. From Derry v Peek the burden on proof is on the person to whom the representations were made or also know as the representee to show that the false statement was made knowingly without belief in the truth of his statements or gross carelessness if present in the cases where there was belief in its truth. Only then can there be an inference of fraud. And that is a quick brief of what fraudulent misrepresentation require for its elements.

The effectiveness of the claim however is usually not brought into courts as it is notoriously difficult to show that there was deceit and fraud, as well as negligent misrepresentation being a far easier cause of action with the same benefits under the fiction of fraud such that section 2 1 of the Misrepresentation Act is usually the arrow loaded into the bows of the people in black suits. It throws the burden on the person giving the representations and statements of facts (that are false) to show that they had been honest and reasonable in saying that which they had said prior. If they can't do that then it bodes well for you.

What you would get under the remedial advantages of section 2 1 include among others the basic measure of damages that would usually be shared with tortious (dealing with tort law matters) and reliance basis instead of a contractual one. The reliance measure will attempt to put the victim as far as money can go into the position he or she would have been had the bad thing not been committed. This becomes the starting point after which one might look for reduction in the value of the proprietary interest or consequential losses. This might lead to exemplary damages and losses of opportunity. Fraudulent inducement cases has thus a tendency of being brought put under s 2 1 of the misrepresentation act.


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