A misrepresentation is a false statement of fact (or law) made by one party that induces another to enter a contract. If you were misled into a deal, misrepresentation may give you the right to unwind it and/or claim damages. Here is a plain-English guide for England and Wales.
The elements of misrepresentation
To establish an actionable misrepresentation, there must generally be:
- a false statement of fact or law (not mere opinion, sales "puff", or a future promise, though these can sometimes qualify);
- made to the claimant (or a class including them);
- that induced the claimant to enter the contract (they relied on it); and
- as a result, the claimant entered the contract (often to their detriment).
Silence is usually not misrepresentation, but there are exceptions (e.g. a half-truth, a change of circumstances, or contracts of "utmost good faith").
The three types
The type of misrepresentation affects the remedy:
- Fraudulent misrepresentation, a false statement made knowingly, without belief in its truth, or recklessly (the test from Derry v Peek). This is the tort of deceit.
- Negligent misrepresentation (a false statement made carelessly, without reasonable grounds for believing it true. Under the Misrepresentation Act 1967 (s 2(1)), the burden is on the representor to prove they had reasonable grounds) which makes this a powerful claim for the innocent party.
- Innocent misrepresentation, a false statement made honestly and with reasonable grounds for believing it true.
The remedies
Rescission
For all types, the primary remedy is rescission, the contract is set aside and the parties are restored, so far as possible, to their pre-contract positions. Rescission can be lost ("barred") where:
- the claimant has affirmed the contract after learning the truth;
- there has been undue lapse of time;
- it is impossible to restore the parties to their original positions; or
- a third party has acquired rights in the subject matter.
Damages
- Fraudulent: damages in the tort of deceit, a generous measure covering all losses flowing directly from entering the contract (even unforeseeable ones).
- Negligent (s 2(1) Misrepresentation Act 1967): unless the representor proves they had reasonable grounds for their belief, damages are generally assessed on the same basis as fraudulent misrepresentation (deceit), covering all direct losses flowing from entering the contract.
- Innocent: there is no automatic right to damages, but under s 2(2) the court has a discretion to award damages in lieu of rescission.
Misrepresentation vs breach of warranty
A statement can be both a misrepresentation and a contractual warranty. Misrepresentation can give rescission and tortious damages; breach of warranty gives contractual damages. Which route is better depends on the facts, and sellers often try to exclude misrepresentation through "entire agreement" and "non-reliance" clauses (which are themselves subject to a reasonableness test).
Practical points
- Act promptly, rescission can be lost by delay or affirmation.
- Keep evidence of the statement, your reliance, and the truth.
- Check the contract for entire agreement / non-reliance clauses.
- Take advice, misrepresentation is technical and the choice of remedy matters.
Key takeaways
- Misrepresentation is a false statement of fact/law that induced you to contract.
- The three types are fraudulent, negligent (Misrepresentation Act 1967, s 2(1)) and innocent, and the type drives the remedy.
- The primary remedy is rescission (subject to bars); damages are available for fraudulent and negligent misrepresentation, and in lieu of rescission (discretion) for innocent misrepresentation.
- Act quickly, watch for non-reliance clauses, and take advice.
Sources
- Misrepresentation Act 1967 (ss 2(1) and 2(2), damages for negligent misrepresentation and damages in lieu of rescission)
- Derry v Peek (1889) (fraudulent misrepresentation / deceit); general law on rescission and its bars
- Controls on exclusion of liability for misrepresentation (Misrepresentation Act 1967, s 3; reasonableness)
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.