When a false statement is made with the knowledge that is false and also with intention to deceive the other party and make him enter into a contract on that basis, it is known as fraud. But when the person making a false statement believes the statement to be true and does not intend to mislead the other party to the contract, it is known as Misrepresentation.  

Distinction between Misrepresentation and fraud:

       The principal difference between 'fraud' and 'misrepresentation' is that in the one case the person making the suggestion does not believe it is to be true and in other he believes it to be true, though in both cases, it is a misstatement of fact which misleads the promisor.  Although in both the cases, the contract can be avoided in case of misrepresentation or a fraudulent silence, the contract cannot be avoided if the party whose consent was so caused had the means of discovering the truth with ordinary diligence.    


No
Misrepresentation
Fraud 

1.
It is an innocent misstatement.
It is a willful statement.



2.
The person making it has not knowledge as to its untruth.
The person making the statement has full knowledge as to its untruth.


3.
In misrepresentation Intention to deceive is not necessary.
Intention to deceive is essential in fraud.



4.
Aggrieved party can avoid the contract but cannot claim damages
Aggrieved party can avoid the contract and can claim damages also.


5.
Misrepresentation by itself is not a tort
Fraud by itself is a tort







2 comments:

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