10. Misrepresentation

Misrepresentation is when one of the parties to a contract made a wrong statement about some material element of the contract and, because of this statement, the other party entered into the contract. Contract common law treats fraudulent misrepresentation differently from innocent misrepresentation. In his book The Law of Contracts in Canada, 1994, p. 295, Professor G. Fridman says there are four conditions that must be met before a court will accept that there has been fraudulent misrepresentation:

"(1) that the representations complained of were made by the wrongdoer to the victim (before the contract); (2) that these representations were false in fact; (3) that the wrongdoer, when he made them, either knew that they were false or made them recklessly without knowing whether they were false or true; and (4) that the victim was thereby induced to enter into the contract in question (a legal presumption exists in this regard)" (emphasis added).

Notice that the courts will not entertain a request to rescind a contract if the representation was merely a puffed-up opinion on a particular product. Parties should know better than to give full credence to commercial aggrandizements. Nor will a misrepresentation on the law be a cause for judicial intervention under this heading, and for the same reasons as given above: everyone is presumed to know the law. Silence can be construed as misrepresentation in certain circumstances.