Misrepresentation
Also called: Innocent misrepresentation
An untrue statement or a breach of duty that misleads a party into a contract without intent to deceive. It makes the contract voidable (Sections 18 and 19 of the Indian Contract Act).
Explained
Section 18 of the Indian Contract Act, 1872 states that misrepresentation means and includes three things: (1) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; (2) any breach of duty which, without an intent to deceive, gains an advantage to the person committing it, or anyone claiming under him, by misleading another to his prejudice; and (3) causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement.
The defining feature is the absence of an intent to deceive. That separates misrepresentation from fraud under Section 17, which requires an act done with intent to deceive or to induce the other party to enter the contract. Under Section 14, consent is not free when caused by misrepresentation, and under Section 19 the contract is voidable at the option of the party whose consent was so caused. The second paragraph of Section 19 lets that party, if he thinks fit, insist on performance and be put in the position he would have been in if the representations had been true.
Two limits apply. By the Exception to Section 19, a contract is not voidable if the party misled had the means of discovering the truth with ordinary diligence; this exception applies to misrepresentation and to fraudulent silence, but not to active fraud. By the Explanation, a misrepresentation that did not cause the consent does not make the contract voidable. Under Section 238, misrepresentations made by an agent acting in the course of business for the principal have the same effect as if made by the principal. A party who avoids the contract may sue for rescission under Section 27 of the Specific Relief Act, 1963.
Examiners test the three clauses of Section 18, the contrast with fraud and mistake, and the Exception to Section 19, often through the indigo factory illustrations to that section.
What the law says
“Misrepresentation” means and includes—
(1) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;
(2) any breach of duty which, without an intent to deceive, gains an advantage to the person committing it, or any one claiming under him; by misleading another to his prejudice, or to the prejudice of any one claiming under him;
(3) causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.
Defines misrepresentation
When consent to an agreement is caused by coercion,*** fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.
A party to a contract whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true.
Exception.—If such consent was caused by misrepresentation or by silence, fraudulent within the meaning of section 17, the contract, nevertheless, is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence.
Contract voidable; exception for ordinary diligence
“Fraud” means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto of his agent, or to induce him to enter into the contract:—
(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
Defines fraud, the contrasting term
Misrepresentation made, or frauds committed, by agents acting in the course of their business for their principals, have the same effect on agreements made by such agents as if such misrepresentations or frauds had been made or committed by the principals; but misrepresentations made, or frauds committed, by agents, in matters which do not fall within their authority, do not affect their principals.
Illustrations
(a) A, being B’s agent for the sale of goods, induces C to buy them by a misrepresentation, which he was not authorized by B to make. The contract is voidable, as between B and C, at the option of C.
Agent's misrepresentation binds the principal
Section 27, Specific Relief Act
(1) Any person interested in a contract may sue to have it rescinded, and such rescission may be adjudged by the court in any of the following cases, namely:—
(a) where the contract is voidable or terminable by the plaintiff;
(b) where the contract is unlawful for causes not apparent on its face and the defendant is more to blame than the plaintiff.
Rescission of a voidable contract
Example
Illustration (b) to Section 19: A, by a misrepresentation, leads B to believe that five hundred maunds of indigo are made yearly at A's factory. B examines the accounts, which show only four hundred maunds, and then buys the factory. The contract is not voidable on account of A's misrepresentation.
For the exam
- Section 18 ICA lists three forms; none requires intent to deceive.
- Fraud (Section 17) requires intent to deceive; misrepresentation does not.
- Contract is voidable at the option of the misled party (Section 19).
- No relief if the truth could be discovered with ordinary diligence (Exception to Section 19).
- Misrepresentation must have caused the consent (Explanation to Section 19).
86 questions in the Law Maker question bank use this term. Practise Contract Law questions
Judgments
Related terms
- FraudUnder Section 17 of the Contract Act, specified acts by a party to a contract, or with his connivance, or by his agent, done to deceive the other party or induce him to contract.
- Voidable contractAn agreement enforceable by law at the option of one or more of the parties but not at the option of the other or others. Section 2(i) of the Indian Contract Act, 1872.
- CoercionCommitting or threatening any act forbidden by the penal code, or unlawfully detaining or threatening to detain property, to anyone's prejudice, with intent to make a person enter into an agreement (Section 15, Contract Act).
- Undue influenceUnder Section 16 of the Contract Act, where one party is in a position to dominate the will of the other and uses that position to obtain an unfair advantage. The contract is voidable.
- Consensus ad idemThe parties must agree upon the same thing in the same sense. Without such identity of minds there is no consent and no valid agreement (Section 13, Contract Act).
- Caveat emptorLet the buyer beware. A buyer must satisfy himself about the quality and fitness of what he buys, since the seller gives no implied assurance except as the law provides.
Further reading
Checked 6 November 2026. Statutory text is quoted from the Bare Acts library, taken from India Code. See the full glossary.