Understanding Misrepresentation In Contract Law In Ontario

Struggling with misrepresentation in contract law? It happens when one party makes a false statement, leading another to enter into a contract and suffer loss. This article explains the types of misrepresentation and how you can address them.

Key Takeaways

 

• • Types of Misrepresentation: There are three types—innocent, negligent, and fraudulent. Each type affects how a contract can be fixed.

• • Innocent Errors: Innocent misrepresentation happens when someone makes an honest mistake. Courts might cancel the contract or award damages.

• • Carelessness and Lies: Negligent misrepresentation occurs due to carelessness. Fraudulent misrepresentation happens when someone lies on purpose.

• • Legal Solutions: You can ask for rescission (canceling the contract) or damages (money compensation). This depends on the type of misrepresentation.

Types of Misrepresentation in Ontario Contract Law

Different types of misrepresentation can affect a contract’s validity. These classifications help determine the legal remedies available to affected parties.

Innocent Misrepresentation

Innocent misrepresentation happens when someone makes a false statement without knowing it is untrue. The person did not lie or act carelessly—they simply made an honest mistake.

This type of misrepresentation is neither fraudulent nor negligent.

If this happens, the court may decide to cancel the contract or award damages instead of cancellation.

Innocent errors can still cause harm, even if they are unintentional.

Negligent Misrepresentation

Negligent misrepresentation happens when someone makes a false statement without checking the facts. They can also be careless and not follow their duty to make sure the information is true.

In these cases, you can take action like rescission or damages compensation.

Fraudulent Misrepresentation

Fraudulent misrepresentation happens when someone knowingly makes a false statement. They might also do this recklessly, without caring if it’s true or not. This trickery leads another person to enter into a contract based on the lie.

In Ontario, victims have remedies for this deceitful conduct. The main options are canceling the contract and seeking money as compensation.

Legal Remedies for Misrepresentation

You have options if a contract misleads you. Legal solutions can help fix the situation or get you compensated.

Rescission of Contract

Rescission of a contract is a legal remedy for misrepresentation. It allows the wronged party to cancel the contract. This remedy can be used in cases of fraudulent and negligent misrepresentation.

Rescission puts both parties back to their original positions before the contract happened.

Damages Compensation

Courts can award damages for lying or being careless. They can also choose to give money for innocent mistakes instead of canceling a deal. For lies and carelessness, the goal is to make up for what was lost.

Conclusion

Misrepresentation can lead to major problems in contracts. Knowing the types—innocent, negligent, and fraudulent—helps you protect your rights. Remedies like rescission or damages matter too. Hadri Law is here to guide you through this legal maze in Ontario. Contact us today at 437-974-2374 or email us at contact@hadrilaw.com. Book your free consultation below.