A representation means a statement of fact made by one party to the other, either before or at the time of contract, relating to some matter essential to the formation of the contract with an intention to induce the other party to enter in to a contract. A representation when wrongly made, either innocently or intentionally, is termed as a misrepresentation.

Misrepresentation is one of the factors which hamper the free consent of contractual party. Misrepresentation is a false statement made by a person innocently without any intention of deceiving (misleading) the other party. Willful or deliberate with an intent, to deceive other party, is called fraud.

According to S.W. Anson; the term misrepresentation is a false statement which the person making it honestly believes to be true or which at any rate he does not know to be false. Nepal Contract Act, 2056 Section 14.1(d) mentions about the misrepresentation which are as follows:-

  • Submitting a false statement or false particulars of any fact without any reasonable basis.
  • Causing any party of the contract to his prejudice.
  • Causing a mistake deliberately about the subject matter.

According to Bare Act, Indian Contract Act, 1872 Section 18 defined the term misrepresentation as follows:

  • Positive assertion (to make certainty): 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. Example, 'A' says to 'B' who intends to purchase his land, "My land produces 10 quintals of wheat per acre." 'A' believes the statement to be true, although he did not have sufficient grounds for the belief. Later on, it transpires that the land produces only 7 quintals of wheat per That is a misrepresentation.
  • Breach of duty which, without intent to deceive, gains an advantage to the person committing it.
  • Causing mistake about the matter innocently

Thus a misrepresentation is a representation when wrongly made by a party to the contract to another innocently or without any intention to deceive the other party. It is not dishonest as a fraud. A contract is made without mens rea (guilty mind) or no intention of deceives others.

Contract caused by misrepresentation is not valid. Such contract is voidable at the option of the party whose consent has been obtained by misrepresentation. The party who claims the contract as suffered from misrepresentation has to present evidence to prove his claims. It means the burden of proof lies upon the aggrieved party.