A misrepresentation is a false statement of fact that induces entry into a contract.

• A. True
• B. False
• C. Only if intentional
• D. Only if in writing

Answer: (A)

Misrepresentation in contract law means a false statement of fact that leads the other party to enter into the contract. The important points are that the assertion must be about a fact (not an opinion), it must be false and material to the deal, the other party must rely on it, and it must induce the contract. Intent to deceive isn’t required for the basic definition—innocent misrepresentation can still make the contract voidable or give rise to remedies. In real estate practice this shows up when a seller or agent states something about the property that isn’t true and the buyer relies on that statement to sign the agreement. Remedies can include rescission or damages. Additionally, while the statement above emphasizes a false factual claim, in real estate there can also be misrepresentation by omission if there’s a duty to disclose known defects.