Understand the Difference Between Misrepresentation And Fraud

August 30th, 2008 Comments off
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Sometimes the terms are used inter-changeable by readers, however, they are actually different. Append below a table on the salient point to distinguish the terms:

Fraud

Misrepresentation

Implies on intention to deceive, hence it is intentional or willful wrong.

Is an innocent wrong without any intention to deceive. The person making the statement believes it to be true.

A civil wrong which entitles a party to claim damages in addition to the right to rescind the contract.

Gives only the right to rescind the contract and there can be no suit for damages.

In case of misrepresentation, the fact that the aggrieved party had the means of discovering the truth with ordinary diligence, the contract does not become voidable. But where consent to an agreement is caused by active fraud, the contract is voidable even though the party defrauded had the means of discovering the truth. However where the silence amount to fraud, the contract is not voidable if the deceived party had the means of discovering the truth.

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