Professional Documents
Culture Documents
IT
SONY OPEN
https://keydifferences.com/difference-between-fraud-and-misrepresentation.html 1/11
12/8/2017 Difference Between Fraud and Misrepresentation (with Examples and Comparison Chart) - Key Differences
The main difference between fraud and misrepresentation is that, fraud is done
with an aim of deceiving others, which is not in the case of misrepresentation. And,
so misrepresentation does not entitles the agrieved party cannot sue the other
party for damages but can avoid the contract. conversely, fraud entitles the
aggrieved party to avoid the contract and also file a suit against other party for
damages. Go through, with the article presented to you, to know some more
differences between these two.
Comparison Chart
BASIS FOR
FRAUD MISREPRESENTATION
COMPARISON
https://keydifferences.com/difference-between-fraud-and-misrepresentation.html 2/11
12/8/2017 Difference Between Fraud and Misrepresentation (with Examples and Comparison Chart) - Key Differences
BASIS FOR
FRAUD MISREPRESENTATION
COMPARISON
Purpose to Yes No
deceive the other
party
Claim The aggrieved party, has the The aggrieved party has no
right to claim for damages. right to sue the other party for
damages.
De nition of Fraud
https://keydifferences.com/difference-between-fraud-and-misrepresentation.html 3/11
12/8/2017 Difference Between Fraud and Misrepresentation (with Examples and Comparison Chart) - Key Differences
The party making false representation has made it either knowingly or negligently
just to deceive the other party. The aggrieved party, relied on the statement,
believing it to be true and acted upon it, which became a cause of loss to the
aggrieved party. In addition to this, the representation of the fact must be made
before the conclusion of the contract. Concealment of a material fact in a contract
also amounts to fraud, but mere silence does not amount to fraud except where the
silence is equivalent to speech or where it is the duty of the person making the
statement to speak.
Now the contract is voidable at the option of the aggrieved party, i.e., he has the
right to perform or terminate the contract. Apart from that, any damages suffered
by the injured party can also be claimed as well as he can sue the other party in
court.
Example: A purchased goods of Rs. 5000 from a shopkeeper B, with the intent of
not paying the money to B, this type of act amounts to Fraud.
De nition of Misrepresentation
A representation of a material fact made by a party to contract who believes it to be
true, the other party relied on the statement, entered into the contract and acted
upon it which later on turned out to be incorrect is known as misrepresentation.
The representation is made unintentionally and unknowingly, not to deceive the
other party but it became a reason of loss to the other party.
Now, the contract is voidable at the option of the injured party who has the right to
avoid his performance. Although, if the truth of the material fact can be discovered
by the aggrieved party in the normal course, then the contract is not voidable.
https://keydifferences.com/difference-between-fraud-and-misrepresentation.html 4/11
12/8/2017 Difference Between Fraud and Misrepresentation (with Examples and Comparison Chart) - Key Differences
5. In fraud, the aggrieved party can claim damages for any loss sustained.
On the other hand, in misrepresentation, the aggrieved party cannot
claim damages for any loss sustained.
Conclusion
The acts done fraudulently are civil wrong and hence the party doing it can be sued
in court by the aggrieved party even if the aggrieved party has a means of
discovering the truth in the normal course of action. Misrepresentation is not a
civil wrong as the party making the wrong representation honestly have no idea
about the actual truth and so the aggrieved party cannot sue the other party in
court but it has the option to rescind the contract.
Hence, there is an absence of free consent in both the conditions whether it is fraud
or misrepresentation that is why the contract is voidable at the option of the party
whose consent was so caused.
https://keydifferences.com/difference-between-fraud-and-misrepresentation.html 5/11
12/8/2017 Difference Between Fraud and Misrepresentation (with Examples and Comparison Chart) - Key Differences
Comments
Reply
Arushi says
March 24, 2017 at 3:57 am
Reply
Atul says
September 29, 2017 at 10:47 pm
Reply
Leave a Reply
Your email address will not be published. Required fields are marked *
Comment
Name *
https://keydifferences.com/difference-between-fraud-and-misrepresentation.html 7/11
12/8/2017 Difference Between Fraud and Misrepresentation (with Examples and Comparison Chart) - Key Differences
Email *
Website
POST COMMENT
Custom Search
TOP 5 DIFFERENCES
RELATED DIFFERENCES
https://keydifferences.com/difference-between-fraud-and-misrepresentation.html 8/11
12/8/2017 Difference Between Fraud and Misrepresentation (with Examples and Comparison Chart) - Key Differences
https://keydifferences.com/difference-between-fraud-and-misrepresentation.html 9/11
12/8/2017 Difference Between Fraud and Misrepresentation (with Examples and Comparison Chart) - Key Differences
NEW ADDITIONS
https://keydifferences.com/difference-between-fraud-and-misrepresentation.html 10/11
12/8/2017 Difference Between Fraud and Misrepresentation (with Examples and Comparison Chart) - Key Differences
Key Differences
5,710 likes
https://keydifferences.com/difference-between-fraud-and-misrepresentation.html 11/11