When a false statement is made with the
knowledge that is false and also with intention to deceive the other party and
make him enter into a contract on that basis, it is known as fraud. But when
the person making a false statement believes the statement to be true and does
not intend to mislead the other party to the contract, it is known as
Misrepresentation.
Distinction between Misrepresentation and fraud:
The principal
difference between 'fraud' and 'misrepresentation' is that in the one case the
person making the suggestion does not believe it is to be true and in other he
believes it to be true, though in both cases, it is a misstatement of fact
which misleads the promisor. Although in both the cases, the contract can
be avoided in case of misrepresentation or a fraudulent silence, the contract
cannot be avoided if the party whose consent was so caused had the means of
discovering the truth with ordinary diligence.
No
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Misrepresentation
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Fraud
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1.
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It is an innocent misstatement.
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It is a willful statement.
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2.
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The person making it has not knowledge as to its untruth.
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The person making the statement has full knowledge as to its
untruth.
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3.
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In misrepresentation Intention to deceive is not necessary.
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Intention to deceive is essential in fraud.
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4.
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Aggrieved party
can avoid the contract but cannot claim damages
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Aggrieved party
can avoid the contract and can claim damages also.
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5.
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Misrepresentation
by itself is not a tort
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Fraud by
itself is a tort
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