Misrepresentation s 18 ca a misrepresentation is

MISREPRESENTATION - S. 18 CA
A misrepresentation is defined as an unambiguous, false statement
of fact which is addressed to the party misled and which
materially induces the contract. 3 elements that need to be
present:
(i)the representation must be an unambiguous false statement
of fact;
(ii) it must be addressed to the party misled; and
(iii) it must have materially induced the representee to enter into
the contract - Sim Thong Realty Sdn Bhd v. Tey Kim Dar @ Tee
Kim [2003] 3 MLJ 460.

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S. 18 deals only with misrepresentation in three prescribed situations:
‘Misrepresentation’ includes -
(a) the positive assertion or statement, of that which is not true, though
he believes it to be true
(b) any breach of duty which, without an intent to deceive, gives an
advantage to the person committing it by misleading another to his
prejudice; and
(c) causing, however innocently, a party to an agreement to make a
mistake as to the substance of the thing which is the subject of the
agreement.
Example :
A tells B ‘The horse is in good shape’. A believes the horse is in good
shape. He does not know that the horse just had an accident and is in bad
shape.

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The misrepresentation does not reflect the state of mind of the
representor at the relevant time. The state of mind of the
representor varies according to the circumstances of each case.
It may be fraudulent, negligent or entirely innocent.
An innocent misrepresentation is made where the
representor believes his assertion to be true and consequently
has no intention of deceiving the representee. The state of
mind of the representor is free of deceit and inadvertence. It
was not made recklessly careless of whether they were true or
false. The word “innocent” is used in law to convey “not
knowingly”.
A representee who has been induced by an innocent
representation may sue for rescission of the contract, but he
may not recover damages.

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He may only rescind the contract if it is still executory and if all parties
can be restored to their original position. Where the contract has been
executed or performed. the right to rescind could be lost. The
representee had elected to affirm the agreement. Such remedy is not
available so far as dealings in land are concerned where the
conveyance has been properly executed by both vendor and purchaser.
- Sim Thong Realty Sdn Bhd v. Teh Kim Dar @ Tee Kim
See also : Abdul Razak bin Datuk Abu Samah v Shah Alam
Properties Sdn Bhd [1999] 3 CLJ 231. CA; Admiral Cove
Development Sdn Bhd v. Balakrishnan a/l Devaraj & Anor. [2011] 9
CLJ 133. Federal Court.

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Misrepresentation and Fraud
The basic difference between them is that in fraud the person
making the representation does not believe in its truth,
whereas in cases of misrepresentation he may believe the
representation to be true.