The sellers solicitor is in effect warning his or her client(s) about the risk of misrepresentation, which in common sense terms is either not disclosing something relevant in response to a specific question or providing a partial or wholly incorrect answer. This is a money payment by the misrepresentor in respect of expenses necessarily created in complying with the terms of the contract and is different from damages. Contracts uberrimae fidei (contracts of the utmost good faith) impose a duty of disclosure of all material facts because one party is in a strong position to know the truth. There will be reliance even if the misrepresentee is given an opportunity to discover the truth but does not take the offer up. The effect of misrepresentation is the same as that of non-disclosure. The caveat emptor principle arises primarily from the asymmetry of information between a purchaser and a seller. In the context of the sale of land, it reflects the old common law rule that the burden of discovering defects in a property rests with the purchaser, and the vendor is relieved from any duty to disclose facts simply because those facts might affect the purchaser’s decision. The elements of fraudulent misrepresentation are: (a) a false representation concerning a fact material to the transaction; (b) knowledge of the falsity of the statement or utter disregard for its truth; (c) intent to induce reliance on the misrepresentation; (d) reliance under circumstances manifesting a right to rely and (e) injury resulting from the reliance. The representee must have relied on the misrepresentation. If the injured party does not take action to rescind within a reasonable time, the right will be lost. VAT Registration Number: 290 6677 68. Who's Who Legal recognised in business crime defence, QA Centre For Assessment Ltd and UKAS Management Systems, The Law Society Accredited Personal Injury Lawyers, Your choice regarding cookies on this site, Road Traffic Offences for Private Clients, Road Traffic Offences for Business Owners. The requirements here are that (a) the misrepresentation must be material and (b) it must have been relied on. However, this is not always necessary as any act indicating repudiation, eg notifying the authorities, may suffice. Exceptions to “Caveat Emptor” Negligent Misrepresentation/ Fraudulent Misrepresentation; Where the Vendor knows of a latent defect that renders the house unfit for habitation; When the vendor is reckless or ignorant as to the correctness of statements relating to the fitness of the house for habitation Some cookies are essential, whilst others help us improve your experience by providing insights into how the site is being used. A good conveyancing solicitor will make a judgment, based on experience on what’s important in terms of enquiries and replies to them. However, the distinction between fact and law is not simple. Any term of a contract which excludes liability for misrepresentation or restricts the remedy available is subject to the test of reasonableness. As he did not know he had such right, he could not be said to have elected to affirm the contract. Thus, a statement that does not present the whole truth may be regarded as a misrepresentation. From a seller perspective, having instructed their solicitor, the sellers will be asked to complete a number of pro forma forms with lots of questions about the property and it’s. If you think you may have a claim for property misrepresentation and wish to discuss it with us, call our specialist team on 01616 966 229 or complete our online enquiry form. The false statement must have induced the representee to enter into the contract.