Before committing to a contract or deal with another company, you likely want to protect your New York business entity by preparing and negotiating. Part of the conversation may include the expectations of duties and responsibilities when it comes to contract drafting. This can take a major turn if one party is not candid about what they can deliver and perform. Misrepresentation can play a major role in your New York business dispute. Read on to learn about the various forms of misrepresentation.
What is a Misrepresentation?
Misrepresentation in its basic form is the act of providing a false or misleading account. It can come in various forms, with each having the possibility of triggering highly contentious business disputes.
A typical fraudulent misrepresentation has one party making a false statement to the other party, which results in the deal or agreement between the parties to be based on an untruth, or false premise. This means that the contract would be invalid if the falsehood has a material effect on the agreement. For instance, you only agree to make a deal for a company to be your café’s vegetable supplier because they have assured you that the produce is organic. Later, you learn that the company rep lied, and the vegetables aren’t organic.
The fraudulent misrepresentation can be made via something that the party said to the other, wrote to the other, or can even be through nonverbal action such as a gesture; silence can even be considered as a misrepresentation.
What Do You Have to Prove for Fraudulent Misrepresentation?
In order to prevail, a plaintiff must show the following:
- That the false representation was made
- That the representation was known to be false at the time it was made or that it was made recklessly without knowledge of its truth
- That the representation was made with the intention that the other party would rely on it
- The other party did in fact rely on the representation
- That the plaintiff suffered damages as a result of the reliance on the representation
Negligent misrepresentation occurs when an individual makes a statement or issues a certificate, with knowledge that this is necessary for a specific aim. The individual also knows that others are relying on the accuracy of the statement (to their detriment) and then the individual fails to take reasonable care to ensure that the statement is accurate, causing harm to the others.
This differs from a fraudulent misrepresentation in that, it does not require proving malicious intent. Rather, the plaintiff needs to show the following:
- That the other party was aware that the statement was going to be used for a particular purpose
- Some conduct by the wrongdoer linking them to the plaintiff and some showing that they knew about the reliance
- The wrongdoer’s statements exaggerated or misstated facts
- That the misstatements resulted from the wrongdoer’s negligence and/or lack of due diligence
- That the plaintiff relied on the misstatements
- That the plaintiff suffered damages as a result
This occurs by a mistake when a party makes a false statement, but they believe that the information that they have given is accurate and true.
Talk to a New York Attorney about Misrepresentations
When business dealings are impacted by allegations of misrepresentations, all the affected parties may wonder about what to do to protect their interest. This is when it makes sense to turn to an experienced business law attorney. You can depend on the expertise of a MOWK Law attorney who can assess your situation and provide viable options, regardless of the type of misrepresentation involved. Get in contact with us today.