Misrepresentation In Contract Law

The term “misrepresentation” is defined in the Black’s Law Dictionary as “any manifestation by words or other conduct by one person to another that, under the given circumstances, amounts to an assertion not in accordance with the facts. An untrue statement of fact. An incorrect or false representation. That which, if accepted, leads the mind to an apprehension of a condition other and different from the one which exists.”
In spite of the fact that Malaysia is having its own particular contract law now, which is known as Contracts Act 1950, yet, the principles of English law was used. It has been changed to suit the local conditions. Contracts Act 1950 depends on the Indian Contract Act, 1872.
According to Section 18 of the Indian Contract

It is a false statement made by one party to the contract to the other, before, or at the time of contracting, on which that other arty relied on in contracting.”
Generally, a misrepresentation means a false statement relating to any material fact in the contract, not an opinion or intention. The contract may become valid or void in future at the alternative of the agony party. There are three types of misrepresentation, which is the fraudulent misrepresentation, innocent misrepresentation and negligent misrepresentation which have been recognized by the courts in Malaysia.
In Abdul Razak bin Datuk Abu Samah v Shah Alam Properties Sdn Bhd & Anor Appeal , the affected party is entitled only to a rescission if the representation was merely innocent. The plaintiff asserted that he had entered into a sale and purchase agreement with the defendant in regard to an apartment building based on the defendant’s fraudulent misrepresentation. The Court of Appeal found that there had been a fraudulent misrepresentation and therefore the court granted rescission of the contract. In this case, Gopal Sri Ram JCA stated

In the event that the statement given is introduced in an approach to representing a fact to induce the representee to go into the contract, that statement is a legally binding term. The issue, in this case, was whether what can be said to be a misrepresentation. In this case, the defendant was the permit holder of a golf course at a resort. The plaintiff baited by the defendant’s brochure and outline listing the facilities and highlights of the club. The plaintiff paid a sum of RM 90, 000 to sign up for membership at the resort. Subsequently, the plaintiff was disappointed with the facilities provided. Therefore he lodged a complaint with the defendant concerning the non-existence of some of the listed facilities and sought rescission of the membership agreement and damages based on misrepresentation. In this case, the High Court held that the defendant had breached its representation to provide a library despite the fact that the plaintiff had suffered no real loss or damage. In addition, although there were misrepresentations on some of the other facilities, they were not matters of major conclusive thought to the plaintiff in his decision to enroll in a membership in the club. An order of rescission was not warranted and the Court only ordered compensation by way of