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Dunn Lambert, LLC | Attorneys At Law

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Dunn Lambert, LLC | Attorneys At Law

Comprehensive Legal Services For Businesses

In New Jersey And New York call
201-957-0874

Dunn Lambert, LLC | Attorneys At Law

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Business Law Professionals

What is business misrepresentation and when may I file a lawsuit?

On Behalf of | May 2, 2022 | Commercial Litigation |

Misrepresentation is a civil offense that includes making false statements to persuade a party to sign a contract. As noted by NJCourts.gov, you may file a lawsuit if you acted on false statements which you had reason to believe were true.

Your complaint may include evidence of untrue representations that a business or its agents provided. Relying on untruthful statements that caused you damages may result in the court awarding financial relief.

Three different forms of misrepresentation may occur

The Corporate Finance Institute explains that misrepresentation interferes with relationships through three different means. An “innocent misrepresentation” occurs when a party carelessly makes a false statement without knowing that it is not true. This type of error could result in voiding the contract. The involved parties may discover that it is impossible to fulfill the purpose behind their signing an agreement.

In some cases. a party could make a “negligent misrepresentation” by providing untrue statements that resulted from a failure to check for accuracy. Finally, “fraudulent representation” occurs and could cause severe harm when a party knowingly provides untrue statements. The purpose of offering false information is then to influence a party to act in a way that would not occur but for the falsehoods.

An “arm’s length” contract may not reflect misrepresentation

If you entered into an “arm’s length” contract, the court may not consider either party’s silence as an act of misrepresentation. Because both parties act in their own self-interests in an arm’s length contract, a duty of care to provide accurate and complete information may not be necessary.

The agreement you choose to make may include terms covering non-disclosure such as how much due diligence each party must perform. The stated conditions may also include remedies for an alleged breach or when the agreement’s terms become impossible to complete.