Even where a contract meets the requirements of offer and acceptance, consideration and intent to create legal relations, it may still not be binding if, at the time the contract was made, certain factors were present which mean there was no genuine consent. These are known as vitiating factors (because they vitiate, or invalidate, consent). One of the vitiating factors amongst others is misrepresentation.

Contracts are enforced by the law because they are expressions of the parties’ own free will; the parties have consented to their contractual obligations. The reason why the vitiating factors prevent a contract from being binding is that they all in some way undermine the validity of the parties’ consent to their agreement.

The presence of a vitiating factor usually makes a contract either void or voidable, depending on which vitiating factor is present. Where a contract is declared void, the effect is that there was never a contract in the first place, so neither party can enforce the agreement. If a contract is voidable, the innocent party can choose whether or not to make it binding.

What is misrepresentation?

If one party has been induced to enter into a contract by a statement made by the other party, and that statement is in fact untrue, the contract is voidable, and the innocent party may also be able to claim damages. For a misrepresentation to be actionable, it has to fulfil three requirements: it must be untrue; it must be a statement of fact, not mere opinion; and it must have induced the innocent party to enter the contract.

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