In common law jurisdictions, a misrepresentation is an untrue or misleading statement of fact made during negotiations by one party to another, the statement then inducing that other party to enter into a contract. The misled party may normally rescind the contract, and sometimes may be awarded damages as well (or instead of rescission).
The law of misrepresentation is an amalgam of contract and tort; and its sources are common law, equity and statute. The common law was amended by the Misrepresentation Act 1967. The general principle of misrepresentation has been adopted by the USA and various Commonwealth countries, e.g. India.
· The customary norms of the trade in question.
· The representation forms the basis of a collateral contract.
Otherwise, an action may lie in misrepresentation, and perhaps in the torts of negligence and deceit also. Although a suit for breach of contract is relatively straightforward, there are advantages in bringing a parallel suit in misrepresentation, because whereas repudiation is available only for breach of condition, rescission is prima facie available for all misreps, subject to the provisions of s.2 of the Misrepresentation Act 1967, and subject to the inherent limitations of an equitable remedy.
Frustration of purpose, in law, is a defense to enforcement of a contract. Frustration of purpose occurs when an unforeseen event undermines a party's principal purpose for entering into a contract such that the performance of the contract is radically different from performance of the contract that was originally contemplated by both parties, and both parties knew of the principal purpose at the time the contract was made. Despite frequently arising as a result of government action, any third party or even nature can frustrate a contracting party's primary purpose for entering into the contract. The concept is also called commercial frustration.
