Types of misrepresentation mistakes. - SS2 Commerce Past Questions and Answers - page 1
What is the key difference between innocent misrepresentation and fraudulent misrepresentation?
Intent to deceive
Negligence of the party making the statement
Mistake made in good faith
Which type of misrepresentation involves a lack of reasonable care in verifying the accuracy of a statement?
Innocent misrepresentation
Negligent misrepresentation
Fraudulent misrepresentation
In a mutual mistake, what must be true for the contract to be voidable?
Both parties were mistaken about a fundamental term
Only one party was mistaken about a material fact
The mistake was made in good faith
What burden does a unilateral mistake generally place on the mistaken party?
Burden to show harm suffered
Burden to ensure due care in contract formation
Burden to ensure due care in contract formation
Which type of misrepresentation involves a deliberate act of deceit?
Innocent misrepresentation
Fraudulent misrepresentation
Unilateral mistake
Explain the concept of innocent misrepresentation in simple terms.
Innocent misrepresentation occurs when a party provides false information in a contract honestly, without any intention to deceive. It can make the contract voidable if the innocent party relied on the false information.
Provide an example of a situation where a contract may be voidable due to a mutual mistake.
An example could be two parties entering into a contract for the sale of a painting, both believing it to be an original work by a famous artist. If it is later discovered that the painting is a forgery, the mutual mistake about its authenticity may make the contract voidable.