What misrepresentation means
Misrepresentation is being talked into a deal by something untrue.
Somebody makes a statement of fact, it turns out to be false, and you entered the contract because of it. That is the core, and each element matters. A statement of opinion is generally not enough, and a statement you did not rely on is generally not enough either.
What distinguishes types of misrepresentation is the state of mind of the person who made it, and that determines what you can recover.
How it is used
It arises constantly in sales of businesses, property transactions and supply arrangements. The seller says the machinery is three years old and it is nine. The vendor says the land is free of dispute and there is pending litigation. The supplier says they hold a licence they never had.
The practical response is to gather what was actually said, in writing wherever possible, then assess whether it was a statement of fact, whether it was false, and whether it induced the contract.
Key features
- A false statement of fact, not of opinion or future intention
- Made before or at the time of contracting
- Must have induced the other party to enter the contract
- Classified as fraudulent, negligent or innocent depending on the maker's state of mind
- Remedies include rescission, damages, or both depending on the type
How this works in Nigeria
Nigerian law follows the common law framework here. Fraudulent misrepresentation, made knowingly or recklessly, attracts the widest remedies and the strongest judicial disapproval.
In property transactions this connects directly to due diligence. A buyer told that land was excised, who never checked the gazette, is in a weaker position than one who asked for documents and was given forgeries. Courts are far more sympathetic to a party who took reasonable steps and was still deceived.
Commercial contracts also frequently contain entire agreement clauses, which attempt to exclude reliance on anything said outside the written document. Those clauses are why what somebody promised in a meeting can be worth very little once the contract is signed.
Fraudulent, negligent and innocent misrepresentation
Fraudulent misrepresentation is made knowingly, without belief in its truth, or recklessly. It attracts the widest remedies including rescission and damages.
Negligent misrepresentation is made carelessly, without reasonable grounds for believing it true. Damages are generally available alongside rescission.
Innocent misrepresentation is made honestly and reasonably, but is still false. The primary remedy is rescission, meaning unwinding the contract, and damages are more limited.
Proving the maker's state of mind is the hard part, which is why documentary evidence of what was said, and when, matters so much.
Limits and risks
Rescission is not always available. Where the parties can no longer be restored to their original positions, where a third party has acquired rights, or where the claimant delayed too long after discovering the truth, the remedy can be lost.
Entire agreement and non reliance clauses also complicate claims in commercial contracts, though they are not always effective, particularly against fraud.
Worth knowing
Get material representations written into the contract as warranties. A promise made in a meeting is far harder to enforce than the same promise appearing as a clause you both signed.