1. Misrepresentation Elements
2. Reckless Disregard

Negligent misrepresentation elements include untruths and misrepresentations of information. Misrepresentation means that false statements have an effect on a contract of some kind. Misrepresentation involves a single person giving false or inaccurate information to another person, coupled with the justified reliance by another person on such information and the harm that stems from it.

A good example would be telling a person that a new-looking stereo is brand new, when it is five-years-old, and has been used heavily. Negligent misrepresentations are one of three legally-recognized types of misrepresentations under contract law. Negligent misrepresentation means you do not lie directly (meaning saying something you know that’s false), but you made a presentation about an issue while having no reason to believe it to be certain, such as the time Sygenta made a claim that its GMO corn could be offered regarding American-based corn.

Negligent misrepresentation should not appear to be a terrible form of litigation in relations to the intentional variety, but it can cause genuine monetary injuries to a company or individual.

  • Example: An agent is selling a home to a buyer, and the buyer stresses a need for quiet and peace. The agent promises that the property is indeed quiet. However, the house that’s next door is under construction, and the worksite causes a great deal of noise. Even though the agent was not aware of this, the agent made the claim because she assumed it was quiet.

Misrepresentation Elements

Be aware of the following aspects of representation:

  • The representation is stated from a defendant during the course of business, or via a transaction in which he has a pecuniary interest
  • Defendant gives false information in the guidance of another party in regards to the business
  • Defendant does not exercise due competence or care in the communication and acquiring of information
  • The plaintiff suffers loss by relying on the false presentation

Justifiable reliability on the plaintiff’s part occurs when the presentation does not appear to be untrue at face value and that person has no reason to doubt the authenticity of a statement. Such misrepresentations could occur in a number of business cases, ranging from purchase/sale agreements to more complicated transactions in the form of acquisitions and mergers.

To reduce the risks on unknowingly making negligent misrepresentations, or to assess a possible answer if another party has made such misrepresentation to you, you should contact a business attorney who deals in business cases. Statements regarding the future do not count, including salesman-type phrases or opinion. For instance, a car-salesman phrase would include the following:

  • This is a spectacular car
  • The is a fine automobile

Such a representations would have been issued with an intention to entice another party into a contract. In essence, a person has to use a misrepresentation to assist another person in making a deal. Another party should have believed the misstatement and used such information. Most courts remain hesitant in protecting buyers if they do not display some degree of skepticism at what’s being said to them.

  • Example: Attempting to sell a car, the seller assured another person it could run up to a thousand miles an hour, and a buyer believes such a claim.

A buyer should also rely partially on a misrepresentation to decide to proceed with a deal. The reliance of false claims mean that the opposite party suffered a great deal of damage, meaning the buyer must be harmed at the final stage of the transaction. If not, no liability exists.

Reckless Disregard

Misrepresentations that are more serious have the same elements, so the lines between them tend to be fine. The sole difference is a false representation requires a reckless disregard of the truth. Further, negligent disregard only mandates no ground in assuming an issue is true, so it boils down to degrees.

  • Example: A buyer says he is lethally allergic to pine wood and asks if there is pine wood in a house. If a seller says there is none, when in truth she did not know what type of wood that the home is made from, then it could constitute reckless disregard of the truth, especially when considering the lethal ramifications if the potential buyer suffers an allergic reaction.

If you need more information on a negligent misrepresentation elements, submit your legal inquiry to our UpCounsel marketplace. UpCounsel’s attorneys will give you more information on what constitutes a deliberate misrepresentation and what you can do if you fall victim to negligence of any kind. Also, they will defend your rights in court if necessary.