When Can I Void a Contract For Misrepresentation?

Last updated on July 16, 2011

Contracts are ever present in our day-to-day activities, and may come in the form of verbal or written agreements. When you purchase an MP3 player from a shop at the mall, a contract is formed. However, if the seller has misrepresented the qualities of the piece of merchandise to you, it is sometimes possible to void (i.e. undo) the contract.

A misrepresentation is a false statement, communicated from one party to the other, which induces the latter to enter into a contract.

To be misrepresentative, the statement must refer to a fact. One example would be if a salesman claims that a car has manual transmission when in fact it does not. In contrast, puff, or mere exaggeration, such as a claim that driving in the car will make you feel as if you are flying, is not a misrepresentation.

Silence can also constitute misrepresentation, when a party makes an incomplete disclosure of crucial facts, or fails to correct a representation that subsequently became false.

In addition, a misrepresentation must also be material enough to cause inducement. It must relate to a matter which would influence a reasonable person’s decision to enter into the contract. If a person enters a contract to buy a car, unaware of the false advertisement that it the car is accident-free, there is no misrepresentation. This is because there has been no inducement.

If misrepresentation is established, the victim can choose to rescind or affirm the contract. Rescinding the contract would free both parties from all obligations (for example, to pay for the car, and to supply the car), and restore the parties to their original positions before the contract. However, the right to rescind may be lost, if:

  1. The victim affirms the contract by choosing to continue with it after being aware of the misrepresentation;
  2. An innocent third-party buys the subject matter of the contract (e.g. goods) from the main parties;
  3. It is impossible to restore the parties to their previous positions; for example, if the buyer had already eaten the food which the seller had misrepresented; and
  4. The time period prescribed by the Limitation Act passes (claims expire if not brought to the court’s attention within a certain period of time, where this period of time depends on the nature of the claim);

In addition to rescinding a contract, a victim may also be able to claim compensation if the misrepresentation was fraudulently or negligently made.

Before making a purchase
  1. Consumer Rights in Singapore
  2. Requisite elements in the formation of a contract
  3. Buying a Car in Singapore: A Comprehensive Guide
  4. “Certified Organic” Food in Singapore: What Does It Mean?
When making a purchase
  1. Can silence amount to acceptance of a contract?
  2. What are Warranties, Conditions and Innominate Terms?
  3. The Sale of Food in Singapore
When there are problems after purchase
  1. What If a Shop Vendor Sells Me a Grossly Overpriced Piece of Merchandise?
  2. When Can I Void a Contract For Misrepresentation?
  3. Repossession for Failure to Pay Instalments in Singapore
  4. What to Do if a Carousell Seller Goes MIA after Getting Paid
  5. What Can You Do if You Were Sold a Defective Product in Singapore?
  6. How to Get Back Your Money from a Company That’s Closing Down in Singapore
How and where to seek redress
  1. How to Resolve Disputes with Car Dealers
  2. How Does the Hire-Purchase Act Protect Consumers in Singapore?
  3. Guide to Lemon Law in Singapore
  4. Unfair Contract Terms Act: UCTA in Singapore
  5. Consumer Protection in Singapore: Unfair Sales Practices
  6. Online Purchase Scams: What to Do If Your Orders Do Not Arrive
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  3. I pawned a piece of jewellery to a pawnshop. What are my rights as a pawner?
  4. Is Ticket Scalping Legal in Singapore? Risks Faced by Buyers/Sellers
  5. Can I refuse to pay restaurants for lousy food or service?
  6. Counterfeit Goods: Is it Illegal to Sell or Buy Them in Singapore?
  7. Am I liable for the charges if my credit card is stolen? What is the law on lost card liability?