Q.No.

1
Distinguish between intentional misrepresentation and innocent misrepresentation, elaborating
on the relevant provisions of the Indian Contract Act, 1872 with cases.

Innocent misrepresentation: The pre-contractual statement was false, but the maker of the
statement wasn’t negligent in making the statement.
The maker of the statement must reasonably believe that what was stated to be true. Then, the
statement will be regarded as ‘wholly innocent.
Rescission can be claimed as a remedy for innocent misrepresentation where:
○ the statement has become a term of the contract
○ the contract has been performed, according to s 1 of the Misrepresentation Act 1967,
and
○ common law tests are satisfied.
The remedy of rescission entitles the affected party to an indemnity (or court orders to a similar
effect) to restore them to the position they were in before the contract was made (known as
restitution in integrum).
Fraudulent misrepresentation: What constitutes Fraud?
When a false statement is made:
○ knowingly, or
○ without belief in its truth, or
○ recklessly, careless as to whether it be true or false.
The first two obviously amount to fraud.
For the purpose of making a reckless statement, there is no need to prove dishonesty or fraud:
only that the statement was made without caring whether the statement was true or not.
The difference between fraudulent misrepresentation and negligent misrepresentation is the
existence of a fraudulent intention.
There's no reason in principle why a fraudulent misrepresentation can't also be a negligent
misrepresentation, provided the facts of the case satisfy the test for each cause of action.

Q.No.2
A, induced B to buy his motorcycle saying that it was in very good condition. After taking the
motorcycle, B complained that there were many defects in the motorcycle. A proposed to get it
repaired and promised to pay 40% cost of repairs After a few days, the motorcycle did not work
at all. Now B wants to rescind the contract. Decide giving reasons.
ans) In the event of misrepresentation by the other party, the aggrieved party has the right to
avoid or rescind the contract [Section 19, Indian Contract Act, 1872]. If the aggrieved party
accepts a benefit under the contract or affirms it in any way after becoming aware of the
misrepresentation, the right to rescind the contract is lost. As a result, in the case at hand, B could
not rescind the contract because his acceptance of A's offer to bear 40% of the repair costs
impliedly amounted to final acceptance of the sale [Long v. Lloyd, (1958)].