Fraud and Misrepresentation
Fraud is a false statement made either knowingly or recklessly. In fact a false claim in regards to one’s state mind can also be termed fraud. Fraud is a valid ground for the nullification or rescission of a contract. A misrepresentation differs from fraud in that it concerns merely a statement of something that is taken to be fact that is not true. The difference lies in that fraud requires a certain immoral stance.
A misrepresentation may occur negligently or innocently, and it may be made in the course of negotiations or be contained within the contract itself. Where it is contained within the contract the misrepresentation amounts to a breach of the contract.
In Canadian contract law there also exists the concept of fraudulent misrepresentation, which relies on the fact that (1) a representation was made; (2) that representation was false; (3) the representation was made knowingly or recklessly; (4) it was made with the intention of the plaintiff relying on it; (5) the plaintiff relied on it, and (6) the plaintiff suffered damages resulting from the fraudulent misrepresentation.