The term “misrepresentation” is defined in the Black’s law Dictionary as “any manifestationby words or other conduct by one person to another that, under the givencircumstances, amounts to an assertion not in accordance with the facts. Anuntrue statement of fact. An incorrect or false representation.
That which, ifaccepted, leads the mind to an apprehension of a condition other and differentfrom the one which exists.”1 Although Malaysia is having its own contract law now,which is known as Contracts Act 1950, but basically, the principles of Englishlaw was used. It has been modified to suit the local conditions. Contracts Act1950 is based on the Indian Contract Act, 1872. According to Section18 of the Indian Contract Act, 1872, misrepresentation includes, “(1) the positive assertion in amanner not warranted by the information of the person making it, of that whichis not true, though he believes it to be true; (2) any breach of duty which, withoutan intent to deceive, gains an advantage of the person committing it, any oneclaiming under him, by misleading another to his prejudice, or to the prejudiceof anyone claiming under him;(3) causing however innocently, aparty to an agreement, to make a mistake as to the substance of the thing whichis the subject of the agreement.
“2 In Travelsight(M) Sdn Bhd & Anor v Atlas Corp Sdn Bhd3as per Abdul Malik Ishak J: “In simple language, a misrepresentation is arepresentation that is untrue. It is a false statement made by one party to thecontract to the other, before, or at the time of contracting, on which thatother arty relied on in contracting.”Generally, a misrepresentation means a false statementpertaining to any material fact in the contract, not an opinion or intention. Acontract is voidable at the option of the aggrieved party where the consent ofthe party is obtained by misrepresentation. The contract may become valid orvoid in future at the option of the suffering party. There are three types ofmisrepresentation, which is fraudulent misrepresentation, innocentmisrepresentation and negligent misrepresentation which have been recognized bythe courts in Malaysia. In Abdul Razakbin Datuk Abu Samah v Shah Alam Properties Sdn Bhd & Anor Appeal4, the affected party isentitled only to a rescission if the representation was merely innocent. Theplaintiff, the purchaser claimed that he had entered into a sale and purchaseagreement with the defendant, the vendor in respect of an apartment buildingbased on the defendant’s fraudulent misrepresentation.
The High Court dismissedthe claim. However, on appeal, the Federal Court set aside the agreement andordered the defendant to, inter alia, refund the purchase price with interestand pay damages to be assessed by the High Court. Gopal Sri Ram JCA stated inthis case that:”Misrepresentation in turn are of three types,depending upon the state of mind of the maker. That state of mind may befraudulent, negligent or innocent, in the sense that it is truly free of anyblameworthiness or inadvertence. The existence of a particular state mind onthe part of the representor determines, in the absence of acquiescence, therange of remedies available to the representee.”5 While in Sim ThongRealty Sdn Bhd v The Kim Dar @ Tee Kim6, Gopal Sri Ram CJA stated:”The expression ‘misrepresentation’ is merelydescriptive of a false pre-contractual statement that induces a contract orother transaction.
But it does not reflect the state of mind of the representorat the relevant time. The state of mind of the representor at the time he madethe representation to the representee varies according to the circumstances ofeach case. It may be fraudulent. It may be negligent.
Or it may be entirelyinnocent, that is to say, the product of a mind that is free of deceit and inadvertence.”In Bisset vWilkinson7,one of the famous case of misrepresentation. The issue was whether thestatement made by the claimant could be considered a statement of fact or itwas simply an opinion held by the claimant.
In this case, the seller of thefarm that had never run sheep gave his opinion that it would support 200 sheep.However, after the purchase, the buyer found that the land as it stood couldnot sustain the number of sheep and therefore the buyer sued for the return ofthe purchase money. The court rejected the appeal based on the saying that thestatement made had not been a representation of fact, but it is merely anexpression of the seller honestly held opinion. 1 BryanA. Garner, Black’s Law Dictionary (5thedn, 1979) 903.
< http://caselaw.findlaw.com/ms-court-of-appeals/1275227.html> accessed 17 December 2017.2Section 18 of the Indian Contract Act, 187232003 6 MLJ 658.41999 2 MLJ 500, CA5Ibid at 507.62003 3 MLJ 460, CA.71927 AC 177