Misrepresentation

In civil law the focus is on the effect on the other party. If you were told something untrue about a product, a policy or a company, relied on it and suffered loss, you may cancel the contract or claim damages. The statement may be innocent, careless or deliberate. Only deliberate misrepresentation, made knowing it is false or with reckless disregard for the truth, amounts to fraud. Concealment, such as hiding a known defect or leaving out a material fact when disclosure is required, can be treated in the same way. In insurance, for example, failing to disclose a medical condition may allow the insurer to refuse a claim. Courts ask whether the maker knew the statement was false, because the answer decides between a civil remedy and a criminal case.

A seller advertises a flat as free of damp, though she knows the bedroom wall has repeated leaks and has been painted over. The buyer relies on the statement and completes the purchase. Six months later the damp returns. The buyer can seek to cancel the sale or recover damages. If the seller had sincerely believed the wall was dry, the claim would be an innocent misrepresentation, not fraud.