FRAUDULENT MISREPRESENTATION

Hi Stan! Long time no see. Listen, me and Lois are trying to sell our restaurant and I want to know if you want to buy it.

Sure. if it is in good condition, and if it makes a lot of money.

Yeah, of course. it’s in good condition and it makes a lot of money.

In that case I will buy it since you said it’s good and will make me a lot of money.

Family, I bought us a restaurant!!!

Do you mean Peter tricked Stan into buying the restaurant?

Brian, Peter sold the restaurant, but he didn’t tell Stan about the gas leak in the kitchen.

Three days after the Grand Opening, something terrible happened.

GAS LEAK!!!!

EXPLOSION!!

BOOM!!

I WANT TO CANCEL THE CONTRACT AND GET THE MONEY BACK!!!

NO WAY! We signed a contract.

But you conned me into buying your restaurant and mislead me by saying that it was in good condition.

Ok, Let’s bring it to court then!

Peter lost the case due to Fraudulent Misrepresentation.

FRAUDULENT MISREPRESENTATION

• A party can cancel a contract based on fraudulent misrepresentation so long as there was a misrepresentation of a material fact, there was intent to deceive, and the innocent party must have justifiably relied on the misrepresentation.