If a statement is a representation and not a term, what rights may it give?

If a statement is a representation and not a term, what rights may it give?

• A. They have no rights
• B. They give a right to damages only if true
• C. If false, misrepresentation claims may arise
• D. They automatically cancel the contract

Answer: (C)

Representations are statements made to induce entering into a contract but they are not binding promises that the contract will include them as terms. If such a statement is false, it may give rise to misrepresentation claims. That opens remedies like rescission (undoing the contract) and, depending on the type of misrepresentation, damages (fraudulent or negligent misrepresentation can lead to damages; innocent misrepresentation may allow rescission and sometimes damages in limited circumstances). If the statement had been a term, the breach would be treated differently, as a breach of contract rather than a misrepresentation.

Representations are statements made to induce entering into a contract but they are not binding promises that the contract will include them as terms. If such a statement is false, it may give rise to misrepresentation claims. That opens remedies like rescission (undoing the contract) and, depending on the type of misrepresentation, damages (fraudulent or negligent misrepresentation can lead to damages; innocent misrepresentation may allow rescission and sometimes damages in limited circumstances). If the statement had been a term, the breach would be treated differently, as a breach of contract rather than a misrepresentation.