Representation and Warranty

• Author: John D. McCamus
• Pages: 728-741

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CHAP TER 18

REPRESENTATION AND

WA R R A N T Y

A. I NTRODUC TION

As we have seen in Chapter 10, a variety of remedies are available to an

individual who is induced into an ag reement by a misrepresentation.

Whether the misrepresentation is fraudulently or innocently false, the

misrepresentee may be able to rescind the agreement. If the misstate-

ment is made fraudulently or negligently, the misrepresentor may be

liable in tort to a claim for compensatory damages. A further alter na-

tive form of relief may be available if a misrepresentation inducing a

contract can be character ized as being subject to an implicit undert ak-

ing that the representation is true. In such circumstances, it may be

possible to render that undertaking enforceable either as a collateral

contract that is subsidi ary to the mai n contract induced by the rep-

resentation or, indeed, as part of that main contract itself. In either

case, the falsity of the representation would constitute a breach of the

implicit undertaking and would give ri se to a claim for damages for

breach of contract. If the undertaki ng is a simple warranty th at the

statement is true, liability will be st rict and not dependent on a f‌inding

of fraud or negligence. The measure of damages in a claim for breach of

contract would be in the expectancy measure, a measure of relief that

is potentially more comprehensive than a compensatory award in tort

as it may include an element of the prof‌it that would have been secured