Representation and Warranty

• Author: John D. Mccamus
• Profession: Professor of Law. Osgoode Hall Law School, York University
• Pages: 689-702

CHAP TER 18

REPRESENTATION

AND WARRANTY

A. INTRODUCTION

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 m isrepre sentation is fraudulently or innocently fal se, the

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

ment is made fraudulently or negligently, the misrepresentor may be li-

able in tort to claim for compensatory damages. A further alter native

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

can be character ized as being subject to an implicit undertaking th at

the representation is true. In such circumstances, it may be possible to

render that undertaking enforceable either as a collateral contract that

is subsidiary to the main contract induced by the representation or, in-

deed, as part of that ma in contract itself. In either ca se, the falsity of

the representation would constitute a breach of the implicit undertak-

ing and would give rise to a claim for damages for breach of contract. If

the undertaking is a simple warranty that the statement is tr ue, liability

will be str ict and not dependent on a f‌i nd ing of fraud or negligence. The

measure of damages i n a claim for breach of contract would be in the

exp ectanc y measur e, a meas ure of rel ief that is potent ially m ore compre-

hensive than a compensatory awa rd in tort as it may include an element

of the prof‌i t that would have been secured if the statement had, in fact,

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