Representation and Warranty

• Author: John D. McCamus
• Pages: 785-798

785

CH AP TER 18

REPRESENTATION AND

WA R R A N T Y

A. INTRODUC 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 misst ate-

ment is made fraudulently or negligently, the misrepresentor may be

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

tive form of relief may be available if a mi srepresentation inducing a

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

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

possible to render that undertak ing enforceable either as a collateral

contract that is subsidia ry to the main contract induced by t he 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 rise to a claim for damages for

breach of contract. If the undertak ing is a simple warranty t hat the

statement is true, liabil ity will be strict and not dependent on a f‌inding

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

contract would be in the expectancy measure, a measure of relief th at

is potentially more comprehensive than a compen satory award in tort

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