Negligent misrepresentation is one of three recognized categories or types of legal misrepresentation.
Misrepresentation is a term that can seem vague or ambiguous. For legal matters, misrepresentation simply refers to a mis-representation of fact, according to Investopedia.
In this article, learn exactly what you need to know about negligent misrepresentation in a legal setting.
The Three Main Types of Misrepresentation
As we mentioned in the introduction here, there are three main types of misrepresentation for legal purposes. While we will devote the rest of this article to negligent misrepresentation, it can help to understand how the types differ.
1. Innocent misrepresentation.
Innocent misrepresentation occurs when someone makes a statement without having any idea that what they are saying is not accurate or true.
For example, perhaps you signed a contract because the other party gave you information that they believed to be true which was in fact not accurate.
There was no intent towards wrongdoing. This is typically the simplest type of misrepresentation to clear up in court by simply voiding the contract.
2. Fraudulent misrepresentation.
Fraudulent misrepresentation occurs when an untrue or non-factual statement is made knowingly, according to E-Law Resources.
Often there is an active intent to defraud the other party or a simple lack of caring about the impact on the other party.
This is the most egregious or serious type of misrepresentation where damages are assessed against the defendant.
3. Negligent misrepresentation.
Negligent misrepresentation occurs when person making the statement doesn’t take the time to verify whether it is true or not.
As Legal Match explains, negligent misrepresentation causes the other party to rely on that statement and this reliance causes them harm in some way.
With negligent misrepresentation, milder events may result in simple contract cancellation and more serious events may also incur damages.
Examples of Negligent Misrepresentation
If you are not sure what type of misrepresentation you may be dealing with, sometimes it can help to take a look at some examples.
In this section, we give you common examples of negligent misrepresentation for comparison purposes.
Real estate negligent misrepresentation.
Let’s say you want to buy a property. You ask the seller (or their agent) if the property has ever had water damage. Without bothering to dig deeper, the other party simply answers “no.”
Later, you discover the property has mold problems because of previous water damage that was never remediated properly.
This is an example of negligent misrepresentation.
Contractual negligent misrepresentation.
In this example, let’s say you want to buy a used car. You go to the seller or sales agent and ask whether the car has ever had brake issues.
The seller/agent quickly says the car has never had brake issues without verifying this from prior owner records.
A few months later, the brakes fail while you are driving and the mechanic tells you that you have to replace them.
You have been a victim of negligent misrepresentation.
How to Press Charges for Negligent Misrepresentation
The first thing to know is that negligent misrepresentation is a matter for the civil courts, according to UpCounsel.
For claims of $10,000 or less, it may be possible to represent yourself in small claims court.
But since negligent misrepresentation can entail greater losses and the ability to sue for damages, the best path for this type of misrepresentation typically begins by consulting a qualified civil lawyer.
You want to verify that the type of issue you are dealing with is, in fact, negligent misrepresentation and not one of the other two types.
Next, you want to learn what your case might be worth in terms of damages.
Finally, you want to find out the potential timeline to have your negligent misrepresentation case heard by a judge and settled so you can move forward with your life.