5 Difference Between Fraud and Misrepresentation

Fraud and Misrepresentation are the topics of Indian contract act 1872. Fraud has the intention to deceive the other party. Like when a person lied to the third party to sell his services and products. While misrepresentation is no intention to deceive the other party. In this case the statement given by the party is true from their side and this statement may false for the other party.

We get confused in fraud and Misrepresentation, we think both are the same. But there are many differences in fraud and Misrepresentation. Fraud and Misrepresentation are related to our daily purchases and selling so it’s very important to understand these concepts. In this article we will discuss in detail about fraud and Misrepresentation.

Fraud vs Misrepresentation

Sr. No.	Fraud	Misrepresentation
1	When it’s the intention of one person to deceive the other person.	Intention to deceive the third person is termed as misrepresentation.
2	False statements are provided with the knowledge that statements are wrong.	Statements are provided with the belief that the statement is true.
3	Defined in section 17 of Indian contract Act 1872.	Defined in section 18 of the Indian Contract Act 1872.
4	It’s the duty of the buyer or the consumer to prove the fraud.	It’s the duty of the seller to prove the statement is true or false.
5	Victims can claim for the damages.	Can’t claim for the damages in misrepresentation.

Fraud

We use fraud words at many places to show false statements. When some give a statement or product and he knows that statement is false and the products are faulty. In this that seller have the intention to deceive the buyer. This is the case of Fraud. In simple words fraud is act when some have the intention to deceive the other person. In fraud person misleads the other person by the false statements.

Fraud mostly happens when we purchase something like services, goods, machinery etc. In fraud it is the duty of the buyer to prove that he had been fraud by the seller. When the fraud is proved, the buyer can claim the damages of his loss. Fraud is defined in section 17 of the Indian contract Act 1872.  Fraud is a voidable contract so the buyer has the right to terminate the contract with the seller and get a claim of the damages.

Some frauds which happened rapidly

1. Made any promises, but have no intention to complete that promise.
2. Sell faulty products with the knowledge of faults.
3. Doing any acts which already declared fraud by the law.
4. Any other act in which intention to deceive the other party.

Example of fraud.

A buys some products from B worth 1000. B takes these goods at credit, but B has the intention not to pay A. This kind of act is fraud.

2 . These days many people avoid tax by hiding their income and assets. In this case the taxpayer kwon about his income and assets but he hid it from the tax authorities. This is also a case of fraud.

Misrepresentation

When some make a statement the maker of the statement knows that the statement is right but the second person or buyer found that the statement is false. This is known as misrepresentation. The seller doesn’t have any intention to deceive the buyer. In misrepresentation, the maker of the statement believes that his services and products are good. Simply, he believes that the statement is true.

Misrepresentation is defined in section 18 of the Indian contract Act 1872. In misrepresentation it is the responsibility of the seller to prove that the statement is true or false. The victim of the Misrepresentation has no right to claim the damages.

Example of misrepresentation

Ravi buys a car from the Yash in good condition. Ravi purchases the car with good faith but after a few days Ravi finds some fault in the car. So, Ravi has to spend some money to repair the car. So this kind of act is termed as misrepresentation because Yash believes the car is in good condition but some faults are in the car.

Main differencee between Fraud and Misrepresentation

1. When it’s the intention of one person to deceive the other person is termed as fraud. When there is no intention to deceive the third person is termed as misrepresentation.
2. In fraud false statements are provided with the knowledge that statements are wrong. In misrepresentation statements are provided with the belief that the statement is true.
3. Fraud is defined in section 17 of Indian contract Act 1872. While misrepresentation is defined in section 18 of the Indian Contract Act 1872.
4. In fraud it’s the duty of the buyer or the consumer to prove the fraud. While in misrepresentation it’s the duty of the seller to prove the statement is true or false.
5. In fraud victims can claim for the damages. Victim can’t claim for the damages in misrepresentation.

Conclusion

Fraud and Misrepresentation are the two terms which are used when someone misleads and misguides the other person. Fraud takes place when a person is willing to deceive with intention. While misrepresentation is when someone doesn’t have intention to deceive the third person.

This is all about fraud and Misrepresentation. We hope this article will be helpful for you. If you have any doubt please feel free to comment on us. For more interesting topics please visit our website.