When someone makes a statement that turns out to be untrue, it can cause all sorts of problems, especially in business deals or contracts. This is where misrepresentation comes into play. It’s basically about making a false statement that leads someone else to make a decision they otherwise wouldn’t have. Understanding the rules around misrepresentation liability standards is pretty important if you want to avoid getting into trouble or being taken advantage of.
Key Takeaways
- Misrepresentation happens when a false statement causes someone to make a decision.
- Liability for misrepresentation depends on the type of misrepresentation involved.
- To prove misrepresentation, you usually need to show a false statement, materiality, reliance, and damages.
- Remedies can include money damages or canceling a contract.
- There are ways to defend against misrepresentation claims, like showing the statement was true or that there were disclaimers.
Understanding Misrepresentation Liability Standards
Defining Misrepresentation in Legal Contexts
Misrepresentation, in a legal sense, happens when someone makes a false statement of fact that another person relies on, and that reliance causes them harm. It’s not just about outright lies; it can also involve misleading statements or even silence when there’s a duty to speak. The core idea is that one party has been led astray by information provided by another. This can have significant consequences, especially in business dealings and contracts. Understanding the nuances is key to avoiding liability or seeking recourse when wronged. It’s about the integrity of the information exchanged between parties, and when that integrity is compromised, legal issues can arise. The law tries to balance the freedom to conduct business with the need to protect parties from being deceived. This involves looking at the nature of the statement, the intent behind it, and the impact it had on the person who received it. It’s a complex area, and the specifics can really depend on the situation.
The Spectrum of Misrepresentation Claims
Misrepresentation claims aren’t all the same; they exist on a spectrum based on the speaker’s state of mind and the nature of the false statement. At one end, you have fraudulent misrepresentation, where the person knows the statement is false or makes it recklessly. Then there’s negligent misrepresentation, which occurs when someone makes a false statement without reasonable grounds for believing it to be true, even if they didn’t intend to deceive. Finally, innocent misrepresentation involves a false statement made entirely without fault, where the speaker genuinely believed it to be true. Each level carries different implications for liability and the types of remedies available. The distinctions are important because they affect how a court will view the conduct and what kind of proof is needed to establish a claim. It’s like a sliding scale of fault, and where a claim falls on that scale really matters for the outcome. This spectrum helps courts assess the blameworthiness of the party making the statement.
Establishing Misrepresentation Liability Standards
To hold someone liable for misrepresentation, certain standards must be met. Generally, this involves proving that a false statement of material fact was made, that the other party reasonably relied on that statement, and that this reliance caused them damages. The specific requirements can vary depending on the type of misrepresentation alleged (fraudulent, negligent, or innocent). For instance, proving intent to deceive is central to fraud, while for negligent misrepresentation, the focus is on the lack of reasonable care in making the statement. The concept of reliance is also critical; the injured party must show they actually acted based on the false statement and that their reliance was justified under the circumstances. Without these elements, a claim for misrepresentation typically won’t succeed. It’s a multi-step process that requires solid evidence to support each part of the claim. The law aims to ensure that liability is only imposed when there’s a clear connection between the false statement and the harm suffered. This framework helps to ensure fairness and predictability in legal dealings, providing a clear path for those seeking redress and a defined set of responsibilities for those making statements. Understanding these standards is key for anyone involved in transactions or agreements where information is exchanged. It’s about setting clear expectations for communication and accountability. Legal liability involves recognizing how laws allocate risk and assign responsibility for harm, and misrepresentation is a significant part of that.
Elements of a Misrepresentation Claim
So, you think someone pulled a fast one on you? When it comes to misrepresentation, there are a few key things a court looks at to decide if a claim is valid. It’s not just about someone saying something untrue; there’s a whole process to it. Think of it like building a case – you need all the right pieces in place.
First off, you’ve got to show there was some kind of false statement or, sometimes, a deliberate silence when there should have been a disclosure. This isn’t just a casual remark; it has to be a statement of fact, not just an opinion or some sales talk. For example, saying a car has "low mileage" is a statement of fact, but saying it’s "the best car ever" is just puffery. Sometimes, not saying something can be just as bad as saying something false, especially if there was a duty to speak up about important details. This is where things can get tricky, and understanding the nuances is key.
Next up is materiality and reliance. Was the false statement important enough to matter? Would a reasonable person have relied on it when making a decision? And did you actually rely on it? It’s not enough for a statement to be false; it has to be significant enough to influence your actions. If you wouldn’t have bought that used widget even if the seller hadn’t lied about its warranty, then the misrepresentation wasn’t material to your decision. You have to show that the lie actually played a role in you agreeing to the deal. This is a core part of establishing legal liability.
Finally, there’s causation and damages. You need to prove that the misrepresentation directly led to your harm or loss. It’s not just about being lied to; it’s about suffering actual consequences because of that lie. This means showing a clear link between the false statement and the financial or other losses you incurred. Without damages, even a clear misrepresentation might not lead to a successful claim. The harm has to be a foreseeable result of the wrongful act, not some bizarre, unconnected outcome. Proving all four components is necessary for a successful claim.
Here’s a quick rundown:
- The False Statement or Omission: A factual assertion that is untrue, or a failure to disclose a material fact when there was a duty to do so.
- Materiality and Reliance: The statement must be significant enough to influence a decision, and the injured party must have actually relied on it.
- Causation: The false statement must have directly caused the damages suffered.
- Damages: The injured party must have suffered actual harm or loss as a result of the misrepresentation.
It’s important to remember that the specifics can vary depending on the jurisdiction and the type of misrepresentation alleged. What might be a clear-cut case in one place could be more complex elsewhere. Always consider the specific facts and the applicable laws when evaluating a potential claim.
Understanding these elements is the first step in determining if you have a case for misrepresentation. It’s a legal puzzle, and each piece needs to fit perfectly. If you’re unsure, consulting with a legal professional is always a good idea to assess your specific situation.
Types of Misrepresentation and Their Liability
When someone makes a false statement that leads another person to enter into an agreement, it’s called misrepresentation. But not all misrepresentations are treated the same way by the law. The level of fault and the resulting liability can differ significantly depending on the type of misrepresentation involved. Understanding these distinctions is pretty important if you’re dealing with contracts or business dealings.
Fraudulent Misrepresentation
This is the most serious kind. Fraudulent misrepresentation happens when someone knowingly makes a false statement, or makes a statement recklessly without caring if it’s true or false, with the intention of deceiving the other party. The key here is the intent to deceive. For example, if a seller knows a car has a major engine problem but tells a buyer it’s in perfect condition, that’s likely fraudulent misrepresentation. The liability for this can be quite severe, often leading to contract rescission and significant damages, including punitive damages in some cases.
Negligent Misrepresentation
Negligent misrepresentation occurs when someone makes a false statement carelessly, without having reasonable grounds to believe it’s true, but without necessarily intending to deceive. It’s about a failure to exercise reasonable care in making the statement. Think about a professional who gives advice based on incomplete information they didn’t bother to verify properly. They didn’t mean to lie, but their lack of diligence caused the problem. Liability here typically involves compensating the injured party for their losses, often through contractual agreements or tort claims.
Innocent Misrepresentation
This is the least culpable form. Innocent misrepresentation is when someone makes a false statement that they genuinely believe to be true, and they had reasonable grounds for that belief. They weren’t trying to trick anyone, and they weren’t negligent. For instance, a seller might honestly believe a property has a certain feature based on outdated information, only for it to turn out not to be the case. While the contract might still be voidable, the liability is usually limited. Often, the remedy is simply rescission of the contract, returning the parties to their original positions, without additional damages. It’s a recognition that mistakes happen, and not every error warrants punishment.
Here’s a quick look at the differences:
| Type of Misrepresentation | Intent to Deceive | Standard of Care | Typical Remedy |
|---|---|---|---|
| Fraudulent | Yes | N/A (Intentional) | Rescission, Damages (Compensatory & Punitive) |
| Negligent | No (but reckless) | Reasonable Care | Rescission, Compensatory Damages |
| Innocent | No | Reasonable Grounds | Rescission |
The legal system tries to balance the need to protect parties from being misled with the reality that honest mistakes can occur in business and personal dealings. The different standards of liability reflect this balance, ensuring that remedies are proportionate to the degree of fault involved.
Establishing Fault in Misrepresentation Cases
So, you think someone pulled a fast one on you with a misleading statement? To actually do something about it legally, you’ve got to show they were at fault. It’s not enough that you were fooled; you need to prove the other party messed up in a way that the law recognizes. This usually boils down to a few key areas: intent, carelessness, or a failure to meet a certain standard of behavior.
Intent to Deceive
This is the big one, especially when you’re talking about fraudulent misrepresentation. Here, you’re trying to prove that the person making the false statement knew it was false, or at least didn’t care if it was true or not, and they said it anyway with the specific goal of tricking you into doing something. It’s about a deliberate plan to mislead. Think about it: if someone intentionally lies to you about a car’s condition to sell it for more money, that’s a clear intent to deceive. Proving this intent can be tricky, as people rarely admit to it. You often have to build a case based on the circumstances surrounding the statement and the person’s actions afterward.
Duty of Care and Breach
This is more about negligent misrepresentation. It’s not about them intending to trick you, but rather them being careless. In certain situations, people have a legal duty to be careful with the information they provide. For example, a professional giving advice might have a duty to ensure that advice is accurate and based on reasonable care. If they mess up – maybe they didn’t do their homework or relied on faulty information without checking – and that carelessness leads to your loss, they could be liable. It’s like a doctor giving bad medical advice because they weren’t paying attention; they didn’t mean to harm you, but their lack of care caused the problem.
Reasonable Reliance by the Injured Party
This element ties everything together. Even if someone intended to deceive you or was negligent, you can’t win a misrepresentation claim if your reliance on their statement wasn’t reasonable. The law expects people to act with a certain level of common sense. If a statement was obviously too good to be true, or if you had easy access to information that would have shown the statement was false, your reliance might not be considered reasonable. For instance, if a seller claims a used car has never been in an accident, but you see clear signs of major bodywork and a salvage title, relying solely on their word without checking might be seen as unreasonable. The idea is that you can’t just blindly trust everything you hear, especially in business dealings. You have to show that a sensible person in your shoes would have relied on the statement. This is where principles like estoppel can come into play, as they often involve assessing the reasonableness of reliance.
Damages and Remedies for Misrepresentation
When someone has been misled by a misrepresentation, the law provides ways to make things right. These aren’t about punishing the person who made the false statement, but rather about fixing the situation for the one who was harmed. The goal is to put the injured party back in the position they would have been in if the misrepresentation hadn’t happened. This can involve getting back money lost or even undoing a deal altogether.
Compensatory Damages for Losses
This is probably the most common type of remedy. Compensatory damages are meant to cover the actual losses someone suffered because they relied on the misrepresentation. Think of it as making up for what you lost. This could include direct financial losses, like money spent on a faulty product or service, or expenses incurred because of the false information. It’s about compensating for the actual harm, not for some abstract wrong. For example, if you bought a business based on fake financial reports, compensatory damages would aim to cover the difference between what you paid and what the business was actually worth, plus any other direct costs you incurred. It’s important to show a clear link between the misrepresentation and the financial hit you took. This is where proving causation and damages becomes really important.
Rescission of Contracts
Sometimes, money just doesn’t cut it. If a misrepresentation was significant enough to be a core reason you entered into a contract, you might be able to get the contract canceled. This is called rescission. It’s like the deal never happened. Both parties are then supposed to return whatever they received under the contract. So, if you bought a car based on a lie about its condition, rescission would mean you give the car back, and the seller gives you your money back. It’s a way to undo the transaction completely. This remedy is particularly useful when the subject of the misrepresentation is central to the agreement, and simply compensating for losses wouldn’t truly fix the problem. It’s a powerful tool for getting out of a bad deal that was based on bad information.
Punitive Damages in Fraudulent Cases
Now, this is a bit different. Punitive damages aren’t about making the injured party whole; they’re about punishment and deterrence. These are usually only awarded in cases of fraudulent misrepresentation, where the person making the false statement knew it was false and intended to deceive. The idea is to punish the wrongdoer for their really bad behavior and to send a message to others that this kind of conduct won’t be tolerated. They are awarded on top of compensatory damages. You won’t see punitive damages in cases of negligent or innocent misrepresentation. The amount awarded can vary widely, depending on the severity of the fraud and the financial standing of the defendant. It’s a way the legal system tries to discourage outright dishonesty in business and personal dealings.
Defenses Against Misrepresentation Claims
Even if someone believes they’ve been misled, there are several ways to push back against a misrepresentation claim. It’s not always a slam dunk for the person claiming they were wronged. The law recognizes that not every inaccurate statement leads to liability, and sometimes, the circumstances just don’t add up to a valid claim.
Lack of Materiality or Reliance
One of the biggest hurdles for someone bringing a misrepresentation claim is proving that the statement was actually material. This means the false statement must have been important enough to influence their decision. If the statement was about something minor, something that wouldn’t have changed their mind about a deal or action, then it’s likely not material. Think about it: if a car salesman told you the radio had a slightly different brand name than it actually did, but you bought the car because you loved its performance and safety features, that radio detail probably wasn’t material to your decision.
Similarly, the claimant has to show they actually relied on the false statement. If they found out the truth before making their decision, or if they would have gone ahead with the deal regardless of the statement, then reliance is missing. It’s not enough to just hear a false statement; you have to have acted because of it.
Truthfulness of the Statement
This might seem obvious, but a primary defense is simply proving that the statement made was actually true. If the information provided was accurate, then there’s no misrepresentation, plain and simple. This often comes down to the evidence. What documents existed at the time? What did witnesses recall? Sometimes, a statement might seem misleading out of context, but when all the facts are laid out, it turns out to be factually correct.
Disclaimers and Contractual Limitations
Contracts can be powerful tools for managing risk, and this includes limiting liability for misrepresentation. Many agreements include clauses that disclaim reliance on oral statements or limit the types of representations that can form the basis of a claim. For instance, an "as-is" clause in a sales contract might indicate that the buyer is not relying on any specific representations about the condition of the item.
It’s important to note that these clauses aren’t always ironclad. Courts may still find misrepresentation if the disclaimer itself was part of a fraudulent scheme or if it attempts to disclaim liability for something fundamental. However, well-drafted and conspicuous disclaimers can be a very effective defense, especially in business-to-business transactions where parties are expected to read and understand the terms they agree to. This is where understanding indemnification clauses can also be helpful in defining responsibilities upfront.
Here’s a quick rundown of common defenses:
- No Materiality: The statement wasn’t important enough to affect the decision.
- No Reliance: The claimant didn’t actually act based on the statement.
- Truth: The statement made was factually correct.
- Disclaimer: A contract clause limits or excludes liability for certain representations.
- Statute of Limitations: The claim was filed too late according to legal deadlines.
Sometimes, the best defense is a good offense, meaning proactive steps taken before a deal even closes can prevent claims from arising in the first place. Clear communication and thorough due diligence go a long way.
Misrepresentation in Contractual Agreements
When you’re getting into a contract, it’s easy to get caught up in the details and just want to get it signed. But what happens if someone tells you something that just isn’t true? That’s where misrepresentation comes into play, and it can really mess up a deal. A contract is supposed to be based on genuine agreement, and if that agreement is built on lies, it’s shaky from the start.
Impact on Contract Formation
Misrepresentation can affect whether a contract is even valid in the first place. If one party makes a false statement about something important – a material fact – and the other party relies on that statement when deciding to sign, the contract might be voidable. This means the person who was misled can choose to back out of the deal. It’s not just about outright lies, either. Sometimes, leaving out key information can be just as damaging. The whole idea is that both sides should have a fair picture before they commit. If that picture is distorted, the foundation of the agreement is flawed. This can happen in all sorts of agreements, from buying a house to signing up for a new service. Understanding how misrepresentation affects contract formation is key to avoiding future headaches.
Enforceability of Contractual Clauses
Contracts often try to limit liability, and you’ll see clauses that say things like "as is" or attempt to disclaim responsibility for certain statements. However, these clauses aren’t always a get-out-of-jail-free card. Courts look closely at these limitations, especially if they seem designed to shield a party from the consequences of their own dishonesty or serious carelessness. A clause that tries to excuse a party from all liability, particularly for intentional wrongdoing or gross negligence, is often thrown out. The wording matters a lot, and so does the specific situation. It’s a balancing act between letting people make their own deals and making sure they can’t just lie their way out of responsibility. Some clauses might limit liability for minor issues, but they usually won’t protect against outright fraud. It’s important to know that not all limitations on liability are enforceable, especially when dealing with serious misrepresentations. You can read more about how these clauses work in relation to limiting liability.
Remedies for Misrepresentation in Contracts
So, what can you do if you’ve been misrepresented in a contract? The remedies usually depend on the type of misrepresentation and how much it affected you. The most common remedy is rescission, which basically means the contract is canceled, and both parties are put back in the position they were in before signing. It’s like the deal never happened. Then there are damages. If you suffered financial losses because of the false statement, you might be able to sue for compensation. This could cover things like money you spent or lost income. In cases of serious fraud, where the misrepresentation was intentional and malicious, punitive damages might also be awarded. These aren’t meant to compensate you but to punish the wrongdoer and deter others. It’s a way to say, "You really messed up, and this will cost you."
Here’s a quick look at common remedies:
- Rescission: Cancels the contract and restores parties to their original positions.
- Compensatory Damages: Covers direct financial losses incurred due to the misrepresentation.
- Punitive Damages: Awarded in cases of intentional fraud to punish and deter.
It’s a complex area, and the specific outcome will always depend on the details of your case and the laws in your jurisdiction.
Disclosure Obligations and Misrepresentation
When you’re involved in a deal, whether it’s buying a house or signing a business contract, there’s often an expectation that everyone involved will be upfront about important stuff. This is where disclosure obligations come into play. Basically, the law sometimes requires parties to share certain information, and failing to do so can lead to misrepresentation claims. It’s not just about not lying; it’s also about actively telling the truth when you have a duty to do so.
Duty to Disclose Material Facts
What exactly counts as a "material fact"? It’s usually something that a reasonable person would consider important when making a decision. Think about a house sale: a leaky roof or a foundation problem would definitely be material. In a business context, undisclosed financial liabilities or pending lawsuits could be material. The idea is to give the other party enough information to make an informed choice. Not revealing a fact that could significantly influence someone’s decision can be just as damaging as making a false statement. This duty can arise from specific laws, like those governing real estate transactions, or from the nature of the relationship between the parties, such as a fiduciary duty. It’s a pretty big deal in contract law, as it helps ensure fairness and prevents one party from gaining an unfair advantage through silence. Understanding these duties is key to avoiding legal trouble, and it’s worth looking into the specific rules for your situation, especially if you’re dealing with significant contractual risk shifting.
Consequences of Failure to Disclose
So, what happens if someone doesn’t disclose a material fact they were supposed to? Well, it can open the door to a misrepresentation claim. The injured party might be able to seek remedies, like getting out of the contract (rescission) or seeking financial compensation for losses they suffered because they didn’t have the full picture. It really depends on the specifics of the situation and the jurisdiction. Sometimes, the failure to disclose is treated as a form of misrepresentation itself, even if no false statement was actively made. It’s a way the law tries to hold people accountable for their silence when it matters.
Balancing Disclosure and Puffery
It’s important to note that not every bit of information needs to be disclosed. There’s a difference between a material fact and mere "puffery" or sales talk. Exaggerated claims about a product’s quality, like "this is the best car ever!", are generally not considered misrepresentations if they’re subjective opinions. The law doesn’t expect absolute perfection in every statement. However, there’s a fine line. When does puffery cross over into a misrepresentation? It usually happens when the statement is presented as a fact rather than an opinion, and it’s material to the decision-making process. Businesses need to be careful not to cross that line, as misrepresentation claims can be costly. It’s all about being honest and transparent about the important stuff, without getting bogged down in every minor detail. This careful balance is often addressed in legal risk allocation discussions.
Navigating Misrepresentation Liability Standards
Understanding how different legal systems approach misrepresentation is key to managing risk. It’s not a one-size-fits-all situation, and what might be a minor issue in one place could lead to significant consequences elsewhere. Jurisdictional variations in standards mean that the specific laws of the state or country where a transaction occurs, or where a dispute is heard, will dictate the rules of engagement.
Jurisdictional Variations in Standards
Different places have different ideas about what constitutes a misrepresentation and what level of fault is needed to hold someone liable. Some jurisdictions might require a high degree of intent to deceive for fraud, while others might focus more on the impact of the false statement itself. This can affect everything from the types of claims that can be brought to the kinds of damages that can be awarded. It’s like trying to play a game where the rules keep changing depending on which field you’re on. For instance, a statement that’s considered mere puffery in one state might be actionable misrepresentation in another. This is why it’s so important to know the specific legal landscape you’re operating within, especially in cross-border or multi-state transactions. Understanding these differences is a big part of managing legal risk.
The Role of Evidence in Proving Misrepresentation
No matter the jurisdiction, proving a misrepresentation claim usually comes down to the evidence. This means having solid proof of the statement made, its falsity, and how it impacted the other party. Evidence can come in many forms:
- Documents: Emails, letters, contracts, marketing materials, and internal memos can all be critical.
- Witness Testimony: Statements from individuals involved in the transaction or who heard the misrepresentation can be persuasive.
- Expert Opinions: In complex cases, experts might be needed to explain technical details or industry standards.
- Circumstantial Evidence: Sometimes, the circumstances surrounding a statement can imply intent or knowledge.
Without strong evidence, even the most compelling story might not hold up in court. It’s about building a clear, factual narrative that demonstrates the elements of the claim. This often involves careful document collection and witness preparation.
Mitigating Risk of Misrepresentation Claims
Preventing misrepresentation claims is always better than dealing with them after the fact. A proactive approach can save a lot of trouble. Here are a few ways to reduce your exposure:
- Be Accurate and Honest: Ensure all statements made, whether in writing or verbally, are truthful and can be backed up.
- Document Everything: Keep clear records of communications and the basis for any factual statements made.
- Use Clear Disclaimers: Where appropriate, include language that limits the scope of representations or clarifies what is not being guaranteed.
- Train Your Staff: Make sure anyone communicating with clients or customers understands the importance of accurate information and the potential pitfalls of misrepresentation.
A commitment to transparency and thoroughness in all dealings can significantly lower the likelihood of facing a misrepresentation claim. It’s about building trust through clear communication and reliable information, which is a cornerstone of good faith in business.
By paying attention to these details, businesses and individuals can better protect themselves from the complexities and costs associated with misrepresentation disputes.
Wrapping Up: What to Remember About Misrepresentation
So, we’ve talked a lot about misrepresentation. It’s basically when someone says something that isn’t true, and it causes someone else to make a decision they wouldn’t have otherwise made, leading to some kind of loss. This can happen in contracts, or even in everyday dealings. The key thing to remember is that if you’ve been misled and suffered because of it, there might be legal options. It’s not always straightforward, and proving it can take some effort, but understanding the basics helps. Always try to be clear and honest in your dealings, and if you feel you’ve been wronged by a false statement, it’s worth looking into what steps you can take.
Frequently Asked Questions
What exactly is misrepresentation in simple terms?
Misrepresentation is basically when someone says something untrue that causes another person to make a decision, like agreeing to a deal. It’s like telling a fib that leads someone to do something they wouldn’t have if they knew the truth.
Are all lies considered misrepresentation?
Not all lies are legally considered misrepresentation. For it to count, the false statement usually has to be about an important fact that directly influences the other person’s decision. Small, unimportant exaggerations, sometimes called ‘puffery,’ might not count.
What’s the difference between fraudulent and negligent misrepresentation?
Fraudulent misrepresentation is when someone knowingly tells a lie or doesn’t care if it’s true, intending to trick you. Negligent misrepresentation is when they say something false but don’t realize it’s untrue because they weren’t careful enough to check the facts.
Can you be held responsible for misrepresentation if you didn’t mean to lie?
Yes, you can. Even if you didn’t intend to deceive someone, you might still be responsible if you made a false statement carelessly (negligent misrepresentation) or sometimes even if you genuinely believed it was true but it turned out to be wrong (innocent misrepresentation), especially in certain business deals.
What happens if someone misrepresents something to me?
If you’ve been a victim of misrepresentation, you might be able to cancel the agreement or contract. You could also be able to get money back to cover any losses you suffered because of the false statement.
What does ‘materiality’ mean when talking about misrepresentation?
Materiality means that the false statement was important. It has to be significant enough that it would likely affect a reasonable person’s decision about entering into a contract or making a deal. A tiny, irrelevant detail usually isn’t considered material.
How can I protect myself from accidentally misrepresenting something?
Be honest and accurate when you’re talking about products, services, or deals. Double-check your facts before making statements, especially important ones. If you’re unsure about something, it’s better to say so than to guess. Clear contracts can also help define what’s being promised.
Does it matter if the misrepresentation was written or spoken?
Generally, it doesn’t matter. Whether the false statement was made in writing, spoken aloud, or even implied through actions, it can still lead to liability for misrepresentation if the other conditions are met.