For a business deal to work, the contracting parties must provide each other with accurate and truthful information. Unfortunately, this doesn’t always happen. Sometimes, a contracting party, either on purpose or inadvertently, misrepresents one or more materials facts to the other party. This practice is called misrepresentation. Depending on the circumstances, an adversely affected party may rescind the contract or seek damages. In this article, we examine misrepresentation in business dealings.
Negligent vs. Fraudulent Misrepresentation
Florida recognizes two primary theories of recovery for damage occurring as a result of misrepresentation: negligent misrepresentation and fraudulent misrepresentation. In other words, a party can be liable for misrepresentation in Florida whether it’s accidental or purposeful. When determining whether a party has committed negligent misrepresentation, a judge or jury considers the following issues:
- Whether the defendant in the case made a statement of material fact that he or she believed to be true but which was actually false;
- Whether the defendant in the case should have known that the statement was false;
- Whether the defendant, in making the statement, expected that the other party would rely on the statement; and
- Whether the other party justifiably relied on the false statement of the defendant.
And when determining whether a party has committed fraudulent misrepresentation, a judge or jury considers the following issues:
- Whether the defendant’s false statement concerning a material fact was intentional;
- Whether the defendant was aware that the statement was false when he or she made the statement;
- Whether the defendant intended the other party to rely on the false statement; and
- Whether the other party in fact relied on the false statement.
Relevant Laws Addressing Misrepresentation
Both legislation and common law govern claims of fraudulent misrepresentation in Florida. On the statutory side, the Florida Deceptive and Unfair Trade Practices Act is a law that prohibits deceptive or unfair practices or acts in the conduct of commerce or trade, including misleading or false statements that are intended to defraud. In addition, courts in Florida have recognized fraudulent misrepresentation claims in many contexts beyond those that are governed by statute. This common law, or case law, has been critical in establishing what a party must prove to succeed in a misrepresentation claim and what defenses are available to defendants in such cases.
Misrepresentation Remedies and Recourse
The primary remedies and recourse for misrepresentation cases in Florida are rescission and damages. Recission allows a victim of misrepresentation to repudiate the transaction, and damages provide a victim with monetary compensation for losses suffered due to the misrepresentation.
Contact a Florida Corporate and Business Law Attorney
If you are conducting business in Florida, it is imperative that you have excellent legal representation. At Gueronniere, P.A., founding attorney Grace de la Gueronniere is here to assist you with your legal needs. With over a decade of legal experience, Grace understands what it takes to fulfill your corporate and business law needs. Please contact us today to schedule a meeting with our talented Florida lawyer.