Download this free Supplier Contracts Checklist to ensure your contracts will meet your business\u2019 needs.<\/p>\n <\/div>\n \n\nDownload Now<\/a> <\/section>\n <\/div>\n\n\n\n\n The business market is highly competitive, with many suppliers offering similar services and trying to stand out to win new clients. During negotiations, meetings, or marketing correspondence, businesses will often make statements that influence decisions to sign contracts. Some of these statements will ultimately become part of the final written agreement<\/a>, while others do not. But if a false or misleading statement persuades a business to enter a contract, it can result in significant legal consequences.<\/p>\n\n\n\n Negligent misrepresentation under the Misrepresentation Act 1967<\/em> arises when one party carelessly makes a false statement (or lacks reasonable grounds for believing it to be true), and the other party relies on that statement when entering the contract. The test is objective, and once the relying party shows that the statement was false, the person who made it must prove that they had reasonable grounds to believe that the statement was true.<\/p>\n\n\n\n Negligent misrepresentation can arise when a person fails to verify facts before making claims. The misrepresentation must go beyond sales talk; it should involve an untrue statement of fact or law that induces a party to enter the contract.<\/p>\n\n\n\n There is often confusion between the legal terms \u2018negligent misrepresentation\u2019 and \u2018negligent misstatement\u2019. <\/p>\n\n\n\n A negligent misstatement happens when someone makes a careless statement in circumstances where they owe the other party a duty of care. This can exist even when no contract is in place. <\/p>\n\n\n\n By contrast, a claim for negligent misrepresentation under the Misrepresentation Act 1967<\/em> only arises between contracting parties or their agents. <\/p>\n\n\n\n In some situations, both duties may exist simultaneously. This can be complex to navigate in practice, and your business should seek legal advice on these situations if you require support with understanding them.<\/p>\n<\/div>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nUnderstanding Negligent Misrepresentation<\/h2>\n\n\n\n
Negligent Misrepresentation and Misstatement Differences<\/h2>\n\n\n\n
If any statements turn out to be false and a business signs the contract, there may be important legal remedies available to the innocent party under the Misrepresentation Act 1967<\/em>. <\/p>\n\n\n\n Negligent misrepresentation can have serious financial and legal consequences. Understanding how negligent misrepresentation works can help you protect your business before signing agreements and understand your options if problems arise. <\/p>\n\n\n\n This article provides a high-level introduction to negligent misrepresentation, potential implications for a business, and practical steps to help reduce risk.<\/p>\n\n\n ![\"Front](\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/4\/2023\/05\/03024102\/LegalVision_UK-Supplier-Contracts-Checklist.jpg\")
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