Fraudulent Misrepresentation

What Does Fraudulent Misrepresentation Mean?

Fraudulent misrepresentation occurs when a person knowingly makes a false statement with the intent to deceive another. In the context of insurance, fraudulent misrepresentation can result in the voiding of a contract.

Insuranceopedia Explains Fraudulent Misrepresentation

To prove fraudulent misrepresentation, five elements must be present. First, there must be a material misrepresentation, meaning a false statement of fact that is significant to the contractual agreement. Second, the person making the statement must have shown reckless disregard for its truth. Third, there must be intent to induce the other party to enter into the contract based on the belief that the false statement is true. Fourth, the false statement must have been the reason the other party entered into the contract. Finally, the false statement must have caused injury or damage to the other party.