Negligent Misrepresentation

In one sentence

A false statement made without reasonable care for its truth, causing harm to the other party.

Plain English

Negligent misrepresentation occurs when someone makes a false statement in a contract without bothering to check whether it's actually true. Unlike an innocent mistake, the person should have known better—they failed to exercise reasonable care. If the other party relies on this false statement and suffers a loss, they can often get out of the contract or sue for damages.

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Example

A used car dealer tells you the engine has never been rebuilt, but never actually inspects the engine records. You buy the car and later discover the engine was completely rebuilt. The dealer's careless statement, made without proper investigation, is negligent misrepresentation.

Used in a sentence

“The contractor's negligent misrepresentation about the building's structural integrity led to the buyer's lawsuit for damages.”

Related terms

Innocent Misrepresentation

A false statement made honestly, without knowledge of its falsity or negligence.

Material Fact

A fact that significantly affects a party's rights, obligations, or decision-making in a contract.

Void Contract

A contract that has no legal effect from the moment it's made.

Actual Breach

Failure to perform a contract duty on or after the date performance is due.

Duress

Forcing someone to sign a contract through threats or coercion.

Mistake

A misunderstanding or error by one or both parties about a fact in a contract.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.