Business and Commerce
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5. What if I am misrepresented (misled) by others in entering into a contract. Will the law help me to discharge the contract or claim compensation?

A person who makes a false statement of fact that induces (persuaded) another person to enter into a contract is guilty of making a misrepresentation. The three pre-requisites for misrepresentation are: i) someone has given a statement of fact, ii) that statement is wrong, and iii) that false statement induced the innocent party to enter into the contract.

Note that a "statement of fact" is different from a "statement of opinion". For example, a car seller would only have given a statement of opinion if he told you that a van might be able to carry 1,000 kg of goods and asked you to try it before confirming your order. However, he would have made a statement of fact if he told you that the van had a 2,500 cc engine. The seller would be liable for misrepresentation if you confirmed your order as a result of his statement, but subsequently discovered that the actual capacity of the van's engine was only 1,500 cc.

The Misrepresentation Ordinance (Cap. 284 of the Laws of Hong Kong) allows the innocent party to apply to court to rescind the contract (cancel the contract and restore the parties to where they were before the contract was made) and to claim compensation.