“Misrepresentation”
is a concept of wide importance in common law jurisdictions. In English contract law and tort law, a
misrepresentation is a false statement of past or present fact made by one
contracting party to another, which has the effect of inducing the other party
to enter into a contract.
It is
often used as an alternate cause of action to breach of contract, because the
remedies for a successful claim for misrepresentation are different from those
available for breach of contract. Importantly,
among the possible remedies for misrepresentation is rescission, where the
contract is annulled and the parties restored to the position they were in before
the contract was entered into.
Misrepresentation,
under English law, does not necessarily require intent to deceive. “Negligent” and even “innocent” statements may
constitute misrepresentation if they are false and their effect was to induce
the other party into the contract.
Entire
agreement clauses in common law jurisdictions typically aim to exclude
liability for misrepresentation, but carve out liability for fraudulent
misrepresentation. In other words, the
parties agree not to claim for “negligent” or “innocent” misrepresentation in
connection with the agreement, but also state expressly that they are not
seeking to limit or exclude claims for fraudulent misrepresentation.
The
Civil Code does not, then, on a literal interpretation, recognise negligent or
innocent misrepresentation: there must be an intention to deceive. The onus is
on the party alleging misrepresentation to establish that (a) they were
deceived by the misrepresentation; and (b) the deception was intentional.
It
must be borne in mind, however, that the Omani courts have a large degree of
judicial discretion, with scant case law to reference, so it is not impossible
to exclude the possibility that they could find misrepresentation without
intent having conclusively been demonstrated.
Nevertheless,
the wording relating to misrepresentation in standard entire agreement clauses
should be drafted bearing in mind the more narrow definition of the term under
Omani law. Any attempt to limit or exclude liability for negligent or innocent
misrepresentation could be at best superfluous and at worst confusing; and any
attempt to exclude liability for fraud would be void under Article 182 of the
Civil Code.
