What is a misrepresentation in the context of a contract?

24. According to O'Shaughnessy v. Sidhu, 2016 BCPC 308, a misrepresentation is a false statement of fact made in the course of negotiations or in an advertisement, that has the effect of inducing a reasonable person to enter into a contract. The judge pointed out that there are several types of misrepresentation including negligent and fraudulent.

25. Although I am not bound by it, I agree with the CRT’s decision in Caviglia v. Jonathan, 2020 BCCRT 426 that negligent misrepresentation occurs when a seller fails to exercise reasonable care to ensure representations are accurate and not misleading. I also agree that a fraudulent misrepresentation occurs when a seller makes a false representation of fact and the seller knew it was false or recklessly made it without knowing it was true or false. In either case, the misrepresentation must reasonably induce the purchaser to buy the item.