REMEDY FOR MISREPRESENTATION IN CONTRACTS: A CASE ANALYSIS IN MALAYSIA

Misrepresentation is a false statement made by one party which affects the other partys decision to agree to a contract. The act of misrepresentation nullifies the free consent of the contracting party to enter the contract, and that party is entitled to remedy. In Malaysia, the act of misrepresentation in contract is governed by section 18, Contracts Act 1950, whereas the remedy is provided for under sections 65 and 66, Contracts Act 1950. Based on this provision, the remedy given in cases of misrepresentation is contract rescission. However, based on previous court decisions, the remedy of contract rescission and rescission and damages have both been awarded by the courts. The objective of this article is to provide an analytical and critical case-by-case analysis of misrepresentation in contract, specifically regarding the remedies awarded by the court. The analysis of these cases found that there are court decisions where the court had awarded the remedy of contract rescission, and other cases where the court awarded contract rescission together with damages. The remedy expressly provided for in the Contracts Act 1950 is, however, contract rescission. This situation may cause confusion as the effects of each remedy are different. It is also submitted that the provisions in the Contracts Act 1950 should be reviewed to ensure their suitability with the application of misrepresentation laws in Malaysia.