Section 18 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 18 defines "misrepresentation". It has three limbs: a positive assertion of something untrue made in a manner not warranted by the speaker's information, even though he believes it; a breach of duty which gains an advantage by misleading another without an intent to deceive; and causing, however innocently, a party to make a mistake as to the substance of the thing agreed on.
Misrepresentation means and includes (1) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; (2) any breach of duty which, without an intent to deceive, gains an advantage by misleading another to his prejudice; and (3) causing, however innocently, a party to make a mistake as to the substance of the thing which is the subject of the agreement. Where consent is caused by misrepresentation, section 19 makes the agreement voidable. Section 18 carries no illustrations in the text.
The three limbs
| Limb | Text in short | Key words |
|---|---|---|
| 1 | Positive assertion of what is not true, in a manner not warranted by the speaker's information, though he believes it | "positive assertion", "not warranted by the information", "believes it to be true" |
| 2 | Breach of duty, without intent to deceive, which gains an advantage by misleading another to his prejudice | "breach of duty", "without an intent to deceive" |
| 3 | Causing, however innocently, a party to make a mistake as to the substance of the thing | "however innocently", "substance" |
If a deal went ahead on statements that turned out to be wrong, our legal dispute resolution service can help you work out whether section 18 applies.
Limb 1: an unwarranted positive assertion
The assertion must be positive, so it is a statement and not silence. It must be of something not true. The speaker believes it to be true, which separates this from fraud, and yet the assertion was made "in a manner not warranted by the information of the person making it". In other words, he asserted more than his information supported. The text does not give a further test of what is "warranted".
Limb 2: breach of duty without intent to deceive
This limb covers "any breach of duty which, without an intent to deceive, gains an advantage to the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him". The elements are a breach of duty, no intent to deceive, an advantage gained, and another person misled to his prejudice. The section does not list the duties; they arise from the relation or circumstances. See also the Explanation to section 17 on a duty to speak, in our article on section 17.
Limb 3: innocently causing a mistake as to substance
The third limb is "causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement". The words "however innocently" show that even an innocent act can be a misrepresentation if it causes such a mistake. The text does not define "substance" beyond that.
Misrepresentation compared with fraud
Fraud is defined in section 17; misrepresentation in section 18. The difference lies in the speaker's state of mind and the kind of act.
| Point | Fraud (s.17) | Misrepresentation (s.18) |
|---|---|---|
| Speaker's belief in a false statement | Does not believe it to be true (first limb) | May believe it to be true (first limb) |
| Intent | Intent to deceive or to induce the contract | Second limb: "without an intent to deceive" |
| Innocent acts | Not covered by the five acts as worded | Third limb covers causing a mistake "however innocently" |
| Effect | Voidable under s.19 | Voidable under s.19 |
Both lead to the same starting point under section 19: where consent is caused by fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. Section 19 also gives an additional right to a party whose consent was caused by fraud or misrepresentation: he may, if he thinks fit, insist that the contract shall be performed and that he shall be put in the position in which he would have been if the representations made had been true.
Section 19's exception and the Act's illustrations
Section 18 has no illustrations in the text we read. Illustrations to section 19 deal with misrepresentation and are restated in plain words.
Section 19, illustration (b). A, by a misrepresentation, leads B to believe wrongly that five hundred maunds of indigo are made annually at A's factory. B examines the accounts of the factory, which show only four hundred maunds. After this B buys the factory. The contract is not voidable on account of A's misrepresentation.
This shows the exception in section 19: if the party whose consent was caused by misrepresentation (or by fraudulent silence) had the means of discovering the truth with ordinary diligence, the contract is not voidable. We cover that in our article on section 19.
A modern example (ours, not the Act's)
Ishaan sells a second-hand delivery van to Jyoti. From the log book he has, he tells her: "This van has done only 40,000 km." He honestly believes it, but he has not checked the odometer or the service records, and the figure is wrong. This is a positive assertion of what is not true, made in a manner not warranted by his information, though he believes it: limb 1. It is not fraud, because he believes it to be true. If Jyoti would not have bought but for the statement, section 19 makes the contract voidable at her option, unless she had the means of discovering the truth with ordinary diligence.
A different case, for limb 3: Ishaan's agent hands Jyoti an old brochure of a different model, without any intent to deceive, and she buys believing the van is that model. Innocently causing a mistake as to the substance of the thing agreed on is misrepresentation under limb 3.
What can the parties change?
The parties cannot change the definition. They can, however, choose what they state and how: stating facts only where they are verified, separating facts from opinions, attaching schedules and documents, and specifying what each party relies on. Whether a clause that tries to exclude liability for misrepresentation will hold is a question that depends on the specific language and on law outside this article.
Practical points
- Check before you assert. Limb 1 reaches positive statements not warranted by the speaker's information, even if he believes them.
- Keep sales material consistent. Brochures and listings that mislead as to substance can fall under limb 3 even if innocent.
- Verify when you buy. Section 19's exception shows that having the means of discovering the truth with ordinary diligence matters.
- Put key statements in the agreement. Written schedules help show what each side was told.
Need help with statements made in a deal?
If you believe you were given inaccurate statements before signing, or you are defending a claim that you gave them, our legal dispute resolution team can review the record and explain the options under sections 18 and 19.
Key takeaways
- Misrepresentation has three limbs: an unwarranted positive assertion, a breach of duty gaining an advantage without intent to deceive, and innocently causing a mistake as to substance (s.18).
- Unlike fraud, a speaker may believe his statement to be true.
- Where consent is caused by misrepresentation, the agreement is voidable at the option of the party whose consent was so caused (s.19).
- A party who had the means of discovering the truth with ordinary diligence may lose the right to avoid (s.19, Exception).
Read next
- Section 17: fraud
- Section 19: voidable agreements
- Section 14: when consent is valid and when it is not
- Free consent: sections 13 to 22
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.