Types of Misrepresentation Fraudulent: Intentional false statement, knowing it's false, intending to induce reliance Negligent: Careless false statement without reasonable basis Innocent: False statement made in good faith, believing it true Elements of Fraud False representation of material fact Made with knowledge of falsity (scienter) Intent to induce reliance Justifiable reliance by other party Resulting damages Remedies for Fraud Rescission (cancel contract), damages (monetary compensation), or both. Punitive damages available for fraudulent misrepresentation. Protection Strategies Get all promises in writing, verify important claims independently, include representations and warranties clause, and investigate suspicious claims.