This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Misrepresentation as to the existence of the liability or property which is the subject-matter of the contract, as where A represented that a parcel of money entrusted to B to be delivered to A had not been so delivered,1 or that there was a large amount of growing timber on a given tract of land,2 or as to the nature and kind of a bond sold by one party to the other,3 or as to the quantity of work to be done under the contract,4 or as to the amount of liability,5 as where an indebtedness incurred before the time covered by a bond of indemnity was represented to have been incurred during such time,6 may be ground for rescission. So a misrepresentation as to the identity of all,7 or a part,8 of a tract of realty conveyed, renders the contract unenforceable. Innocent misrepresentation as to the location of land which vendee has never seen is treated as a collateral matter, involving quality or characteristic,9 and rendering the transaction voidable rather than void.10 The fact that A believes that his parents have entered into a valid contract for the conveyance of certain land, when, in fact, such contract is not enforceable because the written memorandum does not comply with the requirements of the statute of frauds, is a mistake as to a material fact, although such contract did not purport to bind A in any way.11 An innocent misrepresentation by the agent of one who has injured another, by which the nature and extent of such injuries are understated materially, is ground for avoiding a release which is entered into in reliance upon such representations.12
14, 105 Am. St. Rep. 1016, 98 N. W. 923.
1 Perkins v. Fish, 121 Cal. 317, 53 Ac. 901.
1 Houser v. McGinnas, 108 N. Car. 631, 13 S. E. 139.
2 Thwing v. Hall, etc., Co., 40 Minn. 184, 41 N. W. 815. Aa the timber was really what the parties intended to sell, such mistake may be classed as concerning the existence of the subject-matter, though if thought of as a sale of the land, it may seem a case of misrepresentation in the inducement.
3 Ripley v. Case, 86 Mich. 261, 49 N. W. 46.
4 Long v. Inhabitants of Athol, 196 Mass. 497, 17 L. R. A. (N.S.) 96, 82 N. E. 665.
5 Steere v. Oakley, 186 Pa. St. 582, 40 Atl. 815.
6 Beland v. Brewing Association, 157 Mo. 593, 58 S. W. 1.
7 Iowa. Clapp v. Greenlee, 100 la. 586, 69 N. W. 1049; Selby v. Matson, 137 la. 97, 114 N. W. 609.
Louisiana. Schmitz v. Peterson, 113 La. 134, 36 So. 915.
Minnesota. Lindquist v. Gibbs, 122 Minn. 205, 142 N. W. 156.
Montana. Post v. Liberty, 45 Mont. 1, 121 Ac. 475.
New York. Crowe v. Lewin, 95 N. Y. 423.
Washington. Freeman v. Gloyd, 43 Wash. 607, 86 Ac. 1051.
Wisconsin, McKinnon v. Vollmar, 75 Wis. 82, 17 Am. St. Rep. 178, 6 L. R. A. 121, 43 N. W. 800.
8 Trenchard v. Kell, 127 Fed. 596; Bigham v. Madison, 103 Tenn. 358, 47 L. R. A. 267, 52 S. W. 1074; Zunker v. Kuehn, 113 Wis. 421, 88 N. W. 605.
If the misrepresentation concerns an essential element of the contract, such as the subject-matter, it is material even if the subject-matter actually in existence is as valuable as that represented.13