Contracts depend on trust. When two parties agree to exchange goods, services, or promises, each relies on the truthfulness of what the other has said. A business owner purchasing equipment expects the seller's claims about its condition to be accurate. A professional entering a partnership assumes the financial projections shared during negotiations reflect reality. A non-profit signing a lease trusts that the landlord's representations about the property are honest. When those statements turn out to be false, the foundation of the agreement cracks, and Canadian law provides remedies through the doctrine of misrepresentation.
Misrepresentation occurs when one party makes a false statement of fact to another party, that statement induces the other party to enter into a contract, and the statement is material to the decision to contract. This doctrine exists because genuine consent lies at the heart of contract formation. If you agreed to something based on information that was untrue, your consent was compromised. You did not truly agree to what you thought you were agreeing to. Canadian contract law, whether in the common law provinces or under the civil law framework of Quebec, recognizes this fundamental unfairness and provides mechanisms to address it.
The distinction between a statement of fact and other types of statements matters enormously. A statement of fact is an assertion about something that exists or has existed, something capable of being proven true or false. Telling a prospective buyer that a commercial vehicle has never been in an accident is a statement of fact. Telling that same buyer that the vehicle is "excellent" or "reliable" is typically considered an opinion or puffery, a subjective assessment that a reasonable person would not take as a guarantee of specific conditions. Similarly, statements about future intentions or predictions do not usually qualify as misrepresentations unless the person making them knew at the time that they were false or impossible. If a seller tells you their business will definitely earn a certain amount next year, that prediction cannot be verified at the time it is made. However, if that seller knows their major client has already terminated their contract and revenue will certainly decline, the statement about future earnings might actually be a disguised statement about present facts, specifically about existing contractual relationships and the seller's own knowledge.