Legal Updates

‎‎‎‎‎‎‎‎ Representations in a transaction regarding the future will not constitute misrepresentation unless there was no intention to fulfill them

September 4, 2017

Investors who invested in two failed real estate projects in Eastern Europe and lost their investment sued the marketing company, inter alia due to false representations as to project's prospect.

The Court held that a misrepresentation is a representation of a reality that is inconsistent with the actual reality, either negligently or deliberately misleading, either by presenting a false representation or by omitting data when disclosure is required. In general, the rules of the misrepresentation do not apply to evaluations or promises regarding the future, unless the person who made the presentation did not intend from the outset to consummate it. To terminate an agreement because of a misrepresentation one must show that it led to the entering into the contract of the claimant party and it is not sufficient to argue that generally no one would enter into an agreement had the facts be known. In this case, no false representation was made regarding the existing situation and it was not proven that the agreement was signed because of the misrepresentation, and therefore the claim was rejected.