Law Society of Ontario (LSO) Paralegal Practice Exam

What characterizes negligent misrepresentation?

1. Representation was made knowingly

2. Representation was untrue, inaccurate or misleading

3. The reliance was beneficial

4. There was no party that relied on the representation

The correct answer is: Representation was untrue, inaccurate or misleading

Negligent misrepresentation is characterized by a representation that is untrue, inaccurate, or misleading, which is key to establishing liability. In cases of negligent misrepresentation, the party making the statement may not have intended to deceive but failed to take reasonable care in ensuring the accuracy of the information shared. This means that a false statement can occur even if it is made without intent to mislead; rather, the lack of due diligence in verifying the statement's truth can lead to misrepresentation. The implications of this definition are significant: the statement must be incorrect or deceptive and must induce reliance from another party who suffers a loss as a consequence of that reliance. This aspect differentiates negligent misrepresentation from other forms, such as fraudulent misrepresentation, where intent to deceive is critical. While other choices touch on aspects that might be associated with misrepresentation, they fail to encapsulate the fundamental essence of negligent misrepresentation. For instance, the notion that there was no party that relied on the representation would negate the possibility of establishing a claim, as reliance is an essential element. Furthermore, a representation that is beneficial to the relying party is not a characteristic of negligent misrepresentation; it is more about the veracity of the claim made and whether it was reasonably verified