Can an estate agent be sued for a seller's false statement?

Yes, but not under the Misrepresentation Act. Section 2(1) applies only against the other party to the contract, which is the seller. A salesperson who relays a false statement of fact can be sued in deceit if they knew it was false, or for negligent misstatement if they passed it on without reasonable care, and faces CEA discipline. 'I only repeated what the seller told me' is not a complete defence, so verify material claims or attribute them to the seller.

What is the difference between a misrepresentation and mere sales puff?

Puff is vague, non-factual sales talk ('a stunning home') that no one treats as a precise claim. A misrepresentation is a specific false statement of fact, such as the remaining lease or the floor area, that induces the other party to contract. An opinion from someone with better knowledge can also be a misrepresentation if no facts support it.

What can a buyer do about a misrepresentation?

The buyer can usually rescind the contract, even after completion (Misrepresentation Act s 1), and claim damages from the seller: in deceit for fraud, or under s 2(1) unless the seller proves reasonable belief. For an innocent misrepresentation the court may award damages in lieu of rescission (s 2(2)). Rescission is lost through affirmation, delay, impossibility of restitution or third-party rights, but damages remain.

Does a seller have to disclose defects in the property?

Generally no. On the resale of a completed property the seller warrants title, not physical condition, and need not volunteer physical defects; the buyer protects himself by inspection. But a half-truth, a statement that becomes false before signing, or conduct designed to hide a defect is a misrepresentation, and the seller's own agent must not withhold relevant facts from the seller.

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Paper 1 · Law of Contract & Agency · 13 min read

Misrepresentation & an Estate Agent's Liability

Practise this section (163 questions) → · 2.1 Law of contract, in sets of about 30

Must-know for the exam

A misrepresentation is an unambiguous false statement of existing fact, made to the misled party, which induces that party to enter the contract.
It need only be one of the reasons for contracting, and it counts even if the buyer could have discovered the truth by checking.
Mere puff, an honestly held opinion and silence are generally not misrepresentations; a seller of a completed property need not volunteer physical defects.
Half-truths, uncorrected changed circumstances and conduct hiding a defect are misrepresentations; a salesperson must not withhold relevant facts from the client (Code para 6(2)(d)).
All three types make the contract voidable; rescission survives completion (Misrepresentation Act s 1) and is lost by affirmation, delay, impossibility or third-party rights.
Under s 2(1) the other party pays damages as if fraudulent unless he proves reasonable belief; s 2(2) allows damages in lieu of rescission.
Section 2(1) runs only against another party to the contract: the seller, not the salesperson, who answers in deceit or negligent misstatement.
A seller is liable for misstatements his agent makes within authority; 'my agent said it' is no defence, nor is 'I only repeated the seller' for the agent.
A clause excluding misrepresentation liability works only if reasonable (s 3), and nothing excludes liability for fraud.
The standard of care is a reasonably competent salesperson, new or not: know the rules, check or attribute facts and refer what is beyond you (Code paras 4, 5, 14).

On this page · 8 sections

Estate agents talk for a living: describing units, answering buyers' questions, relaying what a seller has said. That is why misrepresentation is the contract-law topic most likely to expose a salesperson personally. Paper 1 tests it in two layers. First, was there an actionable misrepresentation at all? Second, who is liable for what: the seller, who is a party to the sale, faces different remedies from the salesperson, who is not.

What counts as a misrepresentation?

It is an unambiguous false statement of existing fact (or, traditionally, law), made by one party to another, which induces that other party to enter the contract. Four hurdles must all be cleared:

It was a statement of fact: not opinion, not sales puff, not a promise about the future.
The statement was false when the contract was made.
It was made to the person who was misled, directly or through their agent.
It induced the contract: it was one of the reasons the buyer went ahead. It need not be the only reason, and it still counts even if the buyer could have discovered the truth by checking.

Opinion with a hidden fact. An opinion from someone who knows the facts better carries an implied statement that facts exist to justify it. A salesperson who says "rental demand here is strong, easily $4,500 a month" when every recent letting in the block went for $3,600 is not offering harmless opinion. CEA's Code of Ethics makes the same demand: any opinion a salesperson gives must be justifiable by reference to verifiable facts (para 7(3), Estate Agents (Estate Agency Work) Regulations 2010, First Schedule, current at 1 Oct 2026).

What is NOT a misrepresentation

Mere puff — vague sales talk like 'a stunning family home'. No reasonable person treats it as a factual claim.
A genuine statement of opinion honestly held, by someone with no better knowledge than the listener — 'I think this unit gets good afternoon sun'.
A statement of future intention — unless the person never held that intention when they said it.
Silence, as a general rule. On the resale of a completed property the seller warrants title, not physical condition, and need not volunteer physical defects: caveat emptor. His duty of disclosure is limited to latent defects in title.

The trap

Opinion vs fact is the classic trap. 'This is a great investment' is opinion. 'The lease has 95 years left', 'the floor area is 1,200 sq ft' and 'there are no outstanding URA notices' are statements of fact. State one wrongly and you are exposed, even if you were only repeating the seller.

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What four elements make an actionable misrepresentation?Show answer
A statement of fact (not opinion, puff or a future promise), false when the contract was made, made to the person misled, which induced the contract. It need not be the only reason they went ahead.
For a negligent misrepresentation under s 2(1) Misrepresentation Act, who must prove what?Show answer
The maker must prove he had reasonable grounds to believe, and did believe, the statement was true up to the contract. Otherwise damages are assessed as if it were fraudulent.
Can a buyer claim s 2(1) damages from the seller's salesperson?Show answer
No. Section 2(1) runs only against the other party to the contract. The salesperson is liable in deceit if fraudulent or negligent misstatement if careless, and faces CEA discipline.
What four bars take away the right to rescind for misrepresentation?Show answer
Affirmation, lapse of time, restitution being impossible, and third-party rights acquired for value. A bar removes rescission only; the buyer keeps any claim for damages.
A unit listed as 1,200 sq ft is really 1,076 sq ft, and the buyer priced it at $1,500 psf. What is the gap worth?Show answer
About $186,000. Working: 1,200 − 1,076 = 124 sq ft; 124 × $1,500 = $186,000, at the buyer's own pricing.

Common questions

Can an estate agent be sued for a seller's false statement?: Yes, but not under the Misrepresentation Act. Section 2(1) applies only against the other party to the contract, which is the seller. A salesperson who relays a false statement of fact can be sued in deceit if they knew it was false, or for negligent misstatement if they passed it on without reasonable care, and faces CEA discipline. 'I only repeated what the seller told me' is not a complete defence, so verify material claims or attribute them to the seller.
What is the difference between a misrepresentation and mere sales puff?: Puff is vague, non-factual sales talk ('a stunning home') that no one treats as a precise claim. A misrepresentation is a specific false statement of fact, such as the remaining lease or the floor area, that induces the other party to contract. An opinion from someone with better knowledge can also be a misrepresentation if no facts support it.
What can a buyer do about a misrepresentation?: The buyer can usually rescind the contract, even after completion (Misrepresentation Act s 1), and claim damages from the seller: in deceit for fraud, or under s 2(1) unless the seller proves reasonable belief. For an innocent misrepresentation the court may award damages in lieu of rescission (s 2(2)). Rescission is lost through affirmation, delay, impossibility of restitution or third-party rights, but damages remain.
Does a seller have to disclose defects in the property?: Generally no. On the resale of a completed property the seller warrants title, not physical condition, and need not volunteer physical defects; the buyer protects himself by inspection. But a half-truth, a statement that becomes false before signing, or conduct designed to hide a defect is a misrepresentation, and the seller's own agent must not withhold relevant facts from the seller.

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Study material aligned to the public CEA syllabus. Not financial or legal advice — verify current figures with the relevant authority (IRAS, HDB, CEA, MAS).