Which of the following statements about representations in a contract is incorrect?

• A. A representation may be an oral or written statement.
• B. A representation is an inducement to enter into the contract.
• C. A representation need not be material, only false to void a contract.
• D. A representation need be only substantially true when made.

Answer: (C)

Representations are statements of fact made by one party to influence the other’s decision to enter the contract. They can be oral or written and function as inducements—the insurer or counterparty relies on them when agreeing to the deal. For a misrepresentation to void or voidable a contract, the statement must be false and material (it must concern a fact that would have influenced the decision). It’s not enough for a statement to be merely false; it must also be material and relied upon. Minor inaccuracies that are not material may be treated as substantially true and won’t automatically void the contract. That’s why saying a representation only has to be false to void a contract is incorrect. The other statements align with how representations are viewed: they can be oral or written; they serve as inducements; and there can be room for substantial truth rather than perfect accuracy.