Also known as: untrue statements of a material fact · untrue statements of material facts · material misstatement · false statement of material fact
Written by attorneys · grounded in primary & secondary sources — see below
A false representation concerning a fact that would influence a reasonable person's decision or action in the relevant context. The representation must be objectively untrue and must concern a concrete, verifiable matter rather than mere opinion or prediction.
Umar Underwood, representing a client in a contract dispute, tells the judge that his client never received a termination notice. In fact, Umar knows the notice arrived by certified mail two weeks earlier. The tribunal relies on the statement when ruling on a motion to dismiss.
Umeko Uchida, negotiating a settlement on behalf of a client, tells the opposing party that her client has no other pending claims. Umeko knows her client filed a parallel suit the previous month. The opposing party accepts a lower settlement amount in reliance on the statement.
Select any source to read its text and confirm it supports the definition.
Ulysses Ulrich applies for bar admission and answers "no" to a question asking whether any employer has ever found him to have engaged in dishonesty. He had received a formal reprimand for altering data to match a supervisor's preferences. The admissions authority later discovers the reprimand.
Upland Industries announces that a new drug will receive FDA approval by year-end. Company executives know the application faces significant deficiencies. Investors purchase shares at inflated prices before the FDA issues a rejection letter.
Umbra Technologies sells shares without disclosing that the company's primary asset is subject to an undisclosed lien. Buyers later learn of the lien when the lender seizes the asset, causing a sharp drop in share value.
Union Steel issues a press release stating merger discussions have ended. In reality, talks continue at a higher price. Shareholders sell shares before the eventual merger announcement drives the price upward.
A statement is material when it concerns a fact that would affect the admissions authority's evaluation of the applicant's honesty or fitness. An applicant who denies a prior employer finding of dishonesty on the application form makes a knowing false statement of material fact because the finding directly bears on character.
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No. The statement need only be made to the donor with intent that the donor rely on it. When a wrongdoer tells a donor a knowingly false fact about a beneficiary's conduct and the donor changes the estate plan in response, the transfer is procured by fraud even if the statement is not repeated to a court.
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Yes. Once a lawyer learns that a statement of material fact previously made to a tribunal is false, the lawyer must take reasonable remedial measures, including disclosure if necessary, even after the hearing has concluded but before a decision is issued.
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Generally no. A statement framed as a personal belief with an express disclaimer of expertise is treated as opinion rather than fact. When the speaker disclaims specialized knowledge and offers only a subjective assessment, the statement does not qualify as a representation of material fact.
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…of interstate commerce, or of the mails or of any facility of any national securities exchange, "(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading . . . , "in connection with…