Misrepresentation before a contract in Cyprus: your options

In short

If you signed because the other side assured you of something untrue, you may rescind the contract, or keep it and be put where you would be had it been true.

Klitos Platis, advocate

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The seller assured you the property had no unauthorised works, that the business earned a certain turnover, that the machinery worked as it should. You signed, you paid, and then you found out it was not so.

The law does not require you to prove that the other side knew it was lying. It also reaches a careless statement with no proper basis, even one the maker believed, which is the situation many people describe as negligent misrepresentation. Three questions decide the case: what exactly was said, whether it led you to sign, and whether you could have found the truth with ordinary diligence. Our commercial lawyers can review the contract and the messages that came before it.

What counts as misrepresentation

A misrepresentation is an assertion of a fact that is untrue, even where the person making it believed it to be true. Section 18 of the Contract Law, Cap. 149, gives it three forms:

a positive assertion of something untrue, not warranted by the information of the person making it, though he believes it true;
a breach of duty, without intent to deceive, that gains an advantage for the person in breach by misleading the other to his prejudice;
causing, however innocently, a mistake as to the substance of the thing that is the subject of the agreement.

Fraud under section 17 goes further, because it is done with intent to deceive. It includes, among other things:

asserting as true something the person does not believe to be true;
actively concealing a fact the person knows;
a promise made with no intention of performing it.

You do not need to prove the other side knew the statement was false; it is enough that their own information did not support it.

What you can do

The choice is yours. Where your consent was caused by fraud or misrepresentation, the contract is voidable at your option (section 19(1)). There are two routes:

Rescind the contract. The other side no longer has to perform, and you return what you received under it, so far as possible (section 64). Rescission is communicated to the other side (section 66).
Keep the contract and ask to be put in the position you would have been in had the representations been true (section 19(2)).

The two routes lead to different steps, so decide early which you want. If you want to keep the property or the business, the second route usually fits better; if the deal no longer serves you, the first.

Where there was fraud, the Civil Wrongs Law, Cap. 148, also gives a claim for damages (section 36). It needs a statement made knowingly or recklessly, intended to make you act on it, and loss you suffered because you did.

When the right is lost

Two rules in section 19 limit the right:

The statement must have led you into the contract. Fraud or misrepresentation that did not cause your consent does not make the contract voidable (section 19(4)).
For misrepresentation, or silence amounting to fraud, the contract is not voidable if you could have discovered the truth with ordinary diligence (section 19(3)).

In C.L.R. Stockbrokers Ltd v. N. K. Shakolas (Holdings) Ltd (2020), the Supreme Court dismissed an appeal in a CY£3,000,000 claim for misrepresentation and concealment over a purchase of shares. The buyer was a stockbroking firm, and the fact it complained of had been made public on the Stock Exchange a year earlier. An investor of that size, the Court held, would be expected to make all due enquiries, and the other side’s failure to mention the fact was not concealment amounting to fraud.

Check what you can before you sign, and keep the other side’s statements in writing. The checking protects you twice: it keeps you out of a bad deal, and if something was hidden from you all the same, it shows you did your part.

The time limits

An action relating to a contract must be brought within six years of the cause of action being complete, under section 7(1) of Law 66(I)/2012.

Where the action concerns the defendant’s fraud or deliberate concealment, time does not start to run until you discovered the fraud or concealment, or could have discovered it with reasonable diligence (section 14(1)). Our article on limitation periods explains how the periods are counted.

What this means in practice

Write down exactly what you were told, by whom and when, and keep advertisements, emails and messages.
Note when you discovered the statement was untrue: that date may matter for the time limit.
Decide whether you want to leave the contract or keep it with redress, knowing that rescission means returning what you received.
Speak to us before you send a notice of rescission, because the duty to return what you received under section 64 starts with it.

A statement that led you to sign, and was not true, gives you choices. Use them with the documents in hand.

Questions we are asked

What if the other side honestly believed what they told me?

Misrepresentation under section 18 covers a statement made in good faith where the maker’s own information did not warrant it. Good faith matters mainly for a claim in the civil wrong of fraud, which needs a statement made knowingly or recklessly.

Does silence count?

Mere silence is not fraud unless the circumstances placed a duty on the other side to speak, or the silence is in itself equivalent to a statement (section 17(2)). Active concealment is fraud. As the Supreme Court restated in 2020, concealment is active when it shows in a specific act, conduct or attitude.

An estate agent or representative told me something untrue. Is the seller responsible?

A misrepresentation by an agent in the course of the agency has the same effect as if the principal had made it, unless it concerns a matter outside the agent’s authority (section 198). What matters is the authority of the person who spoke to you.

What should my first message include?

What you signed and when, what you were told and by whom, and when you found out it was untrue. If the statement appears in an advertisement, an email or a message, say so.

Sources

Klitos Platis

Advocate, Partner

Kleanthous & Platis LLC, Cyprus
Published 16 October 2026

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