THE LAW OF MISREPRESENTATION IN REAL ESTATE CONTRACT:  STRIKING A BALANCE BETWEEN SELLER'S DISCLOSURE AND BUYER'S DUE DILIGENCE

Nur Yuhanis Ismon; Mohd Asmadi Mohd Angsor; Mohd Nazir Mohd Adi

doi:10.31436/iiumlj.v34i1.1096

Authors

Nur Yuhanis Ismon Pusat Tamhidi, Universiti Sains Islam Malaysia, Malaysia
Mohd Asmadi Mohd Angsor Johor Business School, Universiti Tun Hussein Onn Malaysia, Parit Raja, Johor, Malaysia
Mohd Nazir Mohd Adi Johor Business School, Universiti Tun Hussein Onn Malaysia, Parit Raja, Johor, Malaysia

DOI:

https://doi.org/10.31436/iiumlj.v34i1.1096

Keywords:

Misrepresentation, Real Estate Contract, Disclosure, Due Diligence

Abstract

The law of contract requires the presence of specific fundamental elements for an agreement to be legally valid and enforceable. In real estate transactions, the duty of full disclosure obliges the seller to reveal all material facts concerning the property to prospective buyers. Nevertheless, disputes frequently arise due to misrepresentation, where sellers provide false, misleading, or incomplete information, resulting in legal implications for both parties. This article critically examines the strictness and scope of disclosure obligations in real estate contracts under Malaysian law. Employing a doctrinal legal research methodology, the study analyses statutory provisions and relevant Malaysian case law to evaluate the extent of a seller’s duty to disclose and the continuing relevance of the caveat emptor principle. The findings suggest that both the seller’s disclosure obligation and the buyer’s due diligence duties such as conducting property inspections are typically governed by express contractual terms. Therefore, the duty of disclosure is not absolute but is determined by the specific terms set out in the sale and purchase agreement. This study underscores the importance of a balanced legal framework to ensure fairness and protect parties from the adverse effects of misrepresentation in real estate dealings.

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