How is negligent misrepresentation defined?

Negligent misrepresentation is defined as a false statement made without reasonable grounds for believing it to be true, and it occurs typically when a party provides information in a manner that is careless or reckless, leading to an erroneous belief by another party. This involves a failure to exercise the appropriate level of care that one should have when disseminating information, which results in someone else suffering damages as a result of relying on that misleading information.

The option stating that it is made carelessly aligns with the fundamental principle of negligent misrepresentation, which emphasizes that the individual did not take the necessary steps to ensure the information was accurate before sharing it. This lack of due diligence or care is central to the concept of negligence in the legal context, distinguishing it from fraud, where there is intent to deceive.

Moreover, the essence of negligent misrepresentation is the failure to verify information adequately, which can lead to real harm for the party relying on that information, reinforcing the legal responsibilities that arise in business interactions, especially in the hospitality sector where accurate information is crucial for decision-making.