What term refers to a false statement of fact made by one party that induces another party into a contract?

The term that refers to a false statement of fact made by one party which induces another party into a contract is misrepresentation. It is essential to differentiate misrepresentation from other terms, as it specifically involves an assertion that is untrue and affects the decision-making of the other party regarding the contract.

In a legal context, misrepresentation can be classified into different categories, such as innocent, negligent, or fraudulent, depending on the intent and knowledge of the party making the statement. Regardless of the type, the key element is that the false statement directly influences the other party to enter into the contract.

Fraud, while related, usually involves intentional deception with the aim of securing unfair or unlawful gain, which could encompass misrepresentation but encompasses a wider scope of wrongful acts. Contract breach involves the failure to perform obligations established in a contract rather than the misleading or false statements leading up to it. Deception is a broader term that could apply to various forms of misleading behavior and does not specifically address the aspect of inducing a contract through false facts. Thus, misrepresentation is the most precise term for the scenario described.