Which type of misrepresentation allows an injured party to potentially recover damages?

Fraudulent misrepresentation and negligent misrepresentation both allow injured parties to potentially recover damages.

Fraudulent misrepresentation occurs when a party intentionally misrepresents a material fact with the intent to deceive another party, who relies on that misrepresentation to their detriment. In such cases, the injured party can seek damages because the deceptive conduct was intentional and harmful.

Negligent misrepresentation happens when a party provides incorrect information without exercising reasonable care to ensure its accuracy, resulting in reliance by another party that suffers harm. This type of misrepresentation allows for recovery as it acknowledges the duty of care owed to the party relying on the misstatement.

In contrast, innocent misrepresentation involves a false statement made without intent to deceive and without negligence. Although the injured party can rescind the contract, they typically cannot recover damages because there is no intent or negligence involved in the act of misrepresenting the information.

Therefore, the correct answer is that both fraudulent and negligent misrepresentation provide grounds for recovering damages, making the selection of both types as the correct answer appropriate.