Cancellation

• If a private seller misrepresents important facts about the product that he sold you, you may cancel the contract. This means that you will have no further obligation to meet any of its terms -- such as paying installments -- but must return the product to the seller. Misrepresentation includes false, misleading and negligent statements. It also includes omissions that create a misleading impression.
  
  

Compensatory Damages

• If you bought a product from a seller at less than the market price and the seller breaches the sales agreement through misrepresentation, you are entitled to the benefit of your bargain. You may suspend your performance under the contract and sue for damages for breach of contract. If you choose to return the product, you will be entitled to damages in the amount of the difference between the market price and the price you agreed to pay. If you choose to keep the product, the contract price for the product will be subtracted from your damages.
  
  

Special Damages

• In some cases, misrepresentation by a seller can result in damages beyond the price you paid. If a buyer downplayed the dangers of a product or misrepresented its appropriate uses, for example, you may sue the seller for any injuries or damages you suffered as a result. You may also sue for business interruption expenses if, for example, machinery you purchased broke down and caused you to close your factory for several days. Although some sellers attempt to contractually limit their liability for special damages, most states place limits on their ability to do so.
  
  

Criminal Charges

• In extreme cases, you may seek criminal prosecution of a seller who causes you economic loss by making a false statement. For example, if you paid a private seller for a car that turned out not to exist, you might seek prosecution for theft by deception. As a private citizen, however, you cannot initiate a criminal prosecution. You must file a complaint with the prosecutor and ask him to initiate the prosecution.