B Law Essay

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MCD2070 Business Law Question 1 The main issue in this case/problem is whether the representor, the Jackaroo Resorts Ltd (‘the company’) is liable for negligent misstatement to the representee, the Shire of Gippsland (‘the Shire’). In order to prove negligent misstatement, 3 steps must be satisfied: 1. Does the representor owe a duty of care (DOC) to the representee? 2. Has the representor breached the DOC? 3. Is the damage suffered by the representee directly caused by the representor’s breach or is it too remote? If the representor is liable for negligent misstatement, it is then necessary to consider defences of contributory negligence, voluntary assumption of risk and the existence of disclaimer. Step 1: Duty of Care Issue: Does the Shire owe the company a DOC? Rules: A person who gives advice could owe a DOC to the recipient to take reasonable care in providing that advice if a “special relationship” existed between them. The existence of a special relationship is determined by applying the 4 criteria established in Shaddock’s case.[1] 1. Was the information given about a serious matter as set out in MLC v Evatt[2]? 2. Did the representor realize or ought to have realized that they were being trusted as in Hedley Byrne v Heller[3]? 3. Did the representor reasonably foreseen that the representee would have acted/relied on the information? 4. Was it reasonable for the representee to act on the information as discussed in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords[4]? Application: By applying the 4 tests established in Shaddock’s case, we know that: 1. Any other plans for development in the vicinity of the land will reasonably alter the viability of the resort and thus the value of it. And the money used on buying the land and building the resort is a

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