Contract Law Essay

2107 WordsJan 15, 20159 Pages
Business and company law 1. Misrepresentation Misrepresentation is a concept in the law of contract which alludes to a false statement of fact made by one party to another party in order to induce the representee to enter a contract. A contract made as a result of a misleading representation will be rendered voidable if it was made in reliance on an actionable misrepresentation, or was made under duress or was made on account of undue influence. In other words, once the existence of misrepresentation has been established in the contract, it is voidable by the innocent party and consideration must be given to the remedies available for misrepresentation. The remedy of rescission refers where the contract is set aside and the parties are put back into the position in which they were before the contract was made. Besides, the remedy of damage is compensation designed to compensate the victim of the misrepresentation for the financial loss which they have suffered. In addition, a remedy of rescission or damage depends on the types of misrepresentation. There are three types of misrepresentations: fraudulent, negligent, and innocent. In the given situation, ‘Nick informs Brian that the van was once owned by the Beastie Girls and was used to carry their music equipment when they were on tour.’ Suppose that the van did not belong to the Beastie Girls but Nick intended to add that information to attract buyer attention. Fortunately, Brian is a big fan of the band so he agreed to purchase the van for £5000. It can be seen that Nick made a misrepresentation statement about his van to induce Brian to buy it. As a case Smith v Land and House Property Corp (1884) LR 28 Ch D 7 states that statements of opinions can often involve statements of facts, if the facts are not equally known to both sides, then a statement of opinion by the one who knows the facts best involves very

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