The Van Modification - Case Study Example

Del vs Boyse Facts: Del bought a van from Boyse in March 19 but the van needed modification to meet the requirements of Del. Del supplies curtain tracks and to accommodate the length of the tracks, a longer van space is needed. Boyse agreed to do the modification, stating among others to move the passenger seat from the front and place it at the back part of the van behind the driver's seat. But in order to allow access to the back seat, Boyse said they wuld design the front seat to tip over to provide access to the back seat. Deal also asked that printed on both sides of the van would be: "TRACKERS" Curtain track installers New York, Paris , Neasden. Boyse assured Del that the van would be ready on the 30th of March. On Mar 19, Del was also able to enter a large contract to install tracking for a building society. On March 29, Del found out through phone inquiry that Boyse was not able to finish the van modification. Boyse promised to deliver by March 30, although reluctant. After the van was delivered and Boyse have left, Del found out that the front seat would not tip forward to allow access to the passenger seat. Likewise, the name printed on the side of the band read "Trickers" and not "Trackers." In the process of delivering the van without the modifications specified, Boyse already committed a grave mistake towards his customer. And the fact that Del, the customer was compromised to loss or acquire damages due to the negligence of Boyse all the more added weight to Boyse's failure to deliver as promised or agreed upon. Misrepresentation In common law jurisdictions under contract law, misrepresentation are the false statement of fact made by one party that effect to induce another party into the contract. This is with the premise that three elements are necessarily established under the contract. Contract in this context is a legally binding exchange or agreement between parties that the law will enforce based on the Latin phrase pacta sunt servanda1. These elements are: offer and acceptance, consideration and intention to create legal relations. Offer and Acceptance In the case of Boyse and Del, Boyse made an offer to modify the van he was selling and the offer was accepted that is why there was a sale. The offer of modification include adjustment or removal of the passenger seat in its original location, adjustment of the passenger seat behind the driver's seat, and modification of the driver's seat which is to make it tip forward to allow access to the passenger seat. Another offer was to print the sides of the van with a specified name which was "Tracker". The last offer of course, was the delivery of the van on March 30. Nevertheless, basing on the case of Gordon v Selico (1986) 18 HLR 219 it is possible to make a misrepresentation either by words or by conduct, yet not everything said or done constitute a misrepresentation. In many cases, statements of opinion or intention are not statements of fact in the context of misrepresentation2. In the case of Boyse and Del, Boyse seem to have committed negligent misrepresentation, the following applies from the Misrepresentation Act 1967 under damages for misrepresentation: "(1) Where a person has entered into a contract after a misrepresentation has been made to him by another party thereto and as a result thereof he has suffered loss, then, if the person making the misrepresentation would be liable to damages in respect thereof had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that the misrepresentation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up to the time the contract was made that the facts represented were true. (2) Where a person has entered into a contract after a misrepresentation has been made to him otherwise than fraudulently, and he would be entitled, by reason of the misrepresentation, to rescind the contract, then, if it is claimed, in any proceedings arising out of the contract, that the contract ought to be or has been rescinded the court or arbitrator may declare the contract subsisting and award damages in lieu of rescission, if of opinion that it would be equitable to do so, having regard to the nature of the misrepresentation and the loss that would be caused by it if the contract were upheld, as well as to the loss that rescission would cause to the other party. (3) Damages may be awarded against a person under subsection (2) of this section whether or not he is liable to damages under subsection (1) thereof, but where he is so liable any award under the said subsection (2) shall be taken into account in assessing his liability under the said subsection (1)."3 In the case of Del, it is best that he may file for fraudulent misrepresentation because there seem to be intent to deceive and with the knowledge that the statements: adjusted passenger seat, tipping driver's seat, and printed signage on the sides of the van are all false. Although considered generally a difficult type of misrepresentation to prove, this allows for a remedy for both damages and rescission. This may also be brought as tort, or a civil wrong recognised by law as grounds for lawsuit. As Lord Herschell maintained, "I think the authorities establish the following propositions: First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false."4 In consideration of misrepresentation under Statute enacted by the Misrepresentation Act 1967, dealing with a negligent misrepresentation, it is best for an action to be brought under statute law as burden of proof that is required passes to the person who made the statement. Therefore, Boyse, in this instance would have to prove that the statements, that is, offer or consideration were not "facts" but opinion and that he had "reasonable ground to believe and did believe up to the time the contract was made that the facts represented were true,"5. It has been suggested that laws in consideration of contract, or misrepresentation sometimes present ripe issues that need to be either addressed or amended6. Remedies There are two proposed remedies for the situation of Del and Boyse in consideration of the foregoing. Fraudulent misrepresentation which has caused considerable damage already to Del would allow him to claim for damages under the tort of deceit. Del would be able to recover actual losses. Calculation under the Misrepresentation Act 1967 and that Boyse the defendant was proven to have committed a fraudulent act, even if he had only been negligent due to rushing the van for delivery, would be for actual losses that would include costs for the delay of the repair for the damages or un-made adjustments on the van, as well as the actual cost of the contract of Del with the building society as it protects the claimant's loss even if it was not reasonably foreseeable. The damages for misrepresentation usually reflect Del's reliance interest, whereas damages for breach of contract protect Del's expectation interest, although the rules on mitigation will apply in this case. But in some cases, the courts have awarded damages for loss of profit, basing it on loss of opportunity7. There is also the probability that the misrepresentation done could be rescinded as generally, the effect of misrepresentation is that it makes the contract voidable not void ab initio. Rescission may be done by Del either by informing Boyse or by requesting an order from the court. However, there are certain circumstances where rescission is not possible though as the parties may be restored to the positions they were before entering into the contract. 8 Obviously, this is not a good option for Del. Since Del immediately found the misrepresentation, but economically, would be damaging for him already to void the contract, that is, the buying of the van, it is best that he files for fraudulent misrepresentation. Nevertheless, it must be noted that in England and Wales, under s. 2(2) of the Misrepresentation Act 1967, the court has the discretion to award damages instead of rescission9. Conclusion: In a civil society, and in consideration of Del and Boyse's sides, the action done by Boyse for his customer Del is very damaging and highly compromising considering that Del has taken Boyse's statement/s as facts. Nevertheless, the deed of sale or sales contract must have specified all the demands or requests of modification of product, that is, the van, from Del so that Del could actually sue for the damages brought upon by the act. In the condition that the deed of sale did not contain the statements of Boyse, Del and Boyse could pursue negligent misrepresentation at common law where the representation is made carelessly while having no reasonable reasons for believing it to be true. This kind of misrepresentation is relatively new and was introduced to allow for a remedy of damages in situations where neither a collateral contract nor fraud could be found. Read More