Common Law of Misrepresentation - Case Study Example

CASE STUDY Student’s Name Course Professor’s Name (Student ID) University City (State) Date Word Count= CASE STUDY QUESTION TWO: The common law of misrepresentation is a contract law that takes into account the false statement of fact made by one party to another during the agreement. Misrepresentation can affect the contract's legitimacy. Nevertheless, there is a particular threshold that must be met for the law of misrepresentation to be used. First, a false declaration of a present or preceding fact must have been obtained. Second, the statement must be approved to the party that is suing. Lastly, the statement must have inclined the suing party to get into contract. Mayuri is, therefore, culpable in the law of misrepresentation since all the thresholds are met. In explanation, Mayuri is culpable under the innocent misrepresentation since she had reasonable grounds to believe that the statement she gave was true. Mayuri can be sued under the learned falsity since the falsehood in the accounts was realized later after signing the contract and change of ownership. Mayuri being the representer of the QTS Ltd, she had access to the hard and soft copies of the company but ignored the discrepancies. In the case Lockhart v. Osman (1981) VR 57, an agent publicized cattle that he claimed to be suitable for breeding purposes. It was later revealed that the cattle had an infectious disease that affected their reproductive systems. The verdict argued that the agent had a role in ensuring that remedial action was taken to correct the representation. The agreement was, as a result, set aside because the agent failed to take suitable measures. The statement might have been accurate during the contract signing period but later became untrue. The same scenario is witnessed in the Mayuri case in which the business was doing well during the period to which the contract was being signed but later experienced difficulties after the signing. Mayuri should, therefore, amend the statement made during the signing of the agreement. In With v. O’Flanagan (1936) Ch. 575, With entered into a contract that would see her purchase the medical practice of O’Flanagan. Throughout the negotiations, it was projected that the firm would produce an annual income of £2000. Before the signing of the contract, the firm started experiencing challenges and lost its value, however, the plaintiff was not informed of the changes. After signing the contract, the plaintiff realized the practice's true nature that suing the defendant by misrepresentation. In the verdict, Lord Wright indicated that an action taken as an inducement for the third part to enter into a given contract should be treated as a continued representation thus making the petition of the plaintiff successful. Since the case falls under the acquitted misrepresentation, the remedy is recession. In clarification, the remedy entails putting the parties back to pre-signing of the contract. As a result, it makes the contract to be voidable, and it has got two importances. First, the represent can continue to be contract-bound at her will. Second, since the effects and transactions of the voided contract are taken into consideration, the third party has the right to retain the legal title. Rescission can be conducted through requesting a court order or informing the represent with the goal of restoring the parties to the situation in which they were before signing the contract. In explanation, Mayuri can be sued in the court upon which a court order will be given to ensure that the losses are taken care of, and the shortcomings addressed through means such as refunding. Since the case will fall under innocent misrepresentation, the right to recession lapses thus time limit is less significant. For instance, Section 2 (2) of the Misrepresentation Act 1967 allows for the damages to be awarded instead of rescission in case the court seems it right. However, this is determined by the types of losses suffered by the claimant and innocent representation's nature. In the claims for damages, Mayuri will have to pay for the actual losses. In some of the scenarios, a claim of misrepresentation can serve as a ground for a deceitful action in tort law. The deceit in tort has got different rules and can be of great advantage. The damages can be made tortuous through overriding of the Misrepresentation Act 1967. In explanation, the losses calculated under the Misrepresentation Act 1967 can be calculated as damages treating the defendant to be fraudulent even though she was only negligent. It is usually a wider scope than the normal tortuous liability as it aims to protect the loss of the claimant even under circumstances that the reasons might not be clear. The damages will, however, be based on the reliance interest of the claimant. The court may also award for the loss of profit based on the opportunity loss. In conclusion, you (Jane) can sue Mayuri under the common law and get recession and compensation as remedies (803 words). QUESTION THREE: Taran and Monica have rights against Fantastique for breach of consumer guarantees. In the Australian Consumer Law Chapter 2, Section 3; there is a ban on the deceptive or misleading in commerce or trade (Commonwealth of Australia 2016). In Re Henjo Investments Pty Limited [1988] FCA 40, [31] a deceptive or misleading conduct applies to all the conducts that is likely or is misleading or deceptive and need no representation making. In Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592, [112], conduct can deceive or mislead when there is no remote or real chance that it will deceive or mislead which can be deemed true even when the probability of deceiving or misleading is below 50 percent. In Campomar Sociedad Limited v Nike International Limited (2000) 202 CLR 45, when the deceptive or misleading conduct is directed to the general public, it is appropriate that the reasonable or ordinary member of the section of the prospective purchasers react. However, in Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592, we find that if the conduct is done to specific people, the whole conduct is relevant to the case considering the nature of transaction and parties involved. Chapter 2, Section 3 of the law prohibits someone from engaging, in commerce or trade, in a deceptive or misleading conduct. The prohibition calls for economy-wide good conduct and is not limited to the supply of services and goods. Based on this section of the Australian Consumer Law, Taran, and Monica have the right to sue Fantastique for its employee Fabian giving misleading information regarding the product called ‘Alive.' He assured them that the product had minimal hair damage and very health for their scalp just to realize otherwise. Fabian also indicated that the color of the product would last for months but did not last even for two days. His act was, therefore, deceptive and misleading. In addition, the law states that there should not be unfair contract terms when dealing with the consumers. In explanation, a contract is deemed unfair when leads to an imbalance that is significant in the obligation and rights of the parties in the contract and would lead to non-financial or financial losses to the party. The sign, “Fantastique Ltd. will not be liable for any loss or damage caused by any defective product sold or used in our salon. Any liability will be the complete responsibility of the manufacturers", is unfair since it causes a serious imbalance between the rights of the salon owner and the clients. The fact that the clients that experiences the shortcomings of the product have to look for the supplier will need financial and time resources that might be detrimental to them. In other words, the statement favors the owner of the salon at the expense of the clients through using unfair terms of the contract. Taran and Monica have rights against Alive for breach of consumer guarantees. In Chapter three of the Australian Consumer Law, under the section on the manufacturers’ liability for goods that have safety defects, Taran and Monica have right over Alive. The law holds that an individual can commence a legal action against the manufacturer for compensation in case the person has suffered injury or loss due to the defective goods supplied (Commonwealth of Australia 2016). Taran and Monica suffered both injury and losses due to the use of Alive products. In explanation, they had paid $300 for the services based on the Alive products that lasted only for a day instead of the expected months. Taran also had to pay for additional funds for medical help due to the server itch of the scalp courtesy of Alive product. As per the verdict of Justice Traynor in Escola v. Coca-Cola Bottling Co., 24 Cal. 2d 453, 462 (1944), the public policy calls for a reduction of hazards to health and life due to defective products in the market even when there is no negligence. The public cannot anticipate the hazards associated with the products; therefore, it is the role of the manufacturer to guard against the recurrence of hazards. The manufacturer can insure the public as a cost of doing business to prevent the consumer incurring the cost of loss of health or time or treating of an injury. Justice Traynor also stated that it is in the interest of the public that the manufacturer incurs the cost of the injury relating to its defective products even if the manufacturing process experienced no negligence. In some of the scenarios, the occurrence of the risk might be general and constant thus need for constant and general protection of the public by the manufacturer since she is the only one that can afford such expenses. In conclusion, Taran and Monica have rights against Fantastique and Alive for breach of consumer guarantees under the Australian Consumer Law (810 words).   Reference List Commonwealth of Australia 2016, The Australian consumer law. Available from: < http://consumerlaw.gov.au/the-australian-consumer-law/legislation/ >. [5 September 2016]. Read More