Based on Legislation and Common Law - Case Study Example

Case Base on Legislation and/or Common Law. Name Course Institution Instructor Date This essay will examine how a plaintiff can litigate for compensation under misrepresented information given fraudulently by a defendant to encourage a purchase. The plaintiff is the person suffering loss, while defendant is the person who according to the plaintiff is responsible for the loss. This piece entails details of the fraudulent misrepresentation of the vegetarian café actual financial value by Elvis Eggplant, which resulted in Mr. Manfred purchasing it. There is adequate indication in the provided scenario to show that Elvis Eggplant provided falsified historical accounting figures before giving them to Mr. Manfred. Causing the conclusion that would allow Mr. Manfred to pursue damages against Elvis Eggplant, on the grounds of fraudulent misrepresentation. Fraudulent Misrepresentation is a false declaration made without minding the truth or falsehood. With the aim of inducing a decision or an action by a party who rely on it.1 In the case of Derry v Peek (1889), Lord Herschell stated that fraudulent misrepresentation as either recognizing it to be false, one without truth or careless and reckless to whether it is false or true. The first of the element of misrepresentation represent the statement of untrue fact. In Avon Insurance plc v, Swire Fraser ltd [2000] an examination of falsity substantiated 1 Derry v peek (1889) 5 T. L R 625 misrepresentations is defined as fraudulent when it is made knowing it is false, lacking truth or carelessly and recklessly ignoring whether it is true of r false 2 Avon Insurance plc v Swire Fraser ltd [2000] per. Rix J an examination of falsity substantiated whether a statement was correct Whether a statement was correct , on the other hand, in the case of spice girls v Aprilia World Service [2002] extended that conduct without words would fit the notion of a statement. In the scenario of Mr. Manfredi v Elvis Eggplant, the action of Elvis Eggplant amounts to a statement derived from the conduct devoid of words. Mr. Manfredi discovery of documents revealed Elvis Eggplant falsehood substantiated by an examination of falsity. In the second element of misrepresentation Dimmock v Hallet (1866) case showed that, a mere use of words did not amount to untrue declaration of fact. However, statements of intention as in the case of Edgington v Fitzmaurice (1885) would only become untrue if the party at the time of stating had no intention to carry them. Equally as depicted in the case of Humming Bird Motors Ltd v Hobbs (1986); Smith v Land & House Property Corp, opinions made without belief in them by the opinion maker did not amount to untrue statements. However, if the opinion maker believed they were true, and they turned out untrue then he would be liable for misrepresentation. 6 In the case of provided what Elvis Eggplant presents as truth turns out to be not since at the time of giving the information to Mr. Manfredi he knew they were not facts presenting them as truth. The third element of misrepresentation witnessed in the provided scenario is the disclosure duty. Whereas it is not necessary to reveal facts that would impinge on other parties _____________________________________________________________________ 3 spice girls v Aprilia World Service [2002] EMLR 27 (conduct without words would fit the notion of a statement 4 Dimmock v Hallet (1866) mere use of words did not amount to untrue declaration of fact 5 Edgington v Fitzmaurice (1885) 29 Ch D 459statements would only become untrue if the party at the time of stating had no intention to carry them through 6 Humming Bird Motors Ltd v Hobbs [1986] R.T.R. 276 opinions made without belief in them by the opinion maker did not amount to untrue statements 7Smith v Land & House Property Corp, (1884)28 Ch D 7 failure to believe in presented opinion cleared the statements of falsehood decision to enter a contract as indicated in Bell v Lever Bros. Ltd. (1932). Silence can amount to misrepresentation in four different levels. One being truths made by a party that leave out some facts, resulting in half-truth may be guilty of the misrepresentation. In the case fo Mr. Manfredi v. Elvis Eggplant. The discovery of the undisclosed information by Mr. Manfredi amounted to misrepresentation because Elvis Eggplant failed to disclose the whole truth. Whether the circumstances had changed in the process of the transaction failure to disclose equally amounted to misrepresentation as expressed in the case of with v, O’Flanagan (1936). The fourth element of misrepresentation appears in contracted parties through whom Misrepresentation can occur. Unfortunately, where non-party there is no remedy with the only remedy being in tort. In the some cases for misrepresentation to stand as an argument, it is important to show it induced going through with a contract.5 However, there are factors that would contribute to un- actionable misrepresentation. In Horsfall v Thomas [1862], not knowing the existence of a fault led to un-actionable misrepresentation. This decision established that once a false statement was, there was a need to show that the information given as false and that it was not because of their negligence. There was a need for further evidence to show that that information induced them to agree to a contract.10 In the case of Mr. Manfredi the discovery of cash register tapes, old receipts and old tax documents proved of the falsehood behind the contract. The evidence showed that Elvis Eggplant doctored the figures on paper to induce Mr. Manfredi to buy the Vegetarian café from ­­­­­­­­­­­­­­­­­­­­­­­8 Bell v Lever Bros. Ltd. [1932] AC 161 Silence can amount to misrepresentation 9 With v, O’Flanagan [1936] Ch 575 failure to disclose equally amounted to misrepresentation 10 Horsfall v Thomas [1862] 1 H&C 90 not knowing of the existence of a fault led to un-actionable misrepresentation HappyHippe Pty Ltd. However, there it is important to show that Mr. Manfredi had carried out all the necessary steps to ensure that the accounting information provided to him was real. As seen in Attwood v Small [1838] failure to thoroughly check and validate the statement made despite the opportunity to test would result in the failure of a case. Where Mr. Manfredi then thoroughly checked the reports given to him before taking inherent steps it would be possible to maintain and carry forward litigation. On the other hand, if Mr. Manfredi did not use the necessary tools to measure the truth of the records he received there would be a possibility of him losing the litigation to Elvis Eggplant.  The first remedy to misrepresentation is rescission; it presents an opportunity for equitably resolve all types of misrepresentation. The party, which is innocent, needs to exercise choice to either affirm or rescind the contract. Upon the effecting of rescission parties move back to their pre-contractual situation as seen in Car and universal Finance Co. Ltd. V. Caldwell (1965). Where Elvis Eggplant would be found guilty, he could be made to return any payments made to the purchasing of a business unless both parties come to a settlement other than the rescission. However, there are bars to rescission in the Long v. Lloyd (1958), if the afflicted individual decides to affirm the contract or proceed with the payment then rescission in that case would be void. Equally if the parties cannot rescind back to the first position for reasons they have already altered the first position then in such a case the rescission is impossible and other remedies pursued.13 Similarly, a situation where time has elapsed before discovery of ­11 Attwood v Small [1838] UKHL J60 failure to adequately check and validate the statement made despite the opportunity to review would result in the failure of a case 12 Car and universal Finance Co. Ltd. V. Caldwell (1965) on the effecting of rescission parties move back to their pre-contractual state 13 Long v. Lloyd (1958) 1 WLR 753 state that if the afflicted party decides to affirm the contract or proceed with the payment then rescission in that case would be void Falsehood in a statement recession holds a chance though it does not if discovery of the evidence followed lapse of time. Such lapse of time affects Mr. Manfredi seriously if he had already altered the vegetarian café then at that time it would be difficult to reseed since the likelihood was he had already spent money in renovations. However, if he hadn’t altered the way the café was presented to him following the discovery of false statement he could reseed though there would be a need for prompt action to avoid nullification by lapse of time. The second remedy to misrepresentation involves seeking for damages where fraudulent misrepresentation proved to exist. This would follow the outlined damages of deceit in tort.14 The result of such is that the innocent party has the opportunity to recover any consequential loss with the aim of restoring them back to an earlier position void of misrepresentation. As presented it the case of Doyle v. Olby Ltd. (1969) this was to later affirmed in the case of Smith new Court Securities v, Scrimgeour Vickers Ltd. (1997) where the plaintiff found to be innocent was adequately compensated. However, as depicted in Down v. Chappell (1997) case it was decided that a representee had the duty of reducing loss once fraud was discovered. Similarly, the given scenario of Mr. Manfredi v. Elvis Eggplant showed possibility of full compensation with fraud being a factor. Injury caused was possible to calculate since Mr.Manfredi could calculate how much he had been defrauded. Elvis Eggplant could only relay on 7th remedy of misrepresentation and hope that the statutory controls are attempting to limit liability, as seen in the case of Inntrepreneur pub Co. v. 14 Doyle v. Olby Ltd. [1969] 2QB 158 the innocent party has the opportunity to recover any consequential loss with the aim of restoring them back to an earlier position void of misrepresentation 15 Smith new Court Securities v, Scrimgeour Vickers Ltd. [1997] AC 254 the plaintiff found to be innocent is adequately compensated 16 Down v. Chappell [1996] 3 All ER 34 that a represented had the duty of reducing loss once fraud was discovered East Crown Ltd (2000) that sought to strictly controlled attempt on limiting liability. Elvis Eggplant would have to provide a contract agreed to by the Mr. Manfredi, showing that he had accepted to liability in case of misrepresentation. However, the terms would have had to satisfy the set requirement as in unfair contract terms act 11(1) 1977.18 An example of such a situation is cited in Watford Electronics Ltd. v. Sanderson CFL Ltd. (2001) with clauses like no reliance being left out by MA s. 3 In accordance to the aim of this essay, the piece has shown using references to various case laws how fraudulent misrepresentation could be approached using legal guideline. Upon the discovery of receipts and accounting documents, it is clear that Elvis Eggplant falsified accounting records to induce Mr. Manfredi in purchasing the Vegetarian Café from the HippieHappy Pty Ltd. The result is since Elvis Eggplant knowingly misrepresented relevant information Mr. Manfredi could successfully sue for injury incurred. The state equally could bring criminal charges on Elvis Eggplant for fraud with the aim to cause harm. 17 Inntrepreneur pub Co. v. East Crown [2000] 41 E.G. 209 statutory controls set to attempt limiting liability 18 Watford Electronics Ltd. v. Sanderson CFL Ltd [2001] 1 All ER for liability to succeed it would have to meet the conditions and satisfy the set requirement as in unfair contract terms act 11(1) 1977 Bibliography Articles and books Bower, George, and K. R. Handley. Actionable misrepresentation. 4th ed. London: Butterworths, 2000. Cartwright, John. Misrepresentation. London: Sweet & Maxwell, 2002. Eggers, Peter. Deceit. Hoboken: Taylor and Francis, 2013. Fraudulent misrepresentation. Subang Indah, Petaling Jaya, Selangor: Gavel Publications, 2010. Jones, Keith L., Gopal V. Krishnan, and Kevin D. Melendrez. "Do copy of Discretionary Accruals Detect Actual Cases of Fraudulent and Restated Earnings? An Empirical Analysis." Contemporary Accounting Research 25, no. 2 (2008): 499-531. Kerr, William Williamson, and Sydney Edward Williams. Kerr on fraud including the law relating to misrepresentation &c.. 4th ed. London: Sweet and Maxwell, 1910. Monaghan, Nicola, and Chris Monaghan. Beginning Contract Law. Hoboken: Taylor 2013. North, C, M.. "Remedies in the presence of fraudulent intent." Atlantic Economic Journal 29, no. 2 (2001): 162-176. O’Neil, Collin. "Methodological and Inducement Manipulation." The American Journal of Bioethics 13, no. 11 (2013): 55-57. Payne, Jennifer. "Measure of Damages for Fraudulent Misrepresentation." The Cambridge Law Journal 56, no. 01 (1997): 17. Cases Attwood v Small [1838] UKHL J60 Avon Insurance plc. v. Swire Fraser Ltd. (2000) per. Rix J Car and universal Finance Co. Ltd. V. Caldwell (1965) Bisset v Wilkinson [1927] AC 177 Bell v Lever Bros. Ltd. [1932] AC 161 Derry v Peek (1889) 5 T.L.R. 625 Doyle v. Olby ltd. [1969] 2QB 158 Down v. chappell [1996] 3 All ER 34 Edgington v Fitzmaurice [1885] 29 Ch D 459 Horsfall v Thomas [1862] 1 H&C 90 Humming Bird Motors Ltd v Hobbs [1986] R.T.R. 276 Inntrepreneur pub Co. v. East Crown Ltd [2000] 41 E.G. 209 Long v. Lloyd (1958) 1 WLR 753 Smith v Land and House Property Corp (1884) 28 Ch D 7 Smith new Court Securities v, Scimgeour Vickers ltd. [1997] AC 254 Spice Girls v. Aprilia World Service B.V. [2002] EMLR 27 ( With v, O’Flanagan [1936] Ch 575 Watford Electronics Ltd. v. Sanderson CFL Ltd [2001] 1 All ER Read More