Business and Corporation Law

Running Head: BUSINESS AND CORPORATION LAW 0
Business and Corporation Law
4/16/2019
Student’s Name
Word Count
Part A – 1016 words
Part B- 962 Words

Business and Corporate Law
1
Contents
Part A...............................................................................................................................................2
Issue 2
Rules 2
Application 4
Conclusion 5
Bibliography....................................................................................................................................6
Case Laws 6
Books/Journals 6
Part B...............................................................................................................................................7
Issue 7
Rules 7
Application 9
Conclusion 10
Bibliography..................................................................................................................................11
Legislations 11
Books/Journals 11
Other Resources 11

Business and Corporate Law
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Part A
Issue
The issue of the case is to check the right of Alex in against of the vendor, the city of
Williamstown and his lawyer?
Rules
A contract is an agreement, which is legally binding to the signing parties of the same. Under a
valid contract, both of the parties are required to perform their promises1. For a valid contract,
certain elements are required to be there. Free consent is one of them. It means in a contract the
consent of the parties should not be influenced by any of the factors such as fraud,
misrepresentation, undue influence, unconscionable conduct and so on. Misrepresentation can be
understood as a false statement, which induces the representee to develop a contract. Such a
statement can be related to a fact or a law. Mainly three types of misrepresentations are there
namely fraudulent misrepresentation, innocent misrepresentation, and negligent
misrepresentation2. The categorization of misrepresentation is required because all of them
provide a different remedy to the victim. To be in successful in the claim of misrepresentation,
certain factors are required to be there. The very first factor is a false statement. For every kind
of misrepresentation, a false statement of law or fact must be there. The other factor is reliance.
The victim/offeree must have a reliance on the misstatement made by another party. Further
misstatement/misrepresentation must induce the victim to enter into the contract3. When both of
the conditions are satisfied, the next question arises regarding the type of misrepresentation. As
1 Jeffrey Frederick Fitzpatrick et al, Business and Corporations Law, 3rd Edition (LexisNexis Butterworths, 3rd ed,
2016).
2 Popov Danica. ‘The misrepresentation as a reason of rescission of contract.’ (2013) Zbornik Radova 47.
3 David Wright, Using Commercial Contracts: A Practical Guide for Engineers and Project Managers (John Wiley
& Sons 2016) 88.

Business and Corporate Law
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mentioned above three types of misrepresentation are there that provides different remedies.
Negligent misrepresentation is one of the significant out of them. As the name implies a
negligent misrepresentation is a statement that a party makes without having proper grounds for
belief in its truth. In such a situation the representor has to prove that, the same had reasonable
grounds to believe on the fact and the statement was made because of such belief. It means this
kind of misrepresentation occurs when a party negligently presents a false statement to other
party and other party believing on such statement enters into a contract4. For the existence of
negligent misrepresentation, there must be a special relationship between the parties. Further,
because of such relationship, the misrepresentor must owe a fiduciary duty to misrepresentee.
The person making misrepresentation must have an assumption of responsibility. An assumption
of responsibility is those cases where the person who makes the statement is the expert of a
particular area of knowledge.
The facts and decision of the case of Shaddock & Associates Pty Ltd v Parramatta City Council
5are necessary to discuss here. In this, case the claimant Shaddock & Associates wanted to buy a
property in the council governed area. The solicitor of claimant asked the council about the
prospective proposal and the council confirmed that no proposal was there. Council made this
statement negligently and later on because of some proposals, the value of the property
purchased by claimant reduced to a level. The claimant claimed that they have believed on the
statement made by the council and therefore purchased the property. It the misstatement by the
council was not there then no loss would have happened to them. In the decision of this case, the
court provided judgment in the favor of the claimant and made the council liable for negligent
misstatement. The decision of this case established that in those cases where the person having
4 Mark P. Gergen, ‘Negligent Misrepresentation as Contract’ (2013) California Law Review 101, 4.
5 Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225