Contract and Negligence - Legal Issues and Rules

BUSINESS LAW
CONTRACT AND NEGLIGENCE

CONTRACT ISSUE
• Whether legal issue has been raised by the situation.
• Whether there is any misrepresentation which has led to
the formation of the contract.

CONTRACT RULE
• Misrepresentation must include a false statement regarding a fact, which
is material to the contract and forms an essential part of the contract.
• mere silence towards a fact relating to the contract will not imply
misrepresentation. A person assuming a silence to be a statement of a
fact would not incur a right of misrepresentation based on the
assumption.
• A contract obtained by way of misrepresentation may yield two options
in favour of the party whose consent was so obtained. The aggrieved
party may either rescind the contract, seek damages or ratify the
contract.

CONTRACT APPLICATION
• if any statement has been made by the Sunnybank Pty Ltd,
which is false or untrue, then the same will amount to
misrepresentation and will provide John Gravatt with a
right to bring an action for misrepresentation.
• In such an event, John Gravatt will have an option of
either rescinding the contract or claim damages for the
same. In case of his failure to take an action, the contract
will be ratified.