Contract Law and Misrepresentation

This assignment delves into contract law principles, particularly focusing on misrepresentation and unconscionable conduct within the context of a case involving Mr. Amadio. It examines how these legal concepts apply to situations where individuals enter contracts without understanding their terms due to fraudulent activities. The analysis extends to the bank's potential liability in such scenarios, drawing upon relevant case law and legal principles.

Introduction to Business Law

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Challenges the mortgage guaranteed and three grounds for avoiding a contract...................1
2. Two reasons identified by appeal court..................................................................................1
3. Circumstances whereby bank is not duty-bound to disclose anything to guarantor..............1
4. Two circumstance persuaded Justice Gibbs that the bank require to disclosure to Amadio. .2
5. Torts discussed in lecture........................................................................................................2
6. Ratio in which bank is guilty of..............................................................................................2
7. Ways of identifying positions of bank and Mr. or Mrs. Amadio that is “gross equality of
bargaining power”.......................................................................................................................3
8. Difference between two torts..................................................................................................3
9. Applying of Amadio situation on these two torts...................................................................3
10. General test of bank who is liable to guarantor in case of misrepresentation.......................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business law is a cluster of necessary norms, acts, laws, rules and regulations which are
followed by the entire society while performing any activity because they are liable to consider
laws in order to stay away from fraudulent activities (What is Business Law?, 2018). Thus,
assignment is going to throw light on one of the major sparking cases of Mr. Amadio in Australia
which is a scenario of misrepresentation that is done by son of principal debtor. The important
problems or issues related with this contract is highlighted in this project for identifying the
invisible factors of this contract.
1. Challenges the mortgage guaranteed and three grounds for avoiding a contract
According to given scenario, Mr. and Mrs. Amadio are not knowing about the contract
of his son in which their property is considered as a security in front of bank. In fact, as per the
lecture note, it has been analysed that it is a situation of Unconscionable contract in which an
individual is not aware about the contract in which he/ she is engaged. Thus, three illegal issues
which identified are described as follows:
 One party is facing a liability of this contract.
 Another party which is responsible for this fraudulent activities is fully aware about this
liability.
 Exploits another party which create an unfair contract.
2. Two reasons identified by appeal court
According to appeal court, bank has done a illegal activity due to which this contract
became invalid. Thus, as a result it is influencing the life of Mr. and Mrs Amadio. Thus, two
major reasons or elements which show the wrongful conduct of bank are described as follows:-
 Acquiring signature of a person or property holder without explaining genuine terms and
conditions about contract (Goldberg, 2012).
 Failed in revealing facts behind this contract which is occurred by son of Mr. Amadio.
3. Circumstances whereby bank is not duty-bound to disclose anything to guarantor
According to principle law of Australia, it has been identified that bank can disclose all
the necessary terms and conditions in that situation when contract it taken in between principal
debtor and bank itself without presence of any mediator. Therefore, in the given scenario, Mr.
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Amadio son Vincenzo is susceptible for this contract which was held between him and bank for
increasing their overdraft in order to run their business entity for acquiring maximum profit.
Hence, for disclosing necessary information, bank needs to present itself in the same contract.
4. Two circumstance persuaded Justice Gibbs that the bank require to disclosure to Amadio
It is essential for bank to disclose hidden elements in front of Mr. Amadio while gaining
signature for final consent and need to discuss entire matter with them for acquiring more
information. Along with this, it aids them in understanding the opinion of principal debtor which
supports them while further procedure (Croxen and et. al., 2013). Hence, it is essential for every
member to get aware about the necessary terms and conditions before giving consent on specific
subject in order to make legal or valid contract without exploiting rights of any other person. But
in the given case study, property holder is not aware about significant components,due to which
it creates a situation of misrepresentation.
5. Torts discussed in lecture
Torts are the legal laws which are designed by legitimate bodies of Australia for
preventing parties from exploitation and fraudulent activities. Therefore, according to lecture
note, some of the useful laws or tort which are suited in given case of Mr. Amadios are going to
be described further:- Misrepresentation:- According to this, son of principal debtor is doing fraud activities.
He used to give consent on behalf of his parents for making its provided property as a
security or loan without consulting with their family.
 Unconscionable: - In this an individual is not getting aware about the loss of contract
whereby they are engaged without knowing essential facts or figures.
6. Ratio in which bank is guilty of
According to the above case scenario, it has been observed in the eye Justice Maston
bank is also found guilty because they are failed in disclosing all the matters in front of principal
debtor (Heringa and Kiiver, 2012). As a result, they are also seen as a culprit for Mr. Amadios
that they are not aware about the necessary terms and conditions which affect entire contract.
Hence, it is analysed that as per the rules and regulations of Australian laws, an individual can't
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give consent to bank on the behalf of other person because it is considered as a wrongful activity.
Thus, they are also liable for this misconduct.
7. Ways of identifying positions of bank and Mr. or Mrs. Amadio that is “gross equality of
bargaining power”
According to acts or law, bank is also found guilty because its member get failed in
disclosing matters in front of their main debtor because of wrong information given by son of
Mr. Amadio. Along with this, property holder is also facing this situation as they are also not
updated about their current situations or neither aware about the contract in which he is involved
(Grewal and Purdy, 2014). Thus, it has been observed that it shows that both of them fall under
situation of “gross equality of bargaining power” which means that bank and principal person is
facing a problem of inequality in which both the parties are unaware about the hidden facts or
figures that is done by Mr. Vincenzo son of Mr. Amadio.
8. Difference between two torts
It has been observed that two major torts which is identified in given scenario are duress
and misrepresentation. Thus, both the elements are different from each other in every sense. For
example duress in which an individual are falling under contract due to enforcement activities
which means a person is enforced by some other capable individual in order to attain their set
objectives or goals. Whereas, misrepresentation is word that signifies that terms or conditions are
misrepresented by parties involving in a contract which affects overall agreement.
9. Applying of Amadio situation on these two torts
Mr. Amadio is a person who is 76 years old living with her wife and son in Australia and
surviving his livelihood in a proper manner by serving specific job. But, due to his son’s
misconduct or fraudulent activities, Mr. Amadio get involved in a contract without knowing
about it. Thus, in this situation, misrepresentation and Unconscionable torts are applied in this
circumstance because this contract is signed by principal debtor without any prior information or
consent.
10. General test of bank who is liable to guarantor in case of misrepresentation
Mr. Virgo, who is a bank manager involved in an agreement process on the behalf of
bank and contacting with a person who is engaged in a contract without knowing necessary
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terms or conditions of same. Hence, it has been observed that according to case, bank is also
responsible for these fraudulent activities because they are also involved in a contract after
knowing indispensable facts or figures. Therefore, it is essential to consider all the points before
making any contract in order to prevent each or every person from misrepresentation.
CONCLUSION
From the above report, it has been summarized that business law which is designed by
legitimate bodies of Australia for creating an environment free from exploitative activities and
discrimination. Thus , this report is all about problem faced by Mr. Amadio and highlighted
contract in which he get involved without knowing the necessary terms and conditions. Hence,
various laws was described in above project and decisions made by appeal of court.
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REFERENCES
Books and Journals
Schubert, F. A., 2011. Introduction to law and the legal system. Cengage Learning.
Goldberg, J. C., 2012. Introduction: Pragmatism and private law. Harvard Law Review. 125(7).
pp.1640-1663.
Croxen, M. A. and et. al., 2013. Recent advances in understanding enteric pathogenic
Escherichia coli. Clinical microbiology reviews. 26(4). pp.822-880.
Heringa, A. W. and Kiiver, P., 2012. Constitutions compared. An introduction to comparative
constitutional law. Ius Commune Europaeum. (104).
Grewal, D. S. and Purdy, J., 2014. Introduction: Law and neoliberalism. Law & Contemp. Probs.
77. p.1.
Online
What is Business Law?. 2018. [Online]. Available through: <http://legalcareerpath.com/what-is-
business-law/>.