Questions on Contract Law 2022

Running head: CONTRACT LAW
CONTRACT LAW
Name of the Student:
Name of the University:
Author Note:

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Question 3:
Issue:
The issue involved in the present case study is whether Charlie can rescind the contract
based on the representations made by Abby.
Relevant law:
A contract can be defined as an agreement which is legally binding giving rise to rights
and duties that can be enforced in the court of law (Poole, 2016). The agreement of a contract
contains terms of the contract that denotes the rights as well as duties of the parties involved in
such contract. If any of the parties does not act in accordance to the terms of the contract, then he
will be liable for the breach of contract.
Representation is not a term in the contract and hence cannot be regarded as contract’s
part. If any party to the contract makes any statement which is false, he cannot be made liable for
the contract breach. However, he will be held liable for misrepresentation when the elements of
the misrepresentation are present (Taylor & Taylor, 2019).
Representations are usually made prior to contract formation or during the formation of
contract. Misrepresentation refers to a statement which is not true that induces the representee to
create the contract with the representer. As a result of relying on the false representation, the
representee suffers losses.
In order to prove that the representer had made a misrepresentation, two main criteria are
to be fulfilled. They are as follows:

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 False statement,
 Inducing the representee.
The statement in doubt of misrepresentation made by the representer must either be
related to any past fact or present fact and not to any future incident or fact as entrenched in
Edgington v Fitzmaurice (1885) 29 Ch D 459 case. Only a mere opinion containing statement or
showing intention if tentative will not be enough to prove misrepresentation. But if such
intention or opinion is given by the representer when he has knowledge that there lies no
reasonable ground for that opinion or intention at the time of creating contract, then such
statement is actionable. It is observed in the landmark Smith v Land & House Property Corp
(1884) 28 Ch D 7 case. This is due to the reason that he is mis- stating the fact regarding his
opinion or intention. It is seen in the case of Bisset v Wilkinson [1927] AC 177.
Misrepresentation can be made orally or by writing or by conduct also. Though in
general, silence does not amount to misrepresentation as seen in Walters v Morgan (1861) 3 DF
& J 718 but it is actionable in some context or situation where silence shows what has been
stated as incomplete or false or when there lies a affirmative duty to disclose something as seen
in the decision given in the HIH Casualty and General Insurance Ltd v Chase Manhattan
Bank [2003] UKHL 6 case. Thus although silence does not result into misrepresentation but if
what has been not said results into what is stated to half true, then it will be considered as the
misrepresentation as observed in Dimmock v Hallett (1866) LR 2 Ch App 21 case.
The second element to be proved in order to make a statement actionable is that the
representer has made such statement with the view of inducing the representee to enter into the
contract as observed in the case of Horsfall v Thomas [1862] 1 H&C 90.