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LAW100 Introduction To Business Law

   

Added on  2020-03-16

7 Pages1409 Words125 Views
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LAW2 | P a g eIssue 1The key issue in this case revolves around a possible claim which can be made by Ellen against the council for the advice. RuleMisrepresentation refers to a false statement of fact made to induce the other party into getting forward with the contract by the first party. In misrepresentation, the false statement has to be made of fact and not of opinion, as was held in Bisset v Wilkinson [1927] AC 177. And Horsfall v Thomas [1862] 1 H&C 90 provides that reliance has to be placed by the aggrieved party on the misrepresented fact, for a case of misrepresentation to stand (McKendrick, 2014). Negligence is considered as a breach of duty of care, as a result of which, the person to whom such duty had been owed, gets harmed or has to bear a loss (Greene, 2013). For making a case of negligence, the parties have to show that a duty was owed, that its breach resulted in an injury, that the risk of harm was foreseeable in a reasonable manner and that the parties had proximity between them (Statsky, 2011). Owing to the presence of these elements, in Donoghue v Stevenson [1932] UKHL 100, the aggrieved party was compensated for her illness, due to dead snail found in ginger bottle, which made the consumer sick (Latimer, 2012). Baltic Shipping v Dillon (1993) 176 CLR 344 saw the aggrieved party being compensated for her mental distress (Paterson, Paterson & Duke, 2012).

LAW3 | P a g eVicarious liability is a principle through which, the employer can be made liable for the acts of their employee, and stems out from the agency law (Giliker, 2010). ApplicationBased on vicarious liability, for the acts of Council Employee, the Council would be liable. The Council Employee, in order to induce Ellen into getting the studio in that locality, made a false statement of fact, and on which Ellen relied and went ahead with the leasing agreement. However, a case of misrepresentation would still not stand as no contract was entered between Council and Ellen, or the Council Employee and Ellen, which could state that Ellen was induced into a contract.However, a case of negligence can be made in this case. This is because it was the duty of the Council Employee to give the right information to her. As this duty was contravened, she was injured in form of her nervous disorder, her business failing and her rent being outstanding. So, based on the quoted cases, Ellen can apply for damages, in terms of economic loss and mental distress caused.Conclusion and Recommendations Hence, the Council would have to pay damages to Ellen for the wrong advice, owing to negligence of the Council Employee. So, Ellen should go ahead and initiate a case of negligence against the Council and claim monetary compensation for her mental distress, her loss of income and the pending rent.

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