Making a Contract - Analysis and Application of Common Law of Contract

Running head: MAKING A CONTRACT
Making a Contract
Name of the Student
Name of the University
Author Note

1MAKING A CONTRACT
Table of Contents
Question 1..................................................................................................................................3
Issue........................................................................................................................................3
Rule........................................................................................................................................3
Application.............................................................................................................................3
Conclusion..............................................................................................................................4
Question 2..................................................................................................................................5
Issue........................................................................................................................................5
Rule........................................................................................................................................5
Application.............................................................................................................................6
Conclusion..............................................................................................................................6
Question 3..................................................................................................................................7
Issue........................................................................................................................................7
Rule........................................................................................................................................7
Application.............................................................................................................................7
Conclusion..............................................................................................................................8
Question 4..................................................................................................................................9
Issue........................................................................................................................................9
Rule........................................................................................................................................9
Application...........................................................................................................................10

2MAKING A CONTRACT
Conclusion............................................................................................................................10
Bibliography.............................................................................................................................11

3MAKING A CONTRACT
Question 1
Issue
The issue of this question is to determine whether Alicia have a contractual obligation
to sell her Cafe business to Rasheed.
Rule
According to the Common Law of Contract, misrepresentation refers to the giving
of information, which is false by one party to another before the formation of the contract;
however, such misrepresentation has the potential to induce the party to form the contract and
experience injury or loss1. Therefore, the court gives opportunity to the aggrieved party to
either cancel the contract or make claim for damages. Misrepresentation must be a false
statement of fact and not a statement that lays down an opinion or promise. Although the
buyers are supposed to inspect carefully before investing their money in a particular contract
of sale, yet the promisor or the seller has the little amount of latitude when selling privately to
make alluring statement for enhancing the interest of the potential buyers. A representation is
deemed to be innocent where a promisor or seller makes a particular statement believing it to
be true and bears no intention to cheat or deceive the promisee or the buyer. On the other
hand it would be deemed as a fraudulent misrepresentation where the promisor all the seller
makes a statement knowing it to be untrue and with an intention to deceive the promisee or
the buyer. An aggrieved party in context to a fraudulent misrepresentation can either opt to
rescind the contract or may choose to sue the promisor for damages for the losses.
Application
Rasheed’s misrepresentation of fact was evident to Alicia, which would act as a
defence for her to rescind the agreement. However, Alicia would be under the obligation to
1 Misrepresentation (2019) Lawhandbook.sa.gov.au <https://lawhandbook.sa.gov.au/ch10s02s06.php>.