Misrepresentation and Negligence: Legal Analysis and Application

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Contents
Solution 1....................................................................................................................................................2
Issue........................................................................................................................................................2
Law..........................................................................................................................................................2
Application..............................................................................................................................................3
Conclusion...............................................................................................................................................4
Solution 2....................................................................................................................................................4
Issue........................................................................................................................................................4
Law..........................................................................................................................................................4
Application..............................................................................................................................................5
Conclusion...............................................................................................................................................7
Reference List.............................................................................................................................................8

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Solution 1
Issue
Is the contract of Angela and Jessica is based on any kind of misrepresentation?
Law
The law of misrepresentation is a common law and is applicable in the given situation.
When any defendant makes factual representation upon the plaintiff knowing that the same are
untrue and is made intentionally to misguide the plaintiff so that a contract can be made amid the
defendant and the plaintiff, then, it is an act of misrepresentation. The contract which is based on
misrepresentation has no validity in law and can be cancelled on the basis of misrepresentation.
The plaintiff has every right to terminate the contract and ask for compensation and losses. There
are several elements to prove misrepresentation on the part of the defendant; (McKendrick 2014)
i. The foremost element to prove misrepresentation is that the representation that is
made by the defendant to the plaintiff must be a factual representation. No opinion or
just expression of thoughts makes statements as a factual representation. It is
necessary that the representation that is made are of facts of present or future and not
of past and is held in Edgington v Fitzmaurice (1885).
ii. The factual representation that is made should not be true and this fact must be known
to the defendant who is making the representation and is held in Nottingham Brick &
Tile Co v Butler (1889);
iii. The main intention of making the representation is to influence the plaintiff so that
plaintiff makes a contract with the defendant. The influence is necessary because if
the plaintiff is aware that the factual representation that is made by the defendant is
not true then he will not make a contract with the defendant and is held in Redgrave v
Hurd (1881);
iv. It is very necessary that prior giving acceptance to the offer of the defendant, the
plaintiff must have relied on the statements. If the plaintiff has not relied on the
statements that are made by the defendant and the decision of making the contract is
independent in nature, then, there is no misrepresentation on the part of the defendant
and is held in Williams v Natural Life Health Foods Ltd (1998).

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Compliance of all the elements will make the representation by the defendant as
misrepresentation and thus the plaintiff has the power to terminate the contract and seek
compensation and the losses that are suffered by him.
The law is now applied to the facts of the case.
Application
The contract amid Jessica and Angela is not a valid contract in law and is suffered with
misrepresentation on the part of Jessica. The main events that results in misrepresentation are:
i. Jessica wants to sell the restaurant to Angela. She made a factual representation of
fact that the earnings of the restaurant are $10,000. Thus, there is no opinion or
expression on the part of Jessica while making the said statement because she also
offered Angela that she can check the accounts of the restaurant if she is in any kind
of doubt;
ii. Also, the representation that is made by Jessica is not true. Jessica submitted that the
profits of the restaurant are $10,000. The statement that was made by Jessica hold
true for the accounts of 2007. But, Jessica is aware that the statement that is made by
her is false because the true annual return s of the profits of the restaurant was $2000
from 2008 and for next five years from then. Thus, an untrue statement is made by
Jessica to Angela and the untrue statements is made by Jessica intentionally;
iii. It is also submitted that the wrongful statements that is made Jessica to Angela is
made with an intention to influence Angela and to make sure that based upon the
untrue statements Angela gets influenced and enters into the contract with her;
iv. It is submitted that Angela actually relied upon the statements that are made Jessica
and make a contract with her to buy the restaurant. If Jessica would have been aware
of the truth of the statements that are made by Jessica then certainly she would not
have made a contract with her. Thus, Angela actually relied on the statements that are
made by Jessica.
So, all the elements that are required to prove misrepresentation on the part of Jessica is
complying with.