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..............................................................................................................................................6
Conclusion...............................................................................................................................................7
Reference List.............................................................................................................................................8

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Solution 1
Issue
Whether agreement amid Jessica and Angela is valid or can be rebutted on account of
misrepresentation?
Law
When any statements or representations are made by the wrongdoer which are factual in nature
and not the statements of opinion, law or expressions, and are made to the plaintiff so that the
plaintiff rely on the said statement in order to establish a contract then the act of the wrongdoer is
considered to be misrepresentation in nature and the aggrieved party has the right to terminate
the contract because the same is suffered from misrepresentation. To prove misrepresentation on
the part of the wrongdoer the main elements that exist are: (Cartwright 2012)
i. It is necessary that the statement that is made by the wrongdoer is the statements of
fact. If the statements that are made by the wrongdoer is not of the fact but is any
opinion or any expression or the statement of some past fact, then, it is not considered
to be the element of misrepresentation. It is necessary that a statement of present or
future fact must be made furthermore is analyses in Smith v Land & House Property
Corp (1884);
ii. The declaration that is made is false in its scenery and the wrongdoer must be in the
knowledge of the same and is analyzed in Solle v Butcher [1950];
iii. The statement so made is made by the wrongdoer which is not true is made
intentionally by the wrongdoer so that the aggrieved party can be influenced in such
manner so that the aggrieved party becomes eager to enter in to a contractual
relationship with the wrongdoer and is analyzed in Williams v Natural Life Health
Foods Ltd (1998) and Attwood v Small (1838).
iv. It is also very necessary that the aggrieved party has agreed to make a contractual
relationship with the wrongdoer and makes contract. The core is the factual
declarations considered by wrongdoers for forming the contract which results in
misrepresentation and is held in Royscott Trust Ltd v Rogerson [1991]. The plaintiff
has the right to recover damages from the defendant and is held in Armstrong v
Jackson [1917].

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When all the components of the misrepresentation is comply with then the contract that is made
amid the defendant and the wrongdoer is not binding in nature and can be cancelled by the
aggrieved party and can sue the wrongdoer for the failure that is endured by him.
Application
The law of misrepresentation is applicable.
The contract that is made amid Jessica and Angela has no relevance in law as the same is based
on misrepresentation. There is incurrence of misrepresentation because:
i. Jessica has prepared a declaration under which she has quoted the twelve-monthly
profit of the restaurant which Angela is intending to buy is $ 10,000. Thus, this is the
factual statement that is made by her, the statement is fact because the same is
accompanied by the receipts of the restaurant that are shown by her to Angela. The
statement is not of law, opinion or expression;
ii. That the statement that is made was not true in nature as the actual profits of the
restaurant was not $10,000, rather, the profits of $10,000 is only for the year 2007.
The profits of the restaurant from 2007 was $2000 and which were the actual profit of
the restaurant;
iii. The untrue statement is made by Jessica to Angela mainly in order to influence
Angela so that she agrees to rely on the statement and enter into a contract with
Jessica. The main motive of making the statement was to influence Angela;
iv. That the contract is agreed to be made with Jessica was solely on the ground that
Angela based her decision on the factual declaration that was made by Jessica. If the
untrue statement is not made by Jessica, rather, if the truth of the statement is known
to Angela then, she would not have entered into a contract with Jessica.
Thus, there is misrepresentation upon Angela by Jessica and thus Angela can cancel
the contract.
Conclusion
The contract amid Jessica and Angela is based on misrepresentation and thus must be cancelled
by Angela and can seek compensation and damages for the loss suffered.