Application of the concepts of misrepresentation, breach of contract and Australian Consumer Law to the sale of business

The first issue is related to presence of misrepresentation under contract law and Australian Consumer Law and the second issue is related to breach of contract under common law. Bisset v Wilkinson is a leading case which clarifies that this false statement has to be one of fact or law, and a claim of misrepresentation would not be upheld where this statement is one of opinion or covers a certain advice. Where it can be shown, as was done in Smith v Land & House Property Corp, that the person

Transcript
For all parts, read the speaker notes first and then the text mentioned in PPT slides.
1. Introduction slide
2. This report aims to highlight the applicability of these three concepts, with regards to the
contract which was created between Barry and Angelo for the sale of business, based on
certain terms. The first issue is related to presence of misrepresentation under contract
law and Australian Consumer Law and the second issue is related to breach of contract
under common law.
3. Before analysing the vitiating factors being present in a contract, there is a need to
analyse the terms of the contract. Such terms, which are carried on during the
negotiations phase of the contract, are not binding in the eyes of law, as these are
considered as invitation to treat. Invitation to treat is something which comes before the
offer is made, and is not necessary to be present in every case. It is important to make
differentiation between what exactly has been made, i.e. whether it is an offer or an
invitation to treat, and this can be done by analysing the statement which has been made.
For instance, Partridge v Crittenden is a leading example of an advertisement being
considered as an invitation to treat in general. So, the things or the terms covered under
the advertisement cannot be claimed upon under the contract law, in general. Once the
offer has been made, the contract is formed, where all the remaining elements of contract
are established to be present.
4. Upon a contract being formed, the terms covered under it become binding. However,
there are cases where the court would allow a party from not following the contractual

terms. This is mostly given as a remedy where the contractor is rescinded. This remedy is
given in cases of misrepresentation. In simple words, the statement which is made to
induce a party in getting into the contract, where this is a false statement relating to a fact
or law, it would be deemed as misrepresentation. Bisset v Wilkinson is a leading case
which clarifies that this false statement has to be one of fact or law, and a claim of
misrepresentation would not be upheld where this statement is one of opinion or covers a
certain advice. This does not mean that a person cannot be made liable for the false
opinion given by them in every case. Where it can be shown, as was done in Smith v
Land & House Property Corp, that the person making the false statement, held such a
position, which allowed them to know the truth behind the made statement of opinion,
they would be held liable. Remedy for misrepresentation is available only when the
aggrieved party has relied on the false statement of fact being made, as was established in
Horsfall v Thomas.
5. The provisions of misrepresentation are also provided in the statutory law, and this is the
law meant for protecting the consumers. Competition and Consumer Act, 2010 is a
substantial legislation in this regard, which covers the provisions against
misrepresentation under one of its schedules, which is otherwise known as the Australian
Consumer Law. There is a strict prohibition on false and misleading representation under
section 29 of the Australian Consumer Law. Where any advertisement makes false or
misleading representation, the advertising party can be made liable under this legislation.
Section 35 places prohibition on bait advertising. In The Jewellery Group Pty Ltd v
Australian Competition & Consumer Commission, Charles Tyrwhitt had to pay penalty

for false advertisement regarding the price, which misled the consumers into purchasing
their product.
6. As has been touched upon in the introduction segment of this report, the terms of the
contract are to be fulfilled properly. Where this is not done, the aggrieved party gets the
option of claiming a breach of contract for the contractual obligations not having been
undertaken by the breaching party. When the contract is breached, the aggrieved party
can claim remedies by going to the court. There are different types of remedies which are
available and these include monetary compensation being paid as damages, or equitable
remedies being awarded like injunction, specific performance, rescission, and
repudiation. The damages are awarded, as per the statement made by judges in Addis v
Gramophone, to put the aggrieved party in the pre contractual position.
7. From this discussion, the final advice for Barry can be concluded.