Contract Law Assignment: Misrepresentation, Breach, and ACL

This assignment solution explores key concepts in contract law. It defines mutual, common, and unilateral mistakes, explaining their significance in contractual agreements. The solution also clarifies fraudulent misrepresentation with an example and distinguishes between conditions and warranties, outlining the remedies for their breach. Additionally, it addresses the considerations courts take into account when assessing the validity of a restraint of trade clause in business sales, focusing on factors like the nature, location, and consideration of the business. Finally, the solution explains section 18 of the Australian Consumer Law (ACL), which prohibits misleading or deceptive conduct in trade or commerce, and its implications for the marketplace.

1. Briefly define a mutual, common and unilateral mistake.
The common mistake occurs mainly when both the parties which are involved make the same
mistake with out any particular intention. Here, each is mistaken for different factors.
The mutual mistake is when the parties misunderstand and are at the cross. The purpose is to
focus on instances which are the subject matter of Contract.
Unilateral Mistake: It occurs when one of the parties is making a mistake and the other knows
about it.
2. Explain fraudulent misrepresentation. Use an example to illustrate your answer.
This case of fraud misinterpretation is related to the civil court, that has been arising out of the
contractual law. The misinterpretation is considered to be the false statement which is causing or
inducing someone mainly to enter for a contract. This can be considered in the form of anything,
where one party deceives of the other party and includes the half-truth and silence. The example
is about the jeweler who sells the diamond ring but later it is found as crystal. This is a fraud
misinterpretation (Skaik, Coggins, & Mills, 2016).
3. Distinguish between a condition and warranty. What remedies are available for a breach
of both of these.
The condition is the requirement or the event which needs to be performed before there is a
completion of other action. The violation of the condition is considered as the violation of
warranty. The remedy for this is to repudiate the contract with the proper claim of the damages.
The warranty is about the assurance that is being given by the seller for the product which has
been set under the prescribed factors that are genuine completely. This is considered to be the
subsidiary provision which is related to the contractual object. The claim damages for the breach

and the violation of the warranty does not affect the condition as well. There is a possibility to
claim the damages only.
4. In determining whether a restraint of trade clause in the sale of a business is valid, what
considerations do the courts take into account?
The restraint is considered for the trading which is considered as a contractual clause for
preventing the person selling the business and from undertaking the defined activities. The
purpose involves the competence with the business and the key terms include the sales for the
business contract. The reasonable factors are about the nature, location and the consideration that
needs to be paid for the business (Bigwood & Mullins, 2018). Here, the goodwill and the
negotiations entered into the parties is found more important rather than entering into agreement.
5. Explain section 18 of the Australian Consumer Law (ACL).
ACL section 18 highlights about a person who, in trading or the commercial sector, must not be
engaged in any misleading or the deceptive activity. This section is applicable for the
Commonwealth law for the conduct of operations under section 131. The sector imposes a
standard on the marketplace where the remedies are for the misleading conduct.
References
Bigwood, R., & Mullins, R. (2018). Teaching Contract Vitiation in Australia: New Challenges in
Subject Design. Bond Law Review, 30, 185.
Skaik, S., Coggins, J., & Mills, A. (2016, January). Examining the approaches to diminish
judicial intervention in statutory adjudication in Australia. In AUBEA 2016: Proceedings

of the 40th Australasian Universities Building Education Association Annual
Conference (pp. 660-670). Central Queensland University.