Commercial Law Case Study: Contractual Obligations and Remedies

This case study examines potential legal issues arising from a commercial transaction involving Angelo and a prospective buyer. The primary issues revolve around the validity of a contract based on Angelo's advertisement and the possibility of claiming damages for breach of contract. The analysis differentiates between an offer and an invitation to treat, highlighting that Angelo's advertisement likely constitutes the latter, thus not forming a binding contract. However, the case explores the potential for a misrepresentation claim under the Consumer and Competition Act 2010 due to false statements in the advertisement and incorrect information regarding business expenses. Furthermore, the study discusses the concept of breach of contract and available remedies, such as damages, in the context of Angelo's failure to disclose that the van was leased. It advises filing for misrepresentation and claiming damages for the van, while acknowledging the difficulty in claiming damages for the loader due to the lack of specified working conditions in the contract. The analysis references relevant case law, including Victoria Laundry (Windsor) Ltd v Newman Industries Ltd, Fisher v Bell, and Smith v Land & House Property Corp, to support its legal arguments.

Commercial Law
Part C – Advice

 As per the question 2 and 3 of the case
study, following issues have raised in front
of you.
 The first issue is whether a valid contract
exists between Angelo and you based on
the statements made by Angelo in the
advertisement.
 The second issue is whether you can claim
for damages from Angelo based on breach
of the contract.
Issues

 It is important to understand the difference between an
offer and an invitation to treat. An offer requires a
commitment from the parties in order to enter into a
legal relationship. On the other hand, an invitation to
treat is just supply of information (McKendrick, 2018).
 As provided in Fisher v Bell case, invitation to treat did
not bound its parties into a legal contract.
 In statutory law, the Consumer and Competition Act
2010 provides that false statements in advertisements
are considered as a misrepresentation.
 In Smith v Land & House Property Corp case, it was held
that any misleading or false statement is considered as
misrepresentation which makes a contract void.
Misrepresentation

 Based on the law, the advertisement posted by
Angelo is considered as an invitation to treat based
on which Angelo cannot be held liable.
 However, you can file a claim for misrepresentation
in statutory law because it provides that false
statement in a contract is considered as
misrepresentation. Based on the law, you can
claim for damages for Angelo.
 Angelo also gave a false statement regarding
business expenses which is common information
that he is expected to know therefore you should
file a claim for misrepresentation.
Misrepresentation

 Non-compliance of a contract result in
breach based on which parties can claim for
damages.
 The remedies for breach of contract include
repudiation, specific performance,
rescission, damages and injunction.
 In Victoria Laundry (Windsor) Ltd v Newman
Industries Ltd case, it was held that parties
can claim for such losses which occurred
due to breach of contract.
Breach of Contract

 In your case, Angelo sold you the van without
disclosing that it is leased. He made a false
representation to lure you into the contract.
 You had to pay the lease for the van which
resulted in increasing your business expenses.
Therefore, you can claim for damages.
 On the other hand, terms regarding working
condition of the loader were not specified in
the contract, therefore, you might face
difficulty in claim damages for the loader.
Breach of Contract

 As per the issues faced by you, I can give you
following advice.
 You should file for misrepresentation by arguing
that the statements made by Angelo in the
advertisement are false and he also gave wrong
information regarding business expenses.
 In case of van, you can claim for damages from
Angelo because he did not tell you the truth which
resulted in a breach of contract.
 The damages for the loader are difficult to claim
because its working condition is not specified in
the contract.
Final Advice

 Victoria Laundry (Windsor) Ltd v Newman
Industries Ltd (1949) 2 K.B. 528
 Fisher v Bell (1961) 1 QB 394
 Smith v Land & House Property Corp (1884)
24 Ch D 7
 Ewan McKendrick, Contract Law (Oxford
University Press, 2018).
References