University Business and Corporate Law Assignment - BFA601 Analysis

This assignment solution addresses a case study in business and corporate law, specifically focusing on the elements of mistake and misrepresentation within a contractual context. The analysis examines a scenario involving the sale of a retail shop, where a misrepresentation by the managing director of Aardvark Pty Ltd regarding a proposed carpark influenced the buyers' decision. The solution explores the legal implications of this misrepresentation, considering whether it was innocent or fraudulent, and the presence of a common mistake. It references the case of Hartog v Colin and Shields to support the determination of whether the contract can be voided on grounds of unfairness or unconscionability, and provides the student's analysis of the application of equitable remedies in such a situation.

Running head: BUSINESS AND COPORATE LAW
BUSINESS AND COPORATE LAW
Name of the Student
Name of the University
Author Note

1BUSINESS AND COPORATE LAW
Q6 (a)
In the present case, it can be said that, there exist both the element of mistake and
misrepresentation. Misrepresentation existed from the statement of Antony, who was the
managing director of Aardvark Pty Ltd, by stating that Hobart City Council is proposing to
build a new carpark, which will alleviate parking problems and attract a substantial number
of new shoppers to the area. This statement created a reasonable apprehension in the mind of
both Emily and Rachel, who were interested to buy the small retail shop at 123 Sandy Bay
Road, but was reluctant due to the fact that that parking in Sandy Bay can be difficult for
customers at certain times. Therefore, Antony’s false statement induced them to buy the shop.
However, it is not clear from the fact whether it was an innocent or fraudulent
misrepresentation by Antony. On the other hand, there exist a common mistake existed in
between both the parties (if it was an innocent misrepresentation) regarding the construction
of the parking in that area. Therefore, under equitable remedy, Emily and Rachel can set
aside the contract on grounds of unfairness, or for unconscionability. Therefore, in this case,
the mistake is regarding the factor that have influenced the purchase process. In the case of
Hartog v Colin and Shields, the court held that, in case of unilateral mistake by both the
parties regarding the subject matter, one party must not be in a position to take the benefit of
the contract. Therefore, such contract can be declared void.

2BUSINESS AND COPORATE LAW
Reference:
Hartog v Colin and Shields [1939] 3 All ER 566