Individual Case Assignment: LAWS 6013 - Superstar Inc. and Cybertech

This assignment provides a legal analysis of a case involving Superstar Inc. and Cybertech, focusing on issues of misrepresentation, breach of contract, and defamation. The analysis begins by assessing whether Cybertech made a false statement of fact, examining the elements required for a successful misrepresentation claim. The assignment then explores whether Cybertech's statement induced Superstar to enter an agreement. Next, it examines Cybertech's potential defense of an innominate term and Superstar's argument for breach of a condition. The assignment also identifies defamation as a suitable action for Superstar, considering the elements of a defamation claim. Finally, it discusses relevant legal considerations for Superstar, including Brazilian consumer law, export and import law, and contract and property law. The assignment adheres to legal principles and provides explanations for each issue, supported by relevant case law.

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Question A
The chief legal issue that arises in this case is whether Superstar can bring an action against
Cyber tech for misrepresentation. It is common ground that a misrepresentation is a statement
which is predicated on falsehood and made with an intention to induce another party to sign or
enter in a legal agreement. It is submitted to Superstar for an action for misrepresentation will
only be successful if certain conditions are satisfied. The following issues arise with regards to
misrepresentation.
a) Whether Cybertech made a false Statement about a particular fact
At the onset, it must be shown that the statement was false statement about a particular fact. The
court in Avon Insurance plc. v.Swire Fraser Ltd (2000) observed that the statement has to be
wholly false and any statement which contains a substantial element of truth will not be a
misrepresentation. The false statement must be clearly false and devoid any ambiguity (Bisset v
Wilkinson, 1927). The statement made by Ron that the company’s technology would meet all the
needs of Superstar was wholly false.
b) Whether Cybertech’s Statement induced Superstar and was relied upon to enter to an
agreement
It must also be shown that the statement was relied on and actually induced the other party make
the decision to enter into the agreement. However a misrepresentation will not be actionable if
the statement did not affect the judgment of the other party (Smith v. Chadwick, 1884). Superstar
was induced by the assurance and guarantee given by Ron and actually relied to enter the
agreement.
It can be conceded that it is likely that the Cybertech and owner Ron may be liable for
misrepresentation in commercial contract law.
Question B
Cybertech is likely to assert that that the term that has led Superstar to end the contract, thereby
acting in breach of it is an innominate term. According to Hong Kong Fir Shipping v Kawasaki
Kisen Kaisha (1962) innominate terms are terms if breached may either cause the innocent party

to be denied a substantial benefit of the contract or there will be material benefit even despite the
breach. Cybertech will therefore contend that Superstar has not suffered has not been denied any
substantial benefit of the contract even though they technology did not meet all their needs. It
will further contend that the technology met substantial part of their needs. Therefore,
performance of the contract should continue. The remedy in this argument will be specific
performance.
Superstar will argue that there has been a breach of a condition. A condition is a very vital part of
contract that if breached it will render the contract insignificant. In the leading case of Poussard
v Spiers (1876) the court held that a condition is the most fundamental term of a contract that has
a material role in the performance and continuity of the contract, that if it is breached the
innocent party is entitled to terminate the contract. Superstar will claim that it was a fundamental
term of a contract that the company’s technology will meet all their needs. Therefore since it
there has been breach of a fundamental term they cannot continue to be bound by it since it is
there is a continuous material damage.
Question C
The suitable action against Cybertech is Defamation.
Superstar will pursue a defamation action against Cybertech because its reputation is at risk.
Ideally, an action for defamation arises where there has been statement that is either written or
made orally. The statement must be published. This implies that it must be communicated to a
third party. In addition it must be evident that harm has been suffered due to the negative
reputation that the publication attracted. It can be argued that the harsh sentiment from Cybertech
employees is likely to cause Superstar to suffering huge economic loss.
Question D
Superstar has to consider the Brazilian consumer law. This stems from the fact that sound
consumer law will afford the company misleading and deceptive conduct, unconscionable
conduct and unfair business practices. In addition, Superstar has to consider the Export and
import law to determine if they will be protected against exportation of fraudulent commodities
that may not match the goods or product ordered. Superstar should also consider contract and

property law. The essence is to ensure that if the contract is signed in Brazil, the company
understands the extent of its legal liability and the liability of the company it is seeking to work
with, in the event there is a breach of a contract.

References
Avon Insurance plc v Swire Fraser Ltd [2000] 1 All ER (Comm) 573
Bisset v Wilkinson [1927] AC 177
Smith v Chadwick (1884) 9 App Cas 187
Hong Kong Fir Shipping Ltd v Kisen Kaisha Ltd (1962) EWCA Civ 7
Poussard v Spiers (1875) LR 1 QBD 410