Misrepresentation Answer for contract law PDF

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Chloe is the managing director of a whisky distillery, Glencrows. In an effort to increase sales across Europe, she enters into negotiations with Derek, a European distributor of alcoholic beverages. She tells Derek that Glencrows’ new whisky, Burns, is of the finest quality yet and that this type of dry whisky always sells well across Europe. She also informs Derek that McDougal, the famous whisky connoisseur, works at Glencrows and, if Derek distributes the whisky, he will get to work with him. Derek has never heard of McDougal and is not interested in celebrity culture. However, he finds Chloe very attractive and wishes to get to know her better. He also wants to use this opportunity to expand his business into the whisky market, having formerly concentrated his business solely on wine and beer. He therefore contracts with Chloe to distribute Burns across central Europe. Derek’s attempts to break into the European whisky market are disastrous. It is well known in the whisky industry that dry whisky is unpopular in Europe and will not sell. Derek realises, however, that McDougal is a hugely popular television celebrity in Europe and believes that his association with Glencrows will help Derek to sell the whisky. However, Derek now discovers that a week before he signed the contract with Chloe, McDougal gave Chloe notice to leave Glencrows and no longer works there. Derek is distraught. In addition, the failure of his whisky venture means that he has been unable to invest in a new brandy liqueur which is proving extremely profitable in Europe. Advise Derek. Derek(D) needs to be advised as to the potential rights in relation to the contract that she has entered into with Chloe (C) opportunity to expand his business into the whisky market, and specifically whether are entitled to rescind the contract and/claim damages from C. Their entitlements to these remedies will depend on whether the statement amounts to a representation as opposed to a term, whether there is actionable misrepresentation and finally, type of misrepresentation. Each of these issues will be dealt below in turn. Key issue to consider is whether below statements amount to a mere-representation or a term of the contract. There are three statements made by C. (1) this type of dry whisky always sells well across Europe (2) if Derek distributes the whisky, he will get to work with McDougal, the famous whisky connoisseur. Courts will follow “rules of thumb” in order to establish whether specific statement is representation or not. As explained in OscarChessVWilliams, “If an intelligent bystander would reasonably infer that a warranty was intended that will suffice.” As Heilbut-SymonsvBuckelton, will consider whether the reasonable person would be influenced by the importance of the statement, whether one party is clearly relying upon the other lastly, knowledge of the parties in the sense, if the representee had more knowledge than the representor probably it would be a mere representation. Simultaneously, with the aid of above factors intelligent bystander would consider these

to be a warranty or a condition or a mere representation. However, if it is mere representation, Dick-Bently-productions-ltd, there is no remedy unless one proves it as a misrepresentation. Terms also can sue under Misrepresentation. Regardless, one may consider these statements for misrepresentation. In order to Oscar-Chess , The two statements indicate the importance, statement1, D has relied upon it since he wanted to use this opportunity to expand his business into the whisky market, as a European distributor of alcoholic beverages D should have much knowledge than C. therefore, it seems to be a condition. if so, available remedies are rescission and damages. Statement2, Derek has never heard of McDougal and is not interested in celebrity culture shows that he did not rely on it, and C might have much knowledge regarding how to increase propaganda. Ergo, it seems to be a warranty. if so, available remedy is damages. Misrepresentation can be defined as, unambiguous false statement of fact or law addressed to the party misled and that has induced other party to enter into the contract. Therefore, as per the definition it must be an unambiguous statement. Then one may consider, whether the statement is unambiguous. there are Four statements made by K. Further, there are no appropriate evidence to indicate that the statement of “Glencrows’ new whisky, Burns, is of the finest quality” is untrue. Statement1, seems to be an unambiguous false statement of an existing fact. Generally, opinions do not amount to a misrepresentation. However, C, also can argue that “dry whisky always sells well across Europe”, is that nobbut her opinion as in Bisset v Wilkinson and thus will not amount to actionable misrepresentation. Albeit, as a managing director C might state that dry whisky always sells well across Europe with the effort to increase sales across Europe and C knew that statement could not be sustained, SmithvLanHouseCorporation Although, if C argued that this statement is only an opinion she did not believe in the statement as in Edgington Fitzmaurice. Ultimately, one may conclude that it is not an opinion it could be a false statement in effort to increase sales across Europe. Here the representee is C However, the statement itself was made to D. The last and the most important requirement for actionable misrepresentation is for D to show that the statement induced him to enter into the contract. Also,D has to prove is that it was one of the reasons to enter into a contract. Albeit, it was a real and substantial part of the reason to enter into the contract as in Raiffeisen-v-Royal-Bank-ofScotland. Since, D has entered into the court, it may be thought that there was inducement since the presumption seems hard to rebut, Hayward v Zurich. The test of inducement is subjective as per Museprime-Properties-Ltd-v-Adhill-Properties- Ltd in the sense whether D in this situation got induced. In addition, D, as a European distributor of alcoholic beverages, had the opportunity to inquire and discover the truth. Nevertheless, Redgrave-v -Hurd, even the party had the

opportunity to discover the truth about the statement that would amount to misrepresentation. In addition, C might argue that the reason why he signed with up C is not because he got induced by the statements that I said but because he finds C very attractive and wishes to get to know her better. As in Edgington-v-Fitzmaurice, misrepresentation need not to be the sole reason why the contract was made as long as misrepresentation is one of the reasons. Similarly, D got induced by the facts that C said dry whisky always sells well across Europe which satisfies his intention of expanding his business into the whisky market also, he got induce by the fact that C looks very attractive are unimportant. As long as the statement misrepresentation concern is one of those factors. Statement2, at the moment he made the statement was not untrue albeit D might argue that it was C’s failure to communicate the McDougal has resigned caused the misrepresentation in the sense statement becomes false as a result of a change of circumstances keeping silent may be treated as a misrepresentation, With v O’ Flanagan. Since the time frames are not that clear if McDougal has given the resignation when C made the statement then it might amount to revealing half truth, Dimmock v Hallett. Having established a successful misrepresentation, it is significant to determine the type of misrepresentation. First statement might be fraudulent because as the managing director C supposed to know and believed the statement is untrue and still made the statement. therefore, C knew that statement is false, Derry v Peaks, amount to fraudulent misrepresentation. Further, Rescission is available for all types of misrepresentation. This will set aside and parties put into a position they would have been in had the contract never been made. It seems like in this situation D would be able to claim misrepresentation because limitations which are existing for rescission might not existing here. Albeit it has to be informed to the relevant parties such as Car & Universal Finance Co v Caldwell . Also, one can advise D that if he takes a long time which the court consider beyond reasonable time period, he will not be able to claim for recission. If D successfully proves there has been fraudulent misrepresentation, then D would be able to recover all the losses directly flowing from the misrepresentation. The damages would be awarded on the basis of returning D to the position that would be in if the misrepresentation has not been made under common law before. In tort he will able to claim damages under Derry v peek, if the person made the statement fraudulently or did not care whether it is true or false, Doyle v Olby.. Under Misrepresentation Act 1967 s.2(1), if C does not have reasonable grounds to believe in the statement then she will liable for fraudulent misrepresentation. As per Howard Marine and Dredging Co vOgden she will have to provide reasonable grounds why she made it unless she will be liable. As Royscot Trust Ltd v Rogerson, even if she had made fraudulent misrepresentation, she will be liable for the damages of

fraudulent misrepresentation. This was criticized in the case of Scrimger Vickers. If she

has reasonable grounds to believe in the statement then she has to rely on s.2(2) where instead of awarding rescission courts will might award damages if so courts will take in account that can be suffered by the parties.

In this instance, he could claim damages for the difference in value of the Aprilia of £10,000 and £5,000 for the Ducati...