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Published: Fri, 02 Feb 2018

Misrepresented statement must have been relied upon

A misrepresentation is a false statement of a material fact made by one party which induces another into contract. In order for a statement to be effective as a misrepresentation it must have been relied on by the party complaining.

Caveat emptor says let the buyer beware. Silence on the part of the seller is golden. The general rule is that a party to a contract is not under a duty to disclose all or any known facts regarding the subject matter to the other party.

However under the exceptions where one party makes a positive false statement which deceives the other, this is a misrepresentation and may render the contract voidable at the option of the party misled.

In my opinion, if this case was to go to court, the most likely outcome would be for the judge to find that Karen was correct in bringing the shopkeeper to court and award her with a full refund and compensation for damages including legal fees.

The parties, Smith v Lynn (1954), interested in buying the same property, inspected the premises which, according to the advertisement, ‘was in excellent structural and decorative repair.’ After the purchase, finding the premises full of woodworm, the buyer re-advertised the property using the original advertisement and, when the defendant asked why he was reselling, said it was for personal reasons. The defendant purchased, and on discovering the properties true condition, refused to complete the sale. An order for specific performance was granted on the ground that the advertisement was a trader’s puff and not a misrepresentation. The misrepresentation must be relied on.

Case 2

In case 2 Jackie has breached her contract with XYZ Bank in that she attempted to leave XYZ Bank for a better job with a competing bank which was only 5 miles away from XYZ Bank. She was stopped from leaving XYZ Bank for the job with the competitor because in her contract there is a reasonable clause stating when she leaves XYZ Bank, she cannot work for any competing bank within 100 miles of XYZ Bank

This is a reasonable clause to have in a contract as it may prevent information about the running of one company become known to a competing company through an employee leaving the first company to work with the competing company.

In my opinion, had this case been brought to the courts, the judge would have found Jackie in the wrong as reasonable clauses are allowed and it was in Jackie’s contract with XYZ Bank, which she signed, that prevented her from working for a competitor within a 100 mile radius for a period of 5 years after leaving XYZ Bank.

Case 3

In general, a mistake made by one or both parties to a contract has no effect on its validity, however, a contract can be deemed void if it contains certain mistakes.

Operative Mistake: where the nature of the mistake is such it destroys the basis of the agreement i.e. a mistake of fact. These include

Common mistake – Both parties labour under the same understanding.

Mutual mistake – The parties negotiate under cross-purposes.

Unilateral mistake – One party is mistaken and the other party knows of it.

In this particular case although Karen didn’t get the bag there and then the sales assistant was actually in the wrong therefore had Karen brought the case to court, in my opinion the judge would have decided that Karen was correct in that the assistant had to sell her the bag at the price shown (€45). I feel that Karen would have won the case and got compensated for legal fees.

Case 4

Consideration means to be successful in an action in contract, it must be proven that one party gave or promised to give some advantage to the other party in return for the latter’s promise. Consideration is the third essential ingredient of a valid contract.

In this case Karen had agreed to bring Rosie to Carlow for her car but later realised she couldn’t because she had to work late. When Karen rang Rosie to tell her the news Rosie screamed, “You better pay for my taxi to Carlow or ill sue you”. I believe the judge would have found Rosie incorrect, because, since there was no consideration therefore there was no contract.

The High Court ruled, in Aga Khan V Firestone (1992), that a signed document giving a party the right of first refusal with regard to a stud farm was a voluntary and unenforceable promise in that it was not supported by consideration.

Case 5

A contract for an illegal purpose, or for a purpose which offends the common good, is void. The courts are reluctant to declare a contract illegal and only do so where it clearly offends the Constitution, or where a statute clearly prohibits such a transaction, or where a well-established common law principle forbids it.

The court hearing the case will itself take cognisance of the illegality, as in McIllvenna v Ferris (1955), where The High Court held that it could not ignore the illegality, which had not been pleaded by the parties. The onus of proving illegality lies on the party asserting it.

In this particular case we must deal with David asking Philip to rob and burn out his car so David could claim off his insurance company. In return David would give Philip ¼ of the money he got from his insurance company. In the contract Philip received from David it said that he would get just a 1/8 of what the car was worth. Philip is wondering if he can force David to fulfil his verbal agreement of ¼ of the car value.

In my opinion if this case was brought to court it would be thrown out because a contract is void when it is representing illegal activity, however I do think it is most likely for Philip and David to be prosecuted for attempting insurance fraud.

Case 6

Where the onus of undue influence exists, the onus of proving that no impropriety took place is on the party seeking to uphold the transaction.

Rebutting this presumption is generally done by showing there was a full disclosure of all material facts; that the consideration was adequate; and that the weaker party was independently advised.

A young man who suffered from an alcohol problem, in Smyth v Smyth (1978), was not allowed to set aside a sale to his uncle of property willed by another uncle, because his uncle had not influenced his decision to sell and a fair price had been paid.

I believe that Karen had no case to fight in court because she describes Uncle Bill as “doddery” which means he isn’t the most reliable person in the world. The fact that Bill had taken no legal advice towards signing the property in Kerry into Karen’s name shows us that it is not the first thing on his priority list and also the fact that it of Karen’s interest that he signs the property into her name and not Bills makes it more difficult for her.

Case 7

An acceptance exists when the party to whom the offer is made unqualifiedly accepts it. The acceptance must correspond exactly with the terms of that offer. In most instances of everyday contracts there is little difficulty in deciding whether an offer has been accepted. The marking up of the price of the item on the cash register generally constitutes acceptance however it is when people carry out lengthy discussions that it becomes more difficult to decide exactly whether an offer was made, and when it was accepted. The court must look at any correspondence, and the surrounding circumstances, and decide whether on a true construction the parties agreed to the same terms.

This has been proven by the case of Pernod Ricard & Comrie plc v FII Fyffes plc (1988) where the courts were called on to resolve a dispute which arose following intense negotiations, regarding the purchase of very valuable shares, conducted by a large number of persons over three days. The courts had to examine the negotiations in detail and, on the facts, held that an offer had been made by the defendant which had been accepted by the plaintiff.

In my opinion in this case Karen would be right to bring this hotel to court as she had carried out the terms of the offer by ringing and attempting to book the reservation immediately like it said. Therefore I feel she is right and I think the judge would find him (the hotel manager) guilty.

Case 8

An exemption clause is a contractual stipulation which totally excludes, or partly diminishes, the liability of one party either in contract or in tort. A party wishing to rely on such a clause must show that it was incorporated into the contract, and it covered the loss or damage suffered.

Where the document is not intended to have contractual force but is more in the nature of a receipt, the exemption clause may not be incorporated into the contract. For example, a cinema ticket is in the nature of a receipt because its purpose is to show that the admission price has been paid. But where the document is intended to have contractual effect, for example, to retrieve goods, the exemption clause is incorporated when the receipt is exchanged.

In Miley v McKechnie Ltd (1949) a garment was left to be cleaned and a receipt was given which read on its face, ‘All orders accepted without guarantee’, and directed attentions to conditions printed on the back. The garment was damaged and an action was dismissed on the ground that the receipt containing the conditions was sufficient to exempt liability.

In my opinion if Geraldine was to take this case to court it would be dismissed on the grounds that the exemption was printed on the receipt she received when giving the suede jacket to the dry cleaners and therefore the dry cleaners would win the case.

Case 9

By virtue of the Age of Minority Act 1985, a minor, for the purpose of contract law, is a person under the age of eighteen years who is not, or has never been married. The law governing minors’ contracts is founded on two principles. The law, on one hand, protects minors from inexperience and on the other tries not to cause unnecessary hardship on adults who deal with them.

Certain contracts entered into by minors are absolutely void. These contracts are nullity and can be neither confirmed by the minor nor enforced against the minor. The Infants Relief Act 1874 declares that all contracts entered into by a minor for the repayment of money lent, or to be lent, or for goods supplied, other than a contract for necessaries, are absolutely void. The Betting and Loans Act 1892 makes void any promise by a person after reaching majority to repay a loan contracted during minority.

I believe in this case that the court would dismiss Vincent’s appeal to get his repayments of €10,000 off Laurence after he lent it to Laurence 4 years ago because he was then a minor. In my opinion the judge would find the contract void because Laurence was only 16 years of age at the time he received the loan.

Case 10

As a social contract rarely intends to be legally bound, however, the courts make this assumption. In Mackey v Jones (1959) an uncle verbally promised his nephew, then fourteen years old, that if he came to live and work on the farm, the farm would be willed to him. On the uncles death the farm was left to another relative. The Circuit Court held that there was no binding agreement, only a statement of intention, though the nephew did recover two years wages.

After studying this case I believe Lisa would be entitled to get something for her time spent looking after her ill aunt Jane however she certainly mightn’t get the large sum of money she always expected. I think Lisa would be correct to bring the case to court and believe she would get some compensation however it mightn’t exactly be ‘a nice little something’ she was originally promised by her aunt Jane.

As regards the second part of this case, an acceptance exists when the party to whom the offer is made unqualifiedly accepts it. The acceptance must correspond exactly with the terms of that offer.

Therefore with regards to Lisa having to buy the Car off her brother Brian I don’t believe the contract is valid because there was no acceptance so the contract wasn’t legally binding. I believe the judge would dismiss this case since there was no acceptance and Lisa would not have to buy the car from Brian.

Case 11

Lunatics and drunkards can avoid contractual liability provided the other party is aware of that condition at the time of contracting. In Hassard v Smith (1872) a person of unsound mind leased property and, when later he sought to repudiate the transaction on that ground, the court ruled that provided the contract was fair it could only be set aside had the other party known of the incapacity at the time the lease was executed. Such a voidable contract may be ratified during a lucid, or sober, period and thus becomes completely valid.

I think if this case was to be brought before the courts that Lisa would be found to be of unsound mind at the time the of the contract. Although there was an offer, agreement and acceptance for the laptop and since there was no ratification of the contract when Lisa was sober. Essentially Lisa was drunk at the time and therefore in my opinion the judge would order Lisa to give Pat back the money he gave her and Lisa would keep her laptop.

Case 12

An acceptance exists when the party to whom the offer is made unqualifiedly accepts it. The acceptance must correspond exactly with the terms of that offer. It was decided, in Central Meat Products Ltd v Carney (1944), that ‘an acceptance in principle’ did not constitute a valid acceptance. Nor is the mere acknowledgement of an offer an acceptance. The making of a counter-offer is a rejection of the original offer which cannot subsequently be accepted.

In my opinion if this case was to be brought before the courts the judge would find that there was a new verbal contract formed because Matt offered €1,100 instead of giving her the asking price of €1,250. I think there was acceptance because Deb told Matt to call over the next day with payment and to ensure that he brought a bank draft as payment. In this case I think the judge would have found Matt guilty of breach of a contract and enforced payment in order to terminate the contract.

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