NUS Business School
BMS5102 Legal Issues in Business ST1, 2020/2021
Practice Questions: Misrepresentation. Discharge of Contract and Remedies
# 1
... [Show More] Misrepresentation
Seller (S) wished to sell his furniture business to Buyer (B). He represented to B that he had
checked with HDB and that his checks showed that a new HDB town was coming up within 1
kilometre (fact) of the furniture business within the next two years. Because of this, he said,
business would double (opinion). He asked B to check with HDB (cannot shift the burden to
buyer to check/verification) to verify his claim. B decided to buy the business, partly because of
the closeness of his home to S’s shop and partly because of S’s representations about the new
HDB estate. (inducement) As it turned out, no HDB estate was planned for the vicinity anywhere
in the near future and S had actually told a blatant lie and had never checked with HDB. When B
found out the truth a month later after signing the Sale and Purchase Agreement, B wanted to
rescind the contract and get his deposit back.
Advise B
What if B delayed for 2 years after he found out the truth (because he felt business might still
improve due to other reasons) and then decided to take action?
All elements of misrepresentation are met, so B can get the money back.
Essential element:inducement
1. material statement
2. Knowledge to the claimant
3. Intended to be acted upon by the defendant
4. Actually acted upon
Yes, there is a misrepresentation. Must be a statement of fact, not opinion
This could be a fraudulent misrepresentation --> rescind the contract and get the $$ back.
Can be claim Breach of contract?
NO --> No part of the contract is breached.
A meeting of the minds between the parties, manifested through offer and acceptance;
Consideration;
An intention to create legal relations;
Parties must have a capacity to contract; and.
The parties must freely consent to the agreement.
#2 Discharge of contract and remedies
Santorini SA is an international distributor of Parfum Petit which is selling very well in Europe.
Its marketing director, Toni, is very dynamic, and wishes to expand into the Asian market. [Show Less]