2009 Business Law Final Exam - outline of issues and feedback

2009 Business Law Final Exam - outline of issues and feedback

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2009 Business Law Final Exam – Outline of issues and feedback Question 1 Part I : R’s remedies in contract and/or tort against S Assess 3 statements and consider whether they are terms of the contract : i. S’s statement that there was no reason why the liquor licence will not be renewed. ii. S’s statement that there was no reason why the restaurant licence will not be renewed. iii. S’s statement that there was no serious pest infestation on the premises. Statement i and ii may potentially be construed as being terms of the contract because they are obviously very important terms and R may not have entered into the contract if they were not terms ( Bannerman v White ). If they are terms, then note that there has been no breach of statement ii as the restaurant licence was renewed (albeit with conditions attached). There is a breach of statement i and R can claim for loss of profits because he is not able to serve liquor. However, given that the contract between R and S only provided that S agreed to sell and R agreed to buy Paradise Restaurant and the shophouse for $700,000, the case for the statements being terms is not clearly established. Therefore, go on to consider if the statements are operative/actionable misrepresentations. Statement i : Issue : is it a false statement? Not told whether S received the letter from the NPP before or after making the statement. If S received the letter before making the statement, then it is a half-truth situation whereby S has a duty to reveal all (Dimmovk v Hallett ; Spice Girls v Aprilia World Service ). If S received the letter after making the statement, then S has a duty to communicate the change in circumstances to R ( With v O’Flanagan ). Issue : is it a statement of fact? Looks as if it is merely a statement of opinion by S ( Bisset v Wilkinson – non-actionable), but S has special skill and knowledge so that a statement of opinion by her could be construed as a statement of fact ( Smith v Land ; Esso Petroleum v Mardon ). false, addressed to party misled (R), induced party misled to enter into a contract. Statement ii : non-actionable misrepresentation because it is not false. S has not represented that the restaurant licence will be renewed without any conditions. Statement iii : S may have believed the rats present at the inspection in May was an isolated incident and not ‘serious’. So the clearest statement on which to found an action for misrepresentation is statement i.
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