Session 06 PART 2 Illegal Contracts.ppt - There are three types of misrepresentation or false statements given to induce the formation of a contract

Session 06 PART 2 Illegal Contracts.ppt - There are three...

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There are three types of misrepresentation or false statements given to induce the formation of a contract.Innocent misrepresentationwhere there is absence of proof of fraud or negligence. Reject the defective goods and seek repayment.Fraudulent misrepresentationwhere evidence was recklessly given. Remedy includes damages and/or rescission or action for the tort of deceit.Negligent misrepresentationis misstatement of fact. Remedies include damages in torts and/or rescission of the contract.OHT 7
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Rescission is a common remedy for misrepresentation. However, this right may be lost if;Restitution of the goods is impossible,An innocent third party has purchased the goods in good faith for value,The buyer has expressly affirmed the contract after discovering the misrepresentation, andMore than a reasonable time has elapsed for the buyer to discover the misrepresentation.OHT 8
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Capacity refers to the persons legal capability to enter into legal contracts with others. These are:Minors(people under the age of 18 years).
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