DE3E 34: Business Law: An Introduction
innocent
negligent
fraudulent
Candidates should be able to show a clear understanding of the various types of misrepresentation.
It is crucial that candidates are able to identify the nature of the misrepresentation that Robert made to Christine. There can be very little doubt that the misrepresentation was fraudulent in nature, ie there was conscious dishonesty, a deliberate attempt to deceive. Finally, candidates must state that the misrepresentation encouraged Christine to enter the contract in order for her to be able to sue Robert. If Robert can show that his false statement had no influence on
Christine’s decision to buy the car, a legal action for misrepresentation would fail.
In support of their answer, candidates should be able to cite at least one of the following examples from case law regarding misrepresentation:
Attwood v Small [1838]
Erlanger v New Sombrero Phosphate Co [1878]
Smith v Chadwick [1884]
Derryv Peek [1889]
Boyd & Forrest v Glasgow & South-Western Railway Co [1915]
Smith v Sim [1954]
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963]
Question 2
The contract between Christine and Marvellous Motors is potentially voidable due to the fac
t that the misrepresentation induced Christine to purchase the car in the first place.
Candidates should be able to cite at least one of the following cases as examples of attempts by the innocent party who has suffered a misrepresentation to have the contract declared voidable
—not always successfully it has to be said:
Attwood v Small [1838]
Erlanger v New Sombrero Phosphate Co [1878]
Smith v Chadwick [1884]
Derryv Peek [1889]
Boyd & Forrest v Glasgow & South-Western Railway Co [1915]
Question 3
The following legal remedies or combination of legal remedies are available to Christine in respect of the fraudulent misrepresentation: 1 Rescission or cancellation of the contract.、2 Rescission or cancellation of the contract and an award of damages.、3 Retention of the contract and an award of damages.
Where an innocent misrepresentation is concerned, the only remedy available to the innocent party is rescission or cancellation of the contract — damages cannot be claimed. Rescission, in any case, will only be available when the courts can return the parties to their pre-contractual positions (restitutio in integrum).
DE3E 34: Business Law: An Introduction
Candidates should be able to cite at least one of the following cases relating to remedies for misrepresentation:
Erlanger v New Sombrero Phosphate Co [1878]
Boyd & Forrest v Glasgow & South-Western Railway Co [1915]
Smith v Sim [1954]
Case Study 3
Question 1
The principal remedies for breach of contract are as follows: damages、specific implement、sort out the factsrescission、retention and lien
Question 2
The most appropriate remedy for Alasdair to seek from the courts in this instance would be that of specific implement given the fact that the subject matter of the contract has a unique value.
Alasdair cannot go elsewhere and purchase the same painting. There is only one painting and that is the one that he wishes to own and possess. Specific implement is a fairly limited remedy and it will not always be granted by the courts. Candidates should highlight exampl
es of when this remedy will not be granted because the courts regard it as inappropriate. Candidates should be able to cite at least one case to demonstrate that they understand the remedy of specific implement, for example:
Andersonv Pringle of Scotland [1998]
Case Study 4
Karen’s contract with her business customers has now been terminated on the grounds of supervening illegality. The contract is effectively terminated (or in certain occasions suspended) during the period in which it is illegal for the parties to perform their contractual obligations. The following examples from case law in relation to illegality could be cited by candidates in support of their answer: Stevenson & Sons Ltd v AG fur Cartonnagen Industries [1918]、James B Fraser & Co Ltd v Denny, Mott & Dickson Ltd [1944]
NB It is important that candidates are able to give a summary of the facts of any case law cited AND the decision of the court in order to support their answers. It is not sufficient merely to name a case or cases.
DE3E 34: Business Law: An Introduction

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