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Contract Law

← The American System of Criminal JusticeSnyder v. Phelps →

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When people get to agree on certain issues, it is the assumption of the parties involved that the other party is telling the truth. If the parties or one of the parties is not telling the truth, then the agreement is based on false information and in law of contract that can amount to misrepresentation. This false information given by the parties is usually intended to induce the party to whom the offer is being made, to agree to the contract. Any information that is used during the negotiations is important in the contract and it is referred as representation and when such information later turns out not to be true, the action of giving such information becomes misrepresentation.

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Misrepresentation can be of different types; innocent misrepresentation where by the person making the offer make an honest mistake in stating his/her facts; negligent misrepresentation which normally arises as a result of negligence on the part of the person making the offer, which means that if he/she was keen, such a mistake would not have come to pass; and the last is fraudulent misrepresentation which usually involves changing of figures or facts so that they appear attractive with the main intent being to defraud the other party. By giving false information while contracting places the party being provided with information at a disadvantaged position because the benefits they intend to gain from the contract will not be forthcoming.

The law of contract therefore comes in to shield them from such losses.  To establish whether facts made during a contract amounts to misrepresentation, it should be; the statement should be one of facts and not opinion or intention; the statement should be directed to an innocent party directly and lastly the party should be induced to enter in to the contract because of the misstated facts. There are instances also when a contract becomes unenforceable under the law and this is legally referred to as vitiating factors and they include; misrepresentation, mistake, duress and undue influence.

To begin with it is important to establish whether Robbie was competent to enter in to the contract by establishing if he was of sound mind and whether he has attained legal age (an adult) capable of entering in to contracts. If he meets these two requirements then it means that he entered in to contract and therefore this makes the contract binding assuming that other factors that completes a contract have been observed. On the issue of price, the dealer made an offer of $16,000 which the buyer in this case Robbie has a right to reject or negotiate. But he did not instead he went ahead and paid the price. However, his discovery that the real market price of the car is $12,000 shows that indeed the dealer did misrepresent the price so that it seemed favorable to the buyer.

The statement that the car is very economical in relation to fuel and spare parts is not very specific or elaborate and it is ambiguous. What one person considers economical may not be economical to the other. This therefore means that the dealer may not be able to support the assertion of the car being economical. For example, some vehicles are heavy consumers but they are good in speed. Such a vehicle may be uneconomical for short distance users who do not drive at high speed like in towns or areas prone to traffic jam, but they can be economical to a user who cover long distance.

Tire replacement cost from the information given as offered by the seller is that they are not expensive to replace, this argument is similar to the one above in that it is vague. When one says they are not expensive they probably mean that they are comparing them with other similar or of a different model. There is no figure given here and therefore although Robbie may argue that he expected all the tires to cost the same, the figure of $300 is for 15 inch alloys which are style or fashion for that matter. However if the car cannot operate on other tires other than 15 inch alloys, then this should have been brought to his attention and explained clearly before buying and because this crucial fact was not disclosed, Robbie can  base his argument on this fact.

The dealer claimed that the car had one previous experienced owner; this information is very tricky in that it does not disclose the total previous owners and secondly it is not clear on who qualifies to be experienced. This information lacks clarity because as Robbie may argue that he thought the car had only one owner, the dealer may argue that his key word was experienced. To Robbie, the age factor of the previous owners may be important in making his decision because normally young people may not handle their cars very well and he can argue that this crucial information was not clearly presented to him. This can be supported by the fact that even if he was able to read and understand the logbook information, the issue of previous owners would not have been seen. In his argument Robbie can claim that the dealer took the advantage that he doesn’t know much about cars and because he chose to rely on him, the dealer misrepresented the facts.

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In nut shell, there was misrepresentation on the part of the dealer and therefore Robbie can go ahead and sue. The reason why it is advisable for him to sue is that his failure will mean he holds to a car which he does not intent to have especially after learning about the facts. It is also good for Robbie to be able prove that the dealer indeed misrepresented the facts and the onus is on his side to prove beyond reasonable doubts that he got in to this because of misrepresented facts.

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