LEGAL CASE STUDY

Legal Case Study

Misrepresentation Act

This paper is based on two case studies. Two questions regarding the provided case studies need to be answered. In one case, misrepresentation act is used and in the other case, partnership contract is used. The case studies are based on British contract law.

a): Advise for Cheung

Parties with capacity to enter into agreements have done so only when each has given objective manifestations of their intent to do so. Objective manifestations of intent might be signatures on written agreements, handshakes, oral commitments to be bound, or even, under some circumstances, performance of obligations of agreements (www.statutelaw.gov.uk).

Essential to the formation of contracts is the existence of valid consideration offered by each party. Consideration is something, such as funds, forbearances, performances, or return promises, that each party offers in exchange for the other party's (or parties') consideration. Absent consideration, a promise that would otherwise constitute a contract is a mere gift unenforceable under law. Accordingly, with relatively few exceptions, a promise unsupported by valid consideration cannot be a contract.

Valid contracts must include all essential terms and must be sufficiently specific. The omission of essential terms from agreements renders them unenforceable and therefore invalid. Valid contracts must also sufficiently describe their essential terms. Terms are described as sufficiently specific where the adequacy of a party's performance can be understood when considered in light of such terms. Insofar as contracts with terms that are insufficiently defined cannot be enforced, they cannot be valid (www.statutelaw.gov.uk).

A common misconception regarding contracts is that to be enforceable they must be in writing. Generally, this is not the case. However, a preference for written agreements has arisen out of the obvious benefit of having such agreements for the benefit of proving the terms of agreements should such proof be necessary at a later date. Many jurisdictions require by statute that agreements for certain kinds of performance, such as for the sale of goods valued over a certain amount, for interests in land, for sureties, and for performance that cannot be completed in a year's time, be in writing to be enforceable.

Misrepresentations may be classified as fraudulent, negligent or innocent. Misrepresentations are essentially false statements. They are sometimes referred to as misstatements. According to the case, Raja has misrepresented the information about the horse, which he was selling to Cheung. The common law distinguishes between fraudulent misrepresentations and innocent misrepresentations. The former arises when an assertion of fact is consciously false and the falsity is intended to mislead the other party.

A negligent misrepresentations may be caught by the common law or under the Misrepresentation Act 1967. Financial loss may be recovered where special relationship exists, which is a noteworthy difference with the Tort of Negligence. Innocent misrepresentations are made where the maker of the statement has reasonable grounds for believing in its truth, and a negligent misrepresentation cannot be fraudulent, provided they had an honest belief in the truth of the statement made.

Fraudulent and negligent misrepresentations entitle a claimant to an award of damages ...