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LAW 122 (825)

Chapter 9.docx

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Law and Business
LAW 122
Else Grech

Chapter 9 October 26, 2012 2:24 PM puffs- mere sales word - no consequences representations - induce contract - possible consequences terms - contractual promises - certain consequences Pre-Contractual Statements Contractual term Pre-contractual representation (promise of future performance) (statement of existing fact) Breach of contract if false Misrepresentation if false Non-factual statements (not actionable as misrepresentation)  opinion based on speculation  description of another's future intent  statement of law Factual statements (action as misrepresentation)  expert opinion  description of one's present intent  statement of legal consequences Silence as Misrepresentation  When silence would distort a previous assertion  when statement is half-truth  when the contract requires a duty of utmost good faith o insurance  when a special relationship exist between the parties  When a statutory provision requires disclosure o insurance legislation o financial officers o domestic contracts  when facts are actively concealed Inducement  misrepresentation relevant if contract induced  sufficient that misrepresentation was one inducement  inducement presumed if inducement intended  recipient not obliged to investigate representations Consequences of Misrepresentation 1. Rescission - cancellation of a contract with the aim of restoring the parties to the greatest extent possible, to their pre-contractual state 2. Restitution - involves giving back and taking back on both sides (money, land, goods)  denied if impossible (paint applied)  third party rights (re-sold to honest purchaser)  contract affirmed (purchaser may have acted as owner) 3. Affirmation - occurs when the misled party declares an intention to carry out the contract or otherwise acts as though it is bound by it  person who is misled is said to affirm the contract only if the person discovered the misrepresentation prior to the declaration or act of affirmation  ex. lapse of time Damages  provide monetary comp. for the losses that a person suffered as a result of relying upon a misrepresentation  tort not contract Types of Misrepresentation elements of proof available remedies Innocent  false statement of fact or misleading silence -rescission of misrepresentation  inducing contact contract negligent  false statement  rescission f misrepresentation  made in an unreasonable or carless contract manner  damages in tort  inducing a contract  causing a loss that is now always sufficientl
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