ASSIGNMENT COVER SHEET

This form must be filled in correctly and securely stapled to your assignment or it may not reach your lecturer

Circle Program Enrolled | C4TP | Dip Arts | Dip Bus | Dip Tech IT | Dip Tech EE | Dip Health Sc | Assoc. Degree | COURSE NAME: Business Law LECTURER'S NAME: Mardi Szantyr ASSIGNMENT NO./TITLE: Assignment 2 DUE DATE: 1 MAY DATE RECEIVED STUDENT ID NUMBER | 110164786 | FAMILY NAME | He | GIVEN NAME | Shan |
-------------------------------------------------
* If a group assignment a cover sheet must be completed by each member
-------------------------------------------------

-------------------------------------------------
I declare the following to be my work as understood by the University’s Policy on Plagiarism, unless otherwise cited.
-------------------------------------------------

I authorise SAIBT to test any work submitted by me, using text comparison software, for instances of plagiarism. I understand this will involve the University or its contractor copying my work and storing it on a database to be used in future to test work submitted by others.

I understand that I can obtain further information on this matter at: http://www.unisanet.unisa.edu.au/learningconnection/student/studying/integrity.asp -------------------------------------------------

-------------------------------------------------
SIGNED: __________________________________ DATE: ______________________
-------------------------------------------------
I have submitted this assignment electronically through the SAIBT student portal (Place X in box)
-------------------------------------------------

-------------------------------------------------
NOTE:
-------------------------------------------------
The assignment box is emptied at 4:30pm Monday to Friday.
-------------------------------------------------
Assignments submitted after this time will be collected and date stamped the following day. The assignment box is NOT emptied on weekends. Please remember to place assignments at the same Campus you are studying the course.

-------------------------------------------------

-------------------------------------------------
Answer of Q1:

Issue: Whether Robbie can discharge the contract for the purchase of trumpet, since it’s not the original Tommy Trumpet as George represent it to be. Rules: 1. Misrepresentation refers to a false statement of material fact made during negotiations that induces a contract causing loss or damage. 2. Innocent misrepresentation is a representation made with no intention to deceive. If an innocent misrepresentation is made, the other party is entitled to rescind the contract. 3. Recession is a remedy that enables parties back to their pre-contractual positions.
(FBL – Lecture Notes 2015)

Application：
In this case, when George purchased the trumpet from Joe, he relied on the statement of the seller and believed it when Joe told that the trumpet used to belong to the now retired famous trumpet player because Joe did not inform George otherwise when he found out that the trumpet was actually made after the player’s retirement. Therefore, when George accepted Robbie’s offer to purchase the trumpet at a price of $2,000, he did not know that the trumpet was not an original trumpet played by Tommy Trumpet like he claimed to be. When George made the statement about the condition of the trumpet, he believed in it, though it turned out to be false. By relying on the statement, Robbie entered into the sale with George. It can be concluded that the statement was the reason that Robbie entered into the contract and there was reasonable grounds for both parties to believe the statement to be true when it was made and when the contract was formed. Therefore, the statement constituted misrepresentation, which entitled Robbie the right to rescind the contract. Conclusion: In conclusion, Robbie was entitled to rescind the contract and get his money back.

Answer of Q2: Issue: The issue here is whether George has any cause of action against Joe. Rule: 1. A fraudulent misrepresentation refers to a false representation of material fact made knowingly or recklessly whether it to be true or false. 2. A contract induced by fraudulent misrepresentation is voidable at the option of the innocent party. The contract thus entered into remained enforceable until set aside: Derry v. Peek (1889). 3. To constitute a fraudulent misrepresentation, there must be a false statement of fact, thus there must be an intentional deceit and the innocent party suffered loss.
(FBL – Lecture Notes 2015)

Application: In this case, when Joe first told George that the trumpet belonged to a famous trumpet player, he did not know that the statement was not true. After Joe got the trumpet examined by a technician, he discovered that the trumpet could not have been the original one played by Tommy. However, Joe did not inform George when he agreed to sell the trumpet to George for $1,000. It can be seen that the reason why George was so interested in purchasing the trumpet was that he believed in the statement Joe made that the trumpet used to belong to Tommy Trumpet. When the deal was made, Joe knew that the trumpet was not the original one and that he intended the statement to be relied upon by George. Joe intentionally deceived George into believing his statement. The statement was a fraudulent misrepresentation upon his option, George can rescind the contract. Conclusion
In conclusion, the contract entered into was induced by fraudulent misrepresentation and George can set aside the contract by option.

Answer of Q3：

Issue:
The issue here is whether George could have any cause of action against Joe if Joe genuinely believed that the trumpet was the original one played by Tommy Trumpet. Rules: 1. Mistake at common law is to make a contract voidable, which can be concerning the value, nature or quality of the subject matter of the contract. 2. Innocent party can exercise their option to render the contract void within a reasonable time or before an innocent third party acquires an interest in the contract. Among the three types of mistakes, common mistake occurs when the parties make the same mistake as to some underlying or fundamental fact. 3. Common mistake at equity entitles the innocent party to avoid a contract where it would be unconscionable for one party to benefit from the mistake: Solle v Butcher [1950] 1 KB 671.
(FBL – Lecture Notes 2015) Application:
If Joe, actually believed that the trumpet used to belong to Tommy when he entered into contract with George, there would be a common mistake in contract. Both of the contractual parties made the same mistake as to the fundamental fact of the contract. The reason why George was interested in the trumpet and willing to accept Joe’s offer of a price of $1,000 was because he believed the trumpet to be played by a famous player. The two parties probably would not have agreed to the deal had fact that the trumpet did not used to belong to Tommy Trumpet made known to both of them. Therefore, there is a mutual mistake as both of the contractual parties believed the subject matter of the contract to be something it was not, which was the basic reason for the two to enter into an agreement. Under equity, the innocent party, George, can exercise his right within reasonable time to avoid the contract as it would be unconscionable for Joe to benefit from the mistake as a normal trumpet probably would not attract the attention of George and would cost a lot less. Conclusion:
In conclusion, if Joe genuinely believed the trumpet to be the original one played by Tommy, George could still avoid the contract.