Site Loader
Rock Street, San Francisco

There are some pre existing contracts between Percy and the parties involved. The estate agents act as a third party in the contract between Percy and the seller, where Percy exchanges money for ownership of the property. The defendants, with the responsibility of selling the house on the owner’s behalf, appear to make false claims, possibly under misrepresentation. This is where a false statement of fact is directed at a party to induce that party into entering into a contract. For example, a university claiming they are number one in the country for scientific research when they are in fact not, would be a fraudulent claim and actionable under misrepresentation if students chose this university because of their false statement. Percy may also have a contract with Reena. The issue of whether there is a contract formed falls under offer and acceptance. An offer is the terms that a party is willing to be bound by, and must be accepted with clear communication that the other party will unconditionally abide by all terms. It is vital for there to be offer and acceptance as these are vital for the formation of a contract. Otherwise no contract could exist. Lastly, Percy has possibly formed a contract to hire out his camera equipment with the fraudster impersonating an actor named Howard Jones. This is a unilateral mistake as Percy has been duped by a mistaken identity where the impersonator was aware that he was defrauding Percy. Percy has purchased a house using an estate agent so there exists a fiduciary relationship between claimant and defendant as principal and agent respectively as Percy has placed his trust in the agent and they are in a position of influence. This means that despite having no direct contract with them, Percy is in a legal position to bring a claim under contract as this type of relationship is accepted by the courts as imposing such a duty to disclose vital information about a contract . The agent claims that the garden is bigger than in reality. This could be misrepresentation as the estate agent has used a false claim to induce Percy into buying the house. The size of the garden would be ‘obvious to anyone with any experience’ and, instead of the claimed 1.5 acres, the garden is in fact only three quarters of an acre. As an estate agent with experience in selling houses, this misrepresentation is possibly fraudulent, as they should be aware of the garden’s size when it may be a vital factor for a buyer looking to purchase the house. The terms of fraudulent misrepresentation are set out in the case of Derry v Peek . Lord Herschell stated that ‘fraud is proved when it is shown that false representation has been made (1) knowingly, (2) without belief in its truth’, and the defendants are in a position to know the true size of the garden, and, even if they could prove they had no knowledge, the third aspect of the condition made by Lord Herschell is ‘(3) recklessly, careless whether it be true or false’  suggesting that the first statement made by the estate agents would still be fraudulent misrepresentation. Furthermore, in the case of Esso Petroleum Co. Ltd v Mardon , Lord Denning makes it clear that a professional who claims to have specific knowledge, such as that of an estate agent and the information about a property, is under a duty to make sure his representation is true and, if they make unreliable or false statements that induce a party to enter into a contract, they become liable for damages .However, even if this is suggested as misrepresentation, Percy must prove that he relied on this statement and that the fraudulent claim induced him into purchasing the house as it was 3 months after he moved in that he realised the true size of the garden. In the case of Atwood v Small , it was held that, if the party innocent relies on their own investigations or judgement, the party that has allegedly made the misrepresentation cannot be held liable. It is therefore up to Percy to prove that, such as in Redgrave v Hurd , despite not having the estate agents claim checked, he is entitled to claim as he relied upon the estate agents false statement in his decision to purchase the house. There is a second claim made by the defendants that the house would be ideal for an extension into a larger property when, realistically, building on the land will be extremely expensive. In order for a claim in misrepresentation, the false statement must be one of fact. This is set out in the case of Bisset v Wilkinson  where it was held that a statement of belief is not misrepresentation. It was the seller’s opinion due to him having no previous experience in the field. The agents are not land surveyors and would therefore most likely have no knowledge of the expense of building on the land, they would merely be guessing or stating their opinion, which cannot be held the same as misrepresentation. Per contra, by claiming that the house is ideal for extension, the agent has implied that they are in possession of the correct facts, and if they are not, this could be misrepresentation in itself. Lord Justice Bowen states that, ‘…if the facts are not equally well known to both sides, then a statement of opinion by the one who knows best involves very often a statement of material fact, for he impliedly states that he knows the true facts’ in the case of Smith v Land and House Property Corporation , where the claimant’s statement was an actionable misrepresentation. The defendants may also argue that this statement was only sales talk. In the case of Dimmock v Hallett , land was described as ‘improvable’ and held that sales talk is differentiated from a representation of fact. The agents only state that the extension would be ideal, not that there is an existing extension or a factual cost of the extension, which suggests that Percy would have no successful claim of misrepresentation for the second comment. However, the case also held that omitted facts that distort a situation could be held as misrepresentation. By suggesting that the house is ideal for an extension but leaving out the extortionate cost, the agent could have induced Percy into accepting the house by partially revealing half of what may be true. Overall, Percy’s contractual position with the estate agents is strong despite that for both claims to be held actionable he must be found to be in a fiduciary relationship with the agent and prove that he relied upon the statements when entering into the contract. If this is so, the court should find that Percy has stronger contractual claims and, as mentioned under section 2(1) of the Misrepresentation Act , should therefore be able to claim damages unless the agents can prove they were not negligent, which would be unlikely in this scenario. In the second scenario, Reena advertised a car. Advertisements that lead to bilateral offers (an exchange of promises by both parties) are invitations to treat as they would typically lead to further discussion . This was declared in Partridge v Crittendon , where there was no claim, within contract, as the seller posted an advertisement inviting to treat (it was not in itself an offer), and means that Reena has not made an offer capable of being accepted as an invitation to treat is a declaration of intent to sell and to initiate negotiation. Percy asked how much she would sell her car for. Reena wrote back that she would sell her car for £3,000 cash. This exchange could be seen as a request for further information, which, as held in the case of Harvey v Facey , is not the same as an offer. A request for further information is merely an inquiry before the concerned party enters into a contract. Furthermore, the case of Clifton v Palumbo , a vendor wrote to a buyer suggesting a price. However, the Court of Appeal concluded that the letter was only a preliminary indication of how much he was prepared to sell his estate for. This would mean that there is no offer made by Reena that Percy is capable of accepting. In contrast, Percy could argue the case of Bigg v Boyd Gibbons Ltd . There were continuing negotiations during which both parties communicated a price they would be willing to sell at and acceptance. This is applicable to the communication between Reena and Percy as Reena communicated the price she would be willing to sell her car for and Percy agreed to buy the car. The court held that the clarity of an offer from the plaintiff’s first letter constituted an offer that the defendants accepted . The decision on whether an offer capable of being accepted was made would be based off of the wording and background. It was an inquiry for more information by Percy that provoked the statement by Reena, but the situation resulting in an offer does meet the criteria set by Sir John Chadwick. The offeree (Percy) acting reasonably, would understand that the offeror (Reena) was making a proposal which they intended to be bound by . By Reena stating that she would sell the car for £3,000, she could be seen as implying that she would intend to be bound if Percy unequivocally accepted. If decided an offer capable of being accepted, the dilemma would then be whether Percy is attempting to modify the terms of the offer or if he is making a counter offer. Percy asks Reena if she would accept the first £2,500 immediately and the last £500 at the end of the month. In Hyde v Wrench  a counter offer is implied as introducing a whole new term into the agreement and therefore destroying the previous offer. But by applying Stevenson, Jacques and Co. v McLean , the offer and acceptance still stands as the courts viewed this correspondence as a request for further information and not a counter offer. Percy is merely attempting to remould the terms. Consequently, this would mean that there has been a communicated offer and acceptance, forming a contract. Percy’s position is that Reena is contractually bound to sell him the car despite the fact she no longer wants to. However, Reena would have to agree to his proposal of a different payment method in order for him to carry that out. Percy was then defrauded. The fraudster produced government issued identification to hire Percy’s equipment and then he sold it to Ken. This falls under the realm of a unilateral mistake as one party is seriously mistaken about the other’s identity. Percy’s contractual position depends on how he dealt with the fraudster as Percy will have to prove that his contract with the fraudster is void ab initio for mistake as to identity in order to retrieve his equipment off of Ken. If Percy dealt with the fraudster face to face, the result could have been similar to that in the case of Ingram v Little . The Ingram sisters were also defrauded, the cheque later bounced, the car was sold to Little. The case was void for mistake as the sisters only meant to deal with Hutchinson and their claim successful. However, this was widely criticised and is no longer followed precedent due to Lewis v Avery . Percy’s legal position is more likely to be decided using the latter case. It was held only voidable for misrepresentation of terms and not mistake, as Lewis could have sold his car to anybody, it was not restricted to the impersonated identity. In face to face dealings, the court’s presumption is that the seller intended to deal with the person in front of them, regardless of identity. However, if Percy dealt with the fraudster in writing, he may have a claim under contract for mistake. In Shogun Finance Limited v Hudson , dealer performed a credit check on stolen identity before selling the car to him, and the fraudster then reneged on payments and sold the car. It was held that the contract was void for mistake as it had been made inter absentes. The credit check had not been carried out on the fraudster’s real identity as the dealer had only intended to sell the car to the stolen one and would not have done so without a clean credit check. In written contracts the courts are more open to assuming that the seller only intended to deal with the named person, as applied in this case, which was decided in the House of Lords (making it binding precedent). Unless Percy could prove that he would not have sold the car without the legal identification, the contract would not be declared void. His contractual position is most likely to be that the contract was voidable in the instance of a mistaken person, and Percy could not claim the equipment back off of Ken because Ken bought the equipment in good faith.

Post Author: admin

x

Hi!
I'm Dora!

Would you like to get a custom essay? How about receiving a customized one?

Check it out