The paper "Law of Contracts " Is a great example of a Law Essay. Tom and Sarah should terminate the contract made with Hot Air Limited and regard themselves as discharged from their contractual obligation because of the other party’ s fraudulent misrepresentation. Misrepresentation refers to a false statement or fact that a person makes to another and induces the person to get into a contract. Fraudulent misrepresentation occurs when a party enters into a contract regarding goods, which may be defective and which it is aware of and remains silent on the issue.
They should also sue Hot Air Limited for the court to consider the contract void so that the company can return the money; the party refused to disclose what had been wrong with the humidifier even after Tom and Sarah insisted. This means that Hot Air Limited knew that there was something wrong with the humidifier even as they entered into the seven days contract with Tom and Sarah. In this case, the seller made false promises regarding the quality of the product. Suing Hot Air Limited would allow a remedy of rescission and damages incurred. Article 4 (103) in the “ European Contract Law” (1998), permits a person to avoid a contract because of mistake grounds, “ in the case the mistake crops up from information presented by the other person and if the person were aware of the mistake and it was opposite to fair dealing and good faith” .
Tom and Sarah should argue that if they knew the state of the humidifier, they would have declined to enter into the contract with Hot Air Limited or they would have claimed vast dissimilar terms.
Evidently, Hot Air Limited cannot claim that it was mistaken because they declined to disclose to Tom and Sarah about the state of the humidifier. Misrepresentation of material fact by Hot Air Limited would make the contract void. Consumers either encounter misrepresentation by words or conduct even if not everything is done or said can constitute a misrepresentation. Tom and Sarah can thus void the contract as victims-unfair means induced their participation in the contract. The remedies available for misrepresentation entail restoring the two parties to their pre-contractual arrangement in which every party hands back the benefits received under the contract.
Tom and Sarah can void the contract and claim harm encountered. The damages recompensed in this case would depend on the tort of deceit. Tom and Sarah would have to show that the other party deceived them, and they believed and relied upon the deception justifiably when buying the humidifier causing some damage. Article 4 (103) (2) says that when a party makes a fundamental mistake, it does not have a right to void the contract in case “ her or his mistake” was not excusable or if there is the assumption of the risk of mistake.
When used jointly with Article 4 (103) (1) as well as the need for good faith, Article 4 (103) (2) does not excuse Hot Air Limited as it dealt in bad faith; it made a fraudulent misrepresentation so that it could induce Tom and Sarah into accepting their humidifier under a contract. It is a tightly well-known statute once fraud is demonstrated, the guiltless party (Tom and Sarah) persuaded into the contract by virtue of the deceit have a right to withdraw the contract.
In case, a person makes the mistake of recognizing the other person, as opposed to the traits of the other party, determined to contract with another person, and the other person knows this, the agreement is void because of fault made.
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