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Homework answers / question archive / Belinda wants to buy a second-hand car and visits a number of car dealers before deciding to purchase an as new 1998 Ford Mustang from American Car Sales

Belinda wants to buy a second-hand car and visits a number of car dealers before deciding to purchase an as new 1998 Ford Mustang from American Car Sales

Law

Belinda wants to buy a second-hand car and visits a number of car dealers before deciding to purchase an as new 1998 Ford Mustang from American Car Sales. The sales person, Jaxson, tells Belinda that the car was manufactured in 1998 and had only done 54,000 kms.

Three months later, Belinda has the Mustang serviced with her local mechanic who was a Mustang enthusiast. He comments on the fact that the car was in pretty good condition for a 1994 Mustang, though he was surprised that it had only done 54,000 kms. He would not have been surprised if it had done 100,000 kms.

Belinda makes further inquiries and discovers that the Mustang was in fact made in 1994 and she has paid about $5,000 more than the actual market value of the car. Belinda intends to approach American Car Sales about this issue.

Does Belinda have any contractual rights against American Car Sales?

Required:

You are expected to discuss legal rules learned regarding terms of a contract, in particular statements and representations, and conditions and warranties.

Do not answer this question based on Australian Consumer Law principles. No credit will be given if you do so.

 

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Answer:

Case summary:

1.Belinda wants to buy a second-hand car and visits a number of car dealers before deciding to purchase an as new 1998 Ford Mustang from American Car Sales.

2.The sales person, Jaxson, tells Belinda that the car was manufactured in 1998 and had only done 54,000 kms.

3.Belinda makes further inquiries and discovers that the Mustang was in fact made in 1994 and she has paid about $5,000 more than the actual market value of the car.

4.Belinda intends to approach American Car Sales about this issue.

Issue:

Does Belinda have any contractual rights against American Car Sales and legal rules regarding terms of a contract, in particular statements and representations, and conditions and warranties.

Step-by-step explanation

Rules:

There are different types of fraudulent misrepresentation. These would depend on various factors, that might include the circumstances that are surrounding the agreement. For example, the history of dealings between the parties can also influence the decision of a court as to whether fraudulent misrepresentation has occurred. 

The fraudulent misrepresentation could be accomplished through several forms of communication, like writing, body movements, or even silence, that are verbal or non verbal communication. Some most common types of fraudulent misrepresentation might include:

  • Making such a statement to the other party that is clearly false in nature,
  • Making a statement that is partially true in nature, that depicts some parts of the statement might be true while other aspects might be false,
  • Omitting some details in such a way that would create false beliefs or
  • Remaining completely silent on a particular subject or failing to disclose some important information.

 The elements of proof pertaining fraudulent misrepresentation includes:

  • A representation was made in fact,
  • The particular representation being made was false,
  • The defendant had sufficient knowledge that the representation being made was false,
  • The statement being made with the intention to make the other party rely on it and to enter into a contract,
  • The plaintiff relied on the misrepresentation and would not have entered into the contract without it and,
  • The plaintiff suffered a measurable harm due to the fraudulent information or misstatement. 

Analysis:

In this case the car dealer made a representation that he knew to be false, to get Belinda to buy a car, and Belinda relied on that misrepresentation, hence it formed the basis for a fraudulent misrepresentation claim. The court would also need to show that Belinda relied on the misrepresentation and it caused her some sort of harm, in this case paying $5,000 more than the actual market value of the car.

Conclusion:

In this case, the remedy would be some form of monetary damages that would be calculated based on the amount of harm or loss being experienced by Belinda.

If several persons made fraudulent statements to the plaintiff, along with Jaxson, if the American car sales were being responsible for it or if they assisted in creating the false misrepresentation, then it is possible that all those persons can also be named in the legal claim and can be sued for remedies and damages. 

But for claiming she has to take the onus that the harm that was being caused to her by the sales person Jaxson as a result of the fraudulent representation is a genuine one and can be measurable in monetary terms.

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