contract law question

number13 wrote: »

Im having an arguement with a friend can someone settle the score. If a person is in negotiations about buying property off person. He says the property makes 10,000 euro a year and offers to show me the accounts. I decline but buy the property. Couple of months later it is known by the accounts that the property made nowhere near 10,000.
I think i would have a case for fraudelent misrepresentation even though i declined to see the accounts first time around. My friend says no. Can anyone settle a bet please ?

For it to be any kind of misrep, you need to have been induced into the contract by the representation.

If you declined to view the accounts there is a good case to argue that you werent relying on that particular representation and you were going to purchase the property anyway.

I think your friend wins this one.

mitzicat wrote: »

I'm not sure that the other side could argue that you were not induced by the representation.

Seems a solid enough argument to me. Being the sale of a property, you would assume there were more terms than just what the property makes per year. If it was that important the person would have checked the accounts.

Saying it makes €10,000 per year could be just a sales puff, it will probably fall to the context of the representation but I would rather be arguing there was no misrep that there was a misrep in this case.

mitzicat wrote: »

Yeah, I agree with you now that he could not really argue it induced him to contract. In real-life I cannot see a court finding for a party that did not bother to do its homework.

Must show reliance, there is a rebuttable presumption of reliance.
Where it will succeed is were there the misprep is a material inducement, not just sales puff. See Spice Girls v Aprila

General reluctance of the courts to impose liability here, especially given the hypothetical party had the opportunity to investigate the grounds of the claim.

Better chance to bring a claim under negligent misstatement and claim there was a collateral contract. Pretty doubtful it would succeed as NQ points out the major problem is lack of inducement.

number13 wrote: »

say if before i buy the property he tells me that there are other people looking at the property and they are going to buy it. Then i but it straight away. Would i have a case then?

"Judge the reason I bought the property was because other people were looking at it". Where's the loss and is the fact that other people are considering a the purchase viable grounds for inducement?

All you're demonstrating there is that you rushed into a purchase.

NoQuarter wrote: »

Saying it makes €10,000 per year could be just a sales puff

When we did this, the example given was "This farm can support X sheep". The purchaser sued and the court said that it was mere puff". There lecturer explained some people might like fat sheep and some people might like skinny sheep :eek: :pac:

However, €10,000 per year is a rather specific figure. That said, what is the basis of calculation?