number13 Registered User
#1

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 ?

#2

Bet or homework?

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#3

Griffith did Warrenty etc a few weeks back and no one I know would be revising at this stage because its assignment week so it ain't us

NoQuarter Registered User
#4

number13 said:
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 Registered User
#5

number13 said:
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 ?


I'm not sure that the other side could argue that you were not induced by the representation. However, a claim of fraudulent representation will not be successful where the contractee knew or ought to have known the representation was false. Check out Mairead Enright's book on contract law.

NoQuarter Registered User
#6

mitzicat said:
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 Registered User
#7

NoQuarter said:
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.


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.

jblack Registered User
#8

mitzicat said:
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 Registered User
#9

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?

jblack Registered User
#10

number13 said:
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.

CIARAN_BOYLE Registered User
#11

mitzicat said:
I'm not sure that the other side could argue that you were not induced by the representation. However, a claim of fraudulent representation will not be successful where the contractee knew or ought to have known the representation was false. Check out Mairead Enright's book on contract law.

I think this is the key point, you had the opportunity to check but didn't. If the accounts were falisfied or you weren't offered the opportunity to check then fine but you just failed to do proper diligence.

Sometimes let the buyer beware applies.

Victor Registered User
#12

NoQuarter said:
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

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

NoQuarter Registered User
#13

But being so specific might also help, I mean, were they saying that the property will make EXACTLY €10,000!? Obviously nobody can know the exact amount so it could be construed as a sales puff. But I take your point.

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