Question

Farid and Ah Fong graduated from a university in 2020 with a qualification in Bachelor of Business and Commerce. They decided to form a business offering advice to clients who wish to grow their businesses on a large scale. Fatimah who is a novice businesswoman is looking for a successful business partner in order to grow her business. She met a businessman by the name Felix but she is unsure of his financial credibility. She approached Farid and Ah Fong for consultation and advice as she came across their advertisement in the social media. Farid and Ah Fong did thorough business research and recommended to Fatimah to proceed to have a business dealing with Felix as a business partner. Fatimah approached Felix and entered into a multi-million-dollar project. After a few months, Fatimah discovered that Felix is a financially troubled businessman. Fatimah is very upset. She approached Farid and Ah Fong for a clarification. However, Farid and Ah Fong claimed that they have conducted thorough research on Felix’s financial standing. However, it has now transpired that Farid and Ah Fong did not look at the financial standing of Felix for the year 2018 but only looked at the financial standing for the year 2019. They claimed that there is no need to check the financial standing for the last two years. They also claimed that since they just graduated, they do not have much experience. Fatimah seeks your advice as to her rights against Farid and Ah Fong

Answer 1

In this instance, the main legal dispute or complication is centered on the fact that Fatima, an amateur or novice businesswoman or entrepreneur has been allegedly misinformed or mislead by Farid and Ah Fong regarding the financial viability or credibility of Mr.Felix, who was approached by Fatima for potential business partnership. In this context, despite the initial or primary assurance by Farid and Ah Fong to Fatima about the financial solvency of Mr.Felix, it subsequently turned out that Mr.Felix's financial position in unstable and hence, he cannot be ideally trusted for any business or commercial undertaking or endeavor. Now, as claimed by Farid and Ah Fong, it was completely insufficient to examine the financial records and standing of Mr.Felix for the last two years and hence, based on his financial standing or position in 2019, it appeared to be prudently acceptable to engage in business or commercial partnership with Mr.Felix.

Considering any concrete legal action or step that Fatima can possibly implement against Farid and Ah Fong, it is relevant to first practically verify the claim of the consulting company as any verbal or non-verbal official communication by Farid and Ah Fong can be officially produced in the court of law in case Fatima potentially decides to file any legal lawsuit against the company. Secondly, it is also imperative to review any official verbal or written contractual business agreement reached between Fatima, as the client and Farid and Ah Fong as the consultant or the service provider, which would presumably specify all the relevant and concerning terms and conditions pertaining to the various contingencies of the service in this case. Now, if it is clearly and unequivocally specified that the company is not officially liable to conduct an examination of the financial standing or position of the concerned individual as officially assigned by Mrs./Ms. Fatima and if it is entirely read, corroborated, and officially ratified(signed) by Fatima as the client, then the legal burden would fall predominantly on her to justify her case if the matter escalates to a potential lawsuit. If otherwise is applicable then Fatima is legally justified to undertake any legal action against the company on grounds of negligence of services, as any such condition has not been clearly and officially specified to her which legally violates her rights and prerogatives as a client. Thirdly, another factor that might turn towards Fatma's favor if she files official litigation against the company, is the verbal claim or justification of the company about its professional and occupational inexperience in financial consulting business. Based on the information provided in the case study presented in the question, the company did not inform Fatima, or the client, in this case, anything about their professional competence and credibility when the service was assigned to them in the first place. Therefore, legally and technically, any such excuse cannot be validated to defend or safeguard the professional incompetence and failure of the company and hence, Fatima is legally justified to undertake any legal action against Farid and Ah Fong based on professional negligence and violation of her rights as a client.