Question

For my BUS LAW I , chapter 13

In August of 2014, Duncan went to Smith Motors to look for a used car to buy. He test-drove a 2008 Corvette with an odometer reading of 52,000. Duncan assumed that the heater worked, but he did not turn it on to test it because it was so hot outside. The salesperson assured him that the car was in "mint condition." Duncan decided to buy the car. He later learned that the heater was broken, the radio would not work, the car would not start when the temperature dropped below 40 degrees, and that the car really had 152,000 -- not 52,000 -- miles on it.

Questions for discussion in your first post:  

• Can Duncan get out of this contract and get his money back? Why or why not?
• Did Smith Motors have a duty to disclose the defects in the car?

Questions for discussion in your remaining posts:

• Was the statement that the car was in "mint condition" a misrepresentation?
• Did Duncan have the obligation to investigate the car more thoroughly?

Answer 1

Misrepresentation means an untrue statement of fact made by one party to the other which was intended and did induce the latter to enter into the contract.

Any contract that are entered into as a result of misrepresentation are voidable.

Elements of Misrepresentation:

1. a representation was made
2. the representation was false
3. representation when made, the defendant knew that the representation was false or that the defendant made the statement recklessly without knowledge of its truth
4. that the fraudulent misrepresentation was made with the intention that the plaintiff rely on it
5. that the plaintiff did rely on the fraudulent misrepresentation
6. that the plaintiff suffered harm as a result of the fraudulent misrepresentation

Remedies for misrepresentation:

1. Rescission of contract: in this innocent party may exercise to either rescind the contract or to affirm the contract. In rescission the parties are put back to the original pre contractual position. The descision of recission shall be communicated to the representor.

2. Claim for the damages: in this the party can claim for all the damages suffered due to the misrepresentation of the other party. Innocent party also entitled to full compensation for loss suffered after date of contract.

Therefore in the instant case based on the above provisions we can answer the questions given as

· Answer 1. Can Duncan get out of this contract and get his money back? Why or why not?

Since all the conditions of the misrepresentation were met and there was a fraudulent misrepresentation being made to induce Duncan to purchase the car, therefore Duncan can get out of this contract by rescinding the contract and ask for the money back and the losses suffered by him.

· Answer 2: Did Smith Motors have a duty to disclose the defects in the car?

Yes it was the duty of Smith motors to disclose all the defects about the car and further their silence on the matter that outside it is too hot and the Duncan can not test the heater of the car, then it was their duty to disclose that the car heater is not working. In such case silence of Smith motor will also amount to the misrepresentation of fact about the car.

· Answer 3. Was the statement that the car was in "mint condition" a misrepresentation?

Surely, the statement of salesman of smith motors that the car is in mint condition is a misrepresentation about the condition of the car which induced Duncan to purchase the car. Therefore not telling all the facts about the car truly is a fraudulent misrepresentation.

· Answer 4 Did Duncan have the obligation to investigate the car more thoroughly?

Yes, Duncan also have an obligation to investigate about the car more thoroughly. There was a mistake in taken reading of odometer by Duncan, but he can’t at an instance get to know all the facts about the car. It was the duty of smith motors to disclose all the facts that the heater and radio of car are not working and statement that car is in mint condition also relieves Duncan to further investigate about the car as the smith motors being an expert in their field given the statement.