Question

In: Accounting

Samuel is the owner of a 2018 Toyota corolla. After a standard service he was informed...

Samuel is the owner of a 2018 Toyota corolla. After a standard service he was informed that the rings in the engine are damaged. There is nothing visibly wrong with the car, the performance is good and there is no excessive smoke. Samuel decides to sell the car without having it repaired. He sells the car to peter for the purchase price of N$ 4000 without disclosing the fact the vehicles is in need of repair. Shortly afterwards the car breaks down. The garage owner tells him the rings were damaged and the cost of the repair would be N$ 3000. Advise Peter as to his rights and the remedies he may against Samuel.

Solutions

Expert Solution

This is a situation of misrepresentation

Inspite of knowing that the car has defect Samuel sold it Peter and since it was not appearing from the look that car had some defect Peter bought it from Samuel in good faith , howeo this is the situation of misrepresentation that Samuel created inspite of knowing that the car was not in good condition

Misrepresentation means Misrepresentation means a false statement of fact made by one party to another party and has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality or nature of the product that the seller has may constitute misrepresentation. A finding of misrepresentation allows for a remedy of rescission and sometimes damages depending on the type of misrepresentation.

Conclusion : Peter can claim the entire refund of the car and give it back , or he can claim the repair charges from Samuel if the car is usable after repair


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