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Diary Note

You just informed us that you had inherited three cars from your father. All of the cars have been sold to Anita, Claire, and Nigel in order for you to pay off your obligations. Moreover, you've said that you're dissatisfied with all three contracts you signed to sell your vehicles. You now want to sue Anita, Claire, and Nigel, the person who purchased your three cars, respectively. As far as we know, you've inquired about your rights and remedies in relation to the contracts in this case. The red vehicle is an example of an agreement that you and Anita have the power to revoke. Your contract with Claire for the sale of the blue automobile is voidable because of the element of undue influence since Claire is also your lawyer. Due to the fact that the green car sale contract was valid while Nigel has revoked the contract in accordance with the contract's provisions, you are unable to initiate legal action against him.

Anita was interested in purchasing the blue car, and she requested that you bring the car to her home so that she could personally inspect the car. You had to leave in the middle of discussions to certain important papers. Before you left, Anita wanted you to sign a contract granting her the sole refusal rights to purchase the vehicle. Apart from not reading it, you claimed that you signed the agreement out of a rush. When you returned to Anita's house, you discovered that the paper you signed was a contract of sale rather than the agreement Anita had previously described. The contract said that the blue car would be sold for $10,000, but you anticipated a better price. You should file a lawsuit against Ms Anita for making false misrepresentations. She made a false assertion to get you to sign the document. Anita's contract with you is not a binding agreement. Your contract is voidable because of the element of misrepresentation. You can cancel the contract or sue Ms Anita for damages. Due to a false misrepresentation, the court will either award you compensation or order to rescind the contract.

Also, you sold your car to Mr Claire, who is your lawyer. When you sold the car, it was worth $60,000. He made an offer under $30,000. You were worried about the cost, but you didn't want to insult Claire, who you knew could help you financially. You should sue Ms Claire for her influence on your acceptance of the contract. A lawyer's relationship with their client is fiduciary. Fearing a disagreement with Ms Claire, you decided to sell the car for less. As a fiduciary, she may influence choices. She got a wonderful bargain because you sold the car for half the market value. You, the weak party, got nothing out of the deal. The court says such contracts are voidable since consent was not freely provided. We recommend you terminate the contract since the car may be sold considerably more. The court will not entertain inadequate consideration. The court is only concerned with the contract's legal worth. No recourse if the car is undervalued. The contract may be cancelled for improper influence.

Rule

The final contract is with Nigel, a car salesperson who will purchase the green car. You said that the car's sale price was $30,000. You couldn't understand a 10-page contract full of legal terminology. You told Nigel that you would consult an attorney before signing the deal. Nigel also told you that the offer was only effective that day. You accepted the contract conditions due to a financial need. Nigel notified you the next day that he was terminating the contract per the provisions on the 9th page. You want to complete the transaction and prevent Nigel from withdrawing. But this isn't permitted since the contract was valid. The offer was legitimate, as was your acceptance. The contract clearly stated the parties' intent to form a legal relationship. You might cancel the contract if you don't like it. Fear, coerced or deceived? Not in this transaction. As specified in the contract, you were responsible for knowing the terms prior to withdrawing. So you can't sue Nigel for breach of contract.

I really hope this was useful, and I would be delighted to continue this conversation with you. If you have any questions or would want to meet, please don't hesitate to contact me at my office.

Issue

The validity of the contract between Anita and John is the first question to be addressed in this case. The second problem is whether the contract between Claire and John is genuine since John was unhappy with the payment and feared upsetting Claire. The third and last question is whether Nigel can cancel the written and signed contract with John.

Rule

When one party (or their representative) provides incorrect information to the other prior to the formation of the contract, it is referred to as misrepresentation. The contract may be cancelled, or damages can be claimed if someone enters into the contract based on a misrepresentation and suffers loss as a consequence. A false statement is a fraudulent misrepresentation if the person making it knew it was untrue, didn't believe it was real or didn't check to see whether it was true (1).

Consideration

The term "consideration" is used to describe an incentive given to a party to enter into a contract that is sufficient to make the agreement legally binding. Either the promisee suffers a loss or the other party benefits from the promise. In order to form a valid contract, the consideration must be sufficient; however, it need not be adequate, as can be seen from the case of Chappell & Co Ltd v Nestlé Co Ltd [1960] AC 97 (2).

Undue Influence

It occurs when one individual misuse a position of authority over another. This imbalance of power might void one party's consent if they are unable to freely express their own will. It is common for those who wield excessive power to exploit others who are weaker. A party asserting undue influence may be able to repudiate the contract (3).

Elements of Valid Contract

An offer must be made by one party and accepted by the other side. Respect must be reciprocated (4). The contract's object must be legal, as well as the parties must want to have legal relations. When all of these characteristics are present in a contract, the parties are bound by it and may enforce it against each other (5).

Application

In the scenario described, John and Anita begin discussions about selling John's red car. John must leave the room throughout the course of the discussion in order to sign vital paperwork at the office of his accountant. Before departing, Anita has John sign a paper. Anita was to blame for John's misrepresentation. The paper was a sale contract, and she knew it, but she told John a lie, saying that Anita would have the right of first refusal on the vehicle. In his hurry, John signed the contract without having taken the time to read it first. Upon his return, John learns that the documents he found were a contract for the $10,000 sale of a red car. Since John signed the contract based on Anita's fraudulent declaration, the contract may be terminated.

In order to acquire John's blue car, Claire, who is John's lawyer, approached Claire. Because it was an uncommon model, the car was worth $60,000 on the open market. Claire made an offer of $30,000. Because he didn't want to anger Claire and he needed Claire's help to get out of his present financial issues, John agreed to the amount. Even though the sum Claire paid for the vehicle was less than the car's market worth, the contract was still legal, as it was held by the court in Chappell & Co Ltd v Nestlé Co Ltd., that consideration needs to be adequate and not sufficient. The contract between Claire and John, on the other hand, is not only invalid but also voidable. When John and Claire entered into a fiduciary relationship, it was Claire who benefitted from the contract, while John lost money by selling the car for much lesser consideration. So the element of undue influence will apply, and John's contract may be terminated.

Nigel, a car trader, offers John $30,000 for his green car. John is presented with a 10-page written contract by Nigel. John was unable to comprehend the contract since it had a large number of legal terminology. As a result, he informs Nigel that he must speak with his lawyer. Nigel goes on to say that his offer is only valid until the end of business on the same day that he makes it. John needed $30,000 to pay off a debt, so he agreed to sign the contract. The next day, Nigel notified John that he was terminating the contract in accordance with the terms spelled forth on the document's ninth page. Even if Nigel didn't read the whole contract, he's still bound by it. It was John's responsibility to comprehend and then sign the document. As a result, John cannot take action against Nigel because the contract was legally binding.

Conclusion

According to Anita, John was coerced into signing the contract by making false statements to him. Because of this, John is free to cancel the agreement with Anita to sell his blue car. By virtue of Claire's undue influence, the contract to sell John's red car is voidable and may be revoked by John. John cannot sue Nigel for withdrawing from the contract since the ability to do so was explicitly included in the contract.

References

  1. Chen-Wishart m. Contract Law. [s.l.]: Oxford Univ Press; 2022.

  2. Gooley J, Radan P, Vickovich I. Principles of Australian Contract Law. Sydney: LexisNexis Butterworths; 2021.
  3. Carter J. Good Faith in Contract: Why Australian Law is Incoherent. SSRN Electronic Journal. 2014;.
  4. Taylor R, Taylor D. Contract law. Oxford: Oxford University Press; 2015.
  5. Turner C. Contract law. Abingdon, Oxon: Routledge; 2014.
Cite This Work

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My Assignment Help. (2022). Legal Remedy For The Sale Of Inherited Cars. Retrieved from https://myassignmenthelp.com/free-samples/laws1100-business-law/fraudulent-declaration-file-A1E2498.html.

"Legal Remedy For The Sale Of Inherited Cars." My Assignment Help, 2022, https://myassignmenthelp.com/free-samples/laws1100-business-law/fraudulent-declaration-file-A1E2498.html.

My Assignment Help (2022) Legal Remedy For The Sale Of Inherited Cars [Online]. Available from: https://myassignmenthelp.com/free-samples/laws1100-business-law/fraudulent-declaration-file-A1E2498.html
[Accessed 03 March 2024].

My Assignment Help. 'Legal Remedy For The Sale Of Inherited Cars' (My Assignment Help, 2022) <https://myassignmenthelp.com/free-samples/laws1100-business-law/fraudulent-declaration-file-A1E2498.html> accessed 03 March 2024.

My Assignment Help. Legal Remedy For The Sale Of Inherited Cars [Internet]. My Assignment Help. 2022 [cited 03 March 2024]. Available from: https://myassignmenthelp.com/free-samples/laws1100-business-law/fraudulent-declaration-file-A1E2498.html.

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