Liability For Negligent Misrepresentation, Duress, And Undue Influence

Undue Influence

Discuss about the Liability for Negligent Misrepresentation.

The present essay aims at understating the law that deals with Undue influence, duress, fraudulent misrepresentation, innocent misrepresentation and negligent misrepresentation. All the laws are very important and must be inlayed before applying the same to the facts of the case studies.

The laws are supported with primary and secondary sources.

The main issue is Whether the Batman is legally bound to honor the contract that is established with Batgirl?

The law dealing with undue influence is applicable.

If any contract is supported by Undue Influence, then, such a contract is voidable in law. When the contract is established amid the parties but there is inequality of power amid the parties, wherein, the dominant party by using his dominant status results in establishing a contract with the weaker party, then the contract is suffering from Undue Influence. Normally when the stronger party uses his dominance and influences the weaker party so that he is ready to enter into a contract with the stronger party, which otherwise he would not have entered, then such contract is based on Undue Influence and is voidable.

Express – When the stronger party acts in such manner according to which the weaker party is deprive from using his will and establishes a contract with the stronger party. For instance, when the weaker party establishes a contract and gifts anything to the stronger party but the act is under some kind of pressure resulting the acts as an unfair act and where there is no independent judgment of the weaker party that is used before establishing any relationship with the stronger party then it is a kind of express Undue Influence and is held in Johnson v Buttress.

Presumed – When the relationship of the dominant and weaker party is based on confidence and trust and the stronger party by using such trust and confidence tries to influence the weaker party so as to establish a contract with the weaker party, then, it is a kind of presumed Undue Influence. This kind of Undue influence takes place in the relationships that are generally of kind, parent and child; solicitor and client; guardian and ward; physician and patient; trustee andcestui que trust; cases of religious influence, etc and is rightly analysed in Royal Bank of Scotland Plc v Etridge (No 2).

Now, it is settled from the facts that Batgirl is the girlfriend of Batman. Batman is totally besotted by Batgirl.  Two friends of Batman, that is, Superman and Captain America, often tell Batman that he needs to be stronger. However, Batman was very vulnerable, especially after a poor relationship with Poison Ivory. Also, Batgirl is aware that Batman was so much in love with her and thus she pushes Batman around and always gets her way.

Express

Thus, the relationship that exists amid Batman and Batgirl is of a presumed influence wherein there is presence of so much love, trust and confidence.

But, this influence is used by Batgirl for her own benefit. This is because when Batman was in trouble and he was in need of $10,000.00 for bail and additional sureties in order to be released on bail, then, at that time, instead of helping Batman, batgirls established a contract with him according to which she made Batman agreed that he will Buy Batgirl a $50,000.00 diamond ring; Fund her weekly massages @ $150.00; and Pay-off her ‘Leather Central’ credit card @ $5,000.00 sitting.

Batman was so much in love with Batgirl and Batgirl was in knowledge of the same used her influence so that the contract can be established. Batman does not want to lose her girlfriend and thus agreed to establish the contract.

Thus, Batgirl has used her dominance over Batman and established a contract with him. So, there is presence of presume Undue Influence.

Since, Batgirl has used her presumed Undue Influence upon Batman to make a contract with him to bring gain to herself and loss to batman, thus, the contract is voidable as is suffered from Undue Influence.

The main concern is whether the Wonder Woman is bound by the contract of buying beer bottles at an inflated price?

As per the applicable law, when one party threatens any party so that the aggrieved party agrees to establish a contract with the defaulter party, then, it is an act of duress. Any contract which is established under duress can be cancelled by the aggrieved party.  In order to establish duress, the main essential are:

There must be some kind of inducement which is extended by the first party upon the second party which have resulted the second party to establish a contract with the first party. The presence of influence may not be the only reason for establishing the contract and is held in Barton v Armstrong

The pressure which is exerted by the first party must not be legitimate in nature and is held in Universe Tankships of Monrovia v Int’l Transport Workers Federation[8]. The pressure must comprises of unconscionable conduct or unlawful threats and is held in Crescendo management Pty Ltd v Westpac Banking Corp[9]. An unconscionable conduct is a conduct which is so harsh that it goes beyond the scope of good conscious.[10]

Presumed

In duress the will of the party is defeated and he has only two options, that is, to make a contract or to face a threat and in order to avoid the threat, the part chooses to make a contract.

Now, The Lasso is the restaurant which is owned by Wonder Woman. Riddler one day walks in and hand over an envelope to Wonder women which says, ”Buy bottles of wine for twice their value each month from a green masked man, or else, a roped restaurant may just be overran.  Therefore, buy as said, or a pretty young woman may lose her head”. 

Now, the letter contains a threatening words that either wonder women enters into a contract or enter into a transaction of buying wine bottles at double the price or the restaurant will be overran and a young women may lose her head.

Thus, there are only two options, either to enter into the act or face the threats.

Thus, this is clearly an act of duress.

Thus, wonder women have every right to cancel the contract.

Since the contract by wonder women is supported by duress, so, the contract can be rescinded by her.

The main concern is whether Spider man can sue Penguin for making negligent misrepresentation?

Normally, when the defendant makes a representation with careless intention and has no reason to believe that the representation made by him is true, then, it is called negligent misrepresentation. Normally when there is no fraud that is incurred by the parties nor there is any collateral contract, then, such representation is called negligent in nature. The concept of negligent representation is rightly held in Hedley Byrne v Heller[11]. In Esso Petroleum Co Ltd v Mardon[12], it was held that when an expert advices some other party and makes a statement then he must use all his care and skill while making any advice, otherwise, held liable for negligent misrepresentation.[13]

Also, the plaintiff has to prove that the representation is made by the defendant and the plaintiff relied on such representation which ultimately resulted in his loss. Also, the defendant has to prove that the statement that is made by him is not of any fact but the same is made with utmost good faith and on the belief that the same is true.[14]

Now, Spider-Man, Iron Man and the Hulk go to a local market to have a look around.

Case study: Batman and Batgirl

Spider-Man comes across a radio transmitter which he intends to buy so that he can listen to talk-back radio whilst swinging between buildings. The radio was his desired size, colour and price. 

Now, he asks penguin whether the radio transmitter picked up both AM and FM frequencies? The Penguin informed Spider-Man that all of their radios pick up both AM and FM frequencies”.

Now, it is submitted that penguin is an expert who is furnishing advice to spider man and knows that spider man is relying on his advice before buying the radio.

So, Penguin must make all efforts o that the representation made by him is true to the best of his knowledge.

But, the radio transmitter only picked up FM frequencies. 

Now, because of the assurance of penguin, Spiede4r man parched the radio but face set back.

Thus, penguin can be held negligent in his actions as he must make all due care before giving any advice to spider man.

Thus, there is clear negligent misrepresentation on the part of penguin.

Since, a negligent misrepresentation is made by penguin, so, spider can sue him for the same.

When a statement is made by one person to another and when the statements that is made by the representor has valid grounds to believe that the stamens that is made by him is true (regardless of the facts whether it was actually true or not), then, it is innocent misrepresentation. The intention of the representor must not to deceive the party who is relying on the statement thereby making the representation an innocent one. The court can grant damages to the aggrieved party in lieu of rescission of contract and is held in Curtis v Chemical Cleaning and Dyeing Co[15].[16]

Now, Iron Man comes across a 1,000 piece jig-saw puzzle which he always wanted to purchase. He asked Bane whether or not all of the 1,000 pieces are there?  Bane informs that they are there. Also, that the box is sealed and has therefore been un-opened.  He further assurances that they themselves make and seal the boxes.

Based on the representation made by Bane, Iron made purchases the jig-saw puzzle but, three of the pieces were double-up’s, thus, the puzzle was unable to be completed due to 3 missing pieces. It appears that 3 pieces were left out by mistake.  But not the same what is desired by iron mad.

Duress

An advice is furnished whether the statement by Cat women to Hulck was fraudulent?

One of the misrepresentations that normally found to exists is fraudulent misrepresentation. A fraudulent misrepresentation is one wherein one party makes a representation to another party and is aware that the statement is made by him is not true and is made in order to deceive the other party. Thus, any contract which is framed on the context of fraudulent misrepresentation results in the cancellation of the contract. The concept of fraudulent representation is rightly observed in Derry v Peek.

As per the facts, Hulck was in need of a large calculator mainly because he can add up all the damage he has caused through his ‘Hulk smashes’ and especially that the normal calculators are too small for these huge hands. Hulck finds the right calculator that he is looking for and he takes the same to Cat women.

Hulck specifically asks that whether the calculator is fine or are there any issues with the same. Cat women submitted that there are no issues with the calculator and that the same is brand new and never been opened. However, Cat women is aware that the calculator two digits, that is, 3 and 7 were not working. Also, that the same was not new and that she herself has re-wrapped to re-sell.

Based upon the assurance of Cat women, Hulck bought the calculator, however, two of the digits, that is, 3 and 7 were not working. 

Thus, the statement was made intentionally by Cat women to deceive Hulck. Ther5e is presence of fraudulent act and thus the statement that was made was a fraudulent misrepresentation.

Hulck has every right to cancel the contract and claim damages as the statement made by cat women was a fraudulent misrepresentation.

Conclusion

It is thus concluded that all the laws are very important an different and must be applied adequate in order to achieve just results.

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Beatson, J,  Andrew S. Burrows and John Cartwright, ‘Anson's Law of Contract’ (Oxford University Press, 2016).

Bryan, M and Vann, V, ‘Equity and Trusts in Australia’ (Cambridge University Press, 08-Oct-2012).

Cartwright, John, ‘Misrepresentation, Mistake and Non-disclosure’ (Sweet & Maxwell, 2012).

Curtis v Chemical Cleaning and Dyeing Co [1951].

Christensen, S. A. and Duncan, W, ‘Sale of Businesses in Australia’ (Federation Press, 2009).

Derry v Peek (1889) 14 App. Cas. 337.

Gillies, Peter ‘Concise Contract Law’ (Federation Press, 1988).

McKendrick , E and Liu, , ‘Contract Law: Australian Edition’ (Palgrave Macmillan, 25-Sep-2015).

O'Donovan, James, ‘Lender Liability’ (Sweet & Maxwell, 2005).

Sadler , Pauline,  ‘Liability for Negligent Misrepresentation in the Finance Industry’ (2009)- Volume 11.

Barton v Armstrong [1976] AC 104.

Crescendo management Pty Ltd v Westpac Banking Corp (1988) 19 NSWLR 40.

Hedley Byrne v Heller [1964] A.C. 465.

Johnson v Buttress (1936) 56 CLR 113 at 126.

Royal Bank of Scotland Plc v Etridge (No 2) [2001].

Universe Tankships of Monrovia v Int’l Transport Workers Federation [1983] 1 AC 366, 400-1.