STUDENT ASSESSMENT SUBMISSION AND DECLARATION

When submitting evidence for assessment, each student must sign a declaration confirming that the work

is their own.

Student name & number: Assessor name:

(V) Dinh Phuong Linh (E) F10-028 Mrs. Doti Chee

Issue date: 19th November Submission date: 2nd January Submitted on:

2018 2019

Programme: Pearson BTEC Level 5 Higher National Diploma in Business (Accounting)

Unit: Unit 7: Business Law

Assignment number and title:

BL2: Legal Solutions (2 of 2)

Plagiarism

Plagiarism is a particular form of cheating. Plagiarism must be avoided at all costs and students who

break the rules, however innocently, may be penalised. It is your responsibility to ensure that you

understand correct referencing practices. As a university level student, you are expected to use
appropriate references throughout and keep carefully detailed notes of all your sources of materials for

material you have used in your work, including any material downloaded from the Internet. Please

consult the relevant unit lecturer or your course tutor if you need any further advice.
Section 1:

I. Different types of business organization

1. Sole trader:

According to ACCA (2015), a sole trader is an small enterprise owned and operated by

one person. Besides, they can hire 1 or 2 more people to help with the work. For that

reason, they are the ones who are responsible for the company's debts.

2. Partnership:

Partnership is an enterprise created between agreements of more than 2 individuals to

jointly run a business and they have to share things related to company such as debts,

salaries. Moreover, this company is managed by a partnership agreement (Johnny,

2017).

3. Private limited company:

According to Small Business (2015), private limited company has one owner and can

be maximum to 50 shareholders to control the company.

Private limited company is a company bring economical benefit to the shareholders.

Owners only need to be responsible for the money they invest in the company (Gomez,

2016).

II. Legal structure and characteristics of various type

(Source: Williams, 2017)

Types of business Legal structure Characteristics

organization

Sole trader One person owned The owner has to

the business. For has all the

example: responsibilties for

barbershop. the debts when the

Taxes of this type company has

business will base problems.

on the PIT The aim of the

(personal income owner is to bring

tax) and have to profits to business.

pay self-assesment The owner has fully

tax return every right to manage the

year. company.

Unlimited liability

and this business

has to record all the

business activities.

Owner of sole

trader also must to

provide financial

activities when
 generate the

company.

Partnership Have more than 2 People who invest in

person to control company has the

the company. responsibilities for

The company’s company’s debts.

capital can be Each partner has the

raised by existed equal rights to

partner and also control and make

people who invest decision within the

in the company can business.

become a partner. The profit will be

Unlimited liability. divided for each

Every parner of the partner.

comany will have

to pay tax base on

the personal

income tax

individually.

Private limited One owner and can Private limited

company have many company has limited

liability so that
shareholder (up to shareholders do not

50 members). have to sell their

The company can asset to pay for

raise money invest company loss

from the because investing in

employees, their the company has

family or personal already become a

money. Moreover, risk for them.

they can raise The profit of

invest from outside company will be

investors. divided base on the

Limited liability. people who invest

This business will the most capital for

pay tax base on company.

CIT (corporate Board of directors

income tax) and have responsibility

they have to submit to control all

the tax decleration company’s

to the government. activities. Besides

that, the shareholder

do not participate

direclty the

operation of the
 comany. The

purpose of

shareholder is to

increase the asset,

capital shares and

they have

responsibile for

increase of decrease

the number of

director in case the

director do not gain

the requirement of

work.

III. Formation and evaluation of various type

(Source: Nguyen, 2016)

Type of business Formation Advantages Disadvantages

organization
Sole trader When establishing The owner has The owner’s

the sole trader, the fully power capacity to raise

owner of company control and easier their own capital is

must to choose and to make any restricted.

register the name decision for A sole proprietor

which different his/her own have to take all the

from other business. risk such as debts or

organizations. Do not need to pay become

The comany also corporate tax. bankcruptcy if the

need to have the Less costs to run company has

permission and this type of problems whether it

paper license which business. happens because of

important to run a employees.

bussiness from the

government.

Partnership Same as the sole It is easy to sharre Every partner will

trader, before their have to pay

started they need to responsibilites personal income

have the name for with each other tax so that if who

company with all They can divide earns more money

the paper license their work to gain than others they

 under the the best have to pay more

permission of performance. tax individually.

government. There will be

conflict and

disagreements

between partners in

making any

decision or

generate the

company.

Private limited They need to Easy to raise The shareholder is

company register the capital and expand restricted

company name and the business. (maximum 50

have a full copy of They can reduce members).

the names of its personal income It is difficult to run

members as well as tax and other a large company.

its shares. income taxes that It will be costly and

It is important to related to business take time to be

have the operation through succeed.

application for the approval of

registration with Government.

Memorandom and

the Article of
 Association. After

that is done and

already accepted by

the Government,

this type of

company will

receive all the

important

document related to

company.

Evaluation:

 Sole trader:

As for sole proprietorship, there are some advantages that mentioned above. The owner of

sole trader does not need to spent too much money to start up their business and it can help

them in cost saving.

The sole proprietor has fully power to control their own business and simple to set up but it

also can be the drawback. When the problem occurs with the company, the owner has to pay

and responsible for all the debts and the employees or members in company do not have the

responsibility to share the debts with.

As a result, although this type of business brings the benefits but it is only suitable for who

wants to start a small business. Although the company’s owner will enjoy the full benefits of

the company as profit and total management, they will face many problems not only in

operation and financial issues. Moreover, it is hard to look for angel investors to expanding

their business because the outside investors are not usually investing in sole trader.

 Partnership:

About the advantages of running partnership company, the partner of company easily can share

their responsibility. In more details, they know what position they are good at so it can be

easier to control the company and divided the tasks. Before making any decision regarding the

company, they can ask each other for opinions and based on that help the company make the

best decision.

By contrast, to form partnership company they will have to face with problems such as paying

taxes. Although each partner of the company has to pay personal income tax individually but

as mentioned above if one of them earns more money than the other, that person will have to

pay more tax.

So, in my point of view, this type of business is suitable for both small business and medium

business. When decided to establish this type of company, both of those businesses can be

applied because of its limited members in company (up to 50 members) from that the owner

can control and manage the company easily.

 Private limited company:

 Same as two of those businesses, private limited company has several benefits for their

business. If the taxation is one of the drawback of partnership company, then in this type of

business turns to the advantage. They can reduce personal income taxes and other taxes

associated with operating businesses that are legal by the Government. Besides that, private

limited companies can have a lot of shareholders, they will not have any trouble contributing

capital to invest in the company together.

On the other hand, this type of business also has some disadvantages. Private limited company

is not as small as a sole trader or has a normal size as a partnership, they must determine that

they will spend a lot of capital to invest before gaining profit because they cannot know what

problems can occur during the operation of company. Moreover, whoever owns the company

have to rely on shareholder’s decision or opinion before having officially decision for the

company.

From going through those information about the private limited company, this type of business

is just only suitable for who wants to establish a large company. Because it will be difficult to

run and it will be costly and take many time to be succeed. But if they can generate the company

successfully, this type of business will bring a lot of profit and reduce many taxes for the

owners as well as members in company.

Section 2: Explain the management of the company and how business organizations raise

capital and funds

1. Explain the management of the company:

a. Sole Trader
According to Howell (2018), the responsibility of the owner is important due to some main

reasons. A sole proprietor is responsible for managing all matters of the company from making

decisions as well as profits and debts. Besides that, he/she also has a mission to training employees.

b. Partnership

Each partner in company has the equal rights and responsibilities to control and make decisions in

company’s operation. So that, they will jointly make decision for the benefit of the company and

will agree on a final decision under their authority (Business Law, 2018).

Private Limited Company

 Appointment of Director

According to Scool (2017), board of directors have the responsibile for all the task that related to

the company but under the direction of shareholders. In more details, the director have the mission

to run and to expand the company for the better in the present as well as in the future. If they can’t

do it, the shareholders have the rights to fire them.

 Appointment of Secretary

The secretary is under the management of board of directors. They have to follow the director’s

management and complete the tasks they are assigned to help the company generate smoothly

(Scool, 2017).

Moreover, the secretary must be a good communicator, have all the necessary elements in the job

such as financial accounting, tax knowledge, business law to support the director and to help the

company gain the better performance (Bechkham, 2017).

 Appointment of Auditor
Like the secretary, the auditor must have all the knowledge about the work they are doing to help

the company minimize the risks that the company may face. In addition, they must analyze the

issues and support manager as well as director to provide appropriate solutions.

2. Explain the role of shareholders

According to Cyrus (2016), the shareholder plays a very important role for companies, especially

large-scale companies. A shareholder is the person who has the authority to direct the board of the

board. They do not directly involve in the operation of the company, but they have the right to

change the rules in the company if they feel the rules are not necessary or make a new decision in

Annual General Meeting (Collins, 2017).

Besides that, the shareholders have fullfill the rights to provide new of directors if they feel that

director doesn’t have a good performance and not suitable for its position they have the right to

change that person. The shareholders also have responsible for selling asset or company’s capital

based on the vote of each shareholder (Kelly, 2018).

3. How business organization raise fund and capital

a. Sole trader

According to Howell (2018), if the capital of owner’s asset is not enough, a sole proprietor will

raise fund from borrow friends, their family members or bank loan.

b. Partnership

Like sole trader, partnership can raise funds and capital through borrowing friends and family. By

contrast, they can be easier to find for angel investors because angel investors are not usually raise

capital in a sole proprietor (Murray, 2018).

c. Private Limited Company

Base on the important of shareholders, the capital of private limited company mainly come from

shareholder’s asset or their friends and family and also from angel investors (Williams, 2018).

In addition, they can raise fund and capital by borrow money from the bank. The company must

have sufficient financial proof of the company as well as the license related to the activities of the

enterprise to be able to borrow bank loans when necessary and avoid bad debt (Horton, 2018).

Section 3: Explain case

1. Case 1

A. Case Summary

Duc Huy is the owner of HT Equipment Company. At that time, Duc Huy is offer to Vina Cafe 10

coffee machines with 500 millions in total but Vina Cafe did not agree with that offer and they

provide the lower price to Duc Huy which Duc Huy did not agree and he refused to sell all of that

machines. Then, Vina Cafe came back and agreed with the first offer that Duc Huy already gave

but Duc Huy still refused. As a result, Vina Cafe sued Duc Huy to the court.

B. Arguement

 Claimant’s arguement (Vina Cafe): Duc Huy did not keep his word to sell the machine

for me so i sued him for his unacceptable action. I already accepted his first offer but he

still tried to refuse it.

 Defendant (Duc Huy): That is not my fault when I refuse the price that Vina Cafe provided

for me which lower than my first offer. Moreover, they don’t have the right to force me

accept they new offer even though they gave me the new price which is higher than the

first price they provided. However, Vina Cafe cannot sue me for not accepting their offer.

C. Rules
  Counter offer rule: When the first offer that the offeror provide for the offeree which is

rejected by the offeree or the offeree making the new deal, then the first offer can be

rejected no matter what happens (Lawteacher, 2018).

 The mirror image rule: is considered a legal contract when and only if there is an

agreement between the two parties with the offer that has been made before without any

change (4lawschool.com, 2018).

D. Court Decision

In any situation of this case, Duc Huy can reject Vina Cafe. Although Vina Cafe based on the

mirror image rule that they said they already accepted the first offer of Duc Huy but they missed

the point that the mirror image rule can be applied when there is no change in a deal. So in this

case, Vina Cafe has provided a new offer for Duc Huy which Duc Huy did not accept and it is

known as a change in negotiation so the counter offer rule is activated. Vina Cafe already refused

Duc Huy’s first offer and try to make a new offer so it can be clearly seen that the first offer is

rejected. As a result, Duc Huy has the right to reject Vina Cafe and did not have to sell any machine

for Vina Cafe. This case refers to Hyde v Wrench, 1840, in appendix A.

2. Case 2A

A. Case Summary

Quang Hai is a boy 15 years old at that time and he played a bet game and a betting center which

is legal place. As a result, he won and he should have gained the winning money but the betting

center found out that he was just a minor so they refused to pay him. Quang Hai did not accept

with that decision so he decided to take betting center to the court.

B. Arguement
  Claimant (Quang Hai): The betting center is making the wrong action when they did not

give me the winning money. I was the winner so I have the right to gain that money. They

cannot do this to me.

 Defendant (Betting center): The reason why we did not give the winning money for

Quang Hai is because he is just a teenager. He is only 15 years old and he is not able to

join this betting game.

C. Rules

 Void contract: According to Kenton (2018), a void contract cannot be applied by any

party. This contract is not consider to be formed when it is have a solution before the law.

As a result, a contract will be turned to a void contract when one of the parties try to request

to perform illegal action.

 Infant act: To have enough the condition to play this betting game, the player have to be

at least 21 years old (Kenton, 2018).

D. Court Decision

The betting center do not have to pay the winning money for Quang Hai. Based on the infant act,

Quang Hai is just a minor and clearly he does not have enough condition to join this game.

Moreover, this is considered as an illegal contract so the betting center do not have the responsible

for Quang Hai’s action. This case refers to Leslie Ltd v Sheill, 1914, in appendix B.

2. Case 2B

A. Case Summary

Quang Hai through a new paper hearing the working of Vingroup is good and made a call to a

stockbroker of Vingroup and decided to pay 500 shares from them. But at that moment, he found
out the shares has fallen and he refused to buy because he was lack of capacity. So, Vingroup’s

stockbroker decided to sue Quang Hai to the court.

B. Arguement

 Claimant (Vingroup’s stockbroker): You already said that you buy our shares but you

did not keep your words so it is seriously affected to our business so you have to responsible

for it.

 Defendant (Quang Hai): You have to reminder that I’m just a minor and I don’t have the

personal income yet so I cannot afford to pay that share. You cannot sue me and bring me

to the court.

C. Rules

 Voidable contract: is considered a valid contract to the court between the parties. But it

can be disabled by one of the parties for legitimate reasons (Kenton, 2018).

 Rule of necessaries: When the supplier decided to provide the product or goods for a

minor, they have to make sure that it suitable for a minor’s conditions because a minor do

not have the personal income yet to fully take care for his/her lives (USLegal, 2018).

D. Court Decision

Quang Hai do not have to responsible for the payment for Vingroup’s stockbroker. Based on the

voidable contract, he is just a minor so he can totally reject the contract between him and

stockbroker (this case refers to Steinberg v Scala, 1923, in appendix B). Moreover, he cannot

afford to pay that stocks because he does not have enough condition to take care of his life and he

does not have the personal income yet. He is still a teenager and still have a life under the parents

obey. This case refers to Nash v Inman, 1908, in appendix B.

3. Case 3
 A. Case Summary

When negotiation with supplier, Vinacafe was emphasized orally that should not have more than

0,5% of excelsa beans. If it was Vinacafe will not bother about the price, and supplier ensure that

has none excels beans. However, the supplied was bring coffee with 2% excels beans. The contract

did have any requirement

B. Arguement

 Claimant (Vinacafe): I was said that no more than 0,5% execlsa beans, but when I check

that bean, it has 2% excelsa beans, and not same with my required. For that reason, I want

you compensative to me.

 Defendant (Supplier): In this situation, I do not have any mistake. Because of you were

forgotten write your requirement in contract. For that reason, I do not need pay any

compensative to you.

C. Rules

 Timing: As stated by Bravo (2016), when the time between agreement and sign contract

is too long, it will be seemed the representation.

 Relative expertise: If the representor has good knowledge it can become a term of

contract. By contrast, the representee have more knowledge is can be seemed like

representation (Klein, 2018).

 The important of statement: According to Robert (2018), if the representor can talk

clearly about the important of agreement, it will become term of contract.

D. Court Decision
Vinacafe can have right to reject this contract. First of all, Vinacafe was talk clearly the percent of

excels bean. Besides that, Vinacafe can show the important of quality beans. Finally, based on

expertise, Vinacafe is having more knowledge than supplier, it will become term of contract. For

that reason, Vinacafe do not have any responsibility and they can reject this contract. (case example

Bannerman v White 1861, in Appendix C)

4. Case 4

A. Case Summary

Supplier was supply 50 bags of past crop coffee beans for Vinacafe. However, the supplier was

not talk about the year of 50 bags before have a contract. Besides that, the supplier said that 50

bags crop is current year. Vinacafe found that all the 50 bags are not current year. Moreover,

Vinacafe was forgot to show the important of the year when have a contract.

B. Argument

 Claimant (Vinacafe): when you supply to me the past crop is mean that you was cheated

me. Because of you said that all of bags are current crops. So that, I want to sue you

 Defendant (Supplier): I do not see any mistake here. Because you was not tell me clearly

the important of the year, so I can not to supply true crop. It is not my fault.

C. Rules

 Parole of Evidence: According to Michael (2018), if all requirements were have in

contract by both parties can become a term of contract, it will be seem like representation

when have any oral evidence.

 Timing: As stated by Bravo (2016), when the time between agreement and sign contract

is too long, it will be seem the representation.

  Relative Expertise: If the representor have good knowledge it can become a term of

contract. By contrast, the representee have more knowledge is can be seem like

representation (Klein, 2018).

D. Court decision:

Supplier can reject the contract and do not need compensative to Vinacafe. Because of Vinacafe

does not show the important of crop year in the contract they just talk to the supplier. Besides that,

both of them do not have enough knowledge in this situation. Lastly, depending on timing rule,

the time between sign contract and agreement is too long so it becomes a representation. This case

refers to Routledge vs McKay 1954, in Appendix D.

5. Alternative Dispute Resolution

According to Murray (2018), the ADR including arbitration, mediation and negotiation to tackle

the dispute without making any litigate confliction.

 Arbitration: The third party will listen to both two parties’ argument to have a appropriate

decision. Moreover, both of party can choose non-blinding or binding.

 Mediation: The mediator has the responsible for making a communication with both party.

This is considered as non-blinding.

 Negotiation: Each party can have a lawyer to support them make a decision. Both of the

party will have to talk to each other and together provide a solution and making agreement

between them.

 Litigation: Litigation will happen when there is no agreement between both parties.

Apply to the case

1. Case 1: Instead of bringing each other to the court, they can have a negotiation with each

other and making a new agreement which is suitable for both of them.

2. Case 2: Because there is no agreement between both parties and they still have the conflict

so in this case has to apply the litigation. The judge will base on the rule and the argument

of both party from that the judge can make a fairly decision.

3. Case 3 + 4: The mediation will consider as a best solution for both cases. Base on the

situation the mediator will make a decision to choose the suppliers or Vina Cafe for the

best solution and there is no bias.

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APPENDIX

Case 1: Case example: Hyde v Wrench (1840)

Facts

The defendant, Mr. Wrench, offered to sell the farm he owned to the complainant, Mr. Hyde. He

offered to sell the property for £1,200, but this was declined by Mr. Hyde. The defendant decided

to write to the complainant with another offer; this time to sell the farm to him for £1,000. He

made it clear that this would be his final offer regarding the property. In response, Mr. Hyde offered

£950 for the farm in his letter. This was refused by Mr. Wrench and he confirmed this with the

complainant. Mr. Hyde then agreed to buy the farm for £1,000, which was the sum that had

previously been offered. However, Mr. Wrench refused to sell his farm.

Issues

The complainant brought an action for specific performance, claiming that as Mr. Wrench refused

to sell the farm, this was a breach of contract. The issue in this case was whether there was a valid
contract between the parties and if a counter offer was made in discussions, whether the original

offer would still remain open.

Held

The court dismissed the claims and held that there was no binding contract for the farm between

Mr. Hyde and Mr. Wrench. It was stated that when a counter offer is made, this supersedes and

destroys the original offer. This original offer is no longer available or on the table. In this case,

when Mr. Hyde offered £950, he cancelled the £1,000 offer and could not back track and accept.

B. Case 2a: Case example: Steinberg v Scala Leeds Ltd (1923)

A minor had been allotted shares within a company and had made the payment that related to her

shares. She was then unable to meet the further payments going forward, so she sought to repudiate

the contract and to recover the money she had already paid. She managed to succeed on the first

but not the second.

Case example Nash v Inman (1908) (Contract for necessary for minor enforceable)

Introduction of the case

Nash was a tailor working in Saville Row. Inman was a minor studying at Cambridge University.

Nash sold some cloth on credit to Inman for what was approximately £145. Nash sued to recover

the money, and Inman pleaded infancy.

After hearing evidence, the trial judge held that Inman was actually a minor and that he already

had enough clothing at the time of sale. For this reason, the trial judge found that there was no

evidence that the clothing could possibly be considered to be in the class of necessaries, and

directed the jury to enter judgment in favor of Nash. Inman appealed, claiming that the judge had

decided the issues of fact, instead of letting the jury decide.

Each of the three members of the Court agreed that the trial judge was correct in ordering judgment

to be entered for the defendant, but each gave a separate opinion.

Cozens-Hardy MR

The Infants’ Relief Act, 1874 and the Sale of Goods Act, 1893 set up a situation where minors'

contracts are absolutely void, except those for necessaries. To recover money from a minor's

contract for necessaries, it is not enough to show that the goods were suitable to the infant's

condition in life, one must also show that the minor was not sufficiently supplied at the time. As

no evidence has been introduced to suggest that the goods were necessaries, the trial judge's

decision was correct.

ARGUMENT ON PLAINTIFF. It is not strictly correct to say that a minor contracts for

necessaries. Rather, such an action against a minor is based upon the idea of quantum meruit. The

plaintiff must always make out their case, which means that they must show that the goods were

not only suitable to the minor's condition in life, but also that they were not sufficiently supplied

at the time. The jury should decide issues of fact, but the judge should not put a question to the

jury if there is no evidence upon which they could reasonably find in the affirmative. There is no

such reasonable evidence in this case.

MINORS AGREEMENT. Any contract with a minor is void. A minor may contract for necessaries

at a reasonable price, but it will not be enforceable unless they are necessary to his station in life

and he does not already have enough. If either of these things are disputed, the onus is on the

plaintiff to prove them. The judge must determine whether the goods are capable of being

necessaries as a matter of law, and if they are so capable, let the jury decide whether they are in

fact necessaries. In this case, there was no evidence that the goods were capable of being

necessaries, so the trial judge was correct in not giving the question to the jury for their decision.
B. Case 2b. Leslie Ltd v Sheill (1914) (Minor agreement – void – equitable relief)

FACTS:

Defendant obtained loans from plaintiff by fraudulently misrepresenting that he was of full age at

the time of contract. Defendant sued him to recover the money.

ISSUES:

1) Whether defendants are entitled to equitable restitution against loan given to minor?

2) Whether they could claim restitution either under action for tort arising out of contract, or of

quasi-contractual claim?

HELD:

1) If an infant obtains property or goods by misrepresenting his age, he can be compelled to restore

it so long as the same is traceable in his possession. This is known as equitable doctrine of

restitution.

However, in present case, since the money was spent by the defendant, there was neither any

possibility of tracing it nor any possibility of restoring the thing got by fraud, for if the court will

ask defendant to pay the equivalent sum as that of loan received, it would amount to enforcing a

void contract. Restitution stops when repayment begins and equity does not enforce against minor

any contractual obligation.

2) Infant can’t be held liable for a wrong when the cause of action is ex contract or is so directly

connected with the contract that it would be an indirect way of enforcing the contract. But, if the

wrongful act though connected with the subject matter of the contract, yet is independent of it in

the sense of not being an act contemplated by it, then infant can be liable.
In present case, since an action either on torts or on quasi contractual claim would be tantamount

to enforcing the contract by making defendant liable to pay the damages or restitution, hence, no

such action lies.

QUESTIONS TO PONDER:

Q. An infant, misrepresenting his age, took delivery of furniture, sold it to third party, but refused

to pay for it to the seller. Can seller claim equitable relief against minor?

A. Though in Stocks v. Wilson, [1913] 2 KB 235, this kind of action succeeded for infant was

directed to pay the amount, received by him by sale of furniture, to the original seller. However,

as pointed out by Leslie v. Sheill, this kind of claim would be like enforcing the void contract for

minor can’t be made liable to pay any restitution for damages. Money not being traceable for it

being spent by the minor, no action should lie for restitution in such a case. Equity will only allow

plaintiff to have a cause of action against the third party for tort of conversion since goods are

traceable to the third party.

C. Case 3: Case example: Bannerman v White (1861) 10 CBNS 844

The claimant agreed by contract to purchase some hops to be used for making beer. He asked the

seller if the hops had been treated with sulphur and told him if they had he wouldn't buy them as

he would not be able to use them for making beer if they had. The seller assured him that the hops

had not been treated with sulphur. In fact they had been treated with sulphur.

Held:

The statement that the hops had not been treated with sulphur was a term of the contract rather

than a representation as the claimant had communicated the importance of the term and relied on

the statement. His action for breach of contract was successful.

D. Case 4: Case example: Routledge v Mckay [1954] 1 WLR 615 Court of Appeal
The claimant acquired a Douglas BSA motorcycle and sidecar by exchanging another motorcycle

and paying £30. The registration documents stated that it was a 1942 model and this is what the

defendant stated the year of the motorcycle to be when the claimant came to look at it. The

motorcycle was in fact a 1936 model but had been modified and re-registered by a previous owner.

The purchaser went away to think about it and then returned a few days later a written agreement

was produced to the effect of the exchange which ended with the words "It is understood that when

the £30 is paid over that this transaction is closed".

Held:

The statement was a representation and not a contractual term. The registration document was not

prima facie evidence of a contractual term. Neither party was an expert, nor there a lapse of time

between the making of the statement and entering the contract giving the claimant the opportunity

to check the statement. Furthermore there was no mention of the date in the written agreement and

the words of the agreement stating the transaction is considered closed excluded any possible

collateral warranty.