Submitted to , Effat Sharmin

Lecturer , North South University

Course : Law200

Section : 21

Report

on
A contract entered into as a result of
misrepresentation is voidable.
Group Name : Scales of Justice

Members :

Name ID

Maria Iqbal Diya 1430598030

Asma Sadia 1330440030

Tanvir Ahmed 1530012630

Fahim Mahbub 1612300030

Syed Rafi 1330168030

To,
Effat Sharmin
Lecturer

Department of Law
North south university

September 1st, 2018

………….

Subject: Submission of project on “A contract entered into as a result of

misrepresentation is voidable”

Dear ma’am,

Here is our report paper that we were assigned on the topic as per your request.
The assignment has been completed by the knowledge that we have gathered from
your course and through research.

We have prepared this this by discussing this among our group members and
explaining it as easiest way as possible.

Thanking you.

Yours obediently,

Fahim Mahbub

On behalf of the group : Scales of Justice

 Acknowledgement

I would like to extend thanks to the many people, who so generously contributed to the work
presented in this report.

Special mention goes to my enthusiastic course teacher, Sir. Our classes has been an amazing
experience and we thank him wholeheartedly, not only for his tremendous academic support, but
also for giving us so many wonderful opportunities.

Thanks to all our group mates who worked really hard & contributed in preparing this term
paper. I came to know about so many new things & I am really thankful to them. Secondly I
would also like to thank my parents and friends who helped me a lot in finishing this project
within the limited time frame.
 Executive summery
Business law is very important to conduct a fair flow of business in the world. Our project was
focused on the contract law. Any contract is voidable if there is misrepresentation. To analyze
further details to choose the case Bisset v Wilkinson [1927] AC 177 is a leading contract law
case from New Zealand on the issue of misrepresentation. The claimant purchased a piece of
farm land to use as a sheep farm. He asked the seller how many sheep the land would hold. The
seller had not used it as a sheep farm but estimated that it would carry 2,000 sheep. In reliance of
this statement the claimant purchased the land. The estimate turned out to be wrong and the
claimant brought an action for misrepresentation. So the buyer sue the seller but at the end the
court was in the favor of the seller as the buyer fail to claim the carry of 2,000 sleep was a fact.
Our group has found out that the land was bought only for the purpose of farming sleep. So, the
seller should be very careful while making the estimation of the accommodation. He should have
clearly communicate that he have no idea about the accommodation. Because of his negligence
the plaintiff have faced serious loss. This falls under negligence and the defendant should take
partial damages of the plaintiff. According to our analysis this contract is voidable as this falls
under negligence misrepresentation.
 Introduction

The purpose of doing this project is to have more idea about real life misrepresentation case and
acquire the skill of analyzing the cases. We have chosen Bisset v Wilkinson [1927] AC 177 is a
leading contract law case from New Zealand on the issue of misrepresentation and conduct our
project on this case

Define Law

1. A body of rules of conduct of binding legal force and effect, prescribed, recognized, and
enforced by controlling authority.

2. In U.S. law, the word law refers to any rule that if broken subjects a party to criminal
punishment or civil liability. Laws in the United States are made by federal, state, and
local legislatures, judges, the president, state governors, and administrative agencies.

3. The system of rules which a particular Country or community regulating the action of its
members and which it may enforce by the imposition of penalties.

4. A rule defining correct procedure or behavior in a sport.

Independence of Justice:

Equal treatment of Nationation and foreigners. There is in principle no discrimination against

foreigners, but judicial system is show, inefficient and easily accepting of bribes.

The language of Justice:

In ordinary and lower courts, Bengali is the official language, but English may also be used, In
the higher courts, English usually dominates although Bengali is not forbidden.

Recourse to an Interpreter:
The law stipulates that if the witness does not understand the language used by the court, he must
be provided with a translation in a language he understand.

Why it is needed?

The law is important for a society for it serves as a norm of conduct for citizens. It was also
made to provide for proper guidelines and order upon the behavior for all citizens and to sustain
the equity on the three branches of the government. It keeps the society running. Without law
there would be chaos and it would be survival of the fittest and everyman for himself. Not an
ideal lifestyle for most part.

The law is important because it acts as a guideline as to what is accepted in society. Without it
there would be conflicts between social groups and communities. It is pivotal that we follow
them. The law allows for easy adoption to changes that occur in the society.

Laws are rules that bind all people living in a community. Law Protect our general safety, and
ensure our rights as citizens against abuses by other people, by organizations, and by the
government itself. We have laws to help provide for our general safety. These exist at the local,
state and national levels, and include things like:

 Laws about food safety. At the state and local level, health departments have guidelines
that restaurants follow for how to store and prepare food in a healthy manner, so that
diners won’t get sick. At the national level, the Department of Agriculture and other
federal agencies inspect food production plants to be sure that the food that shows up in
your supermarket is safe to eat.

 Speed limits and traffic laws exist so that we drive in a safe manner.

 Licensing for doctors and nurses ensures proper training of the people who look after us,
and who often have our lives in their hands.

We also have laws that protect our rights as citizens, and which include things like:
  Laws that come from the Bill of Rights in the U.S. Constitution, that guarantee our basic
freedoms like freedom of speech, religion, and the press.

 Laws that protect us from discrimination because of our race, gender, age, or because of a
disability.

Legal tips

 Never sign anything that you don’t understand.

 Never sign anything that you don’t agree with.

 Do not promise something that you cannot provide.

 Put your contract in writing.

 Always keep a copy of all documents that you sign

Misrepresentation: when a party induces other party to enter into a contract by using false
statement is called misrepresentation.

3 types of Misrepresentation:

Fraudulent: when a party of a contract knowingly makes a false statement of fact that
induces other party to enter that contract.

Negligent: a statement made by a person with careless and in a position of trust that
another person relies on and is found to be false.

Innocent: a statement made that is false but honestly believed to be true is called innocent
misrepresentation.
In Contract Act 1872, section 18 – “Misrepresentation” means and includes –

The positive assertion, in a manner not warranted by the information of the person
making it, of that which is not true, though he believes it to be true – section 18(1);

Any breach of duty which, without an intent to deceive, gains an advantage to the person
committing it, or anyone claiming under him, by misleading another to his prejudice or to
the prejudice of anyone claiming under him – section 18(2);

Causing, however innocently, a party to an agreement to make a mistake as to the

substance of the thing which is the subject of the agreement – section 18(3).

Section 19 : When consent to an agreement is caused by coercion, fraud or

misrepresentation, the agreement is a contract voidable at the option of the party whose
consent was so caused.

A party to a contract, whose consent was caused by fraud or misrepresentation, may, if he

thinks fit, insist that the contract shall be performed, and that he shall be put in the
position in which he would have been if the representations made had been true.

Exception – If such consent was caused by misrepresentation or by silence, fraudulent

within the meaning of section 17, the contract, nevertheless, is not voidable, if the party
whose consent was so caused had the means of discovering the truth with ordinary
diligence.

Explanation – A fraud or misrepresentation which did not cause the consent to a contract
of the party on whom such fraud was practiced, or to whom such misrepresentation was
made, does not render a contract voidable.

Illustration :
 (a) A, intending to deceive B, falsely represents that five hundred mounds of indigo are made
annually at A’s factory, and thereby includes B to buy the factory. The contract is voidable
at the option of B.

(b) A, by a misrepresentation, leads B erroneously to believe that five hundred mounds of

indigo are made annually at A’s factory. B examines the accounts of the factory, which
show that only four hundred mounds of indigo have been made. After this, B buys the
factory. The contract is not voidable on account of A’s misrepresentation.

(c) A fraudulently informs B that A’s estate is free from encumbrance. B thereupon buys the
estate. The estate is subject to a mortgage. B may either avoid the contract, or may insist
on its being carried out and the mortgage-debt redeemed.

(d) B, having discovered a vein of ore on the estate of A, adopts means to conceal, and does
conceal, the existence of ore from A. through A’s ignorance B is enable to buy the estate
at an under-value. The contract is voidable at the option of A.

Contract : A contract is like a promise between people. It is an understanding, a deal between two
or more people or organizations to do certain things. Each person or organization who agrees to
do something in a contract is called a party.

An agreement, or a contract, says what you and the other person or organization have agreed to
do. It is a written list of the promises you have made. The best form of contract is written on
paper and signed by each party.

Voidable contract : A voidable contract, unlike a void contract, is a valid contract which may be
either affirmed or rejected at the option of one of the parties. At most, one party to the contract is
bound. The unbound party may repudiate (reject) the contract, at which time
the contract becomes void.
 Voidable misrepresentation case

To conduct our project we have choose the case of (Bisset v Wilkinson) which is occurred
in 1927 in new Zealand and tried to closely examine whether the contract of selling is
voidable or not. We will anylase this case further to come up with better solution. The
scenario of the case is described below.

Facts
The defendant in this matter was the purchaser of land in New Zealand which was
purchased by the claimant for the purpose of sheep farming. The appeal, to which this
judgment relates, is on the defendant’s counterclaim. During the purchase process, the
claimant informed the defendant that the land being purchased was capable of sustaining
2000 sheep. However, after the purchase the defendant discovered that this was only
possible if very careful land management was carried out, and that the land as it stood
could not sustain this number of sheep. The defendant therefore sought to rescind the
contract on the basis that the claimant’s statement was a misrepresentation. (Law
Teacher , 2013) The seller want to cancel this contract and wants to get all the money
back as this expectation as well as his business drops because of not accommodation
2000 sleeps.

Problems
There are different conditions need to be consider while analyzing this case. The selling
by profession was not a sleep farmer so he have no idea about the accommodation of the
sleeps he just made an estimation. It was in the knowledge of the both parties that this
land was not used for sleep farming before. Though the purpose of buying that land for
farming a large number of sleep but further in the court Wilkinson claimed that it is never
has been stated that “ I will buy the land if and only if there is 2000 sleeps
accommodation in the land. “ With this statement wlkinson and his lawyer tried to prove
that this leads to misrepresentation of opinion than the fact and with this regard the
contract law goes on the favor of the defendant (seller). The overall phenomena is jot
down. “ Bisset v Wilkinson [1927] AC 177 is a leading contract law case from New
Zealand on the issue of misrepresentation.[1] The case establishes that a mere
misstatement of opinion given fairly cannot amount to a misrepresentation” (Wikipedia
contributors ,2018, April 12) . This statement not allowed the judge to rescinded the
contract and possibly made this contract voidable.

Final decision by the court

So by analyzing all the statement and all the claims of the defendant and plaintiff the
court come under a decision that this contract is not voidable and plaintiff will not get the
refund of land he bought as accommodation of 2000 sleep was an option not a fact that
lead to Wilkinson to win the case.
Point of view

Though the judge Baron Merrivale came into the final conclusion of this case of Bisset
and Wilkinson but still this case leaves some controversial matters to be focused down
further. The genre of the misrepresentation case only to focus on the facts not to the
opinion. While solving the case of misrepresentation contract fact and opinion should be
carefully examine.

Our final opinion. Tough the statement “the accommodation of 2000 sleep” was failed to
proof by plaintiff as a fact this goes to the favor of defendant win the case.

But both parties knew the purpose of buying that land was farming sheep. Land was
bought for business purpose so accommodation of sleeps was a very crucial factor. The
seller should answer that question very carefully. If he don’t know the exact amount of
the accommodation of the sleep he should have mentioned that very clearly. This will
consider as negligence misrepresentation because of the words of the seller caused
serious damage to the buyer. Not fully but partially the seller should bear the loss with the
buyer.
Conclusion

The purpose of doing this project is to have more idea about real life misrepresentation
case and acquire the skill of analyzing the cases. In the conclusion we have learned about
the misrepresentation hope we will be more skillful about business cases in the future
after doing this report

References

Wikipedia contributors. (2018, August 30). Law. In Wikipedia, The Free Encyclopedia. Retrieved
17:36, August 31, 2018, from https://en.wikipedia.org/w/index.php?title=Law&oldid=857170524

Wikipedia contributors. (2018, July 28). Judicial independence. In Wikipedia, The Free
Encyclopedia. Retrieved 17:37, August 31, 2018, from https://en.wikipedia.org/w/index.php?
title=Judicial_independence&oldid=852359846

Wikipedia contributors. (2018, April 12). Bisset v Wilkinson. In Wikipedia, The Free Encyclopedia.
Retrieved 17:48, August 31, 2018, from https://en.wikipedia.org/w/index.php?
title=Bisset_v_Wilkinson&oldid=836049542

DAVIE, A. J. (2018, may). The Venture Capital Adviser Exemption Explained. Retrieved from
https://www.strictlybusinesslawblog.com/

Law Teacher . (2013, November ). Bisset v Wilkinson [1927] AC 177. Retrieved from Law teacher :
https://www.lawteacher.net/cases/bisset-v-wilkinson.php

The Independence of Justice. (2008). Retrieved from uihj: https://www.uihj.com/en/the-independence-

of-justice_1020615.html
Williams, C. (2017, may). Business Law for Entrepreneurs. Retrieved from udemy:
https://www.udemy.com/business-law-for-entrepreneurs/