Topic
Misrepresentation (Will Dale v Bob & Macy)
Instructions
Bob and Marcy have been dating for 6 years. They are looking to buy a boat together that will be able to take them out on the Brisbane River to fish on weekends. Marcy’s Father is a friend of Dale Putz, who owns a boatyard where he sells both new and also second hand boats. Dale is also a qualified boat repairer and manufacturer, with over 30 years’ industry experience and is known to be very knowledgeable in the boat industry.
Bob and Marcy email Dale. They say that they have a $25,000 budget and want a boat that “is either new or has recently been built and not used very much.” They also say that they have been searching for the perfect boat for a while now and have found a few boats that they like that are within their price range, but Marcy’s Father has insisted they visit Dale before they make any sudden purchases.
Dale has not had a very profitable year and is eager to make the sale. He quickly sets up a meeting with Bob and Marcy. He shows them a number of boats including a second hand “Yamaha Speed Runner” that he is selling for just $19,990.
Dale comments: “I know the full history of this boat. The boat has always been very well cared for and maintained and has only ever been used recreationally on local creeks and rivers by a close friend of mine, Martin Dinis, for about a year. It is a 2015 model and so is not very old at all. In fact, this boat will go up in value as it gets older.” Bob and Marcy like the look of the boat but tell Dale they need some time to think about it.
Later that day, Dale sends Bob and Marcy an email stating that they would have to think quickly about the boat as there were other buyers also interested in purchasing such a great deal. Upon reading the email, Bob and Marcy return to Dale, sign the paperwork and purchase Dale’s boat.
2 months later the boat breaks down whilst Bob and Marcy are out fishing on the Brisbane River. Bob and Marcy then take the boat to an independent boat repairer who tells them that the boat has some major problems.
Upon further investigation, Bob and Marcy find out that whilst what Dale had told them was partially true, the boat was also owned previously (before Martin bought it) by someone who had been involved in boat racing competitions and heavy duty water stunt work. Because of this, the boat had significant wear and tear both structurally and mechanically that Dale had had to fix on a number of occasions whilst at his boat yard. Bob and Marcy are also told that the boat is not a 2015 model, but a 2006 model and that the log books on the boat had been falsely documented by a previous owner. Finally, they learn that the boat will not increase in value over time, but is instead likely to decrease significantly in value, each year.
Dale comes to you seeking your professional advice. He does not want to have to give back any money to Bob and Marcy.
Dale tells you that whilst he was actually aware that the boat had been owned by someone prior to Martin, he did not know who had owned it. He also says that he did not know that the log books had been falsely documented and that he honestly believed that the value of the boat would increase over time.
Note: answer this question using appropriate law that has been taught in Contracts 3.
Please use ILAC to provide an ILAC answer to this question.
Answer preview
Misrepresentation refers to a false declaration of fact that is made by one individual to another. Hence, in the instance where a contracting individual was persuaded to enter into the agreement by a falsification, then such a contract becomes voidable. Certain elements of misrepresentation have to be fulfilled before a court can accept that there was misrepresentation on the part of the individual that was making the statement. First, a false representation or statement of fact is made by the representor to the representee. Secondly, such a statement has to be in relation to a past event or existing fact, and such statement should not be statements of future intention. The statement has to be made at the time or prior to the termination of the agreement. Lastly, the false statement is intended to persuade and in fact it does persuade the other party to the contract to enter into an agreement.
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