Summary of the constitution: Proposal developed by elders of the tribe includes following points and these points are also incorporated in the constitution of the tribe which directly addresses the different issues faced by tribe:
Hart’s part 3 legal systems- above stated proposal is clearly based on the three rules stated by hart and explanation regarding this is stated below:
Australian legal system and hart’s rule- legal system of Australia recognize all three rules of the hart’s theory that re rule of recognition, rule of change, and rule of adjudication. However, Australian legal also accepts the theory of other experts and use different theories including Hart’s theory to frame their legal system this can be understood through example, Australian legal system incorporate rule of recognition in their legal system and this can be seen at various places such as Parliament has power to frame laws and pass legislation in association with the other authorities.
Whether it is possible for the Berry to challenge the validity of the contract in context of declarations made by the Angelo before entering into the contract?
Rights and obligations of the parties in lieu of contract entered into the parties are resolute with the help of the contract terms. While evaluating the terms of the contract, it is necessary that parties to the contract must consider both pre-contractual terms and post contractual conduct, as these terms can result in both non-contractual rights and obligations. Generally, if any party made false pre-contractual statements will result in breach of section 18 of the Australian Consumer Law.
It can be difficult for the parties to classify those statements either oral or written made by parties before entering into the contract, such as one party induced the another party to purchase the second hand computer by making the statement that such computer originally manufactured in the year 2012. What are the consequences if these statements turn out to be false? Whether these statements can be considered as the terms which give rise to the contractual breach or misrepresentations under which party is able to get both contractual and non-contractual remedies. It must be noted that it is necessary to categorize these terms because it will directly impact the provided remedies. Usually, Pre-contractual statements are classified as terms of contract.
For the purpose of framing the terms of contract it is necessary that parties to the contract must intended to be promissory in nature. For ensuring the intention to create legal relations between the parties, it is important to determine it objectively. Thoughts of the reasonable person in similar situation would consider as the circumstances. This can be understood through case law Ellul and Ellul v Oakes, (1972) 3 SASR 377, Supreme Court of South Australia. In This case, Court adopts the position of Oscar Chess Ltd v Williams and Dick Bentley Products Ltd v Harold Smith (Motors) Ltd in which Lord Denning held:
In case representation is made by one party at the time of negotiations of the contract for inducing the other party of the contract to act on the basis of that representation, and actually induced the other party to act on the same by signing the agreement. It can be considered prima facie evidence for concluding that such representation was intended as warranty under the contract. It is not compulsory to specially speak such term as collateral, and sufficient grounds were present that parties to contract intended to act upon the same.
Pre-contractual misrepresentation provides remedies under both common law and statutory law in regards of Competition and Consumer Act 2010. Section 18 of ACL states that, any person who is engaged in trade or commerce must not take any action which is misleading or deceptive in nature. A misrepresentation is considered as false statement related to fact which is made by one party to another party while it is not considered as the term of the contract but it induce the another party to enter into the contract. Consequences of actionable misrepresentation makes the contract voidable, provide right to the innocent party to cancel the contract, or claim damages. Following are the two characteristics of the misrepresentation:
In the present case, Angelo makes different pre-contractual statements in regards of turnover of the statement, competitors, expenses of the business, and also about crowd. However, after signing the contract Barry found all these statements false. In this case, Angelo breach section 18 of the ACL as he makes different misrepresentation under this scenario, and this can be judge on the basis of two factors:
Materiality- misrepresentation made by party must be material in nature, which means it must induced the reasonable person to enter into the contract. This can be understood through case law Museprime Properties v Adhill Properties [1990] 36 EG 114. In this case, Court stated that any misrepresentation which induce the another party to enter into the contract then such misrepresentation is considered as the material misrepresentation. In the present case, Angelo induces the Barry to enter into the contract on the basis of his misrepresentation. Therefore, misrepresentations made by Angelo are material in nature.
Reliance- misrepresentee must rely on the misrepresentation made by misrepresentator. Barry relies on the misrepresentation made by Angelo.
However, contract between the parties is affected by misrepresentation of facts made by Angelo, because of which contract is not binding.
Conclusion:
In this Angelo made misrepresentation to enter the Barry into the contract of purchase of business, and breach section 18 of the ACL. Therefore, Barry can challenge the validity of the contract.
What possible actions are available to Barry in context of breach of contract?
If any person relied on the misrepresentation made by another party to enter into the contract then such person has right take action under breach of contract, and following are the available actions:
Rescission: Rescission stands for setting aside the contract, and this remedy is available in all the cases of misrepresentation. The main aim of this remedy is to put the parties back in original form, which means in similar form when contract is not made between the parties. The injured party can cancel the contract by providing notice to the representator. However, this remedy is not always available as any act shows repudiation. This can be understood through case law Car & Universal Finance v Caldwell [1965] 1 QB 525.
In case person wants to cancel the contract on the basis of the misrepresentation, then such person takes action frequently at the time person discovered misrepresentation. Right to cancel the contract lost if:
It is not possible to restore the other party in the original position if any person cancels the contract by informing the other party and returning the goods in well condition. If other party wants to accept this notification, then such contract comes to an end. In case other party does not accept the same then they can apply to the Court. However, Court has power to validate the contract of sale even though consumer already cancels the contract Under the Misrepresentation Act 1972.
Damages: Damages are considered as the alternative remedy to rescission and under this party can sue the other party for loss. In this injured party has right to claim for damages in regards of fraudulent misrepresentation under the tort of Deceit. The main objective of this remedy is to restore the victim to the original position. This can be understood through case law Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158. In this case, Court held that the test of remoteness under deceit law is that the injured party can recover all the direct loss bear by the party under the fraudulent misrepresentation, instead of foreseeability.
Court consider different factors for determining whether the statement was misrepresentation and whether person relied on the same or not while entering into the contract, and whether person bear some loss. Seller is not liable to pay damages if he/she proved any of the fact:
In the present case, Angelo made fraudulent misrepresentation to the Barry and Barry relied on the same for the purpose of entering to the contract. In this case, Barry can take action under breach of contract and following actions are available to Barry:
Barry can cancel the contract because contract is based on the fraudulent misrepresentation. However, in this case, Angelo cannot ignore this remedy because he knows that statement made by him is fraudulent. Barry can set aside the contract because he acted in fair manner and does not aware about the misrepresentation.
Barry can also claim for damages and sue the Angelo for fraudulent statement made by him to induce the Barry to enter into the contract.
As stated, Court consider different factors for determining whether the statement was misrepresentation and whether person relied on the same or not while entering into the contract, and whether person bear some loss. In this all these factors are present as statement made by Angelo are false and Barry relied on this statement. However, Angelo is also liable to pay damages because he fails to prove that:
Conclusion:
Barry can choose one of these two options for breach of contract that is rescission and damages.
Website
OCW, Paper 1: An Analysis of Hart’s Theory of Primary and Secondary Rules, < https://ocw.mit.edu/courses/linguistics-and-philosophy/24-235j-philosophy-of-law-spring-2012/assignments/MIT24_235JS12_Hartrules.pdf>, Accessed on 1st May 2018.
Lumb, R, fundamental law and the processes of Constitutional change in Australia, < https://classic.austlii.edu.au/au/journals/FedLawRw/1978/12.pdf>, Accessed on 1st May 2018.
ACL, Terms of contract, < https://www.australiancontractlaw.com/law/scope-terms.html#pre>, Accessed on 1st May 2018.
ACL, Ellul and Ellul v Oakes, (1972) 3 SASR 377, < https://www.australiancontractlaw.com/cases/ellul.html>, accessed on 1st may 2018.
ACL, Misleading or Deceptive conduct, < https://www.australiancontractlaw.com/law/avoidance-misleading.html>, accessed on 1st may 2018.
Law handbook, Misrepresentation, < https://www.lawhandbook.sa.gov.au/ch10s02s10.php>, accessed on 1st May 2018.
Case laws
Ellul and Ellul v Oakes, (1972) 3 SASR 377, Supreme Court of South Australia.
Oscar Chess Ltd v Williams and Dick Bentley Products Ltd v Harold Smith (Motors) Ltd.
Car & Universal Finance v Caldwell [1965] 1 QB 525.
Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158.
Museprime Properties v Adhill Properties [1990] 36 EG 114.
Statute
Competition and Consumer Act 2010.
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