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Business Law Essay

560 words - 3 pages

Cheong and Chow entered into a contract with the seller to buy a pair of breeding African Grey Parrots each. However the parrots did not mate after a month so Cheong and Chow took legal actions against the seller.Issue 1: Whether the statement 'proven breeders' constitutes a term or representation.Law: The main criterion in distinguishing between a term and a representation is whether there was intention to establish contractual liability in respect of the statement.Application: 1. Statement made close to contract It is reasonable to assume that the statement was reiterated prior to the sale of the parrots because $3600 is a princely sum for 2 pairs of parrots so Cheong and Chow ought to have demanded reassurance ...view middle of the document...

The statement can thus be reasoned to be a representation.Conclusion (issue 1): My opinion is that there is a stronger argument that the statement constituted a term. Even if it's a representation, the seller cannot deny responsibility because he had made a wrong statement of fact and there was inducement. Point 4 from issue 1 do not in my opinion undermine inducement because the buyers were simply choosing which pairs they like and did not verify the truth since they had believed the seller.Issue 2: If it's a term, whether it's a condition, warranty or an innominate term.Law: Classification of a term depends on whether its breach goes to the root of the contract.Application: There was a fundamental breach since the parrots were not fit for the purpose for which they were bought -- breeding.Conclusion (issue 2): I therefore feel it is a condition.Issue 3: What are the remedies for the breach of condition? Law: A breach of condition entitles the innocent party to affirm the contract, keep it on foot or discharge the contract in addition to damages claims.Application: Since both buyers and seller have already executed consideration, there are no outstanding obligations owed to either party so Cheong and Chow can only claim for damages.Conclusion (issue 3): I feel they can claim damages for breach of contract. And in the case of misrepresentation, they can get a refund through rescission.Final conclusion: I feel that the statement was a term and there was a breach of contract so Cheong and Chow can claim damages.

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