FLK1 · Multiple-choice practice
FLK1 Contract Law — Question 45
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Samantha decides to purchase a vintage car from Classic Motors Ltd. Before the sale, the salesperson at Classic Motors Ltd. tells Samantha that the car has only 20,000 miles on the odometer and has never been in an accident. The salesperson knew this not to be the case, but was keen to make a sale in order to impress her boss. Relying on these statements, Samantha purchases the car for £25,000. After a few weeks, the car suffers a break down. Samantha takes the car to her mechanic for repair, only to discover that the car has actually travelled 80,000 miles and has been involved in a major accident that was not disclosed. Feeling cheated, Samantha wants to take legal action against Classic Motors Ltd. for misrepresentation. Which of the following best describes the type of misrepresentation Samantha has likely encountered, and the remedies available to her?
Answer and explanation
Correct answer: A. Fraudulent misrepresentation; Samantha can rescind the contract and claim damages, including damages for any losses caused by the misrepresentation.
Fraudulent misrepresentation; Samantha can rescind the contract and claim damages, including damages for any losses directly caused by the misrepresentation. Feedback: In this scenario, Samantha has likely encountered fraudulent misrepresentation. Fraudulent misrepresentation occurs when a false representation is made knowingly, without belief in its truth, or recklessly as to whether it is true or false, with the intent to deceive. The salesperson at Classic Motors Ltd. provided false information about the car’s mileage and accident history, which Samantha relied upon in making her purchase. As a result of fraudulent misrepresentation, Samantha has the right to rescind the contract, which would nullify the agreement and restore both parties to their pre-contractual positions. Additionally, she can claim damages for any additional losses, for example mechanic’s costs, loss of income etc. Option 2 describes negligent misrepresentation, which involves a false statement made without reasonable grounds for believing its truth. Although damages can be claimed, rescission is generally the main remedy. Here, as the salesperson knew the information to be false, it is not a matter of negligence. Option 3 involves innocent misrepresentation, where the misrepresentation was made without fault; This does not match the facts. Option 4 suggests exemplary damages, which are rare in English law and not typically awarded for misrepresentation. Option 5 again deals with negligent misrepresentation but suggests that rescission may be unavailable if deemed unreasonable by the court. Rescission being the main remedy, this is not correct. Therefore, the correct and most comprehensive answer is that Samantha can rescind the contract and claim damages, including damages for any losses caused by the misrepresentation due to fraudulent misrepresentation.
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