Business Law Presentation

MERCENTILE LAW PRESENTATION DIFFERENCE BETWEEN MISTAKES AND TOPIC:

MISREPRESENTATION

MISREPRESENTATION 1. Misrepresentation is a false statement which the person making honestly believes to be true. It also includes nondisclosure of a facts without any intent to deceive the other party. 2. In simple we can say “False statement but true in the eyes of the provider”.

• EXAMPLE: A, while selling his mare to B , tells him that the mare is sound. A genuinely believes the mare to be sound although he has no sufficient ground for the for the belief. Later on B finds the mare to be unsound. The representation made by A is a Misrepresentation.

Sec. 18 defines ‘misrepresentation’ A. When a person asserts that a fact is true when his information does not warrant it to be so , though he believes it to be true. C. In case of breach of duty by a person which benefits to him by misleading another to his prejudice.

Consequences of Misrepresentation • The aggrieved party can do the following: II. Avoid or rescind (not valid) the contract. III. He can accept the contract in case he shall be present in the original position.

MISTAKE • Mistake may be defined as an erroneous belief about something. • In simple way we can say mistake“False notion of a thing or a fact material to the contract”.

Types of Mistake and submistakes

Bilateral mistakes • Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, is bilateral mistake. In such case, the agreement is void.(Sec. 20) • Two condition have to fulfilled for the application of Sec.20

Unilateral Mistake • When in a contract only one of the parties is mistaken regarding the subject-matter or in expressing or understanding the terms or the legal effect of the agreement, the mistake is a unilateral mistake . • A unilateral mistake is not allowed as a defense in avoiding a contract unless the mistake is brought about by the other party’s fraud or misrepresentation