Contract Law Essay Example | Topics and Well Written Essays - 1000 words - 4

Contract Law - Essay Example Again, Sudbury confirmed that child labour was not used and at the same time stated that their chocolate contained 95% cocoa solids and was â€Å"the best in the world†. These statements have convinced Buywise to enter into a contract with Sadbury, not being aware of the fact that these statements do not correspond to the reality and they are simple lies. Buywise would not have entered into a contract with Sadbury unless it would have been assured by the latter regarding the quality and non-usage of child labor. According to Richards P. (217) â€Å"A misrepresentation may be defined†¦ as a false statement of fact that induces another to enter into a contract.†1 It is obvious that Sadbury has made a false statement regarding its products in order to induce Buywise to enter into a contract with it. Moreover, this statement was practically the reason that convinced Buywise to sign the contract. In the case of Derry v Peek (1880) the House of Lords concluded that â€Å"Fraud is established where it is proved that a false statement is made: (a) knowingly; or (b) without belief in its truth; or (c) recklessly, careless as to whether it be true or false.†2 Therefore, I believe that Sadbury can be held liable for fraudulent misrepresentation Once the fact of fraudulent misrepresentation has been established, Buywise has the right to rescind the contract. The Misrepresentation Act expressly stipulates that â€Å"Where a person has entered into a contract after a misrepresentation has been made to him by another party thereto and as a result thereof he has suffered loss, then, if the person making the misrepresentation would be liable to damages in respect thereof had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that the misrepresentation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up to the time the contract was made the facts represented were true.†3Therefore,