Issue: I am giving up my business because I am leaving Singapore to study

fashion overseas. Financially, the MCQ line is doing all right but I leave everything
about numbers to my accountant. I am an artist, you know. The accounts are
terribly dull.
Is that statement a term of the contract, or a misrepresentation?
Rules:
According to Ansons law of contract, there is a range of factors taken into account
by the court whether or not a statement has been incorporated into a contract.
First, [the courts] may have regard to the time elapsed between the time of making
the statement and the final manifestation of agreement; if the interval is a long one,
this points to a representation. Secondly, they may consider the importance of the
statement in the minds of the parties; a statement which is important is likely to be
classed as a term of the contract. Thirdly, if the statement was followed by the
execution of a formal contract in writing, it is more likely to be regarded as a
representation where it is not incorporated in the written document. Finally, where
the maker of the statement is, vis--vis the other party, in a better position to
ascertain the accuracy of the statement or has the primary responsibility for doing
this, the Courts will tend to regard it as a contractual term.
Application of rules:
The statement above is likely to be a representation than a term for a few reasons.
First, the time elapsed between the time of making the statement and the final
manifestation of agreement can be seen as short because after the negotiation on
20 September, there were no subsequent negotiation and the contract was signed.
Also, during the execution of the contract, there is no mention of the accounts,
therefore the statement is likely to be a representation. Last, there is no special
knowledge by MCQ about the accounts of the company, because he has already
given a disclaimer that he leave everything about numbers to my accountant, and
hence is more likely to be a representation.
Nonetheless, the statement was able to induce X to contract with MCQ because it
was one of the vital things which a reasonable person will look out for when
purchasing another business- the financial accounts. Thus, when MCQ statements
were discovered to be untrue since the business actually owed its suppliers a total
sum of $25000, it should amount to a fraudulent, negligent or innocent
misrepresentation.
MCQ has no duty to disclose, but if he did, he must do so honestly.
Conclusion:

Whether it is fraudulent, negligent or innocent misrepresentation, it is up to the

courts to ascertain through a fact-finding process. Honesty of the statement must
be determined. It must be determined if MCQ made the statement in good faith.
Our group think that it is unlikely to be fraudulent misrepresentation because there
is no evidence that MCQ knew that the misrepresentation is false. It is more likely to
be a negligent misrepresentation because MCQ ought to have known that the
accounts of his own company, and the misrepresentation was made without
reasonable beliefs by MCQ. X is likely to succeed under an action for
misrepresentation.
Issue: I have 2 employees, Kim and Miley. Kim was naughty when younger and
has been in trouble with the law(winking)By the way I support the Yellow Ribbon
project and all that kind of stuff and adds:and Miley is a single mother of a
young childI try to do what I can for disadvantaged persons.
Is this statement a term of the contract or a misrepresentation?
Rules: The same rules above apply whether a statement is a term of the contract,
or a misrepresentation.
Application of law:
According to the facts, X decides to enter into a contract with MCQ because of the
fact that MCQ has thought about hiring disadvantaged persons. We can infer from
the facts that X has been induced by MCQ to enter into the contract because but for
MCQs representation, X would not have entered into the contract as stated above.
The degree of misrepresentation will also be determined by the facts, whether MCQ
honestly knew about his misstatements. It can be proven that MCQ knew that
misstatement with respect to Miley since it can be proven that MCQ was at her
wedding. Besides, he should have also known about Kims criminal records(or nonexistent one) because it is common practice in Singapore that employers find out
about their employees past criminal records. When MCQ mentioned about the
yellow ribbon project, which is a project to help rehabilitate ex-convicts, he was
impliedly representing Kim was a convicted criminal to X, knowing that this was not
true. In Derry v Peek, the court defined fraudulent misrepresentation.
Conclusion:
It is thus proven from the facts that MCQ fraudulently misrepresented certain facts
which induced X to enter into the contract. X can thus rescind the contract and
claim damages for possible loss of profits under tort.
Issue: There is a statement in the sale contract that The seller is not liable in any
way for any inaccurate statements made to the Buyer. Can this statement exempt
MCQ for his misrepresentation?

Rules:
1. S3(1) of the Misrepresentation Act states that If a contract contains a term
which would exclude or restrict any liability to which a party to a contract
may be subject by reason of any misrepresentation made by him before the
contract was made; that term shall be of no effect except in so far as it
satisfies the requirement of reasonableness as stated in section 11(1) of the
Unfair Contract Terms Act (Cap. 396)
2. Contra Proferentem Rule: Where the exclusion clause is vague or ambiguous,
the exclusion will be construed against the party attempting to rely on it.
Application of rules:
The statement that exempt MCQ for his misrepresentation is unreasonable in this
situation. It is unreasonable for the courts to allow MCQ to rely on the clause to
exempt himself, when he intentionally deceived X and induced X with malicious
intent. Therefore, according to S3(1) of the Misrepresentation Act, the exclusion
clause will not exempt MCQ.
Furthermore, the exclusion clause does not cover any specific liabilities, and is
considered to be vague. Therefore, as per the contra proferentem rule, the
exclusion clause should be construed against the party seeking to rely on it which is
MCQ. Thus, the exclusion clause will not exempt MCQ from his misrepresentations.
Also, given that the exclusion clause is in the footnote, it can be argued that it is an
onerous term and insufficient notice has been given to X, and that the term is not
incorporated into the contract.
Conclusion:
MCQ is unlikely to rely on the exclusion clause in his defence, and X is likely to
succeed in his action against MCQ for misrepresentation.