ASSIGNMENT INSTRUCTION: CASE STUDY – CONTRACT LAW

The University of

School of Business

BBA Programs

Business Law- assignment

                                      2nd Semester 2006/2007

 

 

John, a newsagent, wishes to sell his business which includes the goodwill and the lease of the business premises. In January 2005 he enters into negotiations with Peter who has just arrived in Hong Kong with his life savings. John tells him that the profits over the last 5 years have averaged M per annum. John offers to allow Peter to inspect the annual accounts, but Peter declines to do this. The negotiations go on for a further 3 months, during which time the business has diminished to such an extent that it is likely that the profit for the year will be approximately 0,000. On the 1 May 2005 John states that, in his opinion, the business has an extremely profitable future. On the 1 June 2005 Peter enters into a contract with John whereby the business, including the goodwill and the lease of the premises, are transferred to Peter for M. Peter buys a flat in the neighbourhood for M, and pays the first month’s rent and rates of ,000 on the business premises. On the 14 June 2005 Peter realizes the true state of affairs. He also discovers that the average profit for the previous 5 years was only M per annum.

 

(a)    Has Peter a remedy:

(i)                 for a breach of contract;

(ii)               for misrepresentation?

 

(b)   Assuming Peter can establish either a breach or a misrepresentation, what would be the likely remedy?

 

 

Remark:

The assignment must be type-written, not more than 2,000 words.

Date of distribution: 2 April 2007 (Mon)

Deadline: 11 May 2007 (Fri) 5:00pm.

Place of submission: Assignment box no. 30, 7/F MW

 

 

Credit:ivythesis.typepad.com