VIETNAM NATIONAL UNIVERSITY, HA NOI
INTERNATIONAL SCHOOL
LEGAL, ETHICAL AND SOCIAL ENVIROMENT OF BUSINESS
Name:
Nguyễn Thu Phương
Student ID:
19071478
Class:
INS2022 02
Hanoi, January 2022
Question 1:
Answer:
Yes, the Grand Cars statement is a fraudulent or negligent misrepresentation, as
they presented incorrect information about the capacity of the lorries
Issue:
The extent of liability, if any, for the misstatements made by Grand Cars during
pre-contractual negotiations on the lease of their giant lorry to Transstars
concerning the lorry's provenance specifications is load capacity.
Rules:
The legal rule related to this issue for the following:
1. If a contract is oral, it is a question of fact if a particular statement forms part
of the contract (Oscar Chess v Williams). If the statement is not a term of the
contract then it may be a mere statement not intended to have legal
consequences. However, if the statement is untrue and has all the elements of
misrepresentation it may be actionable.
2. A misrepresentation is a false statement of fact made during negotiations by
one party that induces another to enter into the contract (Bissett Wilkinson;
Atwood v Small). It is not a term of the contract.
3. Innocent misrepresentation is a false statement of fact made honestly. The
effect is to make the contract voidable. The contract can be rescinded(canceled)
at the option of the innocent/injured party.
4. Rescission ends the contract and cancels all further obligations. Rescission
aims to restore each party to their former positions. However, rescission can be
lost by: a substantial change like the subject matter; affirmation of the contract
(performing acts consistent with acceptance of the contract and all its
terms);
delay in claiming misrepresentation; and s. 320A Fair Trading Act 1999 (Vic)
(that states broadly “misrepresentation may be claimed before or a reasonable
time after a contract is completed or performed”) and several other causes not
relevant to this problem. Damages are not
available for innocent misrepresentation.
1
5. Fraudulent Misrepresentation is a false statement made deliberately to induce
another into the contract. Rescission and damages are available(Derry v Peek)
Application:
Relate the given facts to the law
1. The statement made by Kristen regarding load capacity.
Grand Cars intentionally lied about the load capacity when the Technical
director of Grand Car told the Transtars representative that its lorry's load
capacity is 360 tons. Although Grand Cars argue that it got information about a
load of a lorry from an Expert report published in a professional journal in the
transportation field, the origin technical specification of lorry kept by Grand
Cars provides that it is actual load capacity is 300 tons.
2. The statement made by Transtars regarding the damage caused by
misrepresentation.
Transtar got at the contract to ship a great amount of waste rock from a building
site of a river damp to a cement factory nearby. Transtar chose to hire 5 lorries
based on Grand Cars' information to finish the shipping contract on time.
However, Transtars was unable to complete its shipping contract on time since
the vehicles' real load capacity is only 300 tons, not the 360 tons claimed.
Conclusion:
The outcome of the case: Transtars wins
Grand Cars makes load capacity even though it knows to be untrue, to induce
the other party to lease a vehicle when the other party relies on that
misrepresentation, which would form the basis for a fraudulent
misrepresentation claim. The court would also need to show that Transtar's
relied on misrepresentation and caused them some damage that could not have
its shipping contract finished in time. Thus, in counterfeit damages
misrepresentation cases, the remedy will be some form of monetary damages.
These will be calculated based on the amount of harm or loss experienced by
Transtars.
Question 2:
Answer:
a)
2
No. Selena can not allow the repeat performance of the contract.
According to Article 55 of Consumer Rights Act 2015 about the right to repeat
performance: “The consumer cannot require repeat performance if completing
performance of the service in conformity with the contract is impossible.” That
means Selena repeats the performance of the contract if the goods delivered or
service rendered is not as per the term of contracts. The catering service can not
request a repeat performance, repeat performance is allowed only under the
permission of Selena. In this case, catering offers performance after the end of
the party which is suitable for Selena because she already had planned to move
to the other city for a new job the morning after the party. Thus, Selena can not
allow the repeat performance of contract
b)
Yes. Selena can repudiate the contract and ask for damage.
Based on Article 56 of Consumer Rights Act 2015 about the right to price
reduction: “ A consumer who has that right and the right to require repeat
performance is only entitled to a price reduction in one of these situations—
(a) because of section 55(3)the consumer cannot require repeat performance, or
(b) the consumer has required repeat performance, but the trader is in breach of
the requirement of section 55(2)(a)to do it within a reasonable time and without
significant inconvenience to the consumer.” In addition, buyers or lessees have
right to cancel of contract or repudiate contract as: there are/is fundamental
breach(es) of contract; the party is not innocent party (intentional fault); there
was/were damages or late delivery. In this case, Selena has clearly expressed in
the contract about time performing the contract. The contract has not been
performed as per the contractual agreement due to the buffet being delivered
late, at 10 pm, when the party already ended instead of 6 pm. Therefore, the
consumer has the right to repudiate the contract and claim damages.
Question 3:
Answer:
Issue:
Jessica, Belinda, Matthew, and Tom sued High Heaven for damages. Firstly is to
recover damages for negligently induced nervous shock caused by High Heaven,
they must demonstrate that he or she is sufficiently proximate to the event in
question, in that they must be present at the scene which they allege has caused
3
them to suffer psychiatric damage. The second is to determine the nature and
extent of the duty owed by High Heaven to persons whose actions might cause
psychiatric damage and physical injury.
Rules:
In a negligence case, the plaintiff must show duty, breach, causation, and harm.
When the defendant's conduct creates an unreasonable risk of harm to others, a
duty of due care is owed to all foreseeable plaintiffs; the defendant must act as a
reasonable person to protect foreseeable plaintiffs. Finally, the plaintiff must
prove that they suffered damages.
In all negligence actions, the plaintiff must establish proves for negligence,
which generally is composed of four elements:
1. Duty. The defendant owed a duty of care to the plaintiff.
2. Breach. The defendant breached that duty.
3. Causation. The defendant’s breach caused the plaintiff’s injury.
4. Damages. The plaintiff suffered a legally recognizable injury.
All four elements must be established to succeed on a negligence claim.
Application:
1. Duty of High Heaven:
Here, High Heaven is a big resort that has an amusement park with lots of
entertainment games. Thus, they owe a duty to all customers. They ensure
security in the park; report information on all incidents and maintenance
concerns as well as unsafe or unusual conditions to the supervisor, and stay on
top of all emergencies.
2. Breach of the Duty:
Looking to the possible standard of care, High Heaven breached it by the poor
maintenance by High Heaven, Belinda's cabin and some other cabins had
disconnected from the wheel and fell to the ground, causing her and many other
kids seriously injured. Plaintiff suffered the type of injury by the poor
maintenance. Thus, the court may determine negligence per se applies. But
regardless of the outcome with negligence per se, it will likely be held that High
Heaven breached their duty under the common law negligence standard of care.
4
3. Causation:
The actual cause and proximate cause. Looking first to the actual cause, the
defendant's negligent act of maintenance was the cause in fact for the plaintiff's
injury. But for good maintenance, the plaintiff would not have a psychiatric or
physical injury. Secondly, is the proximate cause. Defendant's act directly
proximately caused the plaintiff's injury because it was foreseeable that cabins
had disconnected from the wheel and fell to the ground, causing Belinda and
many other kids seriously injured. Matthew, the big wheel operator, also got a
nervous shock. Thus, the causation element is satisfied.
4. Damages:
Damages will be clearly established because the plaintiff suffered psychiatric
damage and physical injury as a result of High Heaven negligence. Thus, it is
likely that the plaintiff would succeed in his action for negligence against the
High Heaven.
Conclusion:
The High Heaven owner may also be vicariously liable for the negligence of the
maintenance employee because the maintenance employee and the negligence
occurred while acting within the scope of High Heaven owner employment.
Citing Chadwick v British Railways Board ([1967] 1 WLR 912) the duty of
High Heaven owner was confirmed to extend to those who came upon the
‘immediate aftermath of an incident, even if they do not see or hear the incident
with their unaided senses. Thus, Jessica and Matthew likely succeed in this
direct negligence claim against the owner due to Jessica and Matthew
demonstrating that they are sufficiently proximate to the event in question, in
that they must be present at the scene which they allege has caused them to
suffer psychiatric damage. About Tom, a guy sitting on one of the cabins tried to
rescue the injured kids, although he did not suffer any physical injury, he was a
participant in the event, and feared that kids would suffer some sort of personal
injuries. According to Page v Smith [1996] AC 155, Belinda would suffer some
physical injury as a result of High Heaven’s negligence and claim damages for
personal injury caused by the negligence of her is succeed. Therefore, the proper
outcome, in this case, is that High Heaven will be punished and pay a large fine
for their careless behavior in the park.
Question 4:
5
Answer:
A shareholder is an individual or entity that owns the shares of a corporation.
Although shareholders have no responsibility for the daily management of the
corporation, they are ultimately responsible for the following:
• Choosing the board of directors, electing directors, removing directors,
held at least annually. Under state corporate law, shareholders generally
have the right to elect directors. For many years, it was normal practice
for directors to be elected by a plurality of shareholders who could either
vote for or against the director candidates nominated by the board.
Director nominees have received the approval of a ‘majority of the votes
cast and require a director who has not received a majority of the votes
cast to resign. Shareholders can also nominate their director candidates
either before or at the annual general meeting. In the absence of a
contested election, the candidates chosen by the board are automatically
elected, regardless of whether a majority of shareholders vote for them.
• Bringing their ideas up for a shareholder vote if they wish to amend a
corporate policy. They accomplish this by submitting a shareholder
proposal to the board of directors and requesting that the proposal be
included in the proxy materials issued to all shareholders before meetings.
For example, approving or disapproving revisions to the corporation's
certificate of incorporation (which requires prior board approval) or bylaws. Approving or disapproving major changes to the corporation that
are not made in the ordinary course of business, such as mergers,
dissolution, mandatory share exchanges, or disposition of practically all of
the corporation's assets.
• Authorising the issuing of further shares by the corporation in the future
Following shareholder authorization, the board has the authority to decide
when and how many shares to issue at any moment. Under state law, a
corporation may issue classes of stock with different voting rights, limited
voting rights, and even no voting rights, if the rights are described in the
corporation’s certificate of incorporation. However, if a corporation issues
a class of non-voting common stock, it must have an outstanding class of
common shares with full voting rights. Generally, all shareholders, at the
record date set by the board, may participate in the corporation’s general
meeting and are entitled to vote in person or by proxy. A proxy
appointment can be made in the paper, over the phone, or online. Unless
6
the certificate of incorporation states otherwise, shareholders can act by
written approval without holding a meeting.
• The shareholder can also request the director to call a general meeting the
Board of Directors shall call the General Meeting of Shareholders,
whether Annual or Extraordinary, whenever it deems it to be in the
interest of the Company. The Board of Directors shall also call the
General Meeting of Shareholders, whether Annual or Extraordinary, upon
the request of shareholders holding at least three percent of the share
capital, who must state in their request the business to be transacted at the
General Meeting of Shareholders. For such cases, the General Meeting of
Shareholders must be called to be held within the term provided by the
applicable regulations. The Board of Directors shall draw up the agenda
including necessarily all matters stated in the request.
7
References
1. Frank B. Cross & Roger Leroy Miller (2015), The legal enviroment of
business, Cengage Learning
2. Legislaton.gov.uk (2016), Consumer Rights Act 2015, [online] Available at :
https://www.legislation.gov.uk/ukpga/2015/15/section/55,
[ Accessed 4.January. 2022]
8