Terms in this set (159)

Relevant To: ACL s 18 - scope of 'misleading and deceptive conduct', whether rescission was appropriate.

Issue: Did the sale of a licensed restaurant with 128 seats (both facts being true) that did not disclose that it was actually only licensed to seat 84 constitute misleading conduct, and if so, to what, if any, extent was it the cause of the loss/what was the appropriate remedy when the buyer failed to make proper enquiries, and the business ultimately carried on with 128 seats for a substantial time, losing money in the process. Finally, to what extent, if any, was the exclusion clause effective to limiting this statutory duty?

Held: Yes, it was misleading and deceptive conduct - silence can constitute misleading conduct when circumstances give rise to a duty to disclose information, and the mere fact that enquiries COULD have revealed the truth was not sufficient to prevent that duty from existing. As the misleading conduct was one of the factors that induced the purchaser to buy the restaurant, remedies could be awarded to mitigate that loss that stemmed from the purchase - but the restaurant had changed so much (new staff, reduced goodwill, etc.) that rescission would not appropriate, and damages were ordered instead, with the amount and scope remitted to the trial judge. Finally, the exclusion clause was held to be ineffective at ousting the statutory protections - that could only occur if it were considered sufficient evidence that the conduct had not actually been relied on.
Relevant To: Mistake - Common mistake as to quality of a non-fundamental nature is meaningless

Issue: Was an agreement to hire the Great Peace for a minimum of 5 days to rescue the Great Providence void for common mistake due to the ship actually being over 400 miles away, rather than 35?

Held: No, it was not - much like the Eugenia, the additional distance did not render the contract fundamentally different - it could still travel that distance in less than 24 hours. Further, the fact that they did not cancel the contract until finding a closer vessel demonstrated that it was not futile. Analogy was drawn to frustration as well, noting that a mistake could also only occur if the contract was silent on the matter.

Note: Overturned Solle v Butcher, and set out a 5 part test for voiding a contract at common law for common mistake in the UK that has since been at least partly endorsed in Queensland in Australian Estates v Cairns City Council
(i) There must be a common assumption as to the existence of a state of affairs
(ii) There must be no warranty by either party that that state of affairs exists
(iii) The non-existence of the state of affairs must not be attributable to the fault of either party
(iv) The non-existence of the state of affairs must render performance of the contract impossible
(v) The state of affairs may be the existence, or a vital attribute, of the consideration to be provided or circumstances which must subsist if performance of the contractual adventure is to be possible.
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