Question

Business law:

If a sales man lied about a vehicle being one owner, low miles and no prior damage, plus the person he entered into a contract was possibly a minor who has medical issues and did not understand the content of the contract when he paid cash for the car. What kind of damages might be awarded if any? Compensatory, Consequential and nominal?? and why or why not

Answer 1

In the given scenario, the sales man lied about a vehicle being one owner, low miles and no prior damage. This is a fraudulent act and misrepresentation of facts was made to induce the minor to enter into a contract. A minor is a person who has not attended the age of 18. A minor lacks the capacity to make a contract. However, the contract entered by a minor can be either voided or honored. In this case, the contract entered by the minor was purely under false misrepresentation of facts in addition to the fact that the minor did not understand the content of the contract at the time of paying the cash. Hence, the minor has all the rights to void the contract and ask for the damages. The damages thus sought are compensatory damages. Compensatory damages are the money awarded in compensation for the actual economic loss, property damage and/or injury. In this case, there is economic loss for the minor because he/she paid an amount that is not worth the sale; property damage because the car was not in the actual condition as falsely misrepresented and had suffered injury both mentally and physically because the minor had medical issues. Hence, to compensate all of these losses, the sales man should provide compensatory damages to the minor.

Consequential damages does not apply to this situation because it is a kind of special damages that is awarded when one of the parties failed to fulfill the terms of contract (breach of contract). Additionally, nominal damages does not relate to this situation because nominal losses are just a small amount of money awarded to the plaintiff to show that the plaintiff has suffered but not a significant financial loss as mentioned in the scenario.