Question

Question 3.

Explain and discuss the differences between terms and representations. Explain the remedies that a plaintiff can seek for breach of terms, as well as the remedies for establishing misrepresentation at common law.

Answer 1

A term in a contract agreement are any provisions which form and are part of a contract whereas representation is a statement of fact which does not amount to a term of the contract but it is one that the maker of the statement does not guarantee its truth. This gives rise to no contractual obligation but may amount to a tort for example misrepresentation.

The remedies available for a contract breach include:

• Monetary damages. The party who breached the contract can be held responsible for the losses caused by the breach. Both general or expectation damages and consequential damages can result from a breach of a contract. General or expectation damages refer to the loss directly caused by the breach. Consequential damages refer to losses that occurred because of the breach but that were an indirect cause. For example, if you contracted and paid for a machine to be delivered and it never came, the general losses would include the value of the money you paid for the machine. The consequential losses could include the loss of business caused by the fact you did not have the machine you needed to do your work.
• Specific performance. In some cases, the appropriate remedy for a breach of contract is to correct the breach by forcing the breaching party to complete the terms of the agreement. Specific performance is an appropriate remedy in situations where monetary damages could not possibly make the non-breaching party whole for the losses. For example, if there was a contract created for a buyer to purchase a very rare piece of art, the buyer could not simply find the art elsewhere. The only remedy that would help the buyer in this circumstance is for the court to require the sale to go through so the buyer got the unique one-of-a-kind painting that he contracted for.
• Rescission. Rescission allows the non-breaching party to essentially be released from performance obligations. Recession is a remedy for a breach of contract because it makes clear that the party is relieved of his duties due to the failure of the other party to perform.
• Liquidation damages. Sometimes, it is very difficult to determine how much a person was damaged by a breach of contract. To address this problem, some contracts contain liquidated damage clauses. Essentially, these clauses specify that the non-breaching party will be awarded a specific amount of money in the event a breach occurs. These clauses will be upheld as long as they are fair.

The remedies for misrepresentation

Under tort law, when misrepresentation can be found to have caused the victim of it to have incurred some form of appreciable loss, then the victim has the opportunity to pursue legal remedies for their loss from the party who misrepresented the original product or service.

Interestingly, a party accused of misrepresentation under common law can be accused of misrepresentation even if they entered into a contract within good faith, as the standard of the contract implies that it is the responsibility of the misrepresenting party to determine that they are able to enter into the agreement.

In the case of an unintended misrepresentation, which entails specific negligence, it is often more common to pursue remedy under the auspices of statute law, as it shifts the burden of proof to the individual making the misrepresentation, while in tort it falls on the plaintiff to establish that misrepresentation occurred.

The primary and most desired remedies in a case of misrepresentation is typically rescission of the agreement, which, effectively, is an effort by the complainant to remove themselves from a binding agreement that was made due to the misrepresentation.

There are instances where rescission is not possible, mainly in situations where it is impossible to restore a situation to how it was before entering a contract (which can then be used to ascertain if losses have occurred