In this case all of the statement are an oral contract. “It is much harder to tell a term from a representation”. (Business Law and Ethics). Here, all the statement was very weak, and one of the parties had more knowledge, so for the other party it is likely to make representations. All of these representations are false according to Chris and Angela. But may be David can prove that he had reason for believing that all the statement were true.
- The first statement is a negligent misrepresentation. David made a false representation as to a past or existing fact. David did that because he had the intent to induce Chris and Angela to rely upon it. They relied on the representation, without knew it was false. As he is the owner, he is supposed to know the truth. If he can’t, it is a negligent misrepresentation. Otherwise, if David can prove that for him the statement is true, it will be a wholly innocent misrepresentation. This is the burden of proof in non-fraudulent misrepresentation. The authority for a negligent misrepresentation is: (Howard Marine v Ogden ).
- The second statement about the new gas is a liar from David, and it turns to be dangerous for Chris and Angela. The gas central heating system must be replaced, and it will cost £6,000. This statement is a fraudulent misrepresentation; because Chris knew it was a false...