LAW1108 Contract Law Assessment 2 Resit Brief

Question 1

Having been sacked from his job as a law lecturer for writing humorous exam questions, Lars decides, without any prior experience, that his future lies in running canal tours in a narrowboat. Looking around a boatyard he comes across a boat for sale which is described as “the best boat on the river’,  “ideal for tours”, and “in perfect condition” with “no further work needed”. 

Since Lars has no experience of boats, he asks the owner, Walter Ratt, for further information, and Walter tells him that the boat has been used as a tour boat, has a brand new engine and rudder and that, “…as tour boats are a very good way of making money…” That Lars should be able to make a profit of £5k per month over his operating costs “…all year round”, and Walter boasts that he “never made less than £4K a month with that boat”, mainly because there is no competition on that stretch of the canal.

Walter offers to show Lars his accounts and to let Lars talk to Walter’s bank manager, but Lars decides that this not necessary. However, Lars does go and talk to a couple of ex-colleagues from the University, Julius and Leonard, at the local pub, and they tell him what a good idea it is and that “it can’t fail” to make Lars a good living. Julius specialised in film and media studies, while Leonard is on the staff of the Learning and Teaching Best Practice Development and Delivery Department.

Encouraged in his plans by all this enthusiasm, Lars decides to go ahead and buy the boat, renaming it “New Learning Framework”.  Unfortunately, when Lars takes delivery of the boat in April, he finds that is far from ideal, in that it is very tatty inside, and has been used for living aboard rather than for tours; the engine breaks down constantly and the mechanic says it will never be any good as it is a very old model. 

The rudder is very badly bent and corroded and has to be replaced, there are several bad leaks and finally, having spent another £20K on the repairs and internal changes needed, Lars is only making £500 per month. In July, Lars finds that another company has started up doing canal tours in a brand-new boat only a mile away from his mooring, and discovers that Walter knew about their plans from the day after he first met Lars. He also finds out that Walter never made more than £1500 a month, and much less than that during the winter months.

Using case law and Statute, advise Lars as to what legal remedies, if any, he may have.

Question 2

“Mistake…operates so as to negative or in some cases to nullify consent.”

Bell v Lever Bros [1932] AC 161 at 217