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Second year Contract Law Problem question..

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Chanel_2020
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contract law
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Trinculo
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(Original post by Chanel_2020)
Im struggling on this past paper question for contract law and I need serious help..please could someone help with the following question below as it's causing me a lot of stress and worry:

Samantha v Denise

Denise was the owner of a small boutique, ‘PBM’, with offices in Canary Wharf and an enviable list of clients. Still, even though the agency was well known and had two excellent creative teams, Denise was a poor businesswoman and PBM was not doing well financially. She decided, therefore, to sell the agency and let it be known in advertising circles that he was looking for a buyer.

Denise started discussing the sale with twelve different possible buyers, one of whom was her goddaughter, Samantha. Early in the negotiations, she explained that in previous years the turnover had been around £6.7 million per year and the net profit was £800,000 per year. She also stated that she had decided to move to South Korea and would therefore hand over all her existing clients to whoever bought the business.

Eventually, after Denise had spent many months on exhausting negotiations, only Samantha and one other possible purchaser remained interested in pursuing the matter. Denise rang Samantha and told her that although she had decided on no account to sell the business for less than £5 million, she would make a special deal for her as she was her goddaughter and she could have it for £4 million if she made up her mind in two days – otherwise it would be £5 million. Samantha was both pleased and flustered at having to decide so quickly and, as it was a weekend, and she could, therefore, have no access to professional advice. She thought it was too good a chance to miss, however, and rang Denise on the Sunday night to accept her offer to buy at the agreed price. They later signed a formal contract which described the premises and the business, gave the price as £4 million, and included the following clause:

“Clause 69 Entire Agreement
The parties agree that these terms and conditions (together with any other terms and conditions expressly incorporated in the Contract) represent the entire agreement between the parties relating to the sale and purchase of JCS and that no statement or representations made by either party have been relied upon by the other in agreeing to enter into the Contract.”

Denise offered to show Samantha the accounts but Samantha, thinking it would be too embarrassing to give the impression that she did not trust her godmother, declined. The sale was completed and Samantha was very pleased to have her own business, at last. Very soon, however, it became clear that the annual turnover was going to be far less than £6 million and that he would be likely to make a net profit of around £300,000 per year, at the most. To make matters worse, after nine months, Denise opened another agency on the other side of Canary Wharf and her old clients gradually left Samantha for Denise.

In desperation, Samantha had to sell the business and could get no more than £600,000. She can demonstrate, however, that if she had bought for a similar sum another agency in the area, instead of PBM, she would have made a net profit of around £400,000 per annum.

1. What are the causes of actions that might be available to Samantha.
2. Advise Samantha of the likelihood of her success.
This is a question about warranties, representations and exclusion clauses for them. You might want to mention estoppel at the end if you can squeeze it in.

Like anything else, you can CLEO the question. Identify the claim being made (is this about a warranty or a representation - and what were those warranties or representations?), Look for the law - read the statutes and cases. Make your evaluation of it - look at the question at the end - you are being asked to advise Samantha - this means you are acting for her. Liken her case to those that strengthen her position and find differences between those that contradict hers. Then look at an outcome - if she's got nothing - advise her so. If she has a chance explain what her actions can be. It will probably be all about the validity of the clause. Is she barred from estoppel? Finally mention her remedies and alternatives. Did the contract contain a restrictive covenant and how effective that likely that is to be?

Clue - any non-reliance clase is going to have to be UCTA reasonable. This is quite a fast moving area (although some of the commercial practising people here might be able to help on that) and be very careful as a lot of the case law is quite new - less than 5 years, so don't go citing anything from 1867 concerning prized sows or anything without checking the recent law.
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Chanel_2020
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(Original post by Trinculo)
This is a question about warranties, representations and exclusion clauses for them. You might want to mention estoppel at the end if you can squeeze it in.

Like anything else, you can CLEO the question. Identify the claim being made (is this about a warranty or a representation - and what were those warranties or representations?), Look for the law - read the statutes and cases. Make your evaluation of it - look at the question at the end - you are being asked to advise Samantha - this means you are acting for her. Liken her case to those that strengthen her position and find differences between those that contradict hers. Then look at an outcome - if she's got nothing - advise her so. If she has a chance explain what her actions can be. It will probably be all about the validity of the clause. Is she barred from estoppel? Finally mention her remedies and alternatives. Did the contract contain a restrictive covenant and how effective that likely that is to be?

Clue - any non-reliance clase is going to have to be UCTA reasonable. This is quite a fast moving area (although some of the commercial practising people here might be able to help on that) and be very careful as a lot of the case law is quite new - less than 5 years, so don't go citing anything from 1867 concerning prized sows or anything without checking the recent law.
Thank you so much for your reply!

I was a bit confused as to what topics to include..but here's a few I was thinking, please could you
inform me if these are correct:
1. Misrepresentation
2. UCTA
3. Duress
4. Undue Influence
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Trinculo
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(Original post by Chanel_2020)
Thank you so much for your reply!

I was a bit confused as to what topics to include..but here's a few I was thinking, please could you
inform me if these are correct:
1. Misrepresentation
2. UCTA
3. Duress
4. Undue Influence
The first two absolutely.

The second two if you can find argument for them either way then by all means. Look to the rubric of the question, though. Samantha is a god-daughter and clearly an adult business woman with millions of pounds to throw about. That's not the same as a 95 year old parent or an 18 year old direct child. But these are issues for your argument.
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Chanel_2020
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(Original post by Trinculo)
The first two absolutely.

The second two if you can find argument for them either way then by all means. Look to the rubric of the question, though. Samantha is a god-daughter and clearly an adult business woman with millions of pounds to throw about. That's not the same as a 95 year old parent or an 18 year old direct child. But these are issues for your argument.
Realistically, how successful will Samantha be?

Thank you for all your advice too, it's been very helpful
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tinygirl96
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Use your class notes as fodder. You will need to talk about things like warrant, exclusion clauses and representations here. See if you can find some real life examples and facts that can be used as well. Read beyond the lines of the question. Understand what they are looking for. Remember that Samantha is a fully grown adult woman with hopefully a really sound mind and unshakeable mental capacity. When reading the information online make sure to put it into your own words as far as possible.
Good luck. And yes do mention duress and undue influence.
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Trinculo
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(Original post by Chanel_2020)
Realistically, how successful will Samantha be?

Thank you for all your advice too, it's been very helpful
I don't know, I haven't done the specific reading on this for yonks.

Look up a case called First Tower Trustees.
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Chanel_2020
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(Original post by Trinculo)
I don't know, I haven't done the specific reading on this for yonks.

Look up a case called First Tower Trustees.
Thank you once again! I appreciate this so much and I will definitely be looking into that case
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Chanel_2020
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(Original post by tinygirl96)
Use your class notes as fodder. You will need to talk about things like warrant, exclusion clauses and representations here. See if you can find some real life examples and facts that can be used as well. Read beyond the lines of the question. Understand what they are looking for. Remember that Samantha is a fully grown adult woman with hopefully a really sound mind and unshakeable mental capacity. When reading the information online make sure to put it into your own words as far as possible.
Good luck. And yes do mention duress and undue influence.
Thank you so much!
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I wanted to study law next year but this looks so confusing I think I’m gonna struggle lol
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