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BULAW 1502 Fundamentals of Law

Published : 24-Sep,2021  |  Views : 10


Gordon advertised his car for sale. Mary inspected the car and declared her desire to purchase it. Gordon was happy with that but when she said she wanted to take it now but would pay him next week, Gordon explained he could not let her have the car until she provided the money. Mary’s response was as follows: “Oh, but I am Joan Bennett, the new Lord Mayor for Melbourne. Don’t you recognise me?” Gordon knew there had been discussion in the paper of the election of a woman Mayor (for the first time) but remembered no details, including the person’s name. He felt so foolish that he let her take the car. When he did not hear from Mary, she used the phone number she gave him, only to find it did not exist. He also discovers (of course) that Mary is not Joan Bennett.  

Gordon found the car when looking at the classified advertisements section of the newspaper but when he contacted the seller, Cheng, Cheng refused to give it back because he had paid cash for it.


Who has a better claim to the car, Cheng or Gordon? Give reasons for your answer.


Due to lack of awareness on contractual matters, many people have ended up losing their hard earned properties and possessions. A contract refers to a voluntary arrangement between two or more parties which is enforceable by law and which is legally binding (Bridge, 2015). For a contract to be formed, there should be an offer, acceptance, consideration and a legal subject matter. If the contract is breached by one of the involved parties, the other party is entitled to claim damages due to a breach of contract. Contracts are binding agreements, and therefore the parties are advised to examine the contract well before accepting it (Andrews, 2015). This assignment investigates a case study involving a car for sale advertised by Gordon while Cheng has already paid cash for it. The task seeks to find out who has a better claim to the car between Cheng and Gordon.

Cheng has a better claim to the car than Gordon. Cheng bought the car from Mary who pretended to be the new lord mayor of Melbourne, and under the contract of sale, the title of the property which in this case is the car passes to the buyer immediately (Lee & Fullerton, 2014). He fully owns the car provided he was a bona fide buyer who was not aware of what Mary did to possess the vehicle. Cheng, therefore, has all the rights to advertise the car with the intention of selling it because he executed his part as the buyer of the car from Mary and that includes paying for the right consideration of the car. In Currie v Misa, it was declared that consideration is the good interest, benefit, profit and even loss given to the promisor by the promise in contract matters (Razman, 2014). Cheng has the legal right to claim the car, unlike Gordon who overlooked the principles implied under the Sale of goods Act.

Gordon who according to many people who are not much conversant with contract issues could argue that he has a better claim to the car. Surprisingly, he does not have a better claim than Cheng because of the following reasons; He agreed to give Mary the car although he did not know her she convinced him that she was the new lord mayor of Melbourne and that she was going to pay later. Gordon believed her because he had seen a discussion in the paper that Melbourne had elected a woman as the incoming Mayor (Frey, 2015). Through fraudulent misrepresentation, Mary obtained the ownership of the car, and she sold it to a bona fide buyer who in this case happens to be Cheng. Mary gained the title of the car immediately Gordon agreed to sell it on credit (Razman, 2014). Having paid for the car before its sale to Mary gives Cheng a better legal claim to the car under the court of law.

Under Caveat Emptor principle, which states that the buyer should be aware and in most cases it benefits the buyers. In this case, Gordon should have taken the right precautions and ensure that he was selling his car to Mary and not the Mayor. Gordon can only claim for damages from Mary for breach of contract. In Chemical Bank v. Kaufman, it was declared that the seller should be aware of all legal facts underlying the goods to be sold. The misrepresentation, in this case, is a fraudulent one and therefore is actionable. It is actionable because Gordon relied on the statements of Mary to make the sell and that can be proven by the fact that he agreed to sell the car (Hoffer, 2014). Gordon will, therefore, receive damages for the loss suffered. Gordon could have opted for rescission of the contract if he wanted to claim back his car but this is not possible because there is a third party involved and this provides a firm ground why the contract cannot be rescinded. This, therefore, proves that Cheng is the bona fide owner of the car (Schroeter, 2013).

In conclusion, considering the weight of the facts given above concerning contract law, it can be decided without a doubt that Cheng has a better claim to the car than Gordon. Gordon cannot sue for rescission of the contract, and this means that he cannot get the car because there is a third party involved in this case it is Cheng. Without fear of contradiction, Cheng is the bona fide owner of the car. Under the court of law, it is very likely that the tribunal will hold that Cheng has the legal claim to the property (car) and that Gordon failed to follow the sale of goods Act requirements hence is held liable for the mistake.


Andrews, N. (2015). Contract law. Cambridge University Press.

Bridge, M. (2015). Personal property law. OUP Oxford.

Frey, M. A. (2015). Essentials of contract law. Cengage Learning.

Fried, C. (2015). Contract as Promise: A theory of contractual obligation. Oxford University Press, USA.

Hoffer, S. R. (2014). Misrepresentation: The Restatement's Second Mistake. U. Ill. L. Rev., 115.

Kraus, J. S. (2002). Philosophy of contract law. In The Oxford handbook of jurisprudence and philosophy of law.

Lee, J., & Fullerton, S. (2014). Incorporation of victim size in an examination of consumer ethics in South Korea. Australasian Marketing Journal (AMJ), 22(2), 125-135.

Razman, M. R. (2014). Sale of Goods Act, 1957: The role of statutory implied terms towards food and environmental sustainability. Research Journal of Applied Sciences, 9(9), 624- 628.

Schroeter, U. G. (2013). Defining the Borders of Uniform International Contract Law: The CISG and Remedies for Innocent, Negligent, or Fraudulent Misrepresentation. Vill. L. Rev., 58, 553.

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