Contract

A misrepresentation is distinct from a statement of opinion which may render a valid contract void or voidable. There is a difference between innocent, negligent and fraudulent misrepresentations. An innocent misrepresentation would affect a contract. A negligent misrepresentation may result in liability for negligence; whereas, a fraudulent misrepresentation definitely attracts liability for fraud and deceit.

Under the common law, a misrepresentation can be any false or misleading expression of facts with the wilful intention to deceive or defraud the other party. Such misrepresentations mainly transpire in the areas of insurance or real estate businesses. Moreover, advertisements with false representation of facts may also come under misrepresentation. Therefore, any contract that contains or constitutes misrepresentations becomes void or voidable. The party who had sustained injuries by acting upon such misrepresentations can claim damages in a court of law.

A party, on occasion, may be induced to enter into a contract due to false statements being made with regard to the facts and information about the other party to the contract. Such unambiguous false statements can be termed as misrepresentations. It is possible to have various kinds of misrepresentations. For instance, in the case of Spice Girls Ltd v Aprilia World Service BV, the category of misrepresentation by conduct was established.

In that case the plaintiffs, the Spice Girls Ltd, had entered into a contract regarding advertisements with the defendants the Aprilia World Service or AWS. This contract period was to be effective up to March 1999. Accordingly, the Spice Girls Ltd participated in the advertisement of the AWS. The plaintiff had also supplied logos and images of the Spice Girls. In that manner they had induced the defendant company to sign the agreement contract.

Subsequently, after sometime, the Spice Girls Ltd announced that one of the members of Spice Girls troupe was leaving the group. The defendant company, the AWS, argued that the plaintiff company the Spice Girls Ltd had known about that one of its members was about leave, at the time of entering the agreement with them. Thus the AWS claimed that the Spice Girls had deliberately made a misrepresentation.

The Court held that the plaintiff company the Spice Girls Ltd had made a representation by their conduct and induced the defendant company to sign on the agreement. The conduct had been evident in their participating in the advertisement. Their conduct had also been established in their supplying the defendant company with the logos and images of the entire group of five members. The court held that no member could rescind the contract before March 1999, the expiry date of the advertisement contract.

Jeannie, a representative for Pine made some negotiations with Harry who wanted to purchase a store franchise from Pine. During that process she made some statements to Harry and it is to be seen whether these statements were factual or fraudulent.

Her first statement regarding the profit of the store being sold was a negligent misrepresentation, because she had not verified whether the store was making a profit or a loss. As such the store had been making losses for the past two years. She had relied on the information given to her by the accountant and she had not taken the trouble to verify the accounts.

Negligent misrepresentations are dealt with by common law, and in Hedley Byrne v Heller, it was held that compensation for damages in tort were possible for negligent misstatements. However, the party who is making the statement must have knowledge that the party to whom such statement was addressed was likely to act upon the statement without any independent inquiry about that statement. The party making such statements has knowledge regarding the purpose for which the statement is to be used.

The other party must have acted on such statement without conducting any enquiry. As such, these statements result in a detriment to the receiving party after it has acted upon it. In this case the House of Lords decided that in acts of tort it is possible to recover damages from the responsible party for negligent incorrect statements announced by him. However, their Lordships stated that such recovery of damages was subject to certain specific conditions.

In addition, she had made a false statement regarding the number of refrigeration units that could be accommodated in the store.  This constitutes a fraudulent misrepresentation, due to the fact that Harry would rely on her statement to proceed with the contract of sale.

Finally, she failed to inform Harry that just prior to his purchasing the store; another competitor had opened a store that had proved to be very popular with the customers. This act of Jeannie constitutes pre – contractual misrepresentation, as had been established in With v. O’Flanagan, and the underlying phenomenon in this case related to the interesting phenomenon of supervening falsification.

In some instances, statements become false due to change in the prevailing circumstances. In With v O’Flanagan, the vendor of a medical practice had stated that the company’s income was £2,000 per annum. This statement had been correct at the time of its issuance. Subsequently, the vendor became sick and income from the practice declined. Consequently, the value of the practice was much lower at the time of the sale than the amount of price paid by the buyer of the practice. The court held that the medical practitioner had failed to correct his earlier statement made to the purchaser and found that a misrepresentation had occurred in the sale contract.

Under the provisions of the law, an untrue statement of fact made at the time of negotiating a contract that induces other party to enter into the contract, is a misrepresentation. There are several remedies available for the injured party, and they depend on whether the misrepresentation was fraudulent, negligent, or innocent. Silence cannot be construed as misrepresentation. Similarly, statements of opinion cannot be treated as facts.

In Derry v Peek, the company prospectus had contained misleading and incorrect information. The prospectus had stated that the company had been approved by the Parliament for running trams in the city. However, this was not true; and in order to claim and obtain compensation for damages, the injured party had to prove fraudulent, tortuous or deceitful conduct of the other party. The court held that the plaintiff had failed to prove the fraudulent behaviour of the defendants and dismissed the case.

Innocent misrepresentation transpires if the party can prove that the misrepresentations were made out of innocence, without any fraudulent intention and if they were not negligent at common law; in accordance with section 2(1) of the Misrepresentation Act 1967, otherwise they will not be deemed to be innocent misrepresentations.

The only remedy available in common law for a misrepresentation that was made in good faith and after taking all reasonable care, is rescission. Remedies available for misrepresentations include damages for fraudulent or negligent misrepresentations; rescission for fraudulent or negligent misrepresentations that were made innocently; and damages in lieu of rescission.

The 1967 Misrepresentation Act provides several legal consequences for misrepresentations. In the case of innocent misrepresentation, the remedy available is that the innocent party can rescind the contract wholly. English law sets out that there should not be any tortuous and equitable duties that are aimed at deceit or misrepresenting the facts. Moreover, English law does not recognise the general duty of good faith. In contract negotiations, silence cannot be treated as representation, and can only be considered as half truth of a misrepresentation.

The Misrepresentation Act requires the courts to consider the possibility of awarding damages instead of rescission of the contract, in cases where rescission is sought by the parties. The Act provides a right to the innocent party to recover damages from the other party who had made a misrepresentation. However, under those circumstances the injured party is required to prove that he had believed the representation, on grounds that were reasonable.

The party has also to prove that he had believed the facts to be true till the time that he had entered into the contract. In case of fraudulent misrepresentation, the injured party can rescind the contract and claim damages in tort for deceit. There is a vast difference between tort in misrepresentation and in a breach of contract. Similarly, the damage recoverable will also differ. The assessment of damages also varies in these two instances. In a misrepresentation, the damages are assessed in accordance with the legitimate expectation of the innocent party.

In some cases, the party may incur loss by relying on a statement of another party even though there is no contract between them. In those cases, misrepresentation can be applied. In professional relationships; if misrepresentation is made negligently then it is possible to recover the damages caused by breach of duty of care, by the injured party. For instance, a surveyor may advise the party duly misrepresenting the cost or value of certain property.

In such cases the injured party can claim damages from the party who had made the negligent misrepresentation. The principle of duty of care applies in these cases and the courts examine whether the statement was made with a fraudulent motive and accordingly award damages to the injured party. In such cases, the provisions of other laws do not attempt to limit the damages. It is also unnecessary for a contract to exist between the parties.

Since, Harry had suffered losses due to the misrepresentations made by Jeannie; he can rescind the contract and can claim damages for rescission, in accordance with the foregoing discussion.

References

1. Charles Lloyd. Buyers must beware. The Times (London), April 13, 2004, Tuesday, Features; Times2; P19.
2. Derry v Peek (1889) App Cas 337.
3. Hedley Byrne v Heller (1964) AC 465.
4. Misrepresentation. (2006). In Collins Dictionary of Law. June 18, 2008 http://www.credoreference.com/entry/5980858misrepresentation. (2006). In Collins Dictionary of Law. Retrieved June 18, 2008, from DISPLAYURL
5. Misrepresentation. (2006). In Britannica Concise Encyclopedia. June 18, 2008. http://www.credoreference.com/entry/6711377
6. Misrepresentation. (2005). In The Hutchinson Unabridged Encyclopedia including Atlas. June 18, 2008. http://www.credoreference.com/entry/6448183misrepresentation. (2005). In The Hutchinson Unabridged Encyclopedia including Atlas. Retrieved June 18, 2008, from DISPLAYURL
7. Sandra Speares. Law: Contract: Mean what you say, say what you mean is key to prefixture
   Lloyd’s List, March 1, 2000, Pg. 6.
8. Spice Gils Ltd v Aprilia World Service BV (2000) EMLR 478.
9. With v O’Flanagan (1936) CH 575.

Well, people say I’m naturally quiet. This is partially true. While I may come out as shy and reserved to people who don’t know me, I’m actually quite talkative. The reality of the matter is I rarely make the first approach to talk to strangers. Therefore, I’m usually a lone wolf in social settings, unless my pack decides to accompany me.

But, when a person approaches me, I’m very friendly and when the stranger is patient enough s/he may witness my jovial side. Not to be mistaken as a social reject, but my lack of interaction is not a weakness or a deficiency. It is just that I dislike engaging in small talk. I enjoy intelligent conversations and these are rarely found in social settings.

I hate conforming to social norms. I don’t go around breaking rules for the sake of it. However, I cannot be coerced to do something just because everybody is doing it. I live my life the way I want it to be. I love thinking for myself and making my own decisions. The mob mentality is not for me. This is probably the reason why I have very few friends. I only associate with people who respect me and trust my decisions. Large crowds are usually accompanied by too much negativity, backbiting and dishonesty. I actually feel lonelier in crowds than when I’m by myself.

I’m very loyal to the people in my inner circle. Loyalty is probably my biggest virtue. I give it to the fullest and also expect the same from the people I give it to. I show the utmost care and love to the people that matter to me. I will do anything in my power to keep them happy. I am also slow to anger and can tolerate whichever is thrown at me for some time.

I tend to overlook the first instances of misbehavior. However, if the person is persistent with it, then I give them a piece of my mind and avoid them entirely. It is actually hard for someone to piss me off to the point that I don’t want to associate with them anymore. However, if such a point were to reach, then I would never forgive him/her even if it was the last thing for me to do on earth.

I’m also very funny to people who have a knack for intelligent humor. My jokes go over the heads of many people because they do not understand the intellect behind them. To my friends, however, they can’t get enough of them. I never make obscene or racial profiling jokes, because I know the repercussions that they may have on people around me.

I have friends from different races and I’m therefore very sensitive on whatever comes out of my mouth. I go out once in a while with my friends to have some good time. However, most of my Friday nights are spent at the comfort of my home watching a movie or reading a book. We used to do a lot of partying in college, but somehow I outgrew the “clubbing thing” and nowadays I find pleasure in staying home.

more than anything in this world. to me. I listen to virtually every form of music. I love pop, rock, and country music and my favorite artist of all time is Celine Dion. Her music is like . I also love Adele, Katie Perry, Beyoncé and Taylor Swift.

I also make music on my own, although not on a commercial level. I write music and play an acoustic guitar. My performances are usually done during family functions. My other love is nature walks. Nothing keeps my spirits burning with joy than an adventurous expedition into the wild. Whether it is traversing plane lands or making our way through forests or kayaking in a river, I’m okay with it as long as it is far away from the city. It only gets better for me, if we have to hitchhike our way back home.

I also love traveling around the world. Each year, I save enough money to go visit a different nation. So far, I have visited Mexico, France and Italy. I still have a long way to go, but I’m determined to visit at least 75% of all nations on earth before the curtains close on me. I love traveling, because I’m introduced to different people and cultures all over the world. It makes me appreciate people more, despite their differences.

I plan to visit some of the best monuments of the ancient world, such as the Great Wall of China, the Leaning Tower of Pisa in Italy and the Great Pyramids of Giza in Egypt. I’m also a fan of cooking. Apart from being a lover of good food myself, there is this feeling of satisfaction I get whenever people enjoy my food. Thanks to my cooking classes, I can cook most of the popular dishes around the world.

My favorite cuisine is Italian food. I just can’t get enough of them. Most Italian dishes are so good to me that it is hard for me to select one as my favorite. However, not a week goes by without me having a plate of spicy spaghetti Bolognese. Mexican food is a no-no for me. I just can’t stomach Mexican food (pun intended).

I do Mexican food once in a while at the request of my Mexican friends, but my body does not respond well. is The Sound of Music, starring Julie Andrews and Christopher Plummer. The love story between the two protagonists blows me away each time I watch it. I have watched it more than a hundred times and I still get the same feeling I got when I watched it for the first time.

My biggest weakness is that I find it hard to trust people. I don’t know if it is a gift or not, but my first instinct about a person is always right. People tend to mask their true intentions from me, but somehow I just see through it all. My aunt who is a psychiatrist once told me that I have a high emotional quotient (EQ).

It is easier for me to know what a person is going through from their emotions. For instance, a person does not need to tell me that s/he is going through some tough time. I’ll just feel it when they are around me. So, if their actions do not correspond with the emotions I’m getting from them, I will know they are dishonest.

My biggest fear is not achieving whatever I want to accomplish in life. Apart from traveling the world, I want to start a humanitarian organization that will help children in third world nations. Another phobia of mine is heights or . When I’m on high ground, I just panic looking down. That’s why I will never be caught dead on any amusement rides. My other phobia is snakes. I saw a boy succumb to a snake bite when I was young and that incident has never left my mind.

What I dislike the most in life is dishonest people. With dishonest people, you can never know what they are planning for you. Dealing with hypocrites is very difficult because they trick you into letting your guard down and you become very vulnerable. They will attack when you are down or when you least expect it.

The worst thing is that we are always surrounded by them. I’d rather come face to face with a killer than being stabbed in the back by a pretender. I also dislike uncleanliness, both physically and spiritually. People should keep themselves and their immediate surroundings clean. If a person cannot keep his/her body clean, how is he/she going to keep his/her spirit clean? The body is the temple of God and God cannot live in a dirty environment.

Answering the question “who am I” is quite complex, because our lives are very wide that there are areas in our lives we have no knowledge of. Sometimes, we do not see ourselves the way others see us. For instance, we may think we are confident, whereas the people around us feel that we are too proud and arrogant. Furthermore, our behaviors, interests, and other things that define us may change after a while.

If Gray had more knowledge regarding JAZZ Best, he would have realized that this was an evident situation where an independent specialist should have been used to perform the audit procedure. These problems hindered the gathering of several types of audit evidence. Because Larry Gray did not do an adequate Job getting to know Barry Mellow and JAZZ Best, he evidence gathered through “client inquiry” was not reliable. This type of evidence personnel to answer the auditor’s questions. Because Gray did not do enough research, he did not reveal the fact that Minnow was fraudulent and dishonest.

Client inquiry is rarely adequate as the only supporting piece of evidence for an audit objective and usually must be backed up by additional evidence. However, because Minnows and JAZZ Bests integrity were such a problem, basically every other piece of evidence gathered was untrustworthy. The evidence gathered through “confirmation” was greatly impacted as well. This evidence is obtained with questions asked by the auditor, either written or oral, to a third party and the answers are given directly to the auditor.

However, this evidence was made useless because Assured Property Management Inc. And Interstate Appraisal Services directly affiliated with JAZZ Best for the sole purpose of generating fake restoration contracts. However, Gray did not do enough research to figure this out. Furthermore, evidence gathered through “physical examination of tangible assets” and “documentation or inspection of records and documents” were rendered useless because they were fraudulent and not independent of the provider.

The management assertions relating to this evidence is existence/occurrence and rights and obligations. Rights and Obligations is how management asserts that the recorded and disclosed assets are the rights of the entity and the liabilities are the obligations of the entity at a given date. Existence/Occurrence is when management asserts that the recorded assets or liabilities of the entity that are disclosed on the balance sheet exist at a given date and that the recorded transactions disclosed on he income statement have actually occurred during a given period.

The fabricated occurrence of the restoration activity, and the rights and obligations to the building could have been uncovered if Gray had done more research on JAZZ Bests internal controls and Minnows integrity. The evidence obtained during their visit to the restoration site was unreliable due to independence of the provider, a factor of competent evidence. When information is obtained from someone independent of the company and transactions being investigated, the evidence is more reliable. Assured Property Management Inc. And

Interstate Appraisal Services were created by Minnow for the sole purpose of generating fake restoration contracts. However, Gray did not do enough research to figure this out. This influenced the tour of the restoration site in Sacramento, CA because they were not independent of the provider. Another problem that lacked independence of the provider was the evidence Gray obtained regarding documents. Because these three companies were directly associated to each other’s fraudulent activity, none of the documents received were reliable. Evidently, independence of the provider is a crucial factor and this was lacking in this audit procedure.

F ‘Nell del Sure is currently aced with an opportunity to obtain a contract with a mass merchandising retailer to sell their products at 10% below their current prices. The contract would start out with an initial purchase of $750,000 and possibly generate as much as 4 million in sales annually. The dilemma is whether or not the company feels that this contract is a good fit strategically. Also of concern is whether or not this opportunity conflicts with the organizational culture. 2 Available Courses of Action 1 .

Accept the contract with the department store This alternative would require tripling the amount of replica products that the F’ Unix el Sure is producing. One question that F’ Unix del Sure should address is, how would this affect the image of the company? Their focus would be somewhat taken away from acquiring authentic products and directed towards the replica industry. From the SOOT analysis in the appendix, one of Fennel del Subs strengths Is the ability to produce high quality replicas. This strength aligns well with the opportunity to obtain the contract with the department store.

When evaluating opportunities, It Is good to classify them in terms of the type of strategy employed. Since the contract tit the department store would not necessarily be a new offering, they are looking to execute market penetration with their existing products. The retailer currently sells similar products, and is going to attempt to sell F’ Unix del Sure as a more exclusive line. This is a market position strategy In which they are trying to utilize the price and quality attribute of positioning to compete.

A few questions that need to be asked are ; What is the desired position? -The position is an exclusive line of decorations, priced higher than current offerings by competition. F’ Unix del Cur’s products must be understood by customers to be the real deal”, even if they are replicas. ; Which competitors must be bested to gain the position? -Competitors very similar to F ; Nell are signing salary contracts with retailers, but pro- vide a mixture of quality of products. F’ Unix needs to deliver solid quality every time in order to compete well. Is Fiend del Sure capable of holding the position? -F ‘knell’s success in holding the position will depend on several factors. Can they Increase their volume of replica products to meet the demand? Will current the quality of their decorations stay in the top tier, and can they build brand equity ever time that allows them to retain a sustainable advantage? 2. Create a sub brand of products that are sold in retail stores. Fiend del Sure could create a sub brand of their replica products, which are only sold in mass merchandising stores.

This alternative has several pros and cons. Pros: ; Evoke the reputation for quality associated with their products to sell in the retail environment ; Could utilize a down-market stretch to capture more sales at the lower end of the market. ; Overall growth of the business could enable Fiend del Sure to have more purchasing power in the authentic market. Cons: ; If replica brand is too good, sales from it my begin to cannibalize the genuine artifacts. ; Some potential customers might perceive the company as being too cheap if they sell in these stores. Splitting into two brands may cause conflicts within the company and erode the culture they have worked hard to establish. ; Current suppliers may feel undercut by cheap replicas that are sold in retail 3 Recommendation Currently, the gross sales of F’ Unix del Sure is at $MOM and information indicated that it has been growing its sales by 20% a year from the previous decade. Adding the retail account will increase estimated sales by $MM on top of current growth. With current growth at $MM over the previous decade, $MM would be a 16% increase.

The question that remains unanswered is can Fiend del Sure keep their current growth with the competitive conditions, and would adding the new contract hurt their sales? Since their current demand is already calling for more replicas to be made, perhaps F ;Unix del Sure should negotiate with their retailer to obtain a contract that allowed them to sell a dual braded offerings, replicas and genuine artifacts and crafts. They loud sell the brand name as “Fiend del Sure Designs” This plan would allow them to retain their current plan, and Just retool for increased production.

This opportunity could neutralize the threat of a hyper competitive environment that is inevitable. Also, choosing this plan of action would allow them to keep their core culture and be honest about the source of their offerings. Perhaps their new marketing statement could be: “For the savvy cool elector and interior decorator , Fiend del Sure Designs provides a beautiful rustic look that will I transform any space with real world charm.

Under this contract, the customer selects the capital equipment or property (assets) to be nuanced by the bank and the bank then purchases these assets from the manufacturer or supplier and then leases them to the customer for an agreed period. In conformity with the Shari’s, the owner of the assets (in this case the bank) must be paid rent (fixed or variable, as agreed by the lesson and lessee) and must exercise all the rights and obligations that are incidental to ownership such as maintaining, insuring and repairing the assets.

The lessee, on the other hand, obtains the use of the asset for the period of the lease subject to paying the rent. The lessee may assume the obligations, such as maintaining, insuring and repairing the asset, in return for a reduced rent. 1 . 3. 2 What is Car Ajar? As mentioned above ‘Jar is basically the transfer of suffuses (defined below) of a fixed asset to another person for an agreed period, for an agreed consideration. Under a Car ‘Jar agreement the car will be rented to the customer for the period agreed at the time of contract.

Upon completion of the lease period the customer in the Means case discussed below, gets ownership of the car against his initial security deposit. Car ‘Jar is a Shari’s-compliant car-leasing scheme. It is based on the principles of Jar and is completely free from the element of interest. This product is designed for interpretative individuals, looking for a car-financing scheme that helps in avoiding interest-based transactions. So Car ‘Jar is simply a rental agreement under which the car will be given to the customer in exchange for rent for a period, agreed at the time of the contract.

Means Bank, based in Pakistan and a pioneer in this area, purchases the car and rents it out to the customer for a period of three, four or five years. Upon completion of the lease period the customer gets ownership of the car against his initial security deposit. Somewhat confusingly, the Means Car ‘Jar scheme has elements of ‘Jar WA Satin within it. In this case study I propose to follow the Means assumption in using ‘Jar in the sense that it involves car ownership at the end of the maturity of the deal. This is in line with Shari’s methodology and terminology. . 3. 2. 1 What is Suffuses? Suffuses is the right of enjoying a thing, the property of which is vested in another, and to draw from the same all the profit, utility and advantage that it may produce, provided it be without altering the substance of the thing. Items without suffuses cannot be leased. It is necessary for a valid lease contract that the corpus of the leased asset remains in the ownership of the seller, and only its suffuses is transferred to the lessee. 1 . 3. 3 In what Sense is Car ‘Jar Interest Free?

In Car Ajar, the asset remains under the ownership and at the risk of the bank and the customer only pays the rental for the use of the asset, Just like the rent of a house. 3 Under leasing or lease purchase, the Islamic financial institution buys the financed asset and retains the title through the life of the contract. The customer makes a series of lease payments over a specified period of time, and may have the option at the end to buy the item from the lesson (and owner) at a pre specified residual value. Leasing was not originally a mode of financing.

It was simply a transaction meant to transfer the suffuses of a property from one person to another for an agreed period and an agreed upon consideration. Leasing can be used as a mode of financing, in Islamic banks, as an alternative to conventional car financing. However, the consideration of leasing as a mode of financing should be based on certain notations. It should be understood, by all using it as a mode of financing, that it is not sufficient to substitute the term ‘interest’ with the term ‘rent’, and use the term ‘mortgage’ instead of the term ‘leased asset’.

There must be a significant difference between leasing and an interest-bearing loan. It is no secret that an Islamic bank or financial institution will take into consideration the same factors as a conventional bank when determining the rental payments and residual value. These would include the rate of inflation, the creditworthiness of the Jesse, the opportunity cost value of the money (as reflected by market interest rates) and so on. An implicit ‘interest rate’ can trivially be calculated from the price, residual value, term of the lease and the lease payment.

This fact is not hidden. Indeed Muslim customers are encouraged to ‘shop around’ and ensure that the Islamic financial institution is not implicitly charging an interest rate, which is in line with the conventional market. In the final analysis, however, the difference is in the form of the contract. If the lease is structured in accordance with the various conditions within Islamic Jurisprudence, t will contract no rib and ensure that it cannot contain such forbidden rib in the future (e. G. In terms of late payment fees, etc. ). 1 . 3. 4 What is the Difference between a Conventional Lease and an Islamic Lease? The most important financial difference between Islamic leasing and conventional leasing is that, with Islamic leasing, the leasing agency must own the leased object for the duration of the lease. Therefore, although leasing a car from a car manufacturer or car dealership may in principle be permitted for Muslims (if the contract satisfies the other conditions), Muslims should investigate further.

In many cases, the car dealership may in fact use a bank or other financial intermediary to provide a loan for the present value of lease payments, and charge the customer interest on this loan. This would constitute the forbidden rib. Scrupulous Islamic financial institutions ensure that the contract abides by all the restrictions set out in the Shari’s (e. G. , subleasing requires the permission of the lesson; late payment penalties must be handled very carefully to avoid rib, etc. ). The differences between conventional and Islamic financing schemes are described in he sections below. 1. 3. 4. Leasing versus Conventional Financing Conventional Financing The conventional financing schemes provide financing for purchasing a car; that is, in essence the financier is giving a loan and charging interest. 4 Islamic Financing The Islamic car financing – ‘Jar – is based on a lease contract. It is not a financing scheme; rather it is a lease contract. As mentioned earlier leasing is a contract whereby suffuses rights to an asset are transferred by the owner, known as the lesson, to another person, known as the lessee, at an agreed-upon price, called the .NET, and for an agreed-upon period of time, called the term of lease. . 3. 4. 2 Rentals versus Installments A conventional car financing scheme is actually an interest-based loan given by the financial institution, with interest being charged on the loan. Islamic car financing is based on pure rentals. In Car ‘Jar the asset remains at the ownership and risk of the bank and the customer only pays the rental for use of the asset, Just like the rent for a house. 1. 3. 4. 3 Ownership In conventional car financing, the car is purchased in the name of the buyer from the dealer. Islamic Financing

Under ‘Jar the ownership remains with the bank; that is, the car is purchased from the dealer in the name of the bank. This is because it is one of the foremost conditions of the Islamic mode of leasing that an object cannot be leased out unless it is in the possession of the lesson. 1. 3. 4. 4 Risk/loss Since the car is bought in the name of the buyer in the traditional mode of car financing, the risk is immediately transferred to the buyer, whereas in the case of Islamic financing, this is not so. The car is purchased in the name of the bank from the dealer and so the risk mains entirely with the bank.

As the corpus of the leased property remains in the ownership of the lesson, all the liabilities and risks emerging from the ownership are borne by the lesson. The lessee is responsible for any loss caused to the asset by misuse or negligence. The lessee can also be made liable for the wear and tear, which normally occurs during its use. But the lessee cannot be made liable for a loss caused by factors beyond his control. (The agreements CIO 5 with traditional car financing generally do not differentiate between these two situations.

In a lease based on Islamic principles, both situations should be dealt with separately. 1. 3. 4. 5 Down-payment versus Security Deposit Both the down-payment and the security deposit are one-time payments. The major difference occurs because the buyer can buy back the car against the security deposit in the case of Ajar, whereas in conventional banking the down-payment remains with the bank, and no buy-back of the car can occur against the down- payment. With ‘Jar the buyer is required to keep a security deposit at the bank.

There is a minimum and a maximum requirement for the security deposit. The requirement is efferent in the case of conventional car financing, where a down-payment is made by the buyer of the car. 1. 3. 4. 6 Return of the Car In a traditional car financing scheme, the customer takes out a loan to purchase the car, which he cannot return under any circumstances whatsoever, unless he pays off the loan. Islamic Financing In the Islamic mode of financing, the buyer has the right to return the car anytime during or at the end of the lease period.

Since this is a lease agreement, and the lessee has been paying rentals, he can return the car to the bank and take back the security deposit any time he wishes. . 3. 4. 7 Termination of Contract The buyer of the car has the option and right to terminate the contract and return the car before the contract reaches its maturity in both the conventional and Islamic mode of car financing. The difference lies in the post-termination phase. In the conventional car financing scheme, if the customer wants to terminate the contract the only option he has is to buy the car by paying the rest of the installments.

In the Islamic car financing scheme, the customer has two options: either return the car and get back the security deposit or buy the car from the bank at the market alee plus a certain percentage of spread for the bank. 6 1. 3. 4. 8 Documentation Differences Sequence/process Islam considers the procedure in which any transaction takes place as a significant factor in all modes of financing. The underlying difference between the Islamic and conventional modes of financing is that of the process. To Muslims, not only the end result but also the means to it are important.

If the result is correct and the steps are wrong, or vice versa, the entire process is deemed invalid, from a Shari’s perspective. According to Shari’s principles, lawful steps to lawful results are very important. The most important financial difference between Islamic permitted leasing and conventional financial leasing is that the leasing agency must own the leased object for the duration of the lease. Ownership of the asset is the prerequisite for leasing out its suffuses. As mentioned, Islam places great emphasis on the sequencing. 1 . 3. The Means Bank Car ‘Jar Scheme Means Banks Car ‘Jar has been designed according to the principles of Islam and is completely interest-free. Moreover the ‘Jar contract and other documentation also comply with Shari’s requirements. In contrast, a conventional car-financing scheme s actually an interest-based loan given by the financial institution with interest being charged on the loan. Also, in conventional car-leasing schemes, the lease contract is not in compliance with Shari’s law and has rib and other UN-lilacs elements in it. 1. 3. 5. What Makes Car ‘Jar Unique? Some of the key characteristics of the Means Car ‘Jar are described in the following sections. Rights and Liabilities of Owner Versus User ‘Jar is an asset-based contract, that is, the lesson should have ownership of the asset during the life of the contract. Under Shari’s law all ownership-related rights and abilities should lie with the owners while all usage-related rights and liabilities should lie with the user. A conventional lease contract does not distinguish between the nature of these liabilities and dumps all liabilities on the user.

This is not permitted under the Shari’s. Under ‘Jar all ownership-related risks lie with the bank and all usage related links lie with the user, thus making the lesson the true owner of the asset and making the income generated through the contract permissible (hall) for the Islamic bank. Continuation of Lease Rentals in the Case of Total Loss or Theft of Vehicle If the eased vehicle is stolen or completely destroyed the conventional leasing company would continue charging the lease holder rent until the settlement of the insurance claim.

Under the Islamic system, however, rent is consideration for usage of the leased asset and, if the asset has been stolen or destroyed, the concept of rental becomes void. As such, in the above-mentioned eventualities, Means Bank does not charge the lease rental. Is there a Penalty for Late Payment of Rent? If so How is This Permissible Under the Shari’s? In most conventional financial leases an extra monetary amount is charged if rent is to paid on time. This extra amount is considered as rib under the Shari’s and is distinctly forbidden 7 (harm).

The lessee may be asked to undertake that if he fails to pay rent on its due date, he will pay a certain amount to a charity that will be administered through the bank. For this purpose Means Bank maintains a charity fund where such amounts may be credited and disbursed for charitable purposes. What is the Insurance Arrangement under Car Ajar? Being the owner of the car, the bank will be responsible for insurance of the car and for paying the insurance premium. If Tactful (Islamic insurance) is not available, the insurance is done under the conventional system.

Can the User Buy the Car Prior to the Termination of Rental Agreement? Yes. The rental agreement contains the purchase price schedule. Is the Product Approved by Means Banks Shari’s Board Yes. Car ‘Jar is designed under the supervision of Means Banks Shari’s Supervisory Board and is approved by the Board. In order for any Islamic financing technique to be acceptable to the Islamic community it has to be endorsed by the appropriate Shari’s Board who will provide a Fatwa (a religious ruling). The appendix to this case illustrates the Fatwa applicable to the Means Bank Car ‘Jar agreement.

The way in which my son is branded and spoken of is very exaggerated and unfair. Through the past month he experienced a difficult time going through a split with his fellow peer. He tried to reach for help through his teachers and a social worker, hoping to find a way to cope and instead he was abused with statements such as “this young man Is experiencing significant mental health Issues. “This all occurred because he dared to cry and show sorrow when he was told by the peer that she felt uncomfortable talking to him.

Furthermore, after this incident that occurred on March 24, 2014, the peer contacted my son first on the same day. Approximately two weeks after, I was phoned at work by the principal, informing me that she would call the police if I was not able to come and pick up my son after school. I asked her to wait for me around 5-10 minutes, and moments after we had finished our conversation, she called the police nonetheless. She had also told my son that she would not call the police unless he left the school.

He did not leave and the police was still called. My son was escorted by the police to the RE per the principals statement that my son was having a “suicidal crisis. The principal came to this conclusion based on a Faceable conversation between my son and the peer which was shown to the principal by the peer. Recently, I read the messages In which my son stated “I’m always going to be there for you. ” These words obviously show no intentions to commit suicide. My son was assessed by the RE team by DRP.

Doe, a psychiatrist at hospital where he was escorted by the police. He was released in the same night from the hospital as the RE team claimed that he was not in a crisis. The psychiatrist had not considered he needed any follow-up appointments or medication. He was not diagnosed with ant mental health illness. I communicated all of the results to the principal; however, she didn’t accept my son to go back to school for a week now, though he was not suspended.

During the ten school years of his life, I never once heard a complaint from any of his teachers regarding his behavior. His average mark Is over 90%. He has won numerous awards for his academic success and he was only ever praised by his teachers. Please help me rehabilitate my son’s reputation at school and gain fair treatment by his principal and social worker at school. This incident was a small part of his school fife and his great sorrow was misinterpreted as a mental illness.

Based on this event we cannot throw away and ignore all his years of hard work, and great behavior. Why society is unfair with teen male? By conspire “this young man is experiencing significant mental health issues. ” This all occurred was shown to the principal by the peer. Recently, I read the messages in which my intentions to commit suicide.

The Appellant humbly submits this memorandum for one appeal filed before this Honorable Court.. It sets forth the facts and the laws on which the claims are based. Statement of Jurisdiction of the Respondent The Respondent humbly submits this memorandum in response to the appeal filed before this Honorable Court.. It sets forth the facts and the laws on which the claims are based. Statement of Facts On 6th May, 1971, C.

V George and Company, a contractor in Cochin, requested a quotation for the supply of one hot mix plant from Marshall Sons, a dealer in Hot Mix plants and Mini Crushers. The requested quotation was sent by Marshall Sons on 1 lath May, 1971. After a few days, on 21st June 1971, C. V. George and Company requested for a revised quotation which was sent by Marshall Sons on 29th July, 1971. C. V George and Company finally placed the order for one hot mix plant on 31st July, 1971. In their second quotation, Marshall Sons said that they would supply the hot mix plant within 3-4 months, subject to conditions beyond its control.

To this quotation, the contractor sent a letter saying that according to their previous discussions, the hot mix plant should be ready by the last week of September. No reply affirming this condition was sent by the dealer. Nearly a month after the time within which C. V. George and company wanted to have the delivery of the plant, they received a letter from Marshall Sons stating that he plant would be ready for delivery in the middle of next month or even earlier and that they had requested their associate company to expedite delivery of the machine. On 22nd November, 1971 Marshall Sons informed C.

V George and Company that due to the go slow policy adopted by the workers in the factory it would be impossible for its associate company to deliver the plan by the end of November and they would try to deliver it by 10th December, 1971. There was no further correspondence between the two parties and the plant was eventually supplied by Marshall Sons on 30th January,1972. Marshall Sons (plaintiff filed a case against C. V George and Company (defendant) in the trial court due to discrepancies between them. The objective of filing the case was to claim the amount for the supply of the hot mix plant from C. V George and Company whereas C.

V. George and Company made a claim for damages under four counts, namely: (1) RSI. 2,000 being the cost of 12 volt electrical starter equipment with battery complete;(2) RSI. 321. 97 being the expenditure incurred towards the cost of materials and labor charges for welding and rectification of defects before the commission of the plant: (3) RSI. 2,000 being the value of 0. 75 ton of steel and (4) RSI. 8,175 being the hire charges for hiring plant from the Cochin Corporation. The trial court held that: (1) there was no consensus among the parties regarding the mime within which the hot mix plant was to be supplied, (2) C. V.

George would receive an amount of RSI. 500 for the 12 volt electrical supply starter equipment and the other three claims would be set off, (3) even if for any reason, it is held that the amounts claimed under the other three clauses, do not amount to a plea of set off or counterclaim, the evidence adduced, has not established the claim made by the defendant. A decree was given in the favor of the plaintiff for a sum of 12,096 and at an interest rate of 6% annum from 27th’ January, 1971, till the date of plaint and proportionate costs. C. V George and Company appealed against this decree and judgment of the trial court in the high court.

Questions Presented by the Appellant The following questions are presented before the court in the instant matter: 1) Whether time is to be considered an essence of the contract 2) Whether the contract was carried out by the respondent within a reasonable p of time 3) Whether the appellant is entitled to claim full amount for damages 4) Whether there was a breach of warranty Questions Presented by the Respondent Whether time is to be considered an essence of the contract 2) Whether the appellant is entitled to claim full amount for damages 3) Whether there was a breach Summary of Pleadings of the Appellant 1 .

Whether time is to be considered an essence of the contract: Ordinarily, time is to be treated as an essence of commercial contracts, as stated by the Counsel for the appellant. Furthermore, when the appellant requested for the machinery to be supplied latest by the middle of September, 1971 , the subsequent replies of the respondent showed clear indication of acknowledgment of the time p, as well as the stipulated deadline. Therefore, the respondent has committed reach of condition of warranty under Section 59 of the Sale of Goods Act, by not supplying the hot mix plant by the middle of September, 1971. . Whether the contract was carried out by the respondent within a reasonable p of time: The appellant’s case states that the hot mix plant should have been supplied by the middle of September, 1971 and the respondent failed to fulfill his part of the contract as the plant was supplied on 30th January, 1972. The appellant further states that this delay was without any reasonable or probable cause and hence the contract wasn’t fulfilled within reasonable time. 3.

Whether the appellant is entitled to claim full amount for damages: The appellant’s case is that as the hot mix plant was not delivered within the time stipulated, it is entitled to claim damages amounting to 12,496. Due to the delay in the supply of the plant, the appellant had to incur losses. 4. Whether there was a breach of warranty: The appellant claims that there was a breach of warranty and tries to recover the amount he can. He is of the view that part (3) in section 12 of the Sale of Goods Act entitles him to raise a claim.

Part (3) in section 12: ‘A warranty is a stipulation collateral to the main purpose of the contract, the breach f which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated. ‘ Summary of Pleadings of the Respondent 1 . Whether time is to be considered an essence of the contract: The respondent had stated that the hot mix plant would be supplied within 3-4 months, subject to conditions beyond its control. Though the appellant wanted delivery of the hot mix plant in the middle of September, 1971, the respondent did not send any reply agreeing to the appellant’s stipulation.

Marshall Sons sent out another correspondence on 22nd November, stating that in view of the go slow policy adopted by the workers in the factory for the past one month, it would not be possible for its associate company to deliver the plant by the end of November. No objection or protest was raised by the appellant in response to this. There was no consensus regarding the period within which the plant had to be supplied and thus, time was not to be considered as essence. 2.

Whether the appellant is entitled to claim full amount for damages: The appellant aimed to collect its desired sum as compensation, of RSI. 12,496, by using Section 59 of the Sale of Goods Act. An important portion of this act states that if the appellant ants to claim compensation for any loss occasioned by the non-performance of the contract within the stipulated time and if the appellant accepts performance of the contract, he must issue notice to the respondent of his intention to claim damages.

In this situation, the appellant issued the notice to the respondent on 8th December, 1971, which was long prior to the date when the goods were supplied to it and the performance of the contract was accepted by the appellant. Therefore, since the claim was not issued at the time when the appellant accepted the performance of he contract, the appellant is unable to resort to Section 55 of the Contract Act to sustain a claim for damages against the respondent. 3.

Whether there was a breach of warranty: Granting for argument sake that time was essence of the contract and there was breach of contract by the respondent, even then Section 59 of the Sales of Goods Act cannot be attracted as the definition of “Condition and Warranty’ in Section 12 of the Sales of Goods Act is limited to stipulations in a contract of sale with reference to goods and stipulations with regard to time and other matters is outside the definition f Section 12 of Sales of Goods Act.

Pleadings and Authorities 1 . Time is to be considered an essence of the contract: The Counsel for the appellant made its case by stating that time was of essence to this particular situation, and is treated as such for commercial contracts, in reference to two such decisions of the Supreme Court in Inhabit Parkas v. Durra Data and C. C. Exporters v. B. &C. Mills.

The appellant wrote to the respondent, requesting for the machinery to be supplied latest by the middle of September, 1971 , and following were the subsequent replies of the respondent showing clearly the acknowledgment f the time p, as well as the stipulated deadline. Therefore, the respondent has committed breach of condition of warranty under Section 59 of the Sale of Goods Act, by not supplying the hot mix plant by the middle of September, 1971.

The remedy for breach of warranty under the Sale of Goods Act is as follows: (I) Where there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject he goods; but he may- (a) set up against the seller the breach of warranty in diminution or extinction of the price, or (b) sue the seller for damages for breach of warranty. It) The fact that a buyer has set up a breach of warranty in diminution or extinction of the price does not prevent him from suing for the same breach of warranty if he has suffered further damage.

As per the case made, under the Sale of Goods Act, “(I)Where there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by season only of such breach of warranty entitled to reject the goods; but he may (a)set up against the seller the breach of warranty in diminution or extinction of the price”, the Counsel for the appellant further contended that the appellant is entitled to claim by way of damages a total sum of RSI. 2,496. Of time: As already stated, the respondent has indicated under Exhibit 8-9 that it will supply the plant in about 3 to 4 months time from the date of receipt of order subject to conditions beyond its control. The appellant placed the order or 31st July, 1971. Three month’s time expired on 30th December, 1971.

Even before the expiry of the period, the respondent wrote Exhibit A-6 the its associate company had advised that the plant will be ready for delivery in the middle of November, and it has advised its associate company to pay special attention and expedite delivery of the plant. The respondent again wrote under Exhibit A-7 stating that in view of the go-slow policy adopted by the workers in the factory of its associate company, there was a delay in the manufacture of the plant and it would be supplied before 10th December, 1971.

The plant was ultimately delivered to the appellant on 30th January, 1972. Having regard to the time stipulated by the respondent under Exhibit 8-9 and having regard to the difficulties faced by its associate company, the details of which are stated both in Exhibits A-6 and A-9, there is absolutely no difficulty in holding that the respondent has performed the contract within a reasonable time. On a careful perusal of the correspondence between the parties as referred to above, it is seen that no time was fixed for performance of the contract.

There was stipulation by the respondent under Exhibit 8-9 to deliver the plant in about three to four months’ time room the date of receipt of order Subject to conditions beyond its control and a suggestion by the appellant under Exhibit A-2 that the point regarding delivery should be brought to the personal notice of Mr.. Cellular and arrangements may be made to supply the plant by the middle of September, 1971. Thus, it can be seen that there was no consensus ad idem regarding the period within which the plant has to be delivered to the appellant.

Hence the term reasonable time would signify any which period of time by which the plant has been delivered provided there is no delay due to circumstances arising because of inefficiency of the respondent. . Whether the appellant is not entitled to claim full amount for damages The appellant wished to claim set off for the sum of RSI. 12,496, under the following counts: 3. 1 For the first count the appellant asked to claim RSI. 2,000 being the cost of 12 volt electrical starter equipment, complete with battery.

The trial Court allowed a sum of RSI. 500 under this count, while referring to the Sale of Goods Act where if there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, he buyer is not by reason only of such breach of warranty entitled to reject the goods; but he may set up against the seller the breach of warranty in diminution or extinction of the price. 3. The other three claims made by the appellant were denied on the basis of the Contract Act, under Section 55, where if the appellant wants to claim compensation for any loss occasioned by the non-performance of the contract within the stipulated time and if the appellant accepts performance of the contract, he must issue notice to the respondent of his intention to claim damages. It is therefore clear that if the appellant wants to claim damages by resorting to Section 55 of the Contract Act he must issue a notice to the respondent of his intention to claim damages at the time when he accepts performance of the contract.

In the instant case, the goods were delivered to the appellant only on 30th January, 1972. The appellant issued its writing to the respondent on 8th December, 1971, which was long prior to the date when the goods were supplied to it and the performance of the contract was accepted by the appellant. Since the issue was not made at the time when the appellant accepted the reference of the contract, the appellant cannot resort to Section 55 of the Contract Act to sustain a claim for damages against the respondent.

The next question for consideration is whether under Section 59 of the Sale of Goods Act, it is open to the appellant to treat any breach of a condition on the part of the respondent as breach of warranty and set up against the respondent the breach of warranty in diminution of the price. We have already held that time is not the essence of contract and there is no breach of condition on the part of the respondent.

Even granting for argument’s sake that time was essence of the contract ND there was a breach of condition by the respondent, even then Section 59 of the Sale of Goods Act, cannot be attracted, as the definition of “condition and warranty” in Section 12 of the Sale of Goods Act is limited to stipulations in a contract of sale with reference to goods and stipulations with regard to time and other matters are outside the definition contained in Section 12 of Sale of Goods Act. Section 59 of the Sale of Goods Act states that – 12.

Condition and warranty. – (1) A stipulation in a contract of sale with reference to goods which are the subject thereof may be a condition or a warranty. 2) A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated. (3) A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated. 4) Whether a stipulation in a contract of sale is a condition or a warranty depends in each case on the construction of the contract. A stipulation may be a condition, though called a warranty in the contract. It can be noted that section 59 is not applicable as this contract is not stipulated by time or any other such conditions except that it should be completed in reasonable time. Hence it falls outside of the definition of the act and there is no breach of CASE ANALYSIS The C. V.

George and Company vs. Marshall Sons case, is one of appellate Jurisdiction in the High Court as a result of a previous case filed by Marshall Sons against C. V. George and Company. The trial court came to the conclusion that C. V. George and Company was entitled to receive a claim of only RSI. 500 as opposed to their former claim for RSI. 12,496. It ruled in favor of Marshall Sons by announcing a decree for a sum of RSI. 12,096 at 6% interest per annum, from 27th January till the date of plaint and proportionate costs. Aggrieved by this Judgment of the trial court, C. V George and Company filed an appeal in the Madras High Court.

The learned counsel for the appellant relied major on the fact that time is of the essence in commercial contracts and that by failing to meet the deadline, Marshall Sons have breached an important condition of the contract and under Section 59 of the Sale of Goods Act, it is open to the appellant to treat a breach of condition as breach of warranty and set p against the respondent the breach of warranty in diminution of the price. The appellant also stated that this entitled it to claim damages under four counts and those amounts should go in diminution of the price claimed by the respondent for the supply of the hot mix plant.

After careful consideration, it was clear to the court that there was no actual consensus between the parties regarding the time of the delivery. C. V. George and Company expected to receive the plant by mid September whereas Marshall Sons spoke about supplying the plant within 3-4 months after the interact was signed ( 31st July, 1971). Marshall Sons later said that due to the ‘go slow policy adopted by the workers, they wouldn’t be able to supply it earlier than what they had committed. No objections were raised by C. V George and Company.

The plant was finally delivered on 30th January, 1972. We see that, due to the fact that there was no proper agreement about the time between the two parties, Marshall Sons have a stronger case as the court ruled that time was not of the essence for this contract. Keeping in mind all the obstacles faced by Marshall Sons in the delivery of his plant and the stipulated time of 3-4 months the court ruled that the plant was delivered within a reasonable time frame. The case for Marshall Sons Just gets stronger as the contractor isn’t entitled to make a claim for damages.

If the appellant wants to claim damages by resorting to Section 55 of the Contract Act he must issue a notice to the respondent of his intention to claim damages at the time when he accepts performance of the contract which was not done in this case. Further, under section 59 of the Sale of Goods Act, the appellant can treat any breach of a condition n the part of the respondent as a breach of warranty in diminution of the price but this cannot be used in the favor of the appellant in this case.

It has already been established that time was not an essence of contract in this case. Section 12 of the Sale of Goods Act states that the condition of warranty is limited to stipulations in a contract of sale with reference to goods and stipulations with regard to time and other matters are outside the definition contained in that section. As a result, the High Court of Madras confirmed the trial and decree of the trial court. C. V. George ND Company had to make the payment they owed and would receive only RSI. 00 for one of their claims. Marshall Sons had a stronger case to present in both, the Trial Court as well as the High Court.