Rita is in the process of negotiating to sell her caf that sells specialist coffee and light

Rita is in the process of negotiating to sell her café that sells specialist coffee and light meals.  Matiu is very interested in buying the café and asks Rita how far away the nearest competition is.  Rita replies that the nearest similar café is 5 kilometers away.  This is true.  However, Rita is also aware that a new café is to open 500 meters down the road soon and Rita does not tell Matiu this information. The negotiations are concluded, and both parties then sign a contract of sale and purchase for the café.  Matiu pays the deposit of $10,000 to Rita.  A few weeks before Matiu is due to take over the business, he finds out about the proposed new nearby café.  Matiu feels that his café's trade will decrease and tells Rita that he wants to cancel the contract and not go through with the purchase. 

Required:       

Advise Matiu if he is legally entitled to cancel the contract.  Your answer should refer to the law relating to misrepresentation and relevant provisions of the Contract and Commercial Law Act 2017.

Answer rating: 100% (QA)

Answer i In this case Matiu might have the right to terminate the contract due to misrepresentation In terms of contract law misrepresentation is defi... View the full answer