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FACT事实
本案系指Teleport有限公司（Teleport）与绝望风险投资有限公司（绝望风险投资）签订的名为BeyondTime Machine的时间旅行机器销售合同。Sunny Sideup先生（Sunny先生）和Venessa LP女士（Venessa女士）分别是这两家公司的总经理。绝望的风险投资公司从Teleport购买BeyondTime机器的原因如下：1）作为时间旅行机器制造商的Teleport广告；2）Sunny先生在2012年至2016年期间向各公司做了100多次销售演示，试图销售BeyondTime，他在他的陈述是：1）他受过良好的教育，毕业于加利福尼亚大学；2）他有专业背景，曾在一家航空航天公司工作；3）他利用beyondtime进行时间旅行；4）他花了15年时间来制造时间旅行机器。
This case refers to a sales contract of time-travel machine which is called BeyondTime machine between Teleport Ltd (Teleport) and Desperate Ventures Ltd (Desperate Ventures). Mr. Sunny Sideup (Mr. Sunny) and Ms. Venessa Lp (Ms. Venessa) are these two companies’ managing director respectively. The reasons why Desperate Ventures purchased BeyondTime machine from Teleport are as below: 1) Teleport advertised as a manufacturer of time-travel machine; 2) Mr. Sunny made over 100 sales presentations to various companies between 2012 to 2016 in an attempt to sell BeyondTime, and he mentioned in his presentations that: 1) he was well educated and graduated from University of Califonia; 2) he had professional background and had worked in a aerospace company; 3) he had travelled through time by using BeyondTime; 4) he had spent 15 years in building time-travel machines.
由于上述原因，绝望的风险投资公司从Teleport公司购买了五台BeyondTime机器，合同价格高达4760万美元。不幸的是，这五台机器没有工作，也无法成功地计时旅行。瓦内萨随后联系了桑尼先生，并告诉他，BeyondTime的机器根本不工作，她的公司希望退款。桑尼先生拒绝了瓦内萨，他仍然坚持说，他用了beyondtime度过了低谷，beyondtime得到了充分的认证。桑尼说，绝望的风险投资公司没有以正确的方式使用这些机器，他甚至建议绝望的风险投资公司雇用他作为顾问，以解决他们使用beyondtime的问题。
Because of above reasons, Desperate Ventures purchased five BeyondTime machines from Teleport, and the contract price is up to $47.6 million dollars. Unfortunately, these five machines did not work and were never able to time travel successfully. Ms. Vanessa then contacted Mr. Sunny and told him that BeyondTime machines did not work at all and her company wanted their money refunded. Mr. Sunny refused Vanessa, he still insisted he had travelled trough time by using BeyondTime and BeyondTime was fully certified. Mr. Sunny said Desperate Ventures were not using the machines in a right way and he even suggested Desperate Ventures to hire him as a consultant to solve their problem of using BeyondTime.
Ms. Vanessa then ask her Technical Director to conduct an investigation about Teleport and Mr. Sunny, investigation found that, Mr. Sunny lied to everyone about his background and the product: 1) time travel is impossible and had not done successfully by anyone; 2) Sunny was not well educated and he did not have the professional background as what he said in his presentations; 3) BeyondTime machine was not patented by Mr. Sunny.
ISSUE
Given the investigation conducted by Technical Director of Desperate Ventures was true, the issue of this case was, whether or not Teleport and the statement of Mr. Sunny can be regarded as misrepresentation. What kind of misrepresentation it might be?
ARGUMENT
According to ANDREWS Neil and YANG Fan (2016, p.92), “a misrepresentation is an inaccurate statement of fact which induces the other party to enter into the contract”. In Black’s Law Dictionary, misrepresentation is construed as, one party makes a statement either by words or by conduct to another party, and this statement is not consistent with the fact...if this statement is accepted, it may induce an understanding which is inconsistent with a certain condition. (1991, p.692) That is to say, misrepresentation refers to one party’s words or conduct which is inconsistent with the fact, if these words or conduct has negative influence to another party’s benefit, it will lead certain legal consequences. For example, in a sales contract negotiation, a seller of goods makes false statements or promises regarding to goods’ quality or nature to a purchaser, the false statements or promises may constitute misrepresentation.
In the contract law of England and some other Commonwealth countries, misrepresentation usually refers to a false statement or conduct which induce other party to enter into a contract, on the basis of the party’s intention, misrepresentation can be divided into: fraudulent misrepresentation, negligent misrepresentation, and innocent misrepresentation. If representor intends to deceive and is aware that the fact is false, representor’s words or conduct would constitute fraudulent misrepresentation. If representor makes a representation, and this representor has no reasonable basis to believe the subject matter is true, it might constitute negligent misrepresentation. On the contrary, if representor has the reasonable grounds to believe the fact is true, it constitute innocent misrepresentation.
In ANDREWS Neil and YANG Fan’s book, misrepresentation consists of seven elements.
“(1) a statement by words or a representation by conduct (the representor later becomes a party to the contract); the statement must be addressed (normally directly, sometimes indirectly) to the representee who also becomes a party to the contract; (2) the statement must concern a matter of past or present fact or ‘law’”; (3) the statement should not involve the assertion of a mere matter of opinion; (4) the statement must not be vague and unambiguous, and not a ‘mere puff’; (5) it must also be ‘material’ (that is, a comment which, objectively, is apt to influence a reasonable person); (6) it must be made before the main contract; (7) the representee must rely on the statement. (2016, p.94-95)
In the common law, misrepresentation is one of the factors which may affect contract’s validity. When one party makes a false statement, misrepresentation occurs. The consequence can be induce another party to enter into a contract. To judge whether or not there is misrepresentation, certain criteria must be met. As suggested by Andrews Neil and Yang Fan (2016), misrepresentation consists of several elements which can be used to prove a misrepresentation. Back to our case, elements mentioned above can be used to judge if there is misrepresentation. And after analysis, it can be assumed there is misrepresentation existing in the sales contract between Teleport and Desperate Ventures.
1. There was a statement made by words and conduct by Teleport and Mr. Sunny. In our case, Teleport advertised as a manufacturer of time travel machine for a long time, and it proclaimed these machines allow people to travel through time. The conduct of advertising can be regarded as a representation. Besides, in order to sell these machine, Mr. Sunny, the managing director of Teleport, had made over 100 sales presentations to various companies. Desperate Ventures can be one of these companies, or it might have the information from these companies indirectly or from advertisement directly. Obviously, purchasing decision of Desperate Ventures was influenced by the above-mentioned advertisement and sales presentations. Teleport and Desperate Ventures later become parities of the contract.
From case Gordon & Teixeira v Selico Ltd & Select Managements Ltd (1986) 18 HLR 219, the judgment suggests that either by words or by conduct could possibly make a misrepresentation, even not all the words or everything has done are able to constitute a misrepresentation. Normally statements of opinion or intention may not constitute misrepresentation. (See Achut v Achuthan [1927] AC 177. See also Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563) Mr. Sunny addressed his background and what he had done for time travel machine in his 100 sales presentation. Obviously both advertisement and Mr. Sunny’s presentations are not merely opinions or intentions.
The statement of Teleport and Mr. Sunny concerned a matter of past or present fact, that is, the time travelled machine, BeyondTime. Here we are not discussing whether or not this machine works, there is a true machine, and it is the biggest fact. Mr. Sunny’s statement also refers to fact of past, for example, the time travelled machine was patented by Mr. Sunny, and it can be used for through time travelling, Mr. Sunny had done that successfully. Mr. Sunny also suggested he is a specialist as he graduated from California Institute of Technology, he had been a project manager at an aerospace company, he had over 15 years in building the machine and had the patent accordingly. Usually, if one party claims specialist knowledge on the topic discussed, it is more likely to take the specialist knowledge as a statement of fact. (See Esso Petroleum Co Ltd v Mardon [1976] 2 Lloyd's Rep 305). Statement of Mr. Sunny, such as whether or not he graduated from California Institute of Technology, whether or not he patented the machine, is a statement of past or present fact.
The following items do not belong to the past or present fact, which cannot be regarded as the statement of fact. These items include mere puffs, a statement of opinion, and representation as to the future, etc.. As suggested by professor Treitel, in the contract law of England, there is a basic principle, unless misrepresentation concerns existing facts, it is not able to obtain legal relief【2-15】. #p#分页标题#e#
2. Misrepresentation must be material. In our case, Mr. Sunny deliberately made statements about his degree and intellectual property rights, which is material and is apt to influence a reasonable person misunderstanding his professional knowledge. In our case, just because Ms. Vanessa and Desperate Ventures accepted Mr. Sunny’s statement, they finally entered into the sales contract with Teleport.
3. Misrepresentation must be made before the parties entering into a contract. In our case, in order to sell these time-travel machine, Mr. Sunny advertised publicly and made about 100 sales presentations. Obviously, the advertisement and presentations happened before Teleport and Desperate Ventures actually entering into a sales contract.
5. Representee rely on the misrepresentation and conclude a contract according
In 1852, Judge John Romily suggested how representee rely on statement in case Pulesford v Richards. One party makes a statement of fact, the other party relies on this statement and concludes a contract; or if there is no this kind of statement, the other party will not enter into a contract; or one party conceals a fact, if the other party knows, it is reasonable to say that the other party would not enter into a contract. The three situations tell how representee relies on a statement to conclude a contract.
Back to our case, statement of Mr. Sunny makes a normal rational person believe that Mr. Sunny has professional knowledge in mechanical aspects, therefore this normal rational person might trust the time travel machine is true. If Mr. Sunndy did not make the statement, if Ms. Vanessa, the managing director of Desperate Ventures knows the truth is that the research and development person of the time travel machine did not attend college, neither has any patented technology, when she considering to purchase the advanced and unprecedented machine, Ms. Vanessa, as a rational person, will at least be more cautious to ask for advice from technicians. It is reasonable to say that, if Ms. Venessa knows the fact, she and her company would not order five sets time travel machines with a total contract price $47.6 million dollars and paid in full at the time of purchase.
About this point, we can also refer to case Edgington v Fitzmaurice (1885). In this case, even there are several reasons inducing representee to enter into a contract, and the misrepresentation is just one of the reasons, in the common law it still suggests representee entering into the contract because of relying on the false statement.
6. Misrepresentation can be divided as fraudulent misrepresentation, negligent misrepresentation, and innocent misrepresentation. In our case, misrepresentation of Teleport and Mr. Sunny belongs to fraudulent misrepresentation.
About fraudulent misrepresentation, just as Judge Herschell suggested in case Derry v Peek, if misrepresentation is made in any of the following circumstances, it could prove the existence of fraud. They are: 1) be fully aware it is false statement of fact; 2) do not believe the truth of the statement; 3) be indifferent to the truth of the statement. Once fraud can be proved, the motivation of representor is of no great importance.
In our case, it is reasonable to say that, Mr. Sunny knows he himself did not graduate from the University of California, did not have patent certificate. Mr. Sunny is fully aware the false of the fact. Mr. Sunny insisted that he had actually time-travelled himself using the BeyondTime machine. However, Desperate Ventures company had tried all five machines and proved these machines were not working. Later Desperate Ventures even found out time-travel was impossible and had never been successfully done by anyone. It is quite clear that Mr. Sunny’s statement is inconsistent with the fact. If the statement of Mr. Sunny was accepted, a normal national person will believe BeyongTime can help to travel through time, and further be induced to make a purchase decision. Since the statement can affect the validity of a contract and the statement is obviously false, it can be deduced that Mr. Sunny’s statement is fraudulent misrepresentation.
According to Section 3 of Cap 284, unless Mr. Sunny could prove that he had reasonable reasons to believe what he had said in his statements and what he had done are true and which can also be proved by evidence, otherwise no matter what his motivation of the misrepresentation is, intentionally or negligently, his statement will belong to fraudulent misrepresentation and needs to bear legal responsibility accordingly.
CONCLUSION
To sum up, in this case, there is fraudulent misrepresentation. According to the Contract Law of England and Cap 284 Misrepresentation Ordinance of Hong Kong, the other party Ms. Vanessa and her company Desperate Ventures have the right to rescind the sales contract and make their money refunded.
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