Misrepresentation of Information in Legal Contracts

Misrepresentation of Information in Legal Contracts
Making Custodian Pty Ltd v CBRE (C) Pty Ltd [2017] QSC 80.

It is important to note, when dealing with legally binding contracts, that misrepresenting information on a given property is illegal and you can find yourself in serious trouble.

Take the case of Making Custodian Pty Ltd v CBRE Pty Ltd, where the Real Estate agent (the second defendant in this matter) was found to be misrepresenting information both through email and a 39 page Information Memorandum.

In this case, the plaintiffs (Making Custodian Pty Ltd) purchased a shopping Centre from the Vendor. The plaintiffs alleged that the defendants misrepresented the financial performance of the shopping centre to them; claiming that the shopping centre could be purchased for a price that would produce a yield of between 8 to 10 % of the centre’s outgoings and net rental.

The presiding judge distinguished the facts of the case from an earlier decision where it was held that disclaimers were sufficient to erase the effect of the representations made as they appeared on each page of a 2 page leaflet.

The Judge therefore ruled that the disclaimer clauses, that appeared once in the Information Memorandum on page 38, were unsatisfactory despite stating that the purchaser should not rely on the information as the Real Estate agents were uncertain of the accuracy of the information.

Her Honour expressed that the second defendant was ‘far more culpable’ in making the misrepresentations as they were ‘far more powerful an influence on the Purchasers than anything said or done by the Vendor”.

This case illustrates the error in misrepresenting important information in contracts and agreements, as the Judge decreed that the Real Estate agent, providing the most influence to the Purchaser, was in the greater wrong and thus was ordered to satisfy the damages.

Therefore, if you or someone you know are worried about misrepresenting, or you believe someone else has misrepresented important information to you, feel free to contact us at 1300 HATZIS (1300 428 947) and speak with one of our experienced solicitors.

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