For this, you may assume that Jeremy was fully authorised to act on behalf of Grove Electric, and you are therefore not required to discuss issues relating to agency law.

Over the last two years, Sarah, a university student, has been baking sourdough bread from home to sell to her friends and family. Her friends have raved about her sourdough bread on Facebook and Instagram and as a result, she is receiving an ever-increasing order for her sourdough bread.

Sarah wanted to upgrade her oven so that she could churn out more bread in one go. She went to Grove Electric, a retail store selling various home appliances.

Jeremy was a salesperson who attended to Sarah. Sarah explained that she needed an oven to bake sourdough bread, due to an increase in demand from her customers.

Jeremy recommended BAKER'S DREAM Model BD 7000, a semi-industrial oven which was being offered at a promotional price for a limited time. He exclaimed, "This is the best oven ever!" He told Sarah, "Many professional chefs have bought this model for their own homes and they have all given 5-star reviews for this product, so you should check out their reviews online!" Jeremy mentioned this because a few months ago, he did see an online chat forum where a professional chef gave a 5-star review, but he did not check all the reviews on that forum, nor did he check that forum again recently. Sarah mentioned that she felt reassured by Jeremy's comment about the reviews by the professional chefs.

Sarah further mentioned that she needed the oven to inject steam at short intervals as the periodic bursts of steam would allow the bread to develop a nice crust. Jeremy pointed to a button on the oven and said, "See, there is a nice button that says 'STEAM'!"

Jeremy also said that "I think this oven is made in Germany", to which Sarah said, "Never mind! I want to know about your delivery and installation charges." Sarah explained that her current oven was built into her kitchen cabinet and she required someone who was experienced in installing built-in ovens. Jeremy replied that delivery and installation would be free if she bought the oven within the week. He reassured Sarah that "the oven will be installed by our inhouse technician with more than 10 years' installation experience".

Sarah decided to buy this oven because she did not want to miss out on the promotional price and the free delivery and installation.

After the oven was installed, and when Sarah was browsing online to find out more information about the oven, she found out that while BAKER'S DREAM was a German company, the oven model "BD 7000" was made and assembled in Asia. This caused some concern to Sarah as she had paid the premium price (although it was slightly discounted under the promotion) to buy the BAKER'S DREAM oven because she thought it was made in Germany. Sarah knew that German-made products tended to command a higher price. If she had known (before her purchase) that the oven was not actually made in Germany, she would have bought another comparable product instead that was made in Asia for a much lower price.

Further, when Sarah was browsing one of the online chat forums for professional chefs, she found mixed reviews about the oven, which were given more than a year ago. On that particular chat forum, there were 30% negative reviews (i.e. reviews giving 1-star or 2-stars out of a maximum of 5-stars) and the rest of the reviews were either neutral or favourable (i.e., reviews giving 3-stars and above). If she had known before her purchase that there were negative online reviews by professional chefs, she would not have paid the premium price to buy the BAKER'S DREAM oven, and would likely have settled for a cheaper alternative instead.

Question 1

Examine the statements (indicated in italics in the scenario above) made by Jeremy to Sarah and analyse whether each of them is likely to be a puff, representation or contract term. In your analysis, explain why you have identified each of these statements as a puff, representation or contract term.

(60 marks)

Question 1b

For this Question 1b, assume that the following statements made by Jeremy to Sarah are representations (and not contract terms):

(a) "Many professional chefs have bought this model for their own homes and they have all given 5-star reviews for this product, so you should check out their reviews online!" (b) "I think this oven is made in Germany".

Based on the facts and circumstances given in the scenario in relation to these representations, explain whether Sarah would be entitled to rescind the contract with Grove Electric on the basis of misrepresentation.

(40 marks)