Joe Fry owns a chocolate manufacturing business, Lux Choc Ltd, but wants to retire. The company imports cocoa from South America, processes it, and then sells it to shops across the UK. It also has a contract with a supermarket chain which provides a significant part of the company's earnings. Joe relies on the company's chocolatier, Sally Rollo, to design new products. The company accountants, Sweet and Co, audit the business each year. Joe advertised the business for sale in a national trade magazine and was contacted by Albert Bean for more information. Joe confirmed that the supply of the cocoa was from a reliable source in Ecuador and although the business was dependent on this, it was not a problem because the Ecuadorian partner was the biggest producer in the region. When Joe was asked about the contract with the UK supermarket chain, he replied that it would almost certainly be renewed for a further three years. Joe also confirmed that Sally 'had never been happier' working in the business and was one of the company's most valuable assets. A few weeks after providing the information to Albert Bean, several events occurred which would affect the profitability of Lux Choc Ltd and even its survival. These were as follows. i. The Ecuadorian cocoa producer would soon be closed by the government because of an insect infestation. Supplies of cocoa to Joe's company would cease within a month. Joe knew that he would have to buy raw cocoa on the open market and that prices would be 'sky high'. The company's profit margins would disappear overnight. When asked again by Albert about the Ecuadorian cocoa supplies, Joe knew that if he revealed the truth the sale would collapse. Instead, he lied: he informed Albert that the contract with the supplier 'was in great shape' and would continue for years to come. ii. The supermarket chain has informed Joe that it would be reviewing all aspects of its contract with Lux Choc Ltd. Joe did not know whether this would have any effect upon the contract. It could be that everything would stay the same, or instead it could lead to a cancelation: it was uncertain, and simply a matter of opinion. When asked about the contract by Albert, he replied that nothing had changed. The statement was careless: Joe should have checked the finer details with the supermarket first. iii. The company's chocolatier has given notice to Joe that she would be quitting within three months to work for a rival manufacturer. When asked by Albert whether she was still working in the business, Joe replied yes: this was technically correct, but he did not disclose that she would soon be leaving. Albert went ahead and bought Lux Choc Ltd. Within a month he found out the truth about the collapse of supplies from Ecuador. He tried to find alternatives in the open market, but the price of cocoa was three times his current cost. The supermarket chain has also been in contact, informing Albert that it would no longer be offering Lux Choc products in its stores: it had decided that the quality of the products was no longer acceptable. The loss of this contract would reduce future profits by a half. To make matters worse, Sally Rollo has now left the business, leaving Albert with no new product designer. He has also discovered that accounts produced by Sweet and Co had over-valued the business assets and under-reported its losses on sales for the past three years. However, Albert had not contacted the firm to request that they confirm the accounts for his purpose. Albert now wants to cancel the purchase of the business, return it to Joe, and get his money back. With full reference to caselaw and statute, discuss the misrepresentations which may have taken place during the pre-contract negotiations. What remedies may be available to Albert, and in which circumstances may they be lost? What cause of action would Albert consider bringing against Sweet and Co, and why might this not be successful?

Joe Fry owns a chocolate manufacturing business, Lux Choc Ltd, but wants to retire. The company imports cocoa from South America, processes it, and then sells it to shops across the UK. It also has a contract with a supermarket chain which provides a significant part of the company's earnings. Joe relies on the company's chocolatier, Sally Rollo, to design new products. The company accountants, Sweet and Co, audit the business each year. Joe advertised the business for sale in a national trade magazine and was contacted by Albert Bean for more information. Joe confirmed that the supply of the cocoa was from a reliable source in Ecuador and although the business was dependent on this, it was not a problem because the Ecuadorian partner was the biggest producer in the region. When Joe was asked about the contract with the UK supermarket chain, he replied that it would almost certainly be renewed for a further three years. Joe also confirmed that Sally 'had never been happier' working in the business and was one of the company's most valuable assets. ~ A few weeks after providing the information to Albert Bean, several events occurred which would affect the profitability of Lux Choc Led and even its survival. These were as follows