Kay is the founder and CEO of the company Lone Sun which ran a social media website with over 1 million registered users. The website had been elected as one of the most trusted medical reference websites in 2018. In April 2019, Kay had been approached by Jay a representative of a company named Global Cure for collaboration. Under the proposed project, Lone Sun would have the right to exclusively distribute, sell and market the drug Tedroin that had been manufactured by Global Cure and also protected by patent and know-how owned by Global Cure. Kay was persuaded when Jay emphasized on the business value of these patents. Both sides soon proposed major terms in negotiation and decided that a formal contract for collaboration purpose would be made in October 2019.

Meanwhile, omitted by Jay during the negotiation was the fact that Global Cure had been involved in a major litigation for over a year and the judgment was delivered in July 2019. According to the judgment, Global Cure was no longer the patent owner of Tedroin, which meant that it must spend on license fee, an uncertain amount, to the new patent owner of Tedroin. Lone Sun finally concluded the contract with Global Cure in October 2019 without knowing the judgement.

(1) It turned out that the license fee requested by the new patent owner for Tedroin was unexpectedly high. It was foreseen that the project would hardly generate any profits. After knowing the loss of patent of Tedroin and the true position of the project, Lone Sun intended to sue based on misrepresentation.

Required:

Discuss whether the conduct of Jay constitutes misrepresentation. You are required to cite a relevant case to support your answer but do NOT need to discuss the different types of misrepresentation. (20 marks)

(2) Suppose there was a term in the contract Lone Sun and Global Cure signed in October 2019, which provided, "If in case the number of registered users of Lone Sun's website drops below 0.5 million, this contract would end automatically." (The scenario in this part is independent from that of question (1).)

Required:

(i) Assume the current number of registered users of the website is 0.4 million, discuss whether the contract between Lone Sun and Global Cure can be discharged and in what way. (3 marks)

(ii) Describe the other ways to discharge a contract apart from that in (2)(i). (3marks)