Mike's Auto was selling a used car. They advertised the car as being in "perfect working order", which Mike's believed to be true based on statements made to Mike's by a previous owner.

Hank saw the advertisement and were impressed by it.Using Mike's standard form, Hank offered to buy the car at a price of $15,000. On the form right above Hank's signature appeared the following clause:

"The buyer agrees that it is relying on its own inspection of the condition of the goods and that there are no representations, warranties, guarantees of terms on the part of the seller other than those that appear herein in writing."

Hank mailed the offer to Mike's on September 10.Mike's received the offer on September 15 and that day sent Hank a fax that said:

"We welcome your interest in the car but cannot accept the price.We would be willing to sell it to you for $16,500.Mail us your reply on our standard order form."

The next day, when Hank's manager received the fax, she telephoned Mike's representative and said: "We really can't afford to pay that much.Is that your lowest price?"

Mike's representative replied: "Yes"

On September 19 Hank filled in Mike's standard order form agreeing to pay $165,000 for the car and mailed it to Trustee.

On September 21 Mike's received an offer by phone from Betsy to buy the car for $17,000, and Mike accepted the offer immediately by phone.That day Mike phoned Hank to let it know that the car was no longer available because it had been sold to Betsy.

Mike received Hank's order form on September 25.

Hank has threatened to sue Mike for breach of contract.

c)Assume that Mike's and Hank do have a contract for purchase and sale of the car. The day after taking delivery of the car, Hank has it inspected by a mechanic who says that the car is in poor shape and requires about $2,000 worth of repairs before it can be used.Hank does not want the car and wants to return it to Mike's based on the fact that it is not of acceptable quality and because of the inaccuracies on the advertisement.Assess any legal rights and remedies Hank might have in this situation, with references to any applicable cases. (10 marks)

d)Hank was counting on having the car to perform overdue work on a job, and was stunned to hear, after entering into the contract, that the manufacturer has recalled all the same model of car that he purchased, saying that due to an extreme engine deficiency they are hazardous to operate and cannot be sold. Hank wants to sue Mike's as they needed the car and have mounting expenses due to not having it.Advise Trustee as to defences available to them and whether they are liable for Hank's expenses, with references to all relevant case law. (10 marks)