Question 2 (10 marks)

Belinda wants to buy a second-hand car and visits a number of car dealers before deciding to purchase an as new 1998 Ford Mustang from American Car Sales. The sales person, Jaxson, tells Belinda that the car was manufactured in 1998 and had only done 54,000 kms.

Three months later, Belinda has the Mustang serviced with her local mechanic who was a Mustang enthusiast. He comments on the fact that the car was in pretty good condition for a 1994 Mustang, though he was surprised that it had only done 54,000 kms. He would not have been surprised if it had done 100,000 kms.

Belinda makes further inquiries and discovers that the Mustang was in fact made in 1994 and she has paid about $5,000 more than the actual market value of the car. Belinda intends to approach American Car Sales about this issue.

Does Belinda have any contractual rights against American Car Sales?

Required:

You are expected to discuss legal rules learned regarding terms of a contract, in particular statements and representations, and conditions and warranties.