In a commercial sale, the vendor answered the buyer's written pre-contract enquiry by stating the site had never been contaminated, knowing this was untrue. The buyer discovers the contamination after exchange but before settlement. What remedy is most likely available?
Correct Answer
A) Rescinding the contract and claiming damages for the vendor's misrepresentation
A vendor who knowingly makes a false statement that induces the contract commits fraudulent misrepresentation, which is also misleading conduct under the Australian Consumer Law. Before settlement, the buyer can usually rescind the contract and recover the deposit, and can claim damages for losses caused. Mere silence about contamination in a commercial sale would not necessarily give these remedies, because caveat emptor applies unless there is a statutory duty or a misrepresentation.
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