Question

Samuel was looking to buy a chainsaw to cut tough trees in his 10-acre lot. His neighbor Sara who worked for a landscaping company and was an expert in landscaping equipment, had a used chainsaw. The chainsaw was not designed for tough trees, however Sara highly recommended it to Samuel and stated that the motor can ‘certainly’ handle cutting tough trees. Samuel, a little hesitant to purchase the saw, relied on Sara’s expertise and purchased it for $250 from her. He spent $100 to buy some appliances for the used chainsaw to function better. The saw worked perfectly for small branches, but when he tried to cut down a big tough Oak tree the saw broke and injured his left hand severely. The medical treatment cost Sameul $8,000. Later after recovery he figured that the saw was not designed for tough trees. a) Can Samuel rescind the contract with Sara? Explain b) What remedies, if any, are available to Samuel?

Answer 1

(a): Yes, Samuel can rescind the contract in this case as Sara had made a “false statement” of fact with regards to the chainsaw. In this case Sara claimed that the motor can ‘certainly’ handle cutting tough trees and this clearly was a misrepresentation by Sara. Thus, as Samuel has contracted on the basis of a false statement of fact made to it by Sara, he can certainly rescind the contract.

(b): In this case Samuel will receive remedies that will restore him to the position he would have occupied if no contract was ever formed with Sara. The amount of the damages will be the cost of the used chainsaw, amount spend by Samuel to make the used chain saw functional, and medical treatment cost incurred by Samuel. All these amounts will be deemed as actual losses.