Page 50 - DMGT407Corporate and Business Laws

Unit 2: Consent, Indemnity and Guarantee Acts

Notes

Case Study Fraud Case – False Information

“I didn’t receive the products. The supplier said the goods were detained in the Customs
Office because Customs didn’t find the original invoice attached to the goods. The supplier
explained that it’s his company’s policy was to issue original invoices only when quantities
are above 5 units. He told me to pay for another 2 units for another $150 USD, but I have
refused. I paid by Western Union. He registered on your website as a US company, but
actually it is Chinese Company. All his information is fraudulent. His is a fraudulent
company!”
If you think their price is very attractive and want to deal with them, it is very necessary
for you to verify that they are legitimate company and their contact information is correct.
In this case, the fraudster is pretending to be a US company, but all his registered information
is false. This can be judged easily by calling his company telephone number or by searching
the company name on related state government websites.
Western Union is a dangerous payment method, it can be picked up anywhere in the
recipient’s country, with no way of tracing the person who picked it up. The criminal
remains anonymous. So it is a commonly used payment method for con-artists. So try to
avoid adopting this payment method and consider other more secure payment methods
like escrow.

Questions
1. What would you understand if the seller requests you to send payment to another
country instead of his registered country showed on the website?

2. What would be the protection available to the seller of the goods in this scenario?
3. Analyse the ways in which a person can find out the whether the company is
fraudulent.

Source: http://resources.alibaba.com/article/35541/Fraud_Case_Study_5_The_Contract_trap_.htm....
by resources admin
2.10 Summary

When two or more persons agree upon the same thing in the same sense, they are said to
consent.

For a contract to be valid it is not only necessary that the parties consent but also that they
consent freely.
Coercion is committing or threatening to commit any act forbidden by the Indian Penal
Code.
Misrepresentation is also known as simple misrepresentation whereas fraud is known as
fraudulent misrepresentation.
Mistake may be defined as an erroneous belief on the part of the parties to the contract
concerning something pertaining to the contract.

A contract of guarantee is defined as a contract to perform the promise, or discharge the
liability of a third person in case of his default.

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