Case Study (Total Marks: 20 Marks)

In July 2021, Holiday Sdn. Bhd., sold a 2000 model motor boat to Beach Sdn. Bhd. for RM800,000. Due to an honest mistake, Holiday Sdn. Bhd. describes the boat in the contract of sale as a 2004 model. Relying on this, Beach Sdn. Bhd. prepared an information certificate about the boat, which described it as 2004 model and which further stated that it has an odometer reading of 1300 nautical miles. In March of this year, David made enquiries about the boat in response to a newspaper advertisement placed by Beach Sdn. Bhd. He spoke at some length to Rachel Smith, a sales representative at Beach Sdn. Bhd., who assured him that the boat was in excellent condition. "This boat is the best one of its kind in town", she said.

Relying on this information certificate and Rachel's remarks, David purchased the boat for RM1,000,000. Soon after, Racheal discovered the truth about the boat (that it was in fact a 1990 model), but decided not to pass this information on to David. Subsequently David was involved in a minor accident, as a result of which repairs were carried out on the boat. During the course of these repairs, he discovered that the boat was a 1990 model and that the odometer had been disconnected several years before. The boat had in fact travelled more than 5000 nautical miles and there were better models in town. Advise David and Beach Sdn. Bhd. about their rights (if any) and discuss the legal position of the parties by referring to relevant statutory provisions and decided cases.