Marinko v Masri

In *Marinko and Anor v Masri*, the New South Wales Court of Appeal considered an appeal arising from a dispute between the parties concerning a contract for the sale of a business. The primary issue before the Court was whether the appellant purchasers had validly terminated the contract due to alleged misrepresentations made by the respondent vendor.

The Court was required to determine whether the representations made by the vendor regarding the business's profitability and turnover constituted misrepresentations of fact, and if so, whether these misrepresentations were material and induced the purchasers to enter into the contract. Furthermore, the Court had to consider whether the purchasers had affirmed the contract after becoming aware of the alleged misrepresentations, thereby losing their right to terminate.

The Court of Appeal found that the representations made by the vendor were indeed misrepresentations of fact, as they were not supported by the evidence and were demonstrably false. It was held that these misrepresentations were material and had induced the purchasers to enter into the agreement. Crucially, the Court determined that the purchasers had not affirmed the contract, as their actions after discovering the misrepresentations were consistent with an intention to repudiate the contract, not to proceed with it. The appeal was therefore allowed.