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Mr Pinney,the Owner of Three Restaurants,made a Mistake When He

Question 11

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Mr Pinney,the owner of three restaurants,made a mistake when he inspected an exclusive restaurant he wanted to buy.He saw the restaurant had set tables and chairs for 126 customers and assumed,without checking council records,that it had a liquor licence for that many people.The owners of the restaurant never claimed that it could seat 126.After Pinney bought the restaurant for $700 000 he learnt that its liquor licence restricted the number of customers to 84.The contract of sale contained an exclusion clause,which stated Pinney had not relied on any representations made by the seller during the negotiations.Which statement best sums up Pinney's legal rights under s18 of the Australian Consumer Law which prohibits misleading or deceptive conduct?


A) He has no rights because he is barred by the exclusion clause from taking legal action.
B) He is likely to succeed.The seller breached s18 by creating a misleading impression about the seating capacity and keeping silent about the true situation.
C) He has no rights.He was a businessperson,not a consumer,and is therefore unable to sue under s18.
D) He has no rights.He made a mistake,which an experienced businessperson should never have made and must suffer the consequences.
E) B and C above.

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