Business law


A = comes from the New Territories and knows nothing about keeping pigs but wants to buy a farm land in Fukien(福建) to keep pigs;
B= owner of a farm land in Fukien(福建) who has been keeping sheep on his land;
C= estate agent in Hong Kong;
D = estate agent in Fukien(福建) ;
E = a restaurant owner in Fukien(福建);
F= a neighbour of B in Fukien .
Assuming that the Hong Kong law applies in this case.
A was born in Hong Kong and he learnt from E, his Fukien friend that pig farmers in Fukien were making a lot of money. A had dreamt of being a farmer, who owned his land and farmhouse and do whatever he wanted on his property. He found C who in turn located D over the internet. B who was a sheep farmer in Fukien was fed-up with sheep farmer; he wanted to improve his financial position and asked D to help him to sell his farm land and promised to give him a 20% extra on top of the commission that D gained from the selling of his farmland. “I had been keeping sheep for life and had never kept any other animals except my dog and my cat.” B told D, who in turn, told C. C related that to A. A said, “Alright, I will visit the Fukien farmland (B’s farmland) next week.”
7 days later, A and C went to Fukien and met B and D. They went to E’s restaurant for lunch. E prepared a table of 10 dishes of food which were made from different parts of a local sheep. He called this “all sheep feast” and had made full use of every single part of sheep. He also told A that “If the land can support the growth of a sheep, it should also support the growth of a pig. Trust me. I can guarantee. I can bet on it. If it cannot keep pigs, I will offer my entire life savings to you, A ” He only had RMB10,000 in his bank account with the Agricultural Bank of China. B told him that he had been keeping 1,000 sheep on the farmland but they had been sold long time ago.
A asked C his estate agent, “Pal, do you think I can keep pigs on this farmland?” C being very conservative person, replied, “May be, maybe not. I am not sure. I can barely keep myself……” A asked D, “How can I remove the pig droppings?” D replied, “Easy stuff. You can build a ditch and lead the water in from the river nearby into the ditch and flush them into the sea….” F was nearby and stuck his head into the discussion and said, “I am sure that this is a good place with good fung shui (風水)..with a hill at the back and a river in front……”
“OK, it looks fine with me.” A entered into a contract with B and paid him HK$200,000 when C and D came to Hong Kong for the execution.
A did not realize that pigs and sheep require different living conditions; he bought 1,000 piglets with HK$100,000 and introduced them onto the farmland. Within a month, they all died. Further, he did not realize that changing the land use from keeping sheep to pig needs to be approved by the local government. He had not applied for government approval and was fined HK$100,000. A was very annoyed. “These guys are cheating me….”
Consider whether A can sue and if so, on what grounds under Contract Law and/or the Tort of Negligence ? Support your answers with support of legislations, cases and logic.


PART I (75 marks)
Prepare a written group assignment containing your answers to the following questions and according to the instructions given in this assignment. Students should be aware that answer to, say, Question (a) may affect the answer to other questions, and vice versa and are advised to put their heads together to consider answers to Questions (a) to (e). They are expected to be totally familiar with all the answers to such questions. Students should demonstrate their ability to be innovative and to use what they learnt to solve the problem(s).
Advise A whether he can sue B and if so, on what ground(s) ? Check whether B has any defence. If so, what can A say in response ? (15 marks)

(Students should consider that B has never involved in pig farming and that he wished to improve his financial standing and was eager to sell his farmland as soon as possible. B informed A that he had only kept sheep and had sold all of them a long time ago. Students should consider whether B had made any false statement or misrepresentation and whether he had any obligation to provide correct information to A in contract law and in the tort of negligence. Students should consider with whom did A enter into a contract. A was not informed of the law on changing land use. Who is responsible ? )

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