The issues are as follows:
Does Steve have a valid contract with Tom, Pamela, Danny and Trisha?
Can Tom can hold Steve responsible for the losses incurred?
Can Pamela Sue Steve for not fulfilling his promise?
A) At the negotiation stage for the contract, it happens that one of the parties may misrepresent or convey wrong information about a particular good and based on this the contract is executed between the parties. Based on the underlying intent behind misrepresentation, the various types are summarised below (Davenport and Parker, 2014, p.67).
Innocent Misrepresentation – In this case of misrepresentation, the incorrect information is not provided intentionally but due to the representor also having incorrect information about the good.
Negligent Misrepresentation – In this case of misrepresentation, the incorrect information is provided but the representor lacks the belief that it is true.
Fraudulent Misrepresentation – In this case of misrepresentation, the incorrect information is provided by the representor on purpose so as to enter into contractual relations with the other party. To establish fraudulent misrepresentation, the Derry v Peek (1889) 5 T.L.R. 625 case highlights that at least one of the following conditions to be fulfilled. (Gibson and Fraser, 2014, p.79).
Representor at the time of making the statement is aware that it conveys wrong information
Representor does not take requisite care to establish the credibility of the information before communicating it.
Representor gives away the information but has doubts about it being true.
Additional condition for terming the contract as null and void is that the misrepresented information should play a key role in the enactment of contract by the buyer as is evident from the verdict in the Smith New Court Securities v Scrimgeour Vickers  3 WLR 1051 case. In cases involving fraudulent misrepresentation, the aggrieved party can seek remedies that involve...