Successful online business

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Reference no: EM133937699

Question

Mark had a successful online business, selling luxury items from China to a high net worth clientele. He decided to sell his business as he wished to go on a walking trip around Europe. George, who was Mark's long-time friend, expressed an interest in buying the business. When George asked why the business had done so exceptionally well in the past, Mark told him that "there are no other online shops that sell the same Chinese brands as my e-commerce shop"and showed him recent newspaper articles that featured his shop to prove his statement. George read the newspaper articles and nodded happily.

Mark also assured George that the annual profits for his shop exceeded RM 2 million. George had some doubts and, therefore, he asked his accountant, Poon, to investigate and verify Mark's statement on the shop's annual profits. Poon confirmed Mark's statement. Unknown to Georgeand Poon, the shop's annual profit never exceeded RM 100,000. George informed Mark that he would let him know in two weeks of his decision on whether he would buy the shop.

During these two weeks, Mark found out that another online shop, Oriental, was about to start operations and sell the same brands as his online shop. Mark decided not to inform George of this.

Finally, George agreed to purchase Mark's business. They signed a simple written contract that did not contain any of the details mentioned earlier by Mark.

George subsequently discovered, (within a month), the true level of profits of Mark's shop as well as the launch of Oriental.

George wants to rescind the contract for the purchase of Marks's business and has come to you for advice.

Reference no: EM133937699

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