Misrepresentation and exemption clauses continue

Exemption Clause Overview

• Exemption clauses outline conditions under which certain liabilities may not apply.

• There are exceptions to these clauses which need to be considered in relevant transactions.

Example of a Transaction Involving Damages

The Scenario

• Participant A buys a car from Participant B.

• The actual market value of the car is R80,000.

• A purchases the car for R100,000.

Financial Breakdown

• Debit Entry: R80,000 (actual value of the vehicle).

• Credit Entry: R100,000 (price paid by A).

Analysis of the Difference

• Difference: R100,000 (credit) - R80,000 (debit) = R20,000.

• This R20,000 represents the damages incurred in the transaction.

• Importance of comparing the actual value versus the purchase price to gauge financial standing.