CAPE 2005 SECTION A

Answer this question.

1. Rasheed is the owner of 15 Bank Lane on which is located a building which houses
apartment. At lunch with his friend Dilip, Rasheed says that he is thinking of selling
the property and that he has an offer of $450 000.00. Dilip, who has always liked the
property, offers Rasheed $500 000.00. Rasheed says, “No problem, consider it sold.”

Before the contract is signed, Dilip sends his architect, Thomas, to inspect the
property. Thomas enters a darkened room in the basement, on the door of which is a
sign “DANGER-DO NOT ENTER”. He is injured in the room when he trips over the
broiler.

(C) Rasheed contacts Dilip to say that he will still let him have the property of Dilip will
give him a further $50 000.00 “under the table” do that they will pay reduced transfer
tax. Dilip refuses.

Advise Rasheed of the principle of contract on which Dilip could challenge him.

[10 marks]
CAPE 2005 MODULE 2:

LAW OF CONTRACT

Answer ONE question.

2. “There are…many contractual undertakings of a more complex character which

cannot be categorized as being ‘condition’ or ‘warranties’” (per Diplock L J in the
Hong Kong fir case).

How far does this statement support the view that the category of ‘innominate’ or
intermediate terms makes it easier for the courts when dealing with breaches of
contract? Support your answer with reference to relevant case law.
Total 25 marks

3. Marla is the president of a consumer advocacy group. She is unhappy about a the
numerous complaints she has been receiving from consumers about the defective
products they have purchased and unscrupulous workmen who provide sub-standard
work. Many of these consumers find that when they seek redress the defendants rely
on the “fine print” of exemption clauses in contracts signed to or accepted by the
consumers.

Advise Marla on the effect of exemption or exclusion clauses on such contracts.

Total 25 marks

4. (a) Discuss the effect of mistake on the consent of the parties of a contract.
[15 marks]

Edwina visits a local art shop and purchases a few small pieces of what she
believes are 18th century artifacts and is assured of this by the owner, who is her
appraiser and also a well-known art critic. She later discovers that the pieces are
20th century and wants to know what are her legal rights.

Advise Edwina on the effects of the mistake, if any, on her purchase.

[10 marks]

Total 25 marks

CAPE 2007 SECTION A

Answer this question.

 1. Kenyatta, the free holder of a one-storey building, granted a lease to Ruiz for seven years
to operate a restaurant, giving him permission to use the empty lot next door as a car
park. Kenyatta gave Ruiz permission to renovate the building and make the necessary
changes to accommodate the restaurant. Ruiz spent $25 000.00 to renovate the shop. He
then sublet the shop to Candice to operate the restaurant. Ruiz presented his bill to
Kenyatta who accepted it and wrote on it “I.O.U”.

When the first lease expired, Kenyatta offered to sell the property to Ruiz for $100
000.00 and refused to consider the $25 000.00 previously spent by Ruiz. Ruiz refused to
purchase the property. Kenyatta gave him notice to quit but he refused to move out of the
premises. One month later Kenyatta set up a pig farm next to the restaurant. Because of
the constant horrible odours coming from the pig farm, Candice’s customers stopped
coming to the restaurant and Candice lost thousands of dollars in business. Candice also
became ill from constantly inhaling the odours. Eventually she had to close down the
restaurant because all of her customers had stopped coming there.

Advise the following persons:

(b) Ruiz on the likelihood of succeeding on a claim in contract against Kenyatta, in

relation to the cost of the repairs [10 marks]

CAPE 2007 MODULE 2: LAW OF CONTRACT

Answer ONE question.

2. (a) It is an accepted principle of contract law that “an invitation to treat is not an offer for
sale.”

Explain this principle of law with reference to TWO decided cases. [12 marks]

(b) The Housing Authority passes a resolution to sell their tenanted houses to tenants
who have lived in those houses for five or more years.

Richard, the Chief Operating Officer, writes a letter to qualified tenants that “the
Authority will be prepared to sell you the house you currently occupy at the assessed
market value, less 20%.” Tenants, including Bernard, are invited to make formal
applications if they wish to purchase the house they occupy. Bernard applies.

Before Bernard receives an answer from the Authority there is a general election and
a change of government. The Housing Authority’s policy is changed by the new
Board.

Bernard claims that there is a binding contract between him and the Authority.

Advise Bernard, citing ONE case to support your advice. [13 marks]

Total 25 marks

3. (a) Meg, a well-known singer, agrees to be the soloist at her best friend Lil’s wedding.
Meg refuses to accept a fee from Lil and tells her “consider my singing to be your
present.” On the day of the wedding, Meg cannot sing as she is very hoarse.

Citing relevant case law, advise Lil whether she can successfully bring an action against
Meg. [13 marks]

(a) Meg is contracted by Telco Ltd to sing at their Christmas concert. She is paid half of
the fee, the balance to be paid after the concert. On the evening of the concert, Meg
cannot sing as she is hoarse.

Explain to Telco Ltd the basis upon which Meg may be discharged from her contract
with them. Cite relevant case law to support your answer. [12 marks]

4. With reference to decided cases, assess the impact of illegality on a contract.

[25 marks]
CAPE 2008 SECTION A

MODULE 2: LAW OF CONTRACT

Answer this question

 a) Eddie sees on a realtor’s website a listing of a property in his neighborhood. He
e-mails the realtor indicating his interest, as required, and submits a sealed bid
ahead of the deadline.
Unknown to him, the realtor e-mails the enquiry to Mervyn, the vendor, who
instructs the realtor to accept the offer. When Mervyn discovers that Eddie is the
prospective buyer, he withdraws the property from the market.

With reference to decided cases:

(i) Advise Eddie whether he can succeed in a claim against Mervyn.

[4
marks]
(ii) Explain to Mervin his contractual liability, if any. [ 4 marks]

CAPE 2008 MODULE 2: LAW OF CONTRACT

Answer ONE question

1. One writer has observed that the rules developed by the Courts impose fairly heavy
burdens on those arguing that a mistake has been made.

Explain this statement, illustrating your answer with references to mistakes which have
been held to render a contract null and void. [25 marks]

2. (a) (i) Define the term ‘promissory estoppel.’

(ii) Explain the legal application of promissory estoppel. [10 marks]

(b) Marco and Paula are engaged to be married. Both are interested in operating a
business. They executed a pre-nuptial agreement, a term of which is as follows:

“Should our marriage terminate for any reason whatsoever we will not take legal action
against each other on account of any business venture shall be shared equally between us
for a period of three years immediately after the termination, even if that business is
operated by only one of us.”

After five years of marriage during which they operated a successful bakery business,
Marco and Paula divorce. Paula uses her share of profits in the first year to start a
supermarket, which develops into a profitable enterprise.

Marco falls on hard times and claims that, based on their agreement, he is entitled to half
the profits from the supermarket operations. Paula rejects his claim.

Citing case law in support of your answer, advise Marco whether or not his claim is likely
to succeed. [15 marks]

Total 25 marks

3. Rajiv applies to Petroleum Experts Ltd (Pet Ex) for a license to operate one of their gas
stations. The Managing Director of Pet Ex tells Rajiv that the station sells up to 60 000
litres of petrol monthly and that the Pet Ex Store averages an income of $75 000.00
monthly.

Rajiv finds that the store actually sells an average of 40 000 litres monthly and the Pet Ex
Store averages $35 000.00 monthly. He is sometimes late with his rental payments and a
conflict develops between him and Pet Ex as they want to re-take possession of the gas
station.
Rajiv threatens to sue Pet Ex, as he argues that their representation as to the output and
anticipated income constitutes a warranty. He also contends that they are guilty of
negligent misinterpretation. Explain, with reference to decided cases, the effects of
EACH of the following on the contract between Pet Ex and Rajiv:
(a) Warranties [ 8 marks]
(b) Collateral terms [ 8 marks]
(c) Negligent misrepresentation [ 9 marks]
Total 25
marks

CAPE 2010 MODULE 2: LAW OF CONTRACT

Answer ONE question

1. (a) With reference to decided cases, outline FOUR ways in which an offer may be
terminated. [10 marks]
 (b) Donna’s pet dog, Flash, is missing. On March 20, she puts up posters on her
neighborhood offering a reward of $1000 for Flash’s return by March 25. She also
advertises the reward for its return in the local newspaper. On March 23, Donna
decides that she does not want Flash anymore. On the next day, she publishes an
advertisement in the newspaper withdrawing the reward. Evan finds Flash that same
day and sends an e-mail to Donna claiming the reward and informing her she can
collect Flash from his house. Donna opens the e-mail on March 26.

Is Evan entitled to the reward? Support your answer with reference to case law.
[15 marks]
Total 25 marks

2. With reference to decided cases:

(a) Discuss the incorporation of exclusion clauses into contracts. [12 marks]
(b) Evaluate the factors considered by the courts in determining whether or not an
exclusion cause covers the breach which has occurred. [13 marks]

Total 25 marks

CAPE 2011 MODULE 2: LAW OF CONTRACT

Answer ONE question

1. (a) With reference to at least ONE decided case, explain ‘consideration’. [ 8 marks]
(b) Jack asks Hugo, his brother, to keep a special eye on his home while he’s away on a
business trip. Jack tells Hugo,
 “I will settle with you when I return, but do not go overboard. Do not spend more than
$1500 monthly on the yard.”

Upon Jack’s return, he pays Hugo and promises him a further $500. When Hugo asks for
the $500, Jack refuses to pay him.

With reference to at least ONE decided case, advise Hugo whether he is entitled to the
money from Jack. [17 marks]
Total 25 marks

2. (a) With reference to at least ONE decided case, explain each of the following:

(i) Fraudulent misrepresentation [4 marks]

(ii) Negligent misrepresentation [4 marks]

(b) Mary tells Nicole that she intends to open another branch off her beauty salon and
wants Nicole to be her partner. She takes Nicole to a shopping center and points to a
shop which she says she has rented already. Nicole sees some men inside the shop
doing renovations. She wants to take a look, but Mary tells her not to worry as they
can come back another day. She also tells Nicole that she can see the rental agreement
whenever she wants. Nicole gives Mary $2,500 to assist her with her opening. Six
months have gone by and Mary has not opened the new branch. Nicole then discovers
that Mary has never rented the shop.

With reference to at least ONE decided case, advise Nicole whether she can recover
her money.

[17 marks]

Total 25 marks

CAPE 2014 SECTION B

MODULE 2: LAW OF CONTRACT

Answer ONE question from this section.

EITHER
1. Describe the circumstances in which additional terms may be implied into a contract.
Support your answer by referring to decided cases. [12 marks]

(b) Explain the distinction between warranties and conditions, using decided cases or
examples. [13 marks]
Total 25 marks

2. Explain the doctrine of frustration of contract. [4 marks]

Explain the limitations of the doctrine of frustration, using decided cases to illustrate your
answer. [6 marks]

(b) Drake building supplies Ltd, a company based in the state of Gota, entersinto an
agreement to supply timber to Ranna Hotels Ltd, which is based in the state of
Billani. The agreement contains an option for Ranna Hotels Ltd to purchase a
timber yard. A war then breaks out between Gota and Billani. By a wartime
control over in Billani, trading under the agreement becomes illegal. Ranna
Hotels Ltd wishes to exercise the option.

(i) Advise Ranna Hotels Ltd of any claims it may have against Drake Building Supplies
Ltd.

(ii) How would your advice to Ranna Hotels Ltd differ if its managing director knew of
the impending wartime control order when he signed the agreement?
[15 marks]

Total 25 marks