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Law Of Contract Question Paper

Law Of Contract

Course:Bachelor Of Law

Institution: Mount Kenya University question papers

Exam Year:2011

MOUNT KENYA UNIVERSITY
SCHOOL OF LAW
DEPARTMENT OF LAW BACHELOR OF LAW
UNIT CODE MLP:123 UNIT TITLE: CONTRACT II
DATE: AUGUST 2011 MAIN EXAM TIME:2HRS

ANSWER QUESTION ONE AND ANY OTHER TWO

QUESTION ONE
On 2nd May 2009, Ndongo, a prominent rumba musician and performer, entered into a contract with Ajayi in which the former agreed to sell to the latter a second hand vehicle, a Mercedes salon, that was in transit from Singapore and was due to arrive at Mombasa on 25th, may on board "M V MVITA." Ajay paid Ndongo in advance the agreed purchase price of Kshs 2 million and the latter acknowledged the receipt thereof. Besides Ajayi paid Ndongo a further sum of Kshs 500,000 on 3rd may 2009 for the hire of Mr Ndongo's music performance hall, which Ajayi wanted to use two weeks later in promotion of a Congolese music orchestra called NEW T.P OK JAZZ.

Ndongo promised to deliver the car to Ajayi on 28th May 2009. However, unknown to both parties, the M.V MVITA had been hijacked on the high seas by the Somali pirates and set ablaze when the American soldiers attempted to rescue it and all the cargo, including the car on board, were consumed by the ensuing grenade fire. Meanwhile, the music performance hall was set ablaze by suspected music rivals of T.p OK JAZZ before the actual day of performance which was, subsequently, cancelled.

Because of the aforesaid events,Ndongo could neither deliver the car nor the performance hall. Ajayi, feeling aggrieved thereby, has come to you for advice. Citing authorities, discuss the possible causes of action in relation to non delivery of the car as well as the performance hall, in favour of Ajayi. (20 marks)

QUESTION TWO.

Parties sometimes choose to include a term in their contract, known as liquidated damage clause.
Review the approach that the courts have adopted in distinguishing penalty and liquidated damages clauses, using case illustrations. (20 marks)

QUESTION THREE.

(a) Discuss the nature and scope of presumed undue influence (O' BRIEN TYPE 2B) using appropriate case law. (10 marks)

b) What is the relationship between undue influence and the rights of the third parties?
(10 marks)

QUESTION FOUR.

Discuss any two of the following:

(a) Anticipatory breach of contract.
(b) Performance of a contract.
(C) Mutual mistake.

QUESTION FIVE.

Juma owns a 10 acre farm in Nyandarua District. He entered into a contract with X CO Ltd for one year so that they may use it in the production of maize seeds, under which he agreed to let his farm to X CO Ltd. It was agreed that Juma would be paid rent at the rate of Shs 5,000/= per month. In addition, he would be entitled to Shs 40,000/= at the end of each growing season.

At the time of the agreement, Juma told the company that the land was capable of producing seeds worth at least Shs. 1,200,000/= in a year. His statement was based on a report prepared by an agricultural expert which he showed to the company. The report was 10 years old at the time of the contract.

At the end of the first planting season, the company has found out that the land is less productive than the parties thought and this has been confirmed by another study done at the request of the company. If the company continues the seed project on the foregoing terms, it will incur heavy losses.

The company consults you wishing to know whether they have any remedies founded on mistake and/ on misrepresentation.

Prepare an articulate brief for the company, citing relevant authorities. (20 marks)

Law Of Contract Question Paper

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