Law Of Contract 2 Question Paper

Law Of Contract 2

Course:Bachelor Of Laws

Institution: Kenyatta University question papers

Exam Year:2011

Answer question ONE and any other TWO questions.

1.a)Dr.Tembe decides to sell his private medical practice.In May,Dr.Tabu expresses an interest in purchasing the business and negotiations begin.Dr.Tembe,in the course of the negotiations,tell Dr.Tabu that"everything is splendid at the moment.I have more work than I could possibly want"and that his practice would be"an excellent opportunity for a young doctor such as yourself".Dr.Tembe offers to show Dr.Tabu the accounts,which show an annual profit of Kshs.1,000,000,but Dr.Tabu is so impressed that he decides not to bother.He is relieved not to hear that Dr.Tembe is planning to retire,as he knows him not to be popular with the patients.This prompts Dr.Tabu to offer the full asking price immediately,which Dr.Tembe accepts.

Advise Dr.Tabu. (20 marks)

b)Explain two circumstances under which quasi-contracts are created. (10 marks)

2.Fauzia lives alone,but has always been very fond of her cousin,Zamzam,who lives in the same village with her family(Ali,her husband and her son).When Zamzam tells her that Ali has lost his job and that they are suffering from financial difficulties,Fauzia offers to help.She offers to give Ahmed who is in his final year at the university,Kshs.50,000,provided that he works hard and obtains a second class degree.Fauzia also agrees to pay Zamzam Kshs.30,000 for all the errands she has run for her in the past.Zamzam is pleased as she had,selfishly,expected some payment for all this effort.Fauzia also agrees that,although Ali owes her Kshs.10,000,she will accept Kshs.5,000 instead.Ali pays Fauzia Kshs.5,000.Ahmed,who is exceptionally intelligent,does little work,but manages to obtain a first class degree.As a result,he obtains a lucrative training post in a merchant bank.

Advise Fauzia, who has now quarreled with Zamzam and wishes to know to what extent is bound by her promises. (15 Marks)

Would it make a difference if Zamzam paid Fauzzia Ksh. 5000? (5 marks)

3. Write short note on all the following:
a). Liquidated damages (6 Marks)
b). Mitigation of damages (5 Marks)
c). Duress to goods (4Marks)
d). Solus agreements (5 Marks)

4. "The object of the Law Reform (Frustrated Contracts) Act 1943 was to rectify the problems created in a number of decision which allowed a party to retain unjustly a benefit when a contract had been discharged by frustration. Although the objective of the 1943 Act is a good one, the Act presents lawyers with two fundamental difficulties: Fisrt, it does not define a frustrating event and uncertainity thus attends this vital question: and secondly, it is by no means easy to calculate when a benefit will be restored by one party to the other." Discuss. (20 Marks)

5. Lotodo,a licenced arms dealer,sells to Lenges at a price of Kshs.10,000 each,50 rifles,which Lenges tells Lotodo are for use for the Rifles Club of which he is the secretary.Though Lenges is indeed the secretary of a Rifle Club,is infact buying the weapons for the purpose of supplying them to cattle rustlers.

Lotodo delivers 20 rifles to Lenges pursuant to the contract and is about to dispatch the remaining 30 rifles (having set this aside for delivery to Lenges) when he learns of the true purpose to which these are to be put and refuses to release them.Meanwhile,the rifles already delivered to Lenges have been resold by him to the cattle rustlers.

Discuss the rights of Lotodo and Lenges. (20 Marks)

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