Law Of Contract 2 Question Paper

Law Of Contract 2

Course:Bachelor Of Laws

Institution: Kenyatta University question papers

Exam Year:2010

Answer question ONE and any other TWO questions.

1.Christine and James have been married for the past five years.Christine is an artist and would like to set up an art studio next to their house.She contracts Witless Construction Co.to build the studio.Christine has chosen a complicated design for the studio making the construction work expensive.Witless charges Christine Kshs.450,000.Christine informs Witless that the art studio should be completed by 30th April,2010 to allow her to paint portraits she had been commissioned to paint by two wealthy businessmen.While construction of the studio continued,James who recently lost his job asked Christine to stand as his surety for a laon of Kshs.2,000,000 he was taking with Charlatan Imperial Bank.James told Christine that the loan was to help him start an import and export business,which would greatly increase thie income.Unknown to Christine,James actually intended to use the loan to purchase a house in Langata.The bank was aware of this but failed to tell Christine.

Witless have used substandard materials and unskilled workmen to construct the art studio resulting in the collapse of the studio before it is completed.Christine is unable to find an alternative building to do her painting and is forced to return the Kshs.300,000 she had been paid as deposit for the portraits.She is informed that the costs of rebuilding the studio according to her design would be Kshs.900,000.In addition,James has left Christine and is now staying with a mistress in the house in Langata.He has failed to repay the loan and Charlatan Bank has informed Christine that they will be enforcing security against her.Christine is distraught and seeks your advice.

Advice Christine as to her possible causes of action or defences with regard to Witless Construction Co.and Charlatan Imperial Bank. (30 marks)

2.Write short notes on ALL of the following:
a)Anticipatory breach (6 marks)

b)Non-financial loss (5 marks)

c)Quantum merit (4 marks)

d)Non est factum (5 marks)

3.Discuss the concept of illegality and how it operates with respect to the law of contract in Kenya.Citing authorities indicate the consequences of illegality and the remedies available. (20 marks)

4.In a bid to take advantage of the increased interest on Migingo Island following the dispute over its ownership by both Kenya and Uganda,Kanga decided to sell tickets for a tour of the island.The tourists would be taken by boat to view the island.To this end,Kanga,a Kenyan,entere into an agreement with Mamboleo Tour Co.Ltd to supply him with four boats at a weekly fee of Kshs.10,000,payable at the end of each month.He enters into another agreement with a local hotel to provide accommodation for his customers.He makes an eight week advance payment of Kshs.90,000 to the hotel.After the tours have been in operation for two weeks,volcanic activity causes the island to be submerged under the lake.Kanga has accepted Kshs.2000 deposit from 100 prospective tourists for future visits.Concerned about his expenditure,Kanga does not pay Mamboleo at the end of the month.He announces that due to the sinking of the island,all tours are canceled;Mamboleo and the hotel are informed that all arrangements are at an immediate end.

Advise Kanga. (20 marks)

5."The rule that no one except a party to a contract can be made liable under it is generally regarded as just and sensible.But the rule that no one except a party to a contract can enforce it may cause an inconvenience where it prevents the person most interested in enforcing the contract from doing so.The many exceptions to the doctrine make it tolerable in practice,but they have provoked the question whether it would not be better further to modify the doctrine or to abolish it altogether ."Per G.H.Treitel in The Law of Contract.Discuss. (20 marks)

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