THIS PAPER IS NOT TO BE REMOVED FROM THE EXAMINATION HALLS

UNIVERSITY OF LONDON LA1040 ZB

DIPLOMA IN LAW / CertHE COMMON LAW

DIPLOMA IN THE COMMON LAW
LLB
BSc DEGREES WITH LAW

Contract law

Tuesday 17 May 2016: 10.00 – 13.15

Candidates will have THREE HOURS AND FIFTEEN MINUTES in which to

answer the questions.

Candidates should answer FOUR of the following EIGHT questions.

Candidates should answer all parts of a question unless otherwise stated.

Permitted materials
Student are permitted to bring into the examination room the following
specified document: one copy of Blackstone’s Statutes on Contract, Tort &
Restitution (OUP).

© University of London 2016

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1. Lord Aristo is an art collector. His favourite painting, Bacon’s ‘Pope
Pious’, is stolen. Lord Aristo places an advertisement in the Times
newspaper offering a reward of £100,000 to anyone who is able to
locate the painting. Advise Lord Aristo in each of the following
alternative circumstances:

(a) Canon, a private investigator, is employed by Lord Aristo’s

insurance company to recover the picture. Canon locates the
picture and claims the reward.

(b) Devi sees the advertisement, locates the picture and claims the
reward. Devi does not see an advertisement placed in the
Independent newspaper withdrawing the offer of a reward
before he finds the picture.

(c) Vera, a police detective working on the theft, locates the picture
and claims the reward.

(d) Baron Bluster, a friend of Lord Aristo, begins an extensive

search for the painting. He telephones Lord Aristo to tell him that
he will be meeting an informer that evening who will tell him
where the painting is. Lord Aristo tells Baron Bluster not to
bother because he has changed his mind about the reward.
Baron Bluster goes ahead with the meeting, gets the information
and claims the reward.

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2. Ahmed says to Jane, “Would you like to buy my computer for £300?”
Jane agrees to buy it. Advise Ahmed in each of the following
alternative circumstances:

(a) Jane intends to buy the laptop computer that Ahmed was using
when he made the offer. Ahmed intended to sell an old desktop
computer that he has at home and no longer uses.

(b) Ahmed only owns one computer. English is not his first
language and he often confuses the words three and nine when
speaking. Jane realises that Ahmed has probably made a
mistake in that he meant to sell his computer for £900.

(c) Ahmed thinks that his mother has bought him a new computer
as a birthday present. In fact she has bought him a new
television.

(d) Unknown to Ahmed his only computer was destroyed in a gas

explosion at his home which took place an hour before his
conversation with Jane.

(e) Both Ahmed and Jane think that Ahmed’s only computer has the
latest Pentium 10 processor. In fact it has a much less powerful
Pentium 6 processor.

3. Critically evaluate TWO of the following statements:

(a) It is very difficult to rebut the presumption that an agreement

concluded between family members or friends was not, and that
one concluded in a commercial setting was, intended to have
legal effect.

(b) Silence can never amount to acceptance.

(c) The definition of ‘necessaries’ in the context of minor’s contracts

is unclear and antiquated.

(d) The rules concerning so called ‘anticipatory’ breaches of

contract are difficult to state and even harder to defend.

4. ‘The distinction between conditions and warranties should be

abandoned and all contract terms should in the future be regarded as
innominate terms.’

Critically discuss this statement.

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5. Lady Godiva is short of money and so decides to sell a painting, her
Rolls-Royce car and a gun. Three potential purchasers visit her on 1
February, Charles, Sabena and Toby.

Charles, a well-known collector of modern art, arrives to view the

painting of a fish. Lady Godiva says it is one of a series of paintings of
‘Topes’ (a type of fish) by Ham, a famous painter. Charles tells Lady
Godiva he will think about it and leaves.

Sabena arrives to view the Rolls-Royce car. Lady Godiva tells her that
it was the car the Queen rode in at her Silver Jubilee celebrations
(which Lady Godiva believes to be true) and that there are pictures of
the event in the car’s ‘glovebox’. Sabena tells Lady Godiva that she
remembers the event well as she watched it on TV. Sabena does not
inspect the pictures but immediately resolves to buy the car. However,
she pretends not to be interested in the hope that Lady Godiva will
reduce the price. “I may be interested, I’ll be in touch”, says Sabena.

Toby comes to look at the gun which Lady Godiva says ‘is in perfect
condition’ and ‘so accurate it will make anyone look like an expert shot’.
Toby has embarrassed himself many times when shooting and so is
very interested despite noticing a crude repair to the barrel of the gun.
He says he will get in touch.

On 1 April Lady Godiva receives phone calls from her three visitors.
Sabena offers to buy the car for £250,000, Charles, the painting for
£500,000, and Toby, the gun for £50,000. Lady Godiva accepts these
offers and the goods are all collected the next day.

A year later the following events occur:

(a) Charles is visited by Ham who laughs when he sees the painting
and says it is a fake. Lady Godiva was in fact aware that it was a
copy. Charles is especially annoyed because he had been
offered another picture at the same time for the same price
which he turned down to buy the fake ‘Tope’. The other painting
which Ham confirms was genuine recently sold for £2 million.

(b) Sabena, who had completely forgotten about the pictures in the
glovebox, discovers them. They clearly show the Queen in a
different car. Sabena has been using the car to hire out for
wedding parties and so had resprayed the car in pink and gold.

(c) While Toby is shooting, the gun explodes but he is not injured.

Advise Charles, Sabena and Toby why any statements made to

them might be classed as ‘mere representations’ rather than terms,
and if so classified, what remedies for misrepresentation may be
available to them.

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6. ‘The old common law “exceptions” to the doctrine of privity of contract
are irrelevant now that we have the Contracts (Rights of Third
Parties) Act 1999.’

Critically evaluate this statement.

7. The Strolling Bones are an ageing rock band who now enjoy the better
things in life. They contract with Excess University Student Law Society
to appear at their annual dinner for a fee of £200,000 and 20 cases of
Chateau Latour wine. It is agreed that the fee shall be payable and the
wine deliverable in two stages: half on signing and half on the day of
the performance. The Student Law Society make the first payment but
do not deliver any wine to the band. The Strolling Bones pay a non-
refundable deposit of £5,000 when they book two large lorries to
transport their equipment. The Student Law Society spend a large sum
of money on publicity. The venue at which the annual dinner is to take
place fails its safety inspection the day before the performance and the
dinner is cancelled.

Advise the Strolling Bones as to their rights and liabilities.

8. In January 2015, Professor Dim signed a contract with Cambridge

Academic Press (CAP) to write a book on contract law in their
prestigious Masterclass series. Dim was to be paid £20,000 and CAP
had an option to employ Dim to write a companion book on property
law for a £25,000 fee. Over the next year Dim spent £5,000 on books
and travel to libraries while working on his new book. In January 2016
in breach of contract CAP terminate the contract with Dim because
CAP had recently contracted with Professor Genius to write a contract
law book in the Masterclass series. CAP invited Dim to publish his
contract book for a fee of £100 in a new series aimed at school
students. The Head of the School of Law had promised Dim that he
would receive a special payment of £10,000 if his book was published
in the Masterclass series. Dim writes to CAP telling them he feels
humiliated by the way he has been treated and pointing to a clause in
their contract which he had inserted before the parties signed and
which CAP overlooked:

If the contract is terminated by the publishers in breach of

contract, they shall pay to the author a penalty of £10,000.

Advise Dim as to what remedies he is entitled to in respect of CAP’s

breach of contract.

END OF PAPER

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