THIS PAPER IS NOT TO BE REMOVED FROM THE EXAMINATION HALLS
UNIVERSITY OF LONDON LA1040 ZA
DIPLOMA IN LAW/CertHE COMMON LAW
LLB
DIPLOMA IN THE COMMON LAW
BSc DEGREES WITH LAW
Contract law
Wednesday 16 May 2018: 10.00 – 13.15
Candidates will have THREE HOURS AND FIFTEEN MINUTES in which to
answer the questions.
Candidates must answer FOUR of the following EIGHT questions.
Candidates must 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 Core Statutes on Contract, Tort & Restitution (Palgrave
Macmillan).
© University of London 2018
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1. Anna owns a shop that sells expensive watches. On 1 st March Boris
telephones the shop and asks if Anna would like to buy his Rolex watch.
Anna says that she is ‘certainly interested but would need to inspect the
watch first’. On 2nd March at 10am Boris visits the shop and says: ‘This
is the watch; it’s yours for £10,000.’ Anna replies ‘I like it a lot but £10,000
is too much for me.’ Boris responds ‘That’s okay, have a think about it
and I will keep the offer open until midday on 4th March.’
Later on 2nd March, after Boris has left, Anna realises that the watch
would make a good gift for her son’s upcoming 18 th birthday. She calls
Boris and offers him £8,000 for the watch which Boris refuses. Anna says
she will need to speak to her partner before offering any more. When
they speak Anna’s partner tells her that she should offer the full price.
Anna immediately rings Boris and leaves a voice message saying she
would like to buy the watch for £10,000 and will assume this is
acceptable unless Boris tells her otherwise in the morning. She adds that
she will go to Boris’s house at 1pm the following day to pay for it. Boris
was attending an evening business meeting when Anna rang. At the
meeting Boris met Chas. Chas noticed the watch which he liked a lot
and so immediately offered Boris £10,000 for it which Boris accepted.
At 1pm on 3rd March Anna goes to Boris’s house to collect and pay for
the watch. Boris is surprised as he got home late from his meeting and
overslept and so had not yet listened to his voice messages.
Advise Anna.
2. (a) ‘Consideration need not be adequate but it must be sufficient.’
Discuss.
(b) Dirk, who is disabled, returns to his car after work to find that
someone has syphoned off the petrol. He informs Eva, a passing
police officer, who says ‘Don't worry, I will get the person who did
this’. Dirk replies ‘Thank you, if you do I will pay you £100’. Fiona
overhears this conversation and offers to go and get some petrol
for Dirk. Dirk gives Fiona a can and £10 to pay for the petrol.
When Fiona returns Dirk says ‘Thank you for your trouble. I do
not have any more money with me but I want to give you £20 for
getting the petrol’.
Eva caught the thief but Dirk now refuses to pay Eva or Fiona
anything.
Advise Eva and Fiona.
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3. ‘The doctrine of intention to create legal relations adds an unnecessary
requirement for the formation of a contract.’
Discuss.
4. ‘The law relating to mistaken identity is complex and inconsistent. It
should be reformulated in a way that always protects the right of the
innocent third party.’
Discuss.
5. Ivan Earing is the University of Blue Skye’s dynamic, but naive, Vice
Chancellor who is developing an ‘electronic campus’ to reduce staff
costs. He hears about a new robotic professor being sold by Logik plc.
Ivan visits Logik to see a demonstration of the robot which is called
‘Professor Bright’. Ivan is so impressed he immediately signs a contract
to buy one for £200,000 for the Law School. The contract contains the
following provision:
1. Logik plc gives no warranty or assurance that any
equipment provided is of satisfactory quality.
The robot is delivered to the campus where Lurch takes delivery. Lurch
signs a document headed ‘Delivery Note’ which repeats term 1 above
but also has the extra clause below:
2. Logik plc shall not be responsible for any damage to
property caused by their equipment.
Ivan attends the robot’s first lecture in the Law School when ‘Professor
Bright’ appears to get very excited when discussing the doctrine of past
consideration and waves ‘his’ arms wildly. Unfortunately one of his
hands flies off and damages the University laptop which Ivan was using.
The robot then overheats and is ruined but causes no further damage.
Discuss the contractual liability of Logik arising from the above facts.
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6. Hamad is fed up of working as a busy and successful male model. He
decides to open a coffee shop. He has heard that Imogen is interested
in selling her coffee shop located in a trendy part of town. On 1st January
Hamad and Imogen meet to discuss the terms of a sale. Imogen tells
Hamad that the coffee shop is making a profit of £5,000 per month. She
produces a set of accounts which Hamad inspects and which supports
her statement. Hamad is confident that his reputation will enable him to
increase profits by 50%.
On 1st March Hamad agrees to buy the coffee shop for £500,000 and
opens for business two months later after he has spent £100,000
refurbishing the coffee shop. Hamad operates the coffee shop for three
months but the profits never exceed £2,000 per month because
Starbursts, a national coffee shop chain, opened a coffee shop a few
streets away on 1st February. Imogen met a friend for a coffee in the new
Starbursts on its opening day. Hamad is especially annoyed as if he had
not bought the coffee shop he would have invested the money in his
sister’s internet company which is now making large profits.
Advise Hamad as to whether on the above facts Imogen is liable to him
under the law of misrepresentation.
7. (a) Explain what is meant by the term ‘self-induced’ frustration.
(b) Lou Rolls sells and restores antique bathroom fittings. One
evening vandals break in and set fire to his workshop. The
workshop and all its contents are destroyed.
A week before the fire Mel had agreed to pay Lou £5,000 to
restore an antique bath. As agreed, Mel paid Lou £500 when she
delivered the bath with the balance payable on completion. Lou
had purchased for £1,000 some specially formulated enamel to
use in the restoration. Both the bath and the enamel were
destroyed in the fire.
At the time of the fire Ned, a builder, had almost completed retiling
the floor of Lou’s warehouse. It had been agreed that Lou would
pay Ned £8,000 as soon as the job was completed.
Advise Lou as to his rights and liabilities to Mel and Ned taking
account of the law relating to frustration.
8. When are damages for non-pecuniary loss recoverable following a
breach of contract? Should this availability be expanded?
END OF PAPER
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