Law of contract

Contract

– All of the following statements are true EXCEPT:

i. All contracts entered into by an insane person are void

ii. Where the exclusion clause is contained in a document not signed by the parties, the court must be satisfied that it is a part of the contract between the parties.

iii. An expression of an opinion will amount to a misrepresentation where one partytothe contract has a superior knowledge about the subject matter of the contract to the other.

• a. i and ii only

• b. i and iii only

• c. ii and iii only

• d. all of the above

Contract – John John received an offer from Mary Contrary to purchase his car for $300,000.00, offer open until Monday July 27. On the 25th of July John John wrote to Mary to ask if he can pay the purchase price in 2 instalments. Mary did not reply. On the morning of the 27th July John John again wrote to Mary accepting the offer. Mary wrote back to advise that she had already sold the car. All of the following are true.

• i. John John’s letter of the 25th of July was a counter offer which destroyed the original offer

• ii. John John’s letter of the 25th of July was a counter offer which did not destroy the original offe

• iv. John John’s letter of the 25th of July was a request for information which destroyed the original offer therefore his acceptance was valid

• v. Mary is at liberty to sell her car to anyone at anytime she wishes and has no legal obligation to John John

• iii. John John’s letter of the 25th of July was a request for information which did not destroy the original offer therefore his acceptance was valid

  vi. Mary cannot sell her car to anyone unless her offer to John John is destroyed

Contract

A remedy for breach can be:

i. a unilateral rescission

ii. an action for damages

iii. an acceptance of breach

• a. i and ii only

• b. i and iii only

• c. ii and iii only

• d. all of the a

Answer explanation

Unit 9.0 Misrepresentation

page 67

Which of the following DOES NOT amount to an offer.

(i) goods displayed on shelves in a self service shop

(ii) a bid made at an auction

(iii) a request for information in respect of the price of goods being sold

• (a) all of the above

• (b) (i) and (iii)

• c) (i) alone

Andrea, while her neighbour Marcus was on holiday watered his orchids daily as she didn’t want them to die in the intense heat. On his return Marcus was so happy that he promised her a gift certificate to a spa. On discovering the cost, Marcus now consults you to determine if Andrea is entitled to the gift certificate. Which of the following is the correct advise?

• (a) Yes, she is entitled as she accepted the gift.

• (b) The act performed by Andrea was done before the promise of the gift certificate was made and does not amount to consideration.

• (c) Yes, she is entitled but Marcus can give a gift of a lesser value

Which of the following situations amount to fraudulent misrepresentation?

(i) Marsha advises Peggy that the suit she is trying to sell her is made of silk. She believes it is but did not check the manufacturers label.

(ii) In order to get a job Paul tells the prospective employer that he has a degree in accounting which is untrue. In fact he has no qualifications.

• (a) All of the above

• (b) (i)

• (c) (ii)

Which of the following are exceptions to the rule that mere silence is not a misrepresentation.

1. Where a half truth is given there is a duty to disclose the full facts

2. Where the contract is one of uberrimae fidei, a full and frank disclosure must be made.

3. Silence may amount to misrepresentation where there is a fiduciary relationship between the parties.

• a. All of the above

• b. 1and 2

• c. 2 and 3

Which of the following statements are true:

1. Where an offer is made subject to a condition that is not fulfilled, the offer is incapable of acceptance

2. Where an offer is made to the world at large, it is anyone who has actual knowledge of the offer that can accept it.

3. A condition is a term in a contract the breach of which gives rise to a right to repudiate the contract.

• a) All of the above

• b) 2 and 3 only

• c) 1 and 3 only

Which of the following statements is UNTRUE:

1. All contracts entered into by an insane person are void

2. Where the exclusion clause is contained in a document not signed by the parties, the court must be satisfied that it is a part of the contract between the parties.

3. An expression of an opinion will amount to a misrepresentation where one party to the contract has a superior knowledge about the subject matter of the contract to the other.

• a) All of the above

• b) 1 only

• c) 2 and 3

The contract of Agency can be terminated by which of the following?

1. Complete performance of the contract

2. Revocation by the principal

3. Death of the principal

• a) All of the above

• b) 1 and 3

• c) 2 and 3