Questions On Contract Law

EGERTON UNIVERSITY
LLBE 111--CONTRACT LAW

PART I
INSTRUCTIONS
1.Answer question 1 and any other THREE questions.
2.Cases and examples will attract more marks.
3.Marks will be lost for illegibility.
Time:3hrs.
1.(a). Shah wrote to Kimutai on 10th March 2008 asking him to indicate whether he would
be willing to sell his plot in Westlands and if so to fax him the lowest price he would
accept. Kimutai faxed on 12th March 2008 indicating that the lowest price was Kshs.
30,000,000/=. On 13th March, 2008 Shah wrote back asking “I accept to buy your plot
at the Kshs. 30,000,000/= indicated by you as the price you will accept”. Kimutai
faxed him the same day asking whether he would be willing to increase the price to
Kshs. 35,000,000/=. Shah faxed him on 14 th March 2008 saying “I accept to buy your
plot for Kshs. 35,000,000/= asked by you”. Kimutai does not respond and proceeds to
sell the plot to Patel for Kshs. 40,000,000/=. Shah files a suit against Kimutai seeking
damages for breach of contract. You are the Judge before whom the matter is brought.
(b). Explain how you would decide the case giving reasons for your decision and
supporting the same with decided cases. (15 Marks)
With reference to decided cases discuss how an offer may be terminated.

(10Marks)
(c). Courts are very reluctant to effect exemption clauses in contracts unless the
clauses meet judicial controls which have been developed by Courts.
Explain those Judicial Controls and Support your answer with decided cases.
(5 Marks)
(TOTAL MARKS 30)
2. “……….. Infact it is notoriously difficulty to prove intention since there is no

objective evidence which may be produced as conclusive proof. If every party
seeking a legal remedy under a contract were put to the burden of establishing that
both [arties positively intend ed legal consequences to their agreement it would be
major stumbling block to the formation of valid contracts. For this reason the law has
had to accept a much more restricted test of intention (Downes: Textbook on
contract).
Discuss the tests used by Courts to determine whether the parties to an agreement
intended to enter into a legally binding contract or not and support your answer with
decided Cases. (Total 20 Marks)
3. Critically, discuss “Consideration” as an essential ingredient of an enforceable

contract and support your answer with examples and decided Cases.
( Total 20 Marks)
4 Write brief notes on the following supporting your answers with Cases and Examples
(a). Distinction between offer and invitation to treat (10 Marks)

(b). Distinction between conditions and warranties in a contract
(10 Marks)
(TOTAL MARKS 20)
5.(a). The statements made by the parties during negotiations culminating in a

contract may be classified as either terms or mere representations. Discuss the
importance of the distinction and the tests used by the Courts in distinguishing
terms from mere representations supporting your answer with Examples and
decided Cases. (10 Marks)
(b). Critically discuss the rule that acceptance to be effective must be communicated
to the offeror bringing out exceptions thereto and support your answer with
decided Cases. (10 Marks)
(TOTAL MARKS 20)
INSTRUCTIONS:
1. Answer Question 1 and any Other 2 Questions
2. Cases & Candid Examples will attract more Marks
3. Illegibility will lead to lose of Marks
4. Time allowed: 2 Hours
1.(a). On 20th January, 2010Nakuru Electronics Limited placed the following notice on the window of
their shop. “2 very nice Laptops – Kshs. 50,000/= each” Nyamoita and Chepkurui are very keen to
acquire the Laptops, but think that the price is too high. They each offer Kshs. 30,000/=. Nakuru
Electronics Limited refuse to sell at that price but says they can accept Kshs. 40,000/= for each Laptop.
Further the company said that it will keep the offer to them open until 30 th January, 2010 12 O’clock, if
each pays it Kshs. 20,000/=, which they did. On 28 th January, 2010, they have to leave for London for
other business but before they leave, each posts a letter stating that they agreed to buy the Laptops at the
agreed price of Kshs. 40,000/= each .Nyamoita’s letter arrives at 10:00 a.m. on 30 th January, 2010.
Chepkurui’s letter arrives on 1st February, 2010. In any event Nakuru electronics Limited had already sold
both Laptops to Nyawira on 29th January, 2010 for a total of Kshs. 100,000/=.
Analyse the above situation from the point of contract Law emphasizing particular on the offer
and acceptance. In particular advise the parties as to their liabilities and the potential remedies
available to them under contract Law. Support your analysis with decided cases and candid
examples. (15 Marks)
(b). Critically discuss the meaning of an offer taking care to distinguish an offer from a mere puff and
from invitations to treat. (7 Marks)
(c). Briefly explain the ways in which an offer can be terminated or brought to an end
(8 Marks)
(TOTAL MARKS 30)
2.(a). Discuss the various presumptions that the Courts have developed to aid them in determining the
intentions of the parties to a contract, citing relevant authorities.
(15 Marks)
(b). Owen, Nyagaka and Chirchir are brothers. They always contribute money and buy Wingo Charity
Sweepstake Tickets but make entries in the name of Nyagaka in order to increase chances of
winning. They were lucky last month and they won I Million shillings. Now Nyagaka has refused
to share claiming that this was a family agreement and there was no intention to create legal
relations.
DECIDE. (5 Marks)
3.(a). Critically discuss the meaning of consideration and indicate it’s role in the process of formation
of contracts. (10 Marks)
(b). In the course of drafting their agreements, parties quite properly seek to define their obligations.
This includes clause which say they will not be liable for certain losses or their liability will be
limited. Courts are very reluctant to enforce these clauses unless they meet judicial controls
which have been set by courts. Briefly, explain these judicial controls and support your answer
with decided cases. (10 Marks)
(TOTAL MARKS 20)
4.(a). The statement made by the parties during negotiations culminating in a contract
may be classified as either terms or mere representations.
Discuss the importance of the distinction and the tests used by courts in distinguishing terms from
mere representations. (10 Marks)
(b). Briefly explain the classification of terms of a contract according to their seriousness or lack of it
and support your answer with decided cases. 10 Marks)
(TOTAL MARKS 20)
5. Discuss the following
(a). The principal that consideration need not to be adequate but that it must be sufficient.
(10 Marks)
(b). The rule that acceptance must be unconditional and must be communicated to the offeror.
(10 Marks) (TOTAL MARKS 20)

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EGERTON UNIVERSITY

LLBE 111--CONTRACT LAW

With reference to decided cases discuss how an offer may be terminated.

2. “……….. Infact it is notoriously difficulty to prove intention since there is no

3. Critically, discuss “Consideration” as an essential ingredient of an enforceable

(a). Distinction between offer and invitation to treat (10 Marks)

5.(a). The statements made by the parties during negotiations culminating in a

5. Discuss the following

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