THIS PAPER IS NOT TO BE REMOVED FROM THE EXAMINATION HALLS

UNIVERSITY OF LONDON LA1040 October

DIPLOMA IN THE COMMON LAW

DIPLOMA IN LAW
LLB

ALL SCHEMES AND ROUTES

BSc DEGREES WITH LAW

Elements of the Law of Contract

Thursday 22 October 2015: 10.00 – 13.15

Candidates will have fifteen minutes during which they may read the paper and
make rough notes ONLY in their answer books. They then have the remaining
THREE HOURS 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
A student is permitted to bring into the examination room the following specified
document: either one copy of Blackstone’s Statutes on Contract, Tort &
Restitution (OUP) or one copy of Core Statutes on Contract, Tort & Restitution
(Palgrave Macmillan).

© University of London 2015

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1. Andrew sees a gold teddy in the jewellers owned by Zeeshan, and
remembering the one he had as a child but had lost last year, buys it.
When he shows his mother the teddy she recognises it as the one he lost.

Enjoying history Andrew decides to visit Clare Castle and enjoys the
day. Andrew wants to remember the day and while he is sitting in the
garden he begins talking to a gentleman who introduces himself as Lord
Clare. In fact it is a ‘look-a-like’, Charlie Cheek, who seeks out
gullible visitors. Andrew asks ‘Lord Clare’ to sign his autograph book and
is delighted when ‘Lord Clare’ offers to sell him a vintage seal of the
family. Andrew has no money but ‘Lord Clare’ agrees to accept Andrew’s
watch in exchange. Andrew is delighted and hands over the watch. He
later sees his watch in the local second hand shop, which he thinks
unusual as ‘Lord Clare’ was so keen to have it.

Andrew then visits the gift shop and sees a painting of the Castle, which
he believes to be an original – it is in fact a print. He pays for the
picture and is pleased as the price was very reasonable for an original
picture of Clare Castle.

He has now discovered that the seal is worthless and that the picture is
in fact a print.

Andrew wants to return the picture, reclaim his watch from the second
hand shop and get his money back from Zeeshan for the gold teddy.

Advise Andrew.

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2. Bhavesh owns a factory which manufactures a broad range of
electrical appliances using a progressive assembly line. The assembly
line process is reliant on a conveyor belt that is manufactured by
Conveyors Ltd, the only company that manufactures conveyor belts of
the kind required by Bhavesh. On Monday, the conveyor belt develops
a fault and the assembly line grinds to a halt. This is the second time
that this has happened that month and Bhavesh has already used his
spare conveyor belt. Bhavesh is anxious since he has just agreed a
lucrative manufacturing contract with Electrix Ltd for £30,000. This
contract is particularly important to Bhavesh since, if he performs it well,
Electrix Ltd have told him that they will buy his factory for £2 million.

He immediately telephones Fred, the manager of Conveyors Ltd,

ordering a replacement belt. He tells Fred that he has a heavy
workload and that he needs the belt that afternoon. Fred, who
remembers sending a belt only very recently, suddenly gets very busy
and does not deliver the belt for two days.

Bhavesh’s factory is inactive during the period of delay and he incurs

losses of £20,000. Bhavesh could have asked his engineer to
temporarily fix the belt, a measure which would have slowed down the
production process considerably but nevertheless would have reduced
his losses to £10,000. The delay also means that he is in breach of his
contract with Electrix, causing him losses of £10,000. In addition, the
delay means that Electrix Ltd lose faith in the efficiency of Bhavesh’s
assembly line and decide not to buy the factory. Bhavesh is extremely
distressed and has a nervous breakdown.

Advise Bhavesh.

3. Helen takes a lease on a studio for eighteen months, with instalments due
January 2015, June 2015 and January 2016. A week after the June
instalment was due, it was discovered that the premises have to be closed
for fumigation and will have to remain sealed for six months for the
chemicals to work on the infestation of rats. This means that Helen cannot
run her piano teaching classes as her piano and recital music are locked
in the premises. She is forced to cancel all her classes. Khaled refuses to
accept this and says he will arrive as planned on 6th June as he wants to
work on his special recital with her. Helen arranges to get a piano
delivered to her home and a copy of the recital music, but on the day
Khaled is run over by a car and cannot attend the class.

Advise Helen.

How would your answer differ, if at all, if Khaled had cancelled because
he had been to a party the night before and was too tired to concentrate?

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4. Natalie wants to have her drive re-laid and contacts Vinvit Ltd after seeing
their advert in the local paper, ‘£10 per square metre of brick drive –
phone for a quote.’

Vinvit Ltd call round to measure the drive and then sends Natalie a quote:
‘Laying 60 square metres brick drive £80, with labour – call to
confirm by Saturday 1st May’.

Natalie e-mails Vinvit Ltd on 27th April and asks if this quote includes
restoring her brick wall on her boundary. Vinvit Ltd replies by e-mail
saying it does not; if the wall is to be restored then the price is an
additional £50 more. She needs to confirm on 1st May. The email does
not arrive due to a fault on Natalie’s connection. Natalie sends a letter on
28th April to Vinvit Ltd accepting their original price of £80. This letter
arrives on 30th April.

On 30th April she meets her neighbour Sara, who says she can rebuild
her wall and lay the drive for £80 in total. Wanting to help her
neighbour out she agrees that she can do this. Natalie immediately calls
Vinvit Ltd and leaves a message on their answering machine saying she
no longer requires them to do her drive. Vinvit Ltd never hear this
message as they do not check their answering machines, and arrive on
Saturday to do the work and find Sara already there.

Advise Vinvit Ltd.

5. Ahmed wishes to purchase a commercial freehold from Rebecca. He

enquires about the financial reliability of the current leaseholders of the
property. Rebecca informs Ahmed that the leaseholders have never
missed a rental payment. She does not tell Ahmed that each month the
leaseholders refuse to pay rent and she has had to threaten them with
court action several times before they eventually pay. Nor does she tell
him that their antisocial behaviour has been causing problems with the
neighbours. Rebecca also informs Ahmed that the property is in excellent
decorative order throughout. Ahmed sends his brother round to look at the
property, but his brother only looks at the outside and tells Ahmed it looks
a good buy. Ahmed then contracts with Rebecca, in writing, to purchase
the property without inspecting the property himself. However, he quickly
discovers that the property is in desperate need of redecorating and has
mildew growing throughout. He also realises that extracting the rent from
the tenants is incredibly difficult and often can only be done through
threats of court action. The neighbours also approach Ahmed asking him
to deal with the tenants’ antisocial behaviour. After three months, Ahmed
regrets buying the property. He wishes he had purchased the other
property he viewed, which he has discovered is generating a good
income. He wishes to rescind the contract.

Advise Ahmed.

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6. ‘If mistake operates at all it operates so as to negative or in some cases
to nullify consent.’ (Lord Atkin, Bell v Lever Bros (1932))

Explain how mistake can negative consent and the limits on the
doctrine.

7. ‘The Act aims to provide a simple mechanism by which two contracting

parties can give a third party the right to enforce a term of their
contract.’ (McKendrick, Contract, Text & Materials)

Critically evaluate the principle of privity of contract in light of the above

statement.

8. (a) Freya has a contract to supply wedding cakes for a successful

wedding organiser, Pierre. Unfortunately, her oven has become
unreliable threatening to seriously delay her work. Pierre is
desperate to get the cakes ready in time. He fears that any delays
will affect his excellent reputation and may put at risk an extremely
lucrative contract that he is presently negotiating. Freya is aware of
this and, eager to acquire a very expensive oven that she has had
her eye on, tells Pierre that if he increases her contract price to
match the cost of the oven she will ensure that the cakes are ready
in time. Pierre agrees and Freya purchases her new oven. After
providing the cakes for Pierre, Pierre changes his mind and refuses
to pay the extra money to Freya.

Advise Pierre.

(b) Do you think that reform of the doctrine of consideration is

necessary? Give reasons for your answer.

END OF PAPER

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