UNIVERSITY OF LUSAKA

SCHOOL OF LAW

L120 – LAW OF CONTRACT

SECOND SEMESTER FINAL EXAMINATION, NOVEMBER 2009

INSTRUCTIONS

1. SECTION A: ANSWER 2 OUT OF 3 QUESTIONS

2. SECTION B: ANSWER 3 OUT OF 5 QUESTIONS

3. TIME ALLOWED: 3 HOURS PLUS 5 MINUTES FOR READING THE

4. NO STATUTE IS PERMITTED IN THE EXAMINATION ROOM

QUESTION ONE

(a) With reference to at least two decided cases explain whether past consideration
is valid consideration.

[8 Marks]

(b) Chipo is on trial for murder. Mutinta, a close friend of hers, visits her in prison one
day. Mutinta says that she has received a subpoena to attend court to give
evidence. Mutinta does not wish to give evidence because she is afraid of
attending court. Chipo promises to pay her K2 million if she attends. Mutinta duly
attends and there is an acquittal. Chipo is now refusing to pay. Advise Mutinta.

[6 Marks]

(c) Bruce is a keen Lusaka Football Club supporter, but his son Musonda prefers
Zambezi Football Club. Bruce told Mutale that he would give him K2 million if he
did not support Zambezi Football Club for a year. Musonda stopped going to
Zambezi Football Club’s home games and never wore his scarf in the team
colours for a whole year. Secretly, however, he always hoped that Zambezi
Football Club would win their games. Musonda is now demanding the K2 million
from Bruce.

[6 Marks]

QUESTION TWO

(a) Explain the legal remedies available when the contract has been breached?

[10 Marks]

(b) Explain the equitable remedies available when the contract has been breached?

[10 Marks]

QUESTION THREE

(a) Mubita offers a K2 million reward for the return of his lost briefcase by an
advertisement in the “Times of Zambia”. Janet who reads only “The Post”, finds it
and seeing Mubita’s address therein returns it to him. Advise Janet who claims
the reward.
 [6 Marks]

(b) Mabvuto applied for a job as an accountant at Tusheni Bank and the directors
resolved to appoint him as such. Kachepa, who was a director of Tusheni Bank
informed Mabvuto that the Tusheni Bank had resolved to appoint him as an
accountant. Subsequently, the resolution to appoint Mabvuto as an accountant
was rescinded by the Bank and instead Dariso was appointed as an accountant.
Kachepa had no authority from Tusheni Bank to give Mabvuto the information he
did. Mabvuto now wishes to sue Tusheni Bank. Advise Mabvuto. POWELL V
LEE ANSWER

[6 Marks]

(c) James telegraphs Maggie an offer to sell her a Toyota Corolla for K30 million.
Maggie on receipt of the offer posts a letter of acceptance by the next post, but
owing to the delay on the part of the postal authorities the letter reaches James
two days later. Meanwhile James, not having heard from Maggie, telegraphs to
him withdrawing the offer and sells the Toyota Corolla to Chongo, and when
Maggie’s letter arrives he cannot fulfil his offer. Advise James.

[8 Marks]

SECTION B: ANSWER 3 OF 5 QUESTIONS

QUESTION FOUR

Define the term ‘misrepresentation’, and discuss the three types of misrepresentation
and remedies available for such types of misrepresentation.

[20 Marks]

QUESTION FIVE

(a) Discuss three ways through which the terms can be implied into the contract.

[10 Marks]

(b) Sangwapo bought a washing machine from Jeremy Supermarket. He signed the
order form which, contained the following term in small print, ‘any express or
implied condition, statement or warranty, statutory or otherwise not stated herein
is hereby excluded.’ When the washing machine was delivered it did not work
satisfactorily and the Sangwapo sought damages for breach of the implied
statutory term that the washing machine was fit for the purpose for which it was
sold. Jeremy Supermarket sought to rely on the exemption clause, but the
 Sangwapo argued that he had not read the order form and did not know what it
contained. Advise Jeremy Supermarket. ANGLIA V BUILDING SOCIETY

[10 Marks]

QUESTION SIX

(a) Explain the ways in which an agent may be appointed.

[8 Marks]

(b) State concisely the duties owed by an agent to his principal.

[8 Marks]

(c) State briefly the ways in which the agency may be determined.

[4 Marks]

QUESTION SEVEN

(a) Jo Pompwe, wanting to win the first prize of K5 million in the Muckie Bar Caber
Tossing Championships, approaches Dr. Evil, a caber constructor. Jo Pompwe
asks Dr. Evil to construct for him a caber which, at the flick of a concealed switch,
will weigh only half as much as a proper caber. Dr. Evil realizes that this is
impossible but nevertheless agrees to do so for K2 million, demanding K500,000
as a down payment. On the day of the Championships, Jo Pompwe decides not
to use the Dr. Evil caber and instead uses an ordinary one. Jo Pompwe loses. Jo
Pompwe now wishes to return the special caber to Dr. Evil and recover his
K500,000. Dr. Evil is demanding payment of the outstanding K1.5 million. Advise
both Jo Pompwe and Dr. Evil. EXECUTORY

[10 Marks]

(b) Life Insurance Limited conduct business as insurance brokers, with branches
throughout the Zambia. Last year Kumwenda agreed to work for Life Insurance
Limited for five years as head of sales and marketing, and his contract contained
a covenant that he would not be directly or indirectly concerned in any business
acting or carrying on business as insurance brokers anywhere in Lusaka or
Copperbelt for two years after leaving his employment with Life Insurance
Limited. Kalonde has been approached by Blue Insurance Limited, another firm
of insurance brokers, who have asked him to become head of their sales and
marketing at twice his present salary at their head office in Lusaka. Advise
Kalonde.
[10 Marks]
QUESTION EIGHT

(a) Explain the meaning of the terms “anticipatory breach” and “actual breach”. What
remedies are available to the innocent or injured party when “anticipatory and
actual” breaches have occurred.

[10 Marks]

(b) Kachelo Travel Limited specializes in tours to the Zango Island in the Republic of
Ruritania. In June 2009 Mr. Mwambo booked a two week tour for himself and his
wife, Hilda, in October, 2009 and paid a deposit of K2 million. Republic of
Ruritania has always been a peaceful country with a stable government but
recent activities by pirates and insurgents from the nearby Britanya country has
made tours and holiday vacation unsafe in Zango Island in Ruritania. As a result
of the unsafe tours and holiday vacations Kachelo Travel Limited has decided not
to take no more bookings for tours to Zango Island in Ruritania. In September
2009 it informed Mr. Mwambo that it was cancelling the October 2009 tour and
would not be able to return his deposit, as it had paid K4 million in non-
refundable charter fees for seats on flights to Zango Island in Ruritania. Hilda
was so disappointed and outraged at this ‘high-handed treatment’ that she
insisted that Mr. Mwambo should ask Kachelo Travel Limited to provide seats for
them on a scheduled flight to zango Island in Ruritania and two weeks hotel
accommodation for the balance of the cost of the original tour, which Mr.
Mwambo tendered. Advise Kachelo Travel Limited. Would your answer be
different if in August, 2009 the Ruritania government banned all tourists from
entering the country until further notice?

[10 Marks]