LAW OF CONTRACT PQ

University of Ilorin Faculty of Law Department of Business Law Law of Contract Exam Notes

Examination Structure

The examination for the 2019/2020 Harmattan Semester consists of various questions related to the Law of Contract. The instruction states to answer four questions only.

Question 1: Pinnel's Case and Its Exceptions

The excerpt discusses the principle from the case of Pinnel's case, which states that "payment of a lesser sum on the day in satisfaction of a greater cannot be any satisfaction for the whole". This principle establishes that a creditor cannot be compelled to accept a lesser sum in place of a due obligation unless certain exceptions exist.

Exceptions to the Rule in Pinnel's Case:

  1. Payment in a Different Manner: When payment is made in a different form (for instance, goods instead of money), it may be accepted as satisfaction of the whole debt.

  2. Composition with Creditors: An agreement where the creditors accept a lower amount and are in consensus can be legally binding.

  3. Part Payment in Full Satisfaction: If a debtor pays the creditor a lesser amount on the condition that this fulfills their debt and the creditor accepts it in writing, it can be binding.

  4. A Valid Accord and Satisfaction: This occurs when both parties agree to a new contract which settles the difference in the original one.

  5. Promissory Estoppel: Application where a promise is made and relied upon, creating an expectation that leads to considerations beyond the original agreement.

Question 2: Legal Capacity in Contracting

For any contract to be valid, parties must have the requisite legal capacity.

Categories of Persons Lacking Capacity:

  1. Minors: Individuals below the age of majority (often set at 18 years) cannot enter into binding contracts unless for necessities. Contracts with minors are voidable at their option.

  2. Mentally Incapable Persons: Any person who is mentally incapacitated or under the influence of drugs or alcohol may not fully appreciate the nature and consequences of their actions, leading to voidable contracts.

  3. Undischarged Bankrupts: Persons who have been declared bankrupt are restricted from entering into certain types of contracts unless sanctioned by a court.

Question 3: Contractual Obligation to Hajia Ramo

In a scenario where Mallam Audu promises to pay Hajia Ramo N100,000.00 weekly while she is unwell, a discussion of enforceability arises.

Considerations:

  1. Intention to Create Legal Relations: Mallam’s promise needs to be viewed through the lens of whether he intended to create enforceable obligations.

  2. Consideration: The absence of consideration may render the promise unenforceable unless it may fall under a declared category of enforceable promises.

  3. Chances of Success: Given the lack of formal contract elements and the lack of consideration between parties, the likelihood of success in recovering the promised amount may be low.

Question 4: Invitation to Treat vs. Offer

An understanding of the distinction between offers and invitations to treat is crucial. An offer leads to binding acceptance, whereas an invitation to treat invites negotiation.

Instances of Invitation to Treat:

  1. Goods on Display: Display of goods in a store with price tags is considered an invitation to treat.

  2. Advertising: Advertisements generally invite offers rather than making a valid offer themselves.

  3. Auctions: The calling for bids at an auction is an invitation to treat, with the proposal becoming an offer only when the auctioneer accepts the highest bid.

  4. Tender Requests: Requests for tenders are invitations to treat, allowing various parties to submit offers.

Important Terms in Contract Law

Express Terms

Express terms are those explicitly stated either orally or in writing, forming a part of the contract.

Implied Terms

Implied terms, by contrast, are those not expressly stated but integrated through the nature of the transaction, common law, or the parties' presumed intention.

Conditions and Warranties

Conditions are fundamental terms of a contract, the breach of which creates a right to terminate the contract. Warranties are less significant; breach allows for damages but not termination.

Fundamental Terms and Exemption Clauses

Fundamental terms are essential aspects of contracts that need to be followed strictly. Exemption clauses limit liability and require careful scrutiny to determine enforceability.

Additional Scenarios for Analysis

  1. Circumstances of Contractual Disputes: Multiple scenarios provided highlight various legal principles such as considerations in contract formation, the impact of mental capacity, and the implications of advertisements.

  2. Judicial Authorities: When giving advice in various scenarios such as the advertisement for lost items, one must reference legal principles established in previously concluded cases to support arguments and advise clients.

Conclusion

The law of contract is characterized by specific principles that govern obligations and the enforceability of agreements. Understanding these principles, particularly as they apply to specific scenarios, is crucial for sound legal advice and practice.