The University of the South Pacific
Serving the Cook Islands. Fiji. Kiribati, Marshall Islands, Nauru, Niue. Samoa, So!omonlslands, Tokelau, Tonga, Tuvalu, and Vanuatu.
SCHOOL OF LAW
LW202: CONTRACT LAW II
FINAL EXAMINATION - SEMESTER 2, 2008
Time Allowed 3 hours plus 10 minutes reading
50 marks (50% offinal grade)
INSTRUCTIONS
1. This exam has three sections:
a. Section A-I question - Compulsory: 20 marks
b. Section B-2 questions - Choose 1 : 20 marks
c. Section C: - 7 questions - Choose 5 : 10 marks
2. Answer all questions in sections A.
3. Write your answers in the answer booklet provided.
4. This is a closed book exam, and no materials such as textbooks,
library books, cases or statutes are allowed into the exam room.
5. This exam is worth 50% of your overall mark. There is no minimum
pass mark.
LW202 - CONTRACTS II - SEMESTER 2.2008 - EXAMINATION
SECTION A - COMPULSORY (20 MARKS)
TIDS QUESTION MUST BE ANSWERED BY ALL STUDENTS.
QUESTION 1
Mr. Tramp is the owner of a 10 storey building, Tramp Haus, located down town in Wai
City. The building is sub-divided into 10 strata titles and all the 10 individual titles are
held in the name of Tramp Holdings Limited, a company which is owned and managed
by Mr. Tramp.
Due to the klobal financial crisis, Mr. Tramp, as director of Tramp Holdings Limited,
decides to put Tramp Haus on the market for $100,000 and is now in search of any
prospective buyer. Mr. Stamp, who is the owner of a real estate company called 'Stamp
PIes Limited' is interested in purchasing Tramp Haus. Mr. Tramp and Mr. Haus had a
meeting and Mr Tramp gave all the information and strata details of the building,
including the revenue generated from tenants occupying the bUilding. A sale and
purchase contract was also provided for Mr. Stamp to consider, which included all the
normal conditions. Mr. Stamp did look quickly at these papers but did not examine them.
A close examination of the papers would have shown that the actual value ofthe building
is $20,000, there is an outstanding lease rental amounting to $25,000 and the term of all .
10 strata title leases will expire in 3 years time.
Mr. Stamp signed the sale and purchase contract for $100,000 and paid a deposit of
$25,000. Mr. Stamp gave the contract to his fmancial adviser, at which stage it was
discovered the actual situation of Tramp Haus. Mr. Stamp was furious and refused to
complete the sale and purchase contract. Mr. Tramp is has taken legal action against Mr.
Stamp for specific performance.
.
You are the solicitor for Mr. Stamp. Advise him on the possible arguments that he
can use to defend the legal action taken against him by Mr. Tramp.
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SECTION B - (20 MARKS)
YOU ARE REGUIRED TO ANSWER ONLY ONE (1) QUESTIONS FROM
SECTIONB.
QUESTION 2
This year, 2008, the Supreme Court of Pasiflka made a landmark decision in the area of
contract law. The Supreme Court in Pasifika ordered Mr. and Mrs. Kanu to pay
$3,000.00 as damages to a relative, Pita, for the use of his blood. The Court made this
ruling in June 2008 after Pita had gone to court alleging that he was promised some
money in exchange for his blood but that the family failed to honour their part of the deal.
The court heard that 12 years ago, Pita had given some of his blood to Lani, the daughter
of Mr. and Mrs. Kanu who was in a serious medical condition and needed blood
desperately Vt order to save her life.
Mr. and Mrs. Kanu, who are named as defendants in the proceedings, promised that in
return Pita would be given money when the young girl was given away in marriage. On
Lani's marriage, which was done in the normal custom ofPasifika, in January 2008, her
parents failed to fulfill their promise which prompted Pita to go to court.
The Pasiflka Supreme District Court Judge in his decision said:
"To award damages for a claim for the use of blood is quite out ofthe ordinary
for this court to make, however the court appreciates that the aggrieved party by
giving his blood had given. away something that was precious to himself to enable
a young woman to have a second chance in life and his effort should not be
overlooked "
Having read the above information regarding the case by Pita, write' an essay to
address the folJowing questions:
(a) Explain the difference between actual and anticipatory breach?
(b) In your view, what type of contractual breach was caused by Mr. and Mrs. Kanu
in this case?
(c) Putting yourself in the place of the judge in this matter, which legal test would
you have used to determine the issue of whether Pita was entitled to damages for
breach ofcontract
(d) In your view, which method of assessing the amount of damages was used by the
court? Give reasons to support your proposition and briefly mention a case
authority in which this method of assessment was used.
(e) With reference to your own jurisdiction and country, how does this case
contribute to the development of contract law?
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QUESTION 3
" ... But repudiation by one party standing alone does not terminate the contract. It takes
two to end it, by repudiation, on the one side, and acceptance of the repudiation, on the
other'. Whether the other party accepts is a matter for his option: if he does not, the
contract remains alive ...."
Viscount Simon LC Heyman v Darwins Ltd [1942J AC 356 at 361
Discuss the effects of repudiation on a contract, and explain the options that are
available for an injured party whose contract has become repudiated. (You may
refer to any cases and statutes from any jurisdiction in the Pacific.)
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SECTION C ~ SHORT ANSWER QUESTION (10 MARKS)
VOU ARE REQUIRED TO ANSWER ONLV FIVE (5) OF THE QUESTIONS IN
SECTIONC.
QUESTION 4 (2 marks)
What is the doctrine of 'non est factum' and how is it applied?
QUESTION 5 (2 marks)
Define the tenns mutual mistake and unilateral mistake, and explain the
difference between the two tenns.
J
QUESTION 6 (2 marks)
Explain, with a case authority, what is meant by 'unilateral mistake as to the
identity ofthe other party to the contract'?
QUESTION 7 (2 marks)
Explain the tenn 'quantum meruit' and how is it applied?
QUESTION 8 (2 marks)
What remedy is available for fraudulent misrepresentation and what are the bars
to such a remedy, if any?
QUESTION 9 (2 marks)
One of the two elements of duress in contract law is 'illegitimate pressure'.
Describe the concept of 'illegitimate pressure' with reference to any case
authority.
QUESTION 10 (2 marks)
Explain the difference between 'variation' and 'waiver' with some practical
examples to illustrate your explanation.
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