Question 1 Answer all questions below. Do not write more than 20 words on each part of the question. Note form answers are acceptable.
1. What is an offer?
An offer is a proposal made by one party (offeror) to another (offeree) with the intention that it shall become binding as soon as it is accepted. It must be clear and certain, it may be made orally or in writing or by conduct. An offer can be made to a particular individual or to a group of persons, or to the world at large.
2. Define consideration.
Some right, interest, profit or benefit accruing to one party Forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.
3. List 3 groups of implied terms.
Terms implied in fact Terms implied in law Terms implied by custom
4. Name 3 types of remedies provided for breach of contract.
Damages Action for an agreed sum Quantum meruit Specific performance Injunction
5. What does illegal contract mean?
Neither party can get assistance of the courts to enforce a contract Injurious to society
6. Is "trespass" a crime or a tort?
A tort
7. Define the drawer of a cheque.
The person who writes the cheque.
8. What does "negotiable" mean (in relation to a negotiable instrument)?
Transferable
9. If a bill is made payable to "cash or order", is it a bill of exchange?
No
10. What type of indorsement is the following? "Pay Mary Wang on her marriage to Jack Chan Signed: George Lee"
Conditional indorsement
SECTION TWO Answer any four questions only. Each question carries equal marks. Note form answers are acceptable.
Question 2 Answer all questions below. Read the following statements, state whether they are True (T) or False (F). If it is a false statement, try to rewrite a correct version to illustrate your answers.
1. The object of an action in tort is to compensate the individual who has suffered harm caused by the breach of contract.
对 错
B
The object of an action in tort is to compensate the individual who has suffered harm caused by the act or omission of the wrongdoer (tortfeasor).
2. Consideration is either some detriment to the promisor or some benefit to the promisee.
对 错
B
Consideration is either some detriment to the promisee or some benefit to the promisor.
3. Circulation of a price-list by a wine merchant is an offer.
对 错
B
Circulation of a price-list by a wine merchant is an invitation to treat.
4. Insurance policy is not required to be in writing to be enforceable.
对 错
B
Insurance policy is required to be in writing to be enforceable.
5. Vicarious liability means liability for the tort of another.
对 错
A
6. A right in rem is a right in a thing itself which is good against the whole world.
对 错
A
7. An agreement for the sale and purchase of land need not be evidenced in writing to be enforceable.
对 错
B
An agreement for file sale and purchase of land must be evidenced in writing to be enforceable.
8. Certificates of deposits are not negotiable unless they are in a deliverable state.
对 错
A
9. The drawee does not have to pay immediately when a demand bill is presented to him.
对 错
B
The drawee is required to pay immediately when a demand bill is presented to him.
10. A blank indorsement only consists of the signature of the transferee.
对 错
B
A blank indorsement only consists of the signature of the transferor.
11. A promissory note has only two parties: the bearer and payee.
对 错
B
A promissory note has only two parties: the maker and payee.
Question 3
1. Wong, the president of a corporation told Zheng that "if you work hard, and profit remains high, you'll get a bonus, if management thinks it's warranted." Profit remains high, but no bonus is paid. If Zheng sues, would a court enforce the promise?
Consideration is essential to formation of any contract. A contractual promise is only legally binding if it is made in return for another promise or an act. Consideration is either some detriment to the promisee or some benefit to the promisor. A mere moral obligation is insufficient. Consideration must be legally sufficient which is different form adequacy of consideration. Consideration is not sufficient where the act claimed to amount to consideration is one that the promisee is already bound to do. In Stilk v. Myrick, 1809, where a sea-captain promised to divide the wages of two deserting seamen among the remainder of the crew if they would work the ship home. It was held that there was no enforceable contract between the parties as the crew had done no more than they were already required to perform as normal duty in sailing the ship home. Wong promised Zheng to pay him bonus if Zheng would work hard to keep the profit high. The consideration of such promise, following the legal principles of above-mentioned case, is one that the promisee is already bound to do. Zheng is under an existing contractual duty already owed to Wong. The performance of a contractual duty already owed to the promisor is not sufficient. So the court will not enforce the promise as it is not supported by consideration.
Quesiton 4
1. Chan promised to pay his nephew $5,000 if his nephew would refrain from drinking liquor and using tobacco until the nephew should be 21 years of age. The nephew took Chan's words seriously, and abandoned drinking and smoking. After the nephew celebrated his 21st birthday, he asked Chan to pay the amount promised, Chan refused. Could the nephew sue Chan for breach of the contract?
An agreement will become a contract only if the parties have an expressed intention to form a legally binding relationship. The general role is that for an agreement of a domestic nature there is a strong presumption that the parties do not intend to create a legal relationship. In Balfour v. Balfour, 1919, where the defendant, who was about to go abroad, promised to pay his wife $30 per month in consideration of her agreeing to support herself without calling on him for any further maintenance. The wife contended that the defendant was bound by this promise. It was held that there was no legally binding contract between the parties as it was an ordinary domestic arrangement which was not intended to create legal relations. Chan promised to pay his nephew $5,000 if the nephew would refrain from drinking alcohol and using tobacco. Such promise, following the legal principles of above-mentioned cases, does not have an intention to create legal relations and is not binding. However, the nephew could argue that the $5,000 was a consideration for him to abandon drinking and smoking. It is a general rule that it is no consideration if the promise was given from a feeling of moral duty or from "natural love and affection". It is clear that such motives, however worthy they may be, are not the price for the promise. Unless the nephew could prove that his abandoning drinking and smoking would benefit Chan and the argument of consideration is established, otherwise, he could not sue Chan for breach of the contract.
Question 5
1. (a) Define defamation. (b) Explain the difference between libel and slander.
(a) Defamation is defined as a statement "lowering a person in the estimation of right-thinking members of society generally". Mere vulgar or abusive use of language is insufficient, nor is a statement that would lower a person only in the eyes of persons who are not "right-thinking". A statement is defamatory unless an average right-thinking man in the society takes the same view. (b) Libel is a communication in any permanent form such as writing, films, sculpture, records, radio and television broadcast, etc. Slander is a communication in any transient form, e.g. speech and gestures. There are two important distinctions: ·Libel may give rise to criminal as well as civil liability, but not with slander. ·Libel is actionable per se, the mere fact that a person has been libeled is sufficient to bring an action. Slander is actionable only on proof of special damage with exception.
Question 6
1. (a) What is a homer in due course? (b) What rights does a holder in due course enjoy?
(a) Section 29 of the Bills of Exchange Ordinance defines a holder in due course as a holder who has taken a bill, complete and regular on the face of it, under the following conditions, namely: ·that he became the holder of it before it was overdue, and without notice that it had been previously dishonoured, if such was the fact; ·that he took the bill in good faith and for value, and that at the time the bill was negotiated to him he had no notice of any defect in the title of the person who negotiated it. (b) Section 38 of the Bills of Exchange Ordinance provides that holder in due course can: ·sue on the bill in his own name. ·hold the bill free from any defect of title of prior parties, as well as from mere personal defences available to prior parties among themselves, and may enforce payment against all parties liable on the bill. ·get a good and complete title to the bill after negotiation; and get a valid discharge for the bill after payment. Section 20 (2) of Bills of Exchange Ordinance provides that if an inchoate instrument after completion is negotiated to a holder in due course, it shall be valid and enforceable. Section 64 (1) of Bills of Exchange Ordinance provides that alteration of a bill does not affect a holder in due course. Where the alteration is not apparent, he may enforce payment according to its "original tenor".
Question 7
1. Write short notes on: a. Property. b. choses in possession and in action. c. right in rem and in personam.
(a) Property may be defined as anything or matter capable of being possessed or owned. Certain things such as the sea which can not be possessed or owned are not properties. Hong Kong law makes a distinction between real property and personal property. (b) Chose means "a thing". All property, whether land or chattels, is classified into: ·choses in possession: tangible, physical objects capable of physical control. ·choses in action: intangible forms of property. They have a value capable of being owned and transferred. Title to them can be asserted by taking court action. (c) ·A right in rem (real right) is a right in a thing itself which is good against the whole world, e.g. ownership of land. ·A right in personam (personal right) is a right against a particular person only.
Question 8
1. (a) What is indorsement of bills of exchange? (b) How many types are there? Write short notes on them.
(a) The transfer of a bill of exchange is effected by delivery or by indorsement and delivery. Order bill requires both indorsement and delivery. Indorsement is a signature and the signature must be the same with the transferor's name as stated on the bill. Section 32 of the Bills of Exchange Ordinance states that: an indorsement in order to operate as a negotiation must comply with the following conditions: ·it must be written on the bill itself and be signed by the indorser. The simple signature of the indorser on the bill, without additional words, is sufficient; ·it must be an indorsement of the entire bill. (b) There are four types of indorsement: blank, special, restrictive and conditional. ·A blank indorsement only consists of the signature of the transferor. No transferee is specified. When a bill is indorsed in blank it becomes payable to bearer and transfer thereafter is effected by delivery, no further indorsement will be required. ·A special indorsement spells out the name of the transferee. ·A restrictive indorsement will prevent further negotiation of the bill. ·A conditional indorsement transfers ownership subject to a specified term or condition.