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. Briefly explain void, voidable and unenforceable contract.
A void contract is one which does not exist and which has never existed. A contract is void when it is destitute of all legal effect. A contract is voidable when the law allows one of the contracting parties to withdraw from the contract if he so wishes. A contract is unenforceable when, although it is valid if the parties perform it, it cannot be enforced in the courts of law if either party fails to do so.
2. What must the plaintiff prove in order to succeed in an action of negligence.
The defendant owed the plaintiff a legal duty of care. The defendant was in a breach of that duty. The plaintiff suffered damage as a result of thru breach.
3. What is a cheque?
A cheque is a bill of exchange drawn on a banker payable on demand.
4. Who are the holders of bills of exchange, list two of them.
Payee Indorsee Bearer
5. The bill must be in writing. Does this mean the rules governing written contract apply?
Yes.
6. List 2 factors that affect the validity of an otherwise effective contract.
Revocation Rejection Lapse of time Death of either party Failure of a condition subject to which the offer was made.
8. A bill is made payable to "'"order", what kind of bill of exchange is it?
Order bill
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. A right in personam is a right against a particular person only.
对 错
A
2. Easement is a right to use the adjacent land that belongs to another.
对 错
A
3. Bills of lading are negotiable.
对 错
B
Bills of lading are not negotiable.
4. A usance bill is a bill payable immediately.
对 错
B
A usance bill is a bill payable at a future time.
5. A promissory note is an order, whereas a bill of exchange is a promise.
对 错
B
A promissory note is a promise, whereas a bill of exchange is an order.
6. The putting up of goods for sale by auction is an offer.
对 错
B
The putting up of goods for sale by auction is not an offer.
7. An offer can not be made to the world at large.
对 错
B
An offer can be made to the world at large.
8. Slander is a kind of defamation in written form.
对 错
B
Slander is a kind of defamation in transient form.
9. Offers and revocations are effective upon posting, but acceptances are effective upon receipt.
对 错
B
Offers and revocations are effective upon receipt, but acceptances are effective upon posting.
10. Past consideration is not a good consideration for negotiable instruments.
对 错
B
Past consideration is a good consideration for negotiable instruments.
Question 3
1. John wrote to Mary asking "Will you sell your second-hand car? Please tell me your lowest price." Mary replied in a letter: "The lowest price for my used car is $2,000." John then sent the second letter to Mary saying that he agreed to buy the used car for $2,000. But before Mary received the letter from John, Mary sold her used car to David. Can John sue Mary to enforce the contract?
An offer is a proposal made by the offeror to the offeree with the intention that it shall become binding as soon as it is accepted. An offer must carry the definite intention to be bound which is different from supply of information. In Harvey v. Facey, 1893, where a telegraph communication was exchanged between the parties. Harvey: "Will you sell us Bumper Hall Pen? Telegraph lowest price." Facey: "Lowest price for Bumper Hall Pen is $900." Harvey: "We agree to buy Bumper Hall Pen for $900 asked by you." To this last telegram Facey made no reply. It was held that there was no contract between the parties as the defendant was only answering a question concerning the price. John asked Mary about the lowest price of Mary's used car, and John got response from Mary. Mary's response concerning the price, following the legal principles of above-mentioned case, does not carry the definite intention to be bound and Mary was only answering a question concerning the price. An offer is different from supply of information. It is supply of information to state the price at which something might be sold in respond to a request for information. So Mary's reply is not an offer, and there is no contract existed between John and Mary. John can not sue Mary to enforce the contract.
Quesiton 4
1. Chan wanted to sell his business in which Lee was interested. During the course of negotiations in January, Chan correctly represented the takings to be about $40,000 a month. The contract was not signed until June when takings had fallen to $1,000 a month owing to Chan's illness. Chan did not mention the drop when the contract was entered into in June. Can Lee rescind the contract?
A misrepresentation is an untrue statement of fact made by one contracting party to the other to induce the other party to enter into contract. In general, a representation is a statement of some existing facts or past events. Silence does not normally amount to representation. But where a statement is true when it is made, and subsequently becomes false before the conclusion of the contract, the statement is representation. In with v. O'Flanagan, 1936, where the defendant was a medical practitioner who wished to sell his practice. In January, 1934, the defendant informed the plaintiff that the income from the practice was $2,000. Five months later when the contract was signed the income had fallen considerably due to the defendant's illness and no mention of this fact was made to the plaintiff. The plaintiff claimed rescission of the contract. It was held that the plaintiff could rescind the contract as there was misrepresentation. Chan's statement concerning takings to be $4,000 a month during the negotiation is true. But five months later, the takings had fallen to $1,000. Chan's representation, following the legal principle of above-mentioned case, turns to be false before the conclusion of the contract. Chan should correct his statement concerning the takings after the change, but he kept silent. His silence amounts to misrepresentation which affects the genuineness of assent of the other party—Lee. Lee can rescind the contract.
Question 5
1. Write short notes on: a. What must the plaintiff prove in order to succeed in mi action of negligence? b. Explain the defences available to the defendant in an action based on tort. c. Explain the rule established in Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. (1964)
(a) As an independent and specific tort, negligence measures behaviour against an objective standard. The plaintiff must prove that: the defendant owed him a legal duty of care; the defendant was in a breach of that duty; and he has a suffered damage as a result of that breach. (b) Defendant's defences Even if the plaintiff can prove all three elements of negligence, the defendant can establish defences to the plaintiff's claim contributory negligence voluntary assumption of risk on the part of the plaintiff the damage suffered by the plaintiff is too remote. (c) Hedley Byrne & Ltd. v. Heller & Partners Ltd., 1964 It was held in the case that liability would attach for negligent statements, resulting in financial loss to the plaintiff, so long as certain conditions are satisfied. These conditions are: the plaintiff must rely on the advice sought by him, and given by defendant; the defendant is aware of the plaintiff's reliance on his advice; the circumstances must be such that plaintiff’s reliance is reasonable. The advice is given by professional advisers such as accountants, bankers, investment advisers, etc. It is important to note that mere knowledge that the plaintiff will rely on the defendant's advice or information is not sufficient; what matters is whether the defendant knows that the plaintiff will rely on the defendant's advice or information for use in the plaintiff's transaction in contemplation.
Question 6
1. (a) Define cheque. (b) Explain any five points of the differences between cheques and bills of exchange.
(a) Section 73 (1) and section 3 (1) of Bills of Exchange Ordinance define the cheque as an unconditional order in writing, addressed by a person to a bank, signed by the person making it, requiring the bank to pay on demand a stun certain in money to, or to the order of, a specified person or to bearer. (b) Differences between cheques and bills of exchange: The drawee of a cheque is a banker. The drawee of a cheque is not liable to the holder for refusing payment, since the banker never accepts the cheque. The roles on acceptance do not apply to cheques. Because most cheques are usually not negotiated, the rules on negotiation have little significance. Delay in presenting a cheque for payment does not discharge the drawer, unless he suffers actual loss through the delay. The rules concerning crossings are confined to cheques and certain other instruments and not to other bills. Payment of an order cheque with a forged or unauthorized indorsement discharges the paying banker if certain statutory exemptions apply, but in the same situation, the acceptor of a bill would not be discharged. Based on the contractual relationship between a banker and a customer, a number of implied obligations are imposed on them towards the other by law.
Question 7
1. Write short notes on: (a) Real property. (b) Personal property.
(a) Real property is immovable property which is subject to actions in rem. Real property consists of the following: land: Section 2 of Conveyancing and Property Ordinance states that land includes: (i) land covered by water; (ii) any estate, fight, interest or easement; (iii) the whole or part of an undivided share in land and any estate, right, interest or easement in or over the whole or part of an undivided share in land. building and fixtures: Section 2 states that land includes things attached to land or permanently fastened to land and anything attached to land. (b) Personal property is movable property and intangible property which is subject to actions in personam. Personal property includes: - chattels real, i.e. personal property recoverable and/or enforceable by taking an action in rem. - chattels personal, i.e. movable property such as choses in possession and choses in action.
Question 8
1. Explain: a. Acceptance of bills of exchange. b. General acceptance. c. Qualified acceptance.
(a) Section 17 of the Bills of Exchange Ordinance stipulates that: the acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. an acceptance is invalid unless it complies with the following conditions: (i) it must be written on the bill and be signed by the drawee. The mere signature of the drawee, without additional words, is sufficient. (ii) it must not express that the drawee will perform his promise by any other means than the payment of money. (b) A general acceptance assents without qualification to the order of the drawer. (c) A qualified acceptance in express terms varies the effect of the bill as drawn. Qualified acceptance may be: conditional, which makes payment by the acceptor dependent on the fulfillment of a condition therein stated; partial, which pays part only of the amount for which the bill is drawn. qualified as to time; local, which pays only at a particular specified place; the acceptance of some one or more of the drawees, but not of all.