Contract Law: Solved Questions for Business Law Assignment

This Business Law assignment presents a series of questions related to contract law, covering topics such as mistake of fact, ownership claims, restrictive agreements, breach of contract, and the principle of 'Caveat Venditor'. The solutions provided analyze each scenario, referencing relevant case laws like Carlill v Carbolic Smoke Ball Company and Chappell & Co Ltd v Nestle Co Ltd, to support the reasoning. The assignment addresses issues such as the validity of contracts involving stolen goods, the enforceability of restrictive covenants, and the remedies available for breach of contract, offering comprehensive insights into fundamental legal principles. Desklib provides a platform to access more solved assignments and study resources for students.

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

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Table of Contents
Question 1........................................................................................................................................2
Question 2........................................................................................................................................2
Question 3........................................................................................................................................2
Question 4........................................................................................................................................2
Question 5........................................................................................................................................3
Question 6........................................................................................................................................3
Question 7........................................................................................................................................3
Question 8........................................................................................................................................4
Question 9........................................................................................................................................4

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Question 1
The offeror can plead to discharge the contract based on mistake of fact as to the year of
manufacture of the guitar. Mistake of Law makes a contract voidable on the option of the other
party to the contract. In case, the offeree refuses to discharge the agreement, the offeror can sue
him for misrepresentation pertaining to the manufacturing year of the guitar, which he should
have been aware of as the owner of the goods.
Question 2
John would have no legal ownership claim over the lawnmower, as it is a stolen one.
John would not be able to establish his ownership stating the offer, acceptance and consideration
factor to the authority as one of the other essential of contract says that an agreement cannot be
based on illegal or stolen goods. John cannot claim ownership, however can claim a refund from
Cheryl.
Question 3
It would be advised to Janine that she cannot open the men’s clothing store for she sign
an agreement with Yvonne under which she cannot deal in ‘any retail business’ within a radius
of one mile for the next 5 years. Under contract law, such restrictive agreements are valid and
enforceable. Its purpose is to reduce competition when a business is in its thriving stage.

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Question 4
Marion should wait until 4 pm and visit Jimmy’s residence accordingly to check for
himself about the truth behind such rumors as Jimmy and Marion had an agreement to exchange
the painting and the consideration amount at that particular place and time. Any action taken
before the exhaustion of the scheduled time would amount to breach.
Question 5
Sherwin’s father would be the plaintiff in this case and he could sue the seller fort breach
of contract as he made the seller aware of the purpose of his purchase and the goods did not turn
out to be fit for such purpose. He could sue the seller for damages1.
Question 6
John has the eligibility to claim damages under the defense of ‘Caveat Venditor’, that is
‘let the seller beware’ that says a seller should be careful while selling a product and must
convey the pros, cons and specification of the terms of sale to the buyer. Therefore, John can sue
Bad Billy stating that the seller failed to mention any such thing to him at the time of purchase,
thus liable to be prosecuted. Moreover, John can claim for protection under the Consumer Law
as well.2
1 Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256
2 Richard v. Time Inc., (2012) SCC 8

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Question 7
Carson was not contend with the agreement from the beginning, as he was not satisfied
on the deal regarding the company’s specialized computer program and equipment. The
consideration offered on these items were not sufficient as per Carson’s accountant and it would
be a loss for the company to enter into such contract. Therefore, Carson has the defense of
‘Mistake’ to avoid the contract. He can move the court by praying to dissolve the agreement
under unilateral mistake of entering into the contract pertaining to the insufficient consideration
amount3. On the contrary, he can opt for a discharge of the contract by agreement with Sarsfield
stating the issues that his company might face if the contract is performed.
Question 8
Under the law of contract, Consideration may not be ‘adequate’ to form a contract. In
Chappel v Nestle, it was held that consideration is referred to a detriment of value caused to the
promisor who receives something in exchange of such detriment from the promisee4. Therefore,
in this case, it can be held that the promisor had offered $2500 to the promisee in exchange of
her guitar, which she readily agreed to. The promisee cannot refuse to perform the contract later
on the basis of ‘inadequate consideration’.
Question 9
Jimmy would be not be able to prove his ground by stating that he had no intention to
enter into the contract. It was very clear from his actions of accepting the consideration amount
3 Wood v Scarth (1858) 1 F&F 293
4 Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87

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that he had intention to form an agreement. Although ‘intention’ is an independent factor that
needs to be proved by parties, however the presence or exchange of consideration is the strongest
evidence of intention of both the parties to the agreement5.
5 Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256

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Bibliography
Case laws
Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256.
Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87.
Richard v. Time Inc., (2012) SCC 8.
Wood v Scarth (1858) 1 F&F 293.