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Contract Law


Wednesday 19 August 2009


10.00 a.m. – 1.00 p.m.

Internal Examiner:

Prof Steve Hedley UCC

External Examiner:

Mr Michael Cush SC


Candidates must answer Question 1 and any two of the remaining questions. Question 1 carries 50 marks, all other questions carry 25 marks each.

Law of Contract - 2009

  • 1. Amy, who is 18 years old, wishes to learn to drive, and persuades her father Brian that

he should pay for lessons. Brian contacts his friend Ciaran, a driving instructor, and they agree that Ciaran will instruct Amy; Brian pays for a dozen hourly lessons in advance. Ciaran has standard terms of business, which are displayed in the car he uses for driving lessons, and which include a clause stating that “Ciaran is under no liability to his client for any accident which might, through reasonable care by the client, have been avoided”.

On Amy’s second lesson, as she is driving Ciaran’s car under Ciaran’s supervision, she is directed by Ciaran onto a busy main road. Panicking at the heavy traffic, she crashes the car into a traffic light, despite Ciaran’s best efforts to stop her. The damage to the car is slight, but Amy is considerably shaken up by the incident, and refuses to take any further lessons with Ciaran; she suffers from recurrent nightmares of crashing for several months afterwards. Ciaran indignantly denies that the crash was his fault, demands to know when Amy will be taking her remaining lessons, and refuses to return any of the money.

Advise Brian.

  • 2. Damian, a banking executive, is in the habit of advising his aunt Esther on financial

matters. He liked the look of an oil panting Esther owned, and knowing from some quick research that it is likely to be quite valuable, offers Esther €1,000 for it. Esther, who was under the impression that it was a copy and of very little value, replied “Of course, dear” and the sale took place. Damian immediately sold the painting to Fidelma, a professional art dealer, for €50,000. Advise Esther.

  • 3. Gavin, a builder, agreed to build an extension for his niece, Hilary, which she wanted

to improve her house; Gavin agreed to do the work for the low price of €10,000. When he started to dig up the driveway to lay the foundations, Gavin discovered that the work would take a few days longer than he had anticipated, and told Hilary that he would need to charge an extra €500 for the job. Hilary was reluctant to pay more than had been agreed, but, as the work had already been started, she agreed to pay the extra amount. When the extension was completed, Hilary’s husband, Ian, gave Gavin a cheque for €10,000, telling him that this was the amount originally agreed, and this was all he was going to receive. Gavin’s business was not doing well and he needed prompt payment of all his debts; and so, despite complaining, he accepted the cheque from Ian. He now wishes to know if he can recover the extra €500.

  • 4. James and Kathy discuss whether James will sell Kathy his house. They eventually

agree that Kathy would pay €200,000 for the house; that she would also pay €20,000 for certain carpets, furnishings and fittings; that James would give vacant possession on a date two months (to the day) from the meeting; that the agreement was subject to Kathy’s

bank manager confirming that the sale represents “value for money”; and that both parties would exchange letters confirming the details agreed and giving the names of their respective solicitors, who would prepare a formal contract embodying the terms of the agreement.

The letters were duly exchanged; Kathy’s bank manager gave the necessary confirmation; solicitors were instructed by both parties. James has now received a better offer, and says that he intends not to proceed with the purchase. Advise Kathy.

5. In relation to any TWO of the following issues, comment on whether the law is in need of reform, illustrating your answer with relevant case law.

  • a) In what circumstances a contract is illegal for sexual immortality;

  • b) In what circumstances a contract is terminated by frustration;

  • c) In what circumstances a contract may be rectified.