Theory question 106
Law of ContractDigital Trading Limited agreed to supply 200 computers to Mr. Kontch at the cost of D10,000 per computer. The company promised to deliver the machines within 30 days of the agreement.
(a) State four factors that may lead to the cancellation of the agreement.
(b) List and explain four essential elements of the agreement between Mr. Kontch and Digital Trading Limited.
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(a) Any four: failure to deliver within 30 days (breach); delivery of wrong or faulty computers; Mr. Kontch failing to pay; mutual agreement to cancel; impossibility (frustration), e.g. fire, war, government ban; misrepresentation or fraud; death or bankruptcy of a party; the contract being illegal.
(b) Any four, explained: offer (Digital Trading offers to supply computers on stated terms); acceptance (Mr. Kontch agrees unconditionally to the terms); consideration (D10,000 per computer, D2,000,000 in all, exchanged for the computers); intention to create legal relations; capacity of the parties (adult, sane, company duly registered); legality of object; genuine consent (no fraud, mistake or duress).
Elements of a valid contract: offer, acceptance, consideration, capacity, intention, legality.