Contract Quiz

1. What are the six essential elements of a contract?
2. Explain how the rules as to acceptance differ between contracts by post and instantaneous communication.
3. Is it possible for a contract to be formed without an identifiable offer and acceptance? If so, how does a court determine whether agreement has been reached? What tests does a court apply?
4. A contract to purchase a car contains the following clause: ‘If you are not completely satisfied with the car, return it in good condition within seven (7) days and we will give you your money back’. Is this clause a condition precedent or a condition subsequent? Explain your answer.
5. Peter and Mary were engaged to be married. Prior to the marriage, Peter agreed to make Mary a dress allowance of $1000 a year, to be paid in quarterly instalments of $250. Peter paid the allowance for the first three years of their marriage, and then he stopped payment. After Mary had separated from Peter, she sued to recover $4000 arrears of the agreed dress allowance. Do you think she is entitled to recover the money?
6. Is the equitable principle of promissory estoppel likely to be applied widely and freely, or only in special situations? Explain your answer.
7. What is the purpose of consideration in a simple contract? Discuss.
8. Bruce, while he was so drunk that he didn’t know what he was doing, bid successfully at an auction for the purchase of a house. It was clear to the auctioneer that Bruce didn’t know what he was doing. However, after Bruce sobered up he confirmed the contract with the auctioneer. He then subsequently refused to complete the contract. Is Bruce bound?
9. Sam took his suit to Quick Klean Drycleaners Pty Ltd. This was the first time he had been to this drycleaner. After giving his suit to the assistant behind the counter and paying for the drycleaning, he was given a receipt with a number on it. The assistant told Sam that he needed to bring the receipt with him when he came to collect his suit. She also told him that the drycleaner ‘would take all care but accept no responsibility during cleaning’. She pointed out that a similar clause appeared on the back of the ticket. It read: ‘Quick Klean Drycleaners Pty Ltd will take all care but accept no responsibility for effective removal of all stains during cleaning’.

When Sam came back to collect his suit he found a tear in the right sleeve. When he brought this to the attention of the shop assistant, she reminded him that she had previously advised him that all care would be taken, but that Quick Klean didn’t accept responsibility for items left for drycleaning.

Advise Sam.

10. Should the courts be able to award damages for anxiety, injured feelings, disappointment or distress as a result of breach of contract, even though the parties cannot estimate subjective mental reactions to the breach? Discuss.