CATHOLIC UNIVERSITY OF EASTERN AFRICA

CONTRACT 2 TAKE HOME ASSIGNMENT

ANSWER ALL QUESTIONS
1. What is the scope of duress?
2. What are the ingredients of economic duress and what factual indicators are likely to
be used by the court in deciding whether it has occurred?
3. Neil owned a comer shop where he ran a newsagent's and tobacconist's business. Neil
advertised the business and premises for sale in the local paper, stating that planning
permission had been obtained for the development of an off-licence extension to the
business.
Having seen the advertisement, Jane visited the premises and was told by Neil that the
profits were 40,000 per annum, and that he would anticipate an increase of at least 15%
in the next year. Neil said, If you don't believe me, look at these accounts. Jane
declined to do so, but had she done so she would have discovered that the profits had
never exceeded 25,000 and were on a downward trend.
Shortly after this conversation Neil was notified by the local authority that the street on
which the premises were situated would become a traffic-free zone in the near future.
Neil didn't communicate this information to Jane.
Having entered into a written contract to purchase the premises which made no mention
of the above statements, Jane discovers that Neil's statement as to planning permission
was incorrect and that the profits position is not what she thought it to be. Furthermore,
the local authority has now closed the street, causing a drastic fall-off in passing trade.
4. Oscar, a frequent visitor to Diana's house, had always admired her dining table. On one
occasion he expressed interest in buying it and Diana said, it is an Elizabethan relic and
actually belonged to Queen Elizabeth the First herself. One week later Diana sold the
table to Oscar for 20,000.
Some two years later, Oscar wished to sell the table and sent it to Northeby's, the auction
house, for valuation. They reported that the table was no more than 100 years old and
worth about 500
5. Sophie has a business which supplies historical costumes for use on film sets. Shehires
these costumes exclusively from Angel, who is a specialist costume dealer for film and
television. One day, Sophie is approached by Declan, a director of blockbuster films.
Declan is about to shoot a war film and wants Sophie to supply the costumes. Sophie is
delighted since the film intends to use a cast of some 5,000 people in battle scenes and it
will be an extremely lucrative contract for her, earning her 30,000 in just 3 months.

Declan also promises Sophie that, should she do well on this military film, he will
employ her on his next blockbuster. Sophie immediately contacts Angel, informs him of
the war film that she will be working on and places an order for 5,000 military costumes.
The price for this is 8,000. She tells Angel that it is crucial that she receive the costumes
by June 20th since filming starts on June 25th and the director will be upset if the
costumes arrive late. It is a busy time of year for Angels business and he is very stressed.
On June 19th he suddenly realises that he cannot supply the costumes since he has
already hired them out to someone else. On learning of this Sophie panics and contacts a
costume company in New York called Heaven. Although Heaven can provide the
costumes, they charge Sophie 12,000 and tell her that they cannot get the costumes to
her by June 25th. Sophie goes ahead with the order and the
costumes arrive on June 30th. The delay means that filming cannot start on time and
Declan is furious. He refuses to employ Sophie on his next film. In fact, he badmouths
her so much that Sophie cannot get work at all that year.
Sophie is so distressed at the decline of her business that she starts to get panic attacks
and is unable to leave the house for several weeks.
Advise Sophie as to any remedies she might have.
(20 Marks)