THE CATHOLIC UNIVERSITY OF EASTERN AFRICA

A. M. E. C. E. A P.O. Box 62157

00200 Nairobi - KENYA

MAIN EXAMINATION Telephone: 891601-6

Ext 1022/23/25
MAY – AUGUST 2021
Fax: 254-20-891084
FACULTY OF LAW
email:exams@cuea.edu

CLS 103: CONTRACTS I

Date: AUGUST 2021 Duration: 2 Hours

INSTRUCTIONS: Answer Question ONE and any other TWO Questions

Q1. a.) Kamau has worked for his employer for five years. Last week, he was asked to
sign a document entitled ‘Covenant Not to Compete’. In this agreement Kamau
promised not to compete with his employer, regarding accounts that he had serviced,
for a period of two years after leaving. Kamau did not receive anything for signing this
agreement. Where is the consideration? Is this agreement enforceable? (10marks)

b.) Benedette was asked by “Mr. Smith” to find a buyer for his restaurant in exchange
for a payment of 15% of the sales price if she found a buyer. Benedette did not have a
real estate license nor did she claim to have one. She obtained a buyer and was paid
one-half of the commission. Smith refused to pay any more commission saying that he
did not have to since Benedette did not have a realtor’s license as required by state law.
Is he correct? He also said that Benedette had to return the part of the commission that
he had already paid to her. Expound on the legality of Mr.Smith’s actions? (10marks)

c.) Hassan Abdi, a 15-year old boy who looks older, just signed a contract joining a
health club which has “dues” of Kshs. 5,000 a month. Is this contract valid?
Use case law to illustrate your answer. (10marks)

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Q2. Giving facts of the Re McArdle, [1951] 1 Ch 669 Case, Critically explain past
consideration as interpreted by the Courts. (20Marks)

Q3.The appropriate remedy depends on the terms of the contract, the nature of the
breach, and the specific circumstances of the case.

Write short notes on:

a.) General Damages (4Marks)
b.) Specific Performance (4Marks)
c.) Punitive Damages (4Marks)
d.) Injunction (4Marks)
e.) Rescission (4Marks)

Q4. "A valuable consideration, in the sense of the law, may consist either in some right,
interest, profit or benefit accruing to the one party or some forbearance, detriment, loss
or responsibility, given, suffered or undertaken by the other" Discuss this statement
citing relevant Case law. (20Marks)

Q5. a.) What is a vitiating Factor? (5Marks)

b.) Lord Herschell defined a fraudulent misrepresentation as a 'false statement made

knowingly or without belief in its truth or recklessly careless whether it be true or false'.

Max offered to Tom a private sale of his car. Max told Tom that it had travelled only
50,000 miles. In fact Max had forgotten that there had been a fault on the odometer and
the car had actually travelled 52,000. What is the effect of Max’s misrepresentation?

(15Marks)
*END*

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ISO 9001:2015 Certified by the Kenya Bureau of Standards