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CONTRACT LAW

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › CONTRACT LAW

  • This topic has 2 replies, 2 voices, and was last updated 1 year ago by MikeLittle.
Viewing 3 posts - 1 through 3 (of 3 total)
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  • July 25, 2023 at 10:17 pm #688885
    whydoyoucare
    Participant
    • Topics: 50
    • Replies: 46
    • ☆☆

    Q1) With regards to consideration in contract law, which TWO of the following statements are correct?

    A) Performing an existing statutory or contractual duty is not valid consideration, subject to certain exceptions
    B) Performing an existing statutory or contractual dutv is never valid consideration
    C) If a promise of payment is extracted by pressure or threat, the contract is void
    D) There is no requirement in law for each party’s consideration to be equal in value

    I know the answer is not D and B. But I thought it’s C. Why is not C and why is it A? Explain please.

    Q2)
    Joan booked some flights for her and her family to go on a holiday to Spain. When booking online there was a clearly displayed notice that said “You may be charged additional fees for excess baggage. Joan read the notice but didn’t think that it was relevant as her family are ahwars sensible with their baggage and always seem to take less than other people. When they check in at the airport they are told that they need to pay additional charges of €200 as their baszage weight exceeds 40kg
    David has signed up to a mobile phone contract with Purple Telecoms for €20 a month. After he agrees to the deal he discovers that his friend Ben got the exact same package with Purple on the same day for £15. He immediately calls Purple Telecoms to argue that the deal is
    unfair.

    In relation to Joan and David which TWO of the following statements are correct?
    A) The excess baggage charge is likely to be deemed enforceable as the term is transparent and prominent
    B) The excess baggage charge is likely to be deemed unenforceable as it fails the fairness
    test
    C) The mobile phone contract price is likely to be deemed unenforceable as it fails the
    fairness test
    D) The mobile phone contract price is likely to be deemed enforceable as it relates to the appropriateness of the price and the term is transparent and prominent

    I got this totally wrong, how are the answers B and D and not A and C?

    July 26, 2023 at 3:37 pm #688942
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23303
    • ☆☆☆☆☆

    Q1) With regards to consideration in contract law, which TWO of the following statements are correct?

    A) Performing an existing statutory or contractual duty is not valid consideration, subject to certain exceptions
    B) Performing an existing statutory or contractual dutv is never valid consideration
    C) If a promise of payment is extracted by pressure or threat, the contract is void
    D) There is no requirement in law for each party’s consideration to be equal in value

    I know the answer is not D and B. But I thought it’s C. Why is not C and why is it A? Explain please.

    A and B are diametrically opposite. The answer clearly cannot be both A and B, but surely one of them should be correct. My belief is that the law will always allow exceptions unless the law itself makes it absolutely clear that there are NO exceptions. I’m going to opt for option A as being a correct statement. For example, where a person performs such an obligation but performs OVER AND ABOVE the existing statutory or contractual duty, those over and above actions would likely be considered to be valid consideration.

    Option C? My leaning here is to disagree with this statement. iMy understanding is that agreement brought about by duress or threat is voidable at the option of the threatened party

    Option D is categorically correct. There is no requirement in English law for the value of consideration to be equal – nor even close! So long as both sides have given (or promised to give) something of value, that is sufficient to merit the title ‘consideration’.

    So the answer is, in my opinion, options A and D

    OK?

    July 26, 2023 at 3:46 pm #688944
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23303
    • ☆☆☆☆☆

    Moving on to your second question, I too had a struggle!

    But I put the question to our AI professor and this is what Artificial Intelligence came up with!

    Joan’s situation with the excess baggage charges can be analyzed in terms of contract law. The notice displayed during the online booking stating “You may be charged additional fees for excess baggage” can be considered a term of the contract between Joan and the airline. However, the enforceability of this term depends on various factors, including transparency, prominence, and fairness.

    In this case, Joan argues that the excess baggage charge is unfair because her family is always sensible with their baggage and takes less than other people. While Joan’s argument may have some merit, it is important to note that the fairness of a contract term is assessed objectively, considering the circumstances at the time of contracting.

    Without specific information about the baggage weight allowances disclosed in the contract or any indication of the allowable weight in the question, it is difficult to determine whether the excess baggage charge would be enforceable. However, the vague comment in the notice, without clear information on the allowable weight, may weaken the enforceability of the excess baggage charge.

    Regarding David’s situation with the mobile phone contract, he discovers that his friend Ben got the same package for a lower price. David believes this is unfair and calls Purple Telecoms to argue his case. The fairness of a contract price is also assessed objectively, considering factors such as appropriateness and transparency.

    In this case, the mobile phone contract price may be deemed enforceable if it is considered appropriate and the term regarding the price is transparent and prominent. However, without further details about the specific terms and conditions of the contract, it is challenging to provide a definitive answer.

    Overall, the enforceability of contract terms, including excess baggage charges and mobile phone contract prices, depends on various factors and requires a careful analysis of the specific circumstances and terms of the contracts involved.

    OK?

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