Janet and Mary entered into a contract in which Janet was to sell a car to Mary, for Sh. 250,000. Unknown to the parties, the car which had been parked at John’s garage had been burnt down that morning following a fire outbreak at the garage. Mary had paid Janet Sh. 100,000 as deposit. She now intends to sue Janet for breach of contract
Advise Janet. (8 marks)
ANSWER
• This problem is based on frustration of contract.
• It is apparent that the destruction of the car fire frustrated the contract between Mary and Janet and theredischarged the parties as neither of them was blameworthy. However, the deposit of Kshs. 100,000 paid Mary is recoverable.
• My advise to Janet is that there is no cause of alarm as there is no breach of contract. However, Mary is entitled to the Kshs. 100,000 deposit. Janet must refund the same.
• My advise is based on the provisions of the Law Reform (frustrated contracts) Act 1943 which deal with the adjustment of rights of parties when a contract is frustrated. Under the Act, when a contract is frustrated any money paid is recoverable.
Related Posts
-
-
-
-
Mr. A, a car dealer sells second hand cars. On Thursday last week, he placed an advertisement in a daily newspaper which stated the following: “Once in a lifetime, opportunity to own a one year old Nissan Caravan, low mileage, Kshs.500,000 cash. The offer is valid for only one day and the car will go to the first person who accepts it.” When Mr. B saw the advertisement, he immediately posted a letter of acceptance of Mr. A‟s offer. Mrs. C also saw the advertisement and came to inspect the car after which Mrs. C offered Mr. A a cheque of Kshs. 500,000. However, Mr. A refused to accept the cheque stating that another potential buyer had already offered to buy the car. Later in the day Ms D, another interested buyer telephoned Mr. A informing him that she was willing to buy the car but asked Mr. A if he would keep the offer open until she could go to her bank to obtain a loan. Mr. A accepted the request. However later, in the day, Mr. E, another potential buyer said that he would pay Sh. 600,000 in cash for the car. Mr. A agreed to sell the car to Mr. E. On Monday morning, Mr. A received Mr. B‟s letter of acceptance. At the same time, Mr. E returned to complete the transaction. However, in the afternoon Mr. E telephoned Mr. A to say that he had second thoughts and he no longer wished to purchase the car. Citing relevant decided cases where applicable, explain the legal principles in the case in relation to: (a) Mr. A (4 marks) (b) Mr. B (4 marks) (c) Mrs. C (4 marks) (d) Ms. D (4 marks) (e) Mr. E (4 marks)
-