- 20 Marks
Question
a. A pharmaceutical company advertising its newly developed vaccine made an offer of N1,000,000.00 (One million naira) to anyone who contracted the disease after taking the vaccination administered freely. Daniel accepted the offer, took the vaccine of his own free will, and contracted the disease. The pharmaceutical company has failed to pay him the one million naira.
Required:
Advise Daniel if his action for breach of contract would succeed or fail, giving reasons for your advice. (5 Marks)
b. Explain the difference between a contract under seal and a simple contract. (5 Marks)
c. Promoters usually enter into a contract on behalf of a proposed company.
Required:
Explain the means of validating a pre-incorporation contract and when it becomes invalid. (6 Marks)
d. Ethical codes are codes adopted by professional bodies for differentiating between right and wrong conduct in the performance of members’ professional duties.
Required:
State FOUR objectives of ethical codes. (4 Marks)
Answer
a. Advice to Daniel on breach of contract (5 Marks): Daniel’s action for breach of contract may succeed because the pharmaceutical company’s offer constituted a unilateral contract. Daniel accepted the offer by taking the vaccine and subsequently contracting the disease. The company’s failure to pay the agreed sum constitutes a breach. However, the specific terms of the offer and any disclaimers could affect the outcome.
b. Difference between a contract under seal and a simple contract (5 Marks):
- A contract under seal (also known as a deed) is a formal contract executed in writing and sealed by the parties. It does not require consideration to be enforceable.
- A simple contract is an informal contract, either written or oral, that requires consideration to be enforceable.
c. Validating a pre-incorporation contract (6 Marks):
- A pre-incorporation contract is one entered into by promoters on behalf of a company that has not yet been incorporated. It can be validated by ratification after the company is registered. If the company does not ratify the contract, the promoters remain personally liable.
- The contract becomes invalid if the company is not incorporated or fails to ratify the contract within a reasonable time after incorporation.
d. Objectives of ethical codes (4 Marks):
- To ensure professional conduct and integrity.
- To protect the public interest.
- To maintain the dignity and reputation of the profession.
- To promote transparency and accountability in professional activities.
- Tags: Breach of Contract, Contract Law, Corporate Governance
- Level: Level 1
- Topic: Corporate Governance
- Series: NOV 2021
- Uploader: Theophilus