Commerce WASSCE (PC), 2021

Question 7

 

  1. Differentiate between a contract discharged by frustration and a contract discharged by illegality.                                                                    
  2. Mr Okun, a manufacturer and distributor of consumer goods, appointed Mr Jobe as an agent.
  1. State four duties of Mr Jobe to Mr Okun.
  2. State four factors that could lead to the termination of the agreement between Mr Okun and Mr Jobe.

 

Observation

 

Most candidates who attempted the question did well.
The expected responses to the question include:

(a)  Differences between a Contract Discharged by Frustration and a Contract Discharged by Illegality


Discharge by Frustration

Discharged by Illegality

This is a valid contract that cannot be completed because an object in the contract has been destroyed due to no fault of both parties.

This is a valid contract entered into before the object of the contract becomes illegal/unlawful.

                                                                                            
(b)  (i) Duties of Mr. Jobe to Mr. Okun

  1. He must obey and carry out all lawful instructions given by Mr. Okun.
  2. He has to exercise all reasonable care, skills, diligence and loyalty in performing his duties.
  3. He must act in good faith and honesty for the benefit of Mr. Okun.
  4. He must act personally and not delegate his duties as an agent to a third party.
  5. He must render accounts to Mr. Okun any time he is required to.
  6. He must keep Mr. Okun informed of any material information that may affect Mr. Okun’s business.         

 

(iiFactors that could lead to the Termination of the Agreement    between Mr. Okun and Mr. Jobe

  1. The insanity of either Mr. Okun or Mr. Jobe.                            
  2. The bankruptcy of Mr. Okun.
  3. The illegality of the object of the agency.
  4. The death of either Mr. Okun or Mr Jobe.
  5. When there is a continuous disagreement between Mr. Okun and his agent,

Mr. Jobe.

  1. If the agency is set up for a purpose and that purpose expires.
  2. Agreement between Mr. Okun and Mr. Jobe to end the agency relationships.
  3. When the business continuously makes losses.
  4. Dishonesty of Mr. Jobe could lead to the termination of his agency.
  5.  Performance of the contract.