Law of Contract
What this domain tests
Contract questions test formation, terms, vitiating factors, discharge and remedies under Malawi's common-law and equitable principles, supplemented by statutes such as the Sale of Goods Act.
Core rules
- Formation requires offer, acceptance, consideration, intention to create legal relations, capacity, certainty and legality.
- An offer must be communicated and may be revoked before acceptance. A counter-offer destroys the original offer. Acceptance must be communicated unless the offeror waives it.
- Consideration must be sufficient but need not be adequate; past consideration is generally not good.
- Terms may be express or implied. Exemption clauses must be incorporated and are construed strictly against the party relying on them.
- Vitiating factors include misrepresentation, mistake, duress, undue influence and illegality.
- Breach may entitle the innocent party to damages, specific performance, injunction or termination. Damages aim to put the claimant in the position as if the contract had been performed, subject to remoteness and mitigation.
Worked example
A offers to sell a laptop for K500,000. B replies, 'I will pay K450,000.' This is a counter-offer, not acceptance; no contract exists. If A then refuses to sell, B cannot sue for breach because B's counter-offer ended A's original offer. Had B accepted before any revocation, a contract would have arisen.
Traps
Confusing invitations to treat with offers is a common error. Do not say consideration must be adequate. Do not enforce an exemption clause without checking notice, timing and interpretation. Do not award damages for distress in ordinary commercial contracts without a recognised exception.