Question 6
- State four functions of a wholesaler.
- Jumoke is interested in purchasing a car from Favour, an auto dealer. Both parties decided to enter into a contract.
List and explain four elements that will make the transaction legally binding
Observation
- This is the most well answered question by candidates. The question was well attempted and candidates gained marks. Candidates’ good performance could be attributed to the fact that the topic cut across other subject like Economics and Commerce.
- Candidates were able to obtain an average score from this part of the question.
Elements of a contract
- Offer: this is a promise in exchange for performance by another party. An offer must be distinguished from mere willingness to deal. It can be withdrawn before being accepted, so long as it is communicated to the other party. Offers that are not rejected, withdrawn or revoked generally continue until the expiration of the specified period.
- Acceptance: this is an expression of assent of the offer. It must generally be made in the manner specified by the offer. An acceptance is only valid if the offeree knows of the offer and the offeree shows an intention to accept and the acceptance is expressed as an unequivocal and unconditional agreement to the terms of the offer.
- Consideration: each party to a contract must provide something of value to the other to enter into the agreement. It is whatever a person gives or promises to give in return for what he has.
- Intention to create legal relation: a contract requires that the parties have the intention to enter into a legally binding agreement. That is, the parties entering into the contract must understand that the agreement can be enforced by law.
- Contractual capacity: this is the ability of persons to enter into a contract. Adults who are not insane have full capacity to enter into any kind of contract.
- Legality of object: a contract must be undertaken for a lawful purpose.