WAEC Commerce 2024 Theory — Question 6

Model answer

(a) Factors that can lead to cancellation of contracts: (i) Death of one of the parties to the contract: if one of them dies, they can cancel the contract. (ii) Frustration: if a party finds it practically impossible to supply or is faced by natural challenges such as flood, he will be frustrated and the contract can be cancelled. (iii) Failure on the part of a trading party to pay consideration or part of it as at when due. (iv) Breach of an agreement by one of the parties as related to the contract can also lead to cancellation of the contract. (b) Essential elements of contracts: (i) Offer: this involves an agreement by a party to the contract to execute or go into the contract. (ii) Acceptance: this has to do with the act of the other party (not the one that made an offer) agreeing to the terms proposed. (iii) Consideration: this is the amount or cost implication accepted by both parties to the contract. (iv) Capacity: this involves the ability of each party to carry out its own obligation of the contract.