Question 1 - Contract Law John is a used car salesman. He has had the following dealings with two customers. Kelvin saw an advertisement which John had placed in the News Straits Times. Impressed by the advertisement, Kelvin went to see the car. Without taking it for a test drive, Kelvin said he would buy it for $7,300 and John agreed. Kelvin then asked John the price of a tow-bar. John quoted $300 and Kelvin said he would think about it. Nothing more was said about a tow-bar. However, when preparing the car for collection, John fitted a tow-bar, believing that Kelvin had asked for one to be fitted. However, when Kelvin collected the car and saw the tow-bar, he told John that, although he had not ordered it, he now wanted one and would pay for it at the end of the month. Shortly after buying the car, Kelvin discovered that its performance was poor, it would only do 30 miles to the gallon and that the previous owner was a car rental company. John also had a motorbike for sale for $6,000. On 14 December, Marcos offered $5,500 for the motorbike. John said he would sell it to him for $5,750. Marcos had to check whether he could borrow the additional $250 and said that he would write to John to let him know. On 18 December, Marcos wrote to John accepting his offer. On 19 December, John sold the motorbike to Amos. On 20 December, John received Marcos's letter of acceptance. A. Explain the legal status of John's advertisement. (5 marks) B. (i) Explain the requirements for a valid contract. (10 marks) B. (ii) Explain whether a valid contract exists between John and Kelvin (10 marks) C. Explain whether consideration exists between John and Kelvin in respect of the tow-bar. (5 marks) D. Explain whether Marcos has communicated acceptance to John in respect of the motorbike. (10 marks) E. (i) Define misrepresentation. (5 marks) (ii) Explain whether each of the statements in Andy's advertisement for the sports car could be a misrepresentation. (5 marks) (Total: 50 marks)