NATIONAL AGENCY FOR EXAMINATIONS (NAE) NATIONAL EXIT

EXAMINATION FOR STUDENTS OF ETHIOPIAN LAW SCHOOLS

2010/2011 (2003 E.C) ACADEMIC YEAR
PART I: - PRIVATE LAWS (2003 _- 2015 E.C )

1. Mr Girma agreed to pay Meles, his son, 8000 birr if the latter scores 4.00 points in
National Examination. An agreement between Mr. Girma and his son is not a contract
because .

A. father and a son cannot enter into contract

B. The agreement created unilateral obligation

C. Mr. Girma had no intention to be bound

D. Meles had no obligation under the agreement

2. In cases of non-performance of a contract, a creditor may claim .

A. Forced performance in addition to cancellation

B. Invalidation in addition to specific performance

C. Compensation in addition to cancellation

D. Cancellation in addition to invalidation

3. In which one of the following statements a mistake is not a ground for invalidation of a
contract?

A. A party donated her house thinking that she was selling it.

B. A party sold a house thinking that she signed contract of lease.

C. A party donated her house to Mr. Y thinking that she was donating to Mr. X

D. A party bought an item from Mr. M thinking that she was buying from Mr. N

4. Nine years ago, Mr N lent Mr D 23000 birr. Which one of the following agreement
interrupts the period of limitation?

A. An agreement that Mr Z pays the loan if Mr D fails

B. An agreement that Mr D sells a house mortgaged for the loan to Mr C

Prepared by G-MANs NAE 2003- 2015 E.C Page 1

C. An agreement that Mr N sells his car to Mr D at 23000 birr

D. An agreement that Mr D sells his house to Mr N

5. Mr A has undertaken to deliver either a house or a car to Mr B for a price of 170,000

birr. If the house is totally destroyed by flood after the conclusion of the contract, then

A. Mr A will be relieved from paying damages as flood is a force majeure

B.. Mr B can cancel the contract as the obligation to deliver a house became impossible

C. Mr A would not be relieved of paying damages if he fails to perform the contract

D. Any party can claim invalidation of the contract as its object is impossible

6. In which one of the following a creditor can claim forced performance?

A. An agreement to write a book

B. An agreement to work as an accountant

C. An agreement to deliver a thing

D. An agreement to teach in a college

7. Which one of the following merger extinguishes the obligation of suretyship?

A. Merger of the debtor and creditor

B. Merger of the creditor and surety

C. Merger of debtor and surety

D. All of the above merger extinguish obligation of suretyship

8. In a suit for performance of a contract, burden of proof shifts to a defendant who alleges
that the contract is invalid.

9. An oral declaration or a written demand clearly showing the intention of a creditor to

obtain performance of a contract is called_______________________ .

10. A remedy for non-performance of a contract in which the debtor is forced to do or

deliver a thing is_______
Prepared by G-MANs NAE 2003- 2015 E.C Page 2
11. An action taken by the creditor, upon the authorization of court, to prevent
impoverishment of the debtor which otherwise jeopardizes the creditor's right to payment
is______________________________ .

12. A statutory period after which a lawsuit for performance or invalidation of a contract
cannot be brought in court is___________________ .

13. Discuss the meaning and types of subrogation.

14. Under the Ethiopian law of contracts, the validity of any contract necessarily
requires the cumulative presence of:

A. Object, form, consent and capacity.

B. Form, capacity and consent.

C. Consent, capacity and object.

D. Consent, object and form.

E. Capacity and consent.

15. Which one of the following juridical acts is not within the scope of application of
the Ethiopian law of contract?

A. Conditional contract.

B. Contract involving earnest.

C. Adoption agreement.

D. Marriage contract.

E. A and C.

16. Under the Ethiopian law of contracts, assignment of obligatory rights

A. Is the same as stipulation of a beneficiary in all respects.

B. May be made gratuitously in which case the assignor is not obliged to guarantee the
existence of the right.

C. Can be made for consideration though the assignor is not required to guarantee the
existence of the right at the time of the assignment.

D. Is not possible as it violates the principle of privity of contract which is the nucleus of
the Ethiopian law of contract.

Prepared by G-MANs NAE 2003- 2015 E.C Page 3

E. Is made before the conclusion of the contract to be assigned to the beneficiary.

17. In the Ethiopian Law of Contracts, the essence of joint and several liability of co
debtors is that:

A. One of the debtors may validly refuse performance of the contract as the creditor has
the liberty to proceed against the remaining co- debtors.

B. The creditor has the right to claim the whole debt from one of the co- debtors
irrespective of the share of the co-debtors.

C. If the consent of any of the co-debtors was vitiated by any vice of consent during the
formation of the contract, any of the co-debtors can raise such defense against the creditor.

D. All the co-debtors shall assume equal obligations towards the creditor irrespective of
the agreement of the co-debtors as between themselves.

E. B and C above.

18. What is the status of oath under the Civil Code of Ethiopia in relation to proof of
contracts?

A. It is used to prove contracts that need to be made in writing provided that the document
establishing the contract was lost.

B. Because the moral standards of the people of Ethiopia have been greatly eroded, oath
does not have any significance to prove a contract in Ethiopia today.

C. It is a useful tool to rebut the presumption of payments incorporated in the Ethiopian

Civil Code.

D. It has been expressly made unlawful since the adoption of the FDRE Constitution.

E. A and C above

19. Immorality or unlawfulness of object of a contract leads to _____________

While non-performance of contract may lead to ______________

A. Forced performance of contract/compensation.

B. Cancellation/invalidation.

C. Invalidation/compensation.

D. Specific performance/compensation.

Prepared by G-MANs NAE 2003- 2015 E.C Page 4

E. Termination/ cancellation.

20. Which one of the following grounds of extinction of contracts does not necessarily invite
the involvement of the court?

A. Invalidation

B. Novation

C. Termination

D. Cancellation

E. Set- off

21. Which one of the following statements is true about invalidation of contracts under the
Ethiopian Civil Code?

A. In Ethiopia, invalidation of a contract may not be sought after a passage of a certain

period of time provided by law irrespective of the nature of the defect of the contract.

B. Invalidation of a contract may be requested only by one of the contracting parties

irrespective of the nature of the defect leading to invalidation.

C. In Ethiopia, it is only void contracts that are to be invalidated while voidable contracts
cannot be invalidated.

D. In Ethiopia, invalidation of contracts made by the contracting parties does not have any
retrospective effect.

E. A and C above

22. What is the basic difference between a counter-guarantor and a secondary guarantor?

23. Under the Ethiopian Law of Contracts, a debtor is strictly liable to pay compensation to
the creditor in the case of non-performance of a contract. However, in exceptional
circumstances, a debtor is required to pay compensation only when non-performance of
the contract is attributable to the fault committed by the debtor. What are such exceptional
situations?

24. Which one of the following statements is true?

A. The provisions of a contract are as strong as legal provisions as far as the rights and
duties of the contracting parties are concerned.

B. The provisions of a contract are the same as legal provisions as both of them are
stipulated by the law-maker.

Prepared by G-MANs NAE 2003- 2015 E.C Page 5

C. The Ethiopian law maker can make contracts on behalf of the contracting parties in
some exceptional circumstances.

D. Contracts are always expected to be interpreted by the executive branch of the

government.

E. B&C.

25. If contracting parties fail to determine place of performance a contract,

A. The contract will be invalidated.

B. The contract is void ab initio.

C. The contract will be performed at the place where it is convenient to the creditor.

D. A&B.

E. None.

26. Which one of the following statements is not true about subrogation under the
Ethiopian Law of Contracts?

A. it is exactly the same as the principle of indemnity in all circumstances.

B. It created by the agreements of the contracting parties both in the case of surety and
plurality of debtors.
C. It is applicable by virtue of the law.
D. D. It is created by judicial decision in the case of surety.
E. E. All.

27. A contract duly created by the contracting parties:

A. May establish the value of exchange

B. Defines the respective rights and obligations of the contracting parties.
C. Enables the contracting parties to allocate risks in advance as between themselves.
D. All.
E. E. A and B.

28. Which one of the following grounds of extinction of a contract necessarily requires the
agreement of both contracting parties?

A. Termination.

B. Novation.

C. Cancellation.

Prepared by G-MANs NAE 2003- 2015 E.C Page 6

D. set-off.

E. All.

29. Which one of the following statements is not true about joint and several liabilities of
co-debtors under the 1960 Civil Code of Ethiopia?

A. One of the co-debtors cannot validly refuse performance of the contract though the
creditor has the Uberty to proceed against the co-debtors.

B. The creditor does have the right to claim the whole debt from one of the co-debtors
irrespective of the amount of share of the codebtors.

C. If the consent of any of the co-debtors was vitiated by any vice of consent during the
formation of the contract, any of the co-debtors can raise such defense against the creditor.

D. All the co-debtors shall assume equal obligations towards the creditor where they fail to
determine their respective shares of obligations in the contract.

E. A and C.

30. Art.1714 (2) of the 1960 Civil Code of Ethiopia stipulates that the court may not make a
contract under the guise of interpretation [of the contract}. Which one of the following
inferences can validly be made from this legal provision?

A. Ethiopian courts are prohibited to interpret contractual provisions even if the

provisions are vague, ambiguous or contradictory since it is the contracting parties who
have the power to determine the contents of the contract.

B. Ethiopian courts are not prohibited from interpreting contracts where interpretation is
genuinely called for because" of ambiguity, vagueness or contradiction of contractual
provisions.

C. Contracts should come from interpretation where the parties have not clearly defined
their respective contractual rights and obligations.

D. All.

E. Band C.

Prepared by G-MANs NAE 2003- 2015 E.C Page 7

31. The bedrock of every contractual obligation is .

A. the decision of the government

B. the agreement of the parties

C. the law

D. religious edict

E. Moral obligation.

32. Which one of the following is different from the others?

A. Novation

B. Termination

C. Set-off

D. Merger

E. Variation

33.I n the normal course of circumstances, the normal way of extinction of a contract i

A. Variation of the contract

B. Termination of the contract

C. Merger of the contract

D. Novation of the contract

E. Performance of the contract

34. In Ethiopia, a contract of surety is an accessory obligation because:

A. Of the presence of plurality of guarantors.

B. It can be established without obtaining the consent of the guarantor and the creditor.

C. It cannot be established in the absence of a principal legal or contractual obligation and

it normally dies concomitant to the death of the principal obligation.

D. It is an obligation imposed by the law to insure security of transactions with a view to

enhance confidence of the contracting parties.

Prepared by G-MANs NAE 2003- 2015 E.C Page 8

E. It remains valid even after the extinction of the principal obligation which necessitated
the creation of the contract of surety.

35. What roles do courts of law play in relation to contracts?

A. Courts play some roles in the formation of contract where the parties fail to come to
terms as to the final terms and conditions of the contract.

B. Courts play some roles for the variation and novation of contracts.

C. Courts do have the power to make contracts by positive interpretation of a contract

containing vague terms and conditions.

D. Courts play some roles with regard to variation, termination and set of contracts in
accordance with the relevant provisions of the Civil Code.

E. Courts assist the intending contracting parties during the time of offer and acceptance.

36. A secondary guarantor:

A. Is a guarantor who guarantees towards the guarantor the effectiveness of his indemnity
claim against the principal debtor.

B. Is established only for conditional contracts whose performance date is uncertain.

C. Is created without the knowledge of the creditor since such guarantee is created in favor
of the first guarantor.

D. Is obliged to discharge the obligation of the debtor where the debtor or the first
guarantor fails to discharge the obligation owed to the creditor.

E. Is not recognized under the Civil Code of Ethiopia.

37. Unilateral cancellation of contracts by one party is possible where:

A. A party in default fails to discharge his contractual obligation within a period of grace
granted to him by a court of law.

B. The contract is a contract of diligence or a contract of result.

C. The other contracting party dies or becomes insolvent before the due date of the
contract.

D. There is an undue delay of the performance of the contract for whatever reason.

E. The other party fails to discharge his obligation after a default notice

Prepared by G-MANs NAE 2003- 2015 E.C Page 9

38. What roles do courts of law play in relation to contracts?

A. Courts play some roles in the formation of contract where the parties fail to come to
terms as to the final terms and conditions of the contract.

B. Courts play some roles for the variation and novation of contracts.

C. Courts do have the power to make contracts by positive interpretation of a contract

containing vague terms and conditions.

D. Courts play some roles with regard to variation, termination and set of contracts in
accordance with the relevant provisions of the Civil Code.

E. Courts assist the intending contracting parties during the time of offer and acceptance.

39. A secondary guarantor:

A. Is a guarantor who guarantees towards the guarantor the effectiveness of his indemnity
claim against the principal debtor.

B. Is established only for conditional contracts whose performance date is uncertain.

C. Is created without the knowledge of the creditor since such guarantee is created in favor
of the first guarantor.

D. Is obliged to discharge the obligation of the debtor where the debtor or the first
guarantor fails to discharge the obligation owed to the creditor.

E. Is not recognized under the Civil Code of Ethiopia.

40. Unilateral cancellation of contracts by one party is possible where:

A. A party in default fails to discharge his contractual obligation within a period of grace
granted to him by a court of law.

B. The contract is a contract of diligence or a contract of result.

C. The other contracting party dies or becomes insolvent before the due date of the
contract.

D. There is an undue delay of the performance of the contract for whatever reason.

E. The other party fails to discharge his obligation after a default notice.

Prepared by G-MANs NAE 2003- 2015 E.C Page 10

41. Under the Civil Code of Ethiopia, a contract may be invalidated where:

A. The object of the contract is not sufficiently defined.

B. One or both of the contracting parties are below 25 years of age.

C. One of the contracting pa11ies fails to perform the contract in accordance with the
terms and conditions of the contract.

D. One of the contracting parties becomes incapable after the formation of the contract.

E. One of the contracting parties dies after the formation of the contract.

42. In contractual relations, good faith of the contracting parties should be seriously
considered by a court of law or an arbitral tribunal in relation to one of the following
except:

A. The fulfillment of a conditional contract.

B. Interpretation of contracts.

C. Cancellation of contracts.

D. Novation of a contract.

E. Variation of contracts.

43. Which one of the following statements is true about obligations in general?

A. The source of every obligation is the law everywhere in the world.

B. The source of an obligation is a contract everywhere in the world.

C. In contractual obligations, entry into obligation is consensual while legal obligations

may be assumed against the wil1 of the obligor.

D. Legal obligations are imposed only on legal persons while contractual obligations may
be assumed both by legal persons and physical persons.

E. Obligations cannot in any case be extinguished once they are created in accordance with
the requirements of the law.

Prepared by G-MANs NAE 2003- 2015 E.C Page 11

44. In case of doubt, a contract is expected to be interpreted against the party who
stipulates an obligation and in favor of the debtor in the case of:

A. All commutative contracts.

B. Adhesive contracts.

C. Aleatory contracts.

D. Synallagmatic contracts.

E. Conditional contracts.

45. If compensation is associate with non-performance of contract invalidation IS

associated with: '

A. Termination of a contract.
B. Defect in the formation of a contract.
C. Privity of contract.
D. Non-retroactivity of contract.
E. Novation of contract.

46. Which one of the following cannot be embraced by the expression "vice of consent"
under the Ethiopian Law of Contracts?

A. Mistake.

B. Fraud.

C. Duress.

D. False statement.

E. Immorality of object of contract.

47. What is the important of mandatory provisions of a law of contract?

48. Contractual obligation is distinguished from criminal obligation in that:

A. Contractual obligation implies the existence of an obligee and obligor.

B. Violation of contractual obligation imposes obligation of monetary value.
C. Contractual obligation has no implication on public interest and is solely an issue
and concern of private interest alone.

Prepared by G-MANs NAE 2003- 2015 E.C Page 12

 D. Court plays active role in the enforcement of contractual obligation.
E. Contractual obligation may be used as a means to enforce moral value

49. Object of a contract under Article 1678(b) refers to:

A. The economic gain that the parties expect to get from a contract.

B. The obligations of both parties to a contract which is the subject matter of the contract.

C. The motives of both parties or at least one of the parties to a contract.

D. The subject matter of a contract.

E. The ultimate utility of the contract to the general public.

50. Which of the following statement is contrary to the law of interpretation of contracts?

A. A general term in a contract shall be given narrower meaning.

B. Good faith and common intention of the parties justify departure from clear terms of
the contract.

C. Article 1739 is a further elaboration of Article 1738.

D Ambiguous terms of a contract shall be given the meaning commonly intended by both
parties. V

E Court may complement the terms of the contract by interpretation

51. One of the followingis NOTT specific performance under Ethiopian contract law.

A. Court orders police to force the debtor to deliver a specified thing to the creditor.

B. Court authorizes the creditor to declare unilateral cancellation of a contract.

C. Court gives power of agency to the creditor to represent the debtor on the matter
specified as obligation of the debtor on the contract.

D. Court authorizes the debtor to deposit a thing that he is bound to deliver to the creditor
at the risk and expense of the creditor in a public warehouse.

E. Court gives power of agency to the debtor to sell perishable goods on behalf and by the
name of the creditor.

Prepared by G-MANs NAE 2003- 2015 E.C Page 13

52. A contract that provides an alternative debtor for the person who claims as per Articles
1940, 194 and 1942 is a contract of:

A Counter-guarantee.

B. Secondary guarantee.

C. Subrogation.

D. Delegation.

E. Assignment.

53. Which of the following statements is WRONG?

A. A creditor is bound to receive part payment of fungible goods.

B. Provisions of Contracts in General (Art 1675-2026) could possibly govern personal

effects of marriage.

C. If a midwife claims payment for professional services after two years of the debt's due
date,it suffices for the claimant to prove that the obligation was created.

D. When obligation is assigned,the law presumes that the original debtor changes his
position from principal debtor to secondary debtor and obligation of those who were
secondary debtors would be extinguished.

E. Default notice is a precondition to invoke non-performance of a contact.

54. Identify the WRONG statement.

A. Reserves and restrictions intended by one party but not known by the other party may
be binding if such reserves and restrictions are incidental effects as are attached to the
obligations concerned by custom.

B. Signature under Ethiopian Contracts Law is defined as either as a handwriting or a

stampor both.

C. A court may invoke family relation as a justification to modify a contract.

D. A commercial contract may be affected by defect in consent if one of the parties lies to
the other and such lie relates to the nature of the obligation which is decisive.

E. When a debtor is adjudged bankrupt, his debt becomes due immediately regardless of
contractually agreed time of performance.

Prepared by G-MANs NAE 2003- 2015 E.C Page 14

55. Socialist Model of Contract Law champions all but one

A. labor right protection.

B. consumer right protection.

C. freedom of contract.

D. written form as a validity requirement.

E. legally binding standard contract terms.

56. The FDRE Constitution gives constitutional recognition to contract by recognizing

A. private property and economic rights.

B. public ownership of land.

C. democratic rights.

D. sovereignty of the people.

E. parliamentary form of government.

57. Which one of the following is true about offer?

A. Ethiopian Law of Contract generally disregards freedom of form of offer.

B. A declaration of intention to buy things by auction is an offer.

C. An offer may never contain general terms of business.

D. An offer without time limit for acceptance would favor an offeror than an offeree.

E. The binding effect of offer expires if the offeror dies.

58. Which of the following is a rebuttable indication of performance of contract?

A. Entries made by a creditor at the back of document of title.

B. Handing over of document of title.

C. Receipt for the principal debt.

D. Expiry of six months after due date.

E. Unqualified entries in trade books against those who made the entries.

Prepared by G-MANs NAE 2003- 2015 E.C Page 15

59. A court need NOT take into account one of the following while interpreting a contract

A. freedom of Contract.

B. trust as a foundation of contract.

C. the context and the situation in which the contract was made.

D. economic benefits that both parties expect.

E. the nationality of the parties to the contract.

60. Contractual performance is possible through a delegate where it relates to

A. an obligation to provide a legal consultancy service.

B. an obligation to deliver a fungible thing.

C. an obligation to make a painting.

D. an obligation to provide a medical service.

E. an obligation to weave 'Habesha Kemis'.

61. Which of the following is FALSE about performance of a contract?

A. When two or more persons hold themselves out to be creditors for a certain debt,a
debtor may refuse to pay any of them without risking himself against consequences of non-
performance unless the case is pending in court.

B. The Ethiopian Contract Law authorizes parties to use gold as a medium of exchange.

C. A seller may unilaterally make slight modification to the contract terms that provides
about quality or quantity of fungible things to be delivered to the buyer.

D. In principle, payment made to incapable persons amounts to non-performance.

E. There is situation where payment to unauthorized agent validly releases the debtor from
his obligation.

62. Which one of the following is a correct combination about contract law model?

A. Consent Theory-cumulative of economic law and objective intention

B. Bargain Theory-substantive fairness

C. Efficiency Theory-Consideration
Prepared by G-MANs NAE 2003- 2015 E.C Page 16
D. Will Theory-subjective expectation of a creditor

E. Reliance Theory-aggregate utility

63. Which one of the following is true about default notice?

A.It should always be in writing.

B. It may contain grace period.

C. It is unnecessary to claim damage.

D. It is unnecessary in obligation not to do.

E. It is given by a debtor to his creditor.

64. Identify the INCORRECT statement among the following

A. Some contracts that relate to immovable property may be made oraly.

B. Even in case where written form is not mandatory, contract made in writing need to be
attested by witnesses.

C. The effects of presumption of payment of certain debts after certain periods and the
effects of period of limitation of action are usually the same regardless of less significant
procedural differences.

D. Provisions of the Civil Code of Ethiopia dealing with effects of contract are generally
complementary provisions that are applicable in the absence contractual terms.

E. In a contract of stipulation for the benefit of third parties,the contract is completed

when an identified beneficiary accepts the benefit.

65. A surety-ship certifier is

A. a person who guarantees the effectiveness of the indemnity claim of a guarantor.

B. a person demanding assurance by the debtor.

C. secondary guarantor,

D. joint creditor.

E. joint debtor.

Prepared by G-MANs NAE 2003- 2015 E.C Page 17

66. What are the three altemative ways of contractual extinction of cbligation?

67. One of the following is not consequence of unconscionable contract.

A. Contract aspect leading to invalidation

B. Tort aspect leading to claim of damage

C. A penal aspect leading to punishment under usury

D. Moral aspect leading to social criticism

E. Administrative aspect leading to suspension of business licenses,if any

68. One of the following is not specific performance:

A.A creditor is authorized by a court to buy at a debtor's expense.

B. A creditor is authorized to demolish things done by a debtor in violation of his

obligation.

C. A debtor is authorized to deposit things at the risk and expenses of a creditor.

D.A seller is required to handover to the buyer a thing which is the subject matter of the
sale contract.

E. A seller is authorized to make a compensatory sale.

69. Identify an incorrect statement about proof of contracts.

A. A content of a written contract may serve as circumstantial evidence against third

parties.

B. Statements contained in a written contract may be freely challenged by the heirs of the
parties to the contract.

C.A person can disclaim his alleged handwriting/signature contained in authenticated

document.

D.Date of the death of a person who signed a contract would be the authentic date of that
contract.

E. Parties to a contract do not have autonomy to determine proof of the contract.

Prepared by G-MANs NAE 2003- 2015 E.C Page 18

70. Which of one of the following means would the government use to regulate contract?

A. Introducing written form as a validity element of contract

B. Broadening freedom of contract

C. Defining contract as a consensual relation between parties

D.Recognizing contract as a law between the parties

E. Introducing liberal economic policy

71. "The purpose of interpretation of a contract is to complement it but not to create

it.”Comment on thevalidity or otherwise of this statement by referring to the relevant
provisions of the Civil Code of Ethiopia. (10%)

72. One of the following is true about the effects of non-performance.

A. In obligation to give,the debtor may escape liability by showing that he has not been at
fault.

B.In obligation to do the best,the creditor can claim non-performance if he has not
obtained the result he expected.

C. Force majeure exists when unforeseen conditions have made the obligation of a debtor
more onerous than he foresaw.

D.Force majeure exists when a seller shows that he has been unable to deliver a fungible
good since the fungible good was consumed by a fire that broke out in his village.

E. In a contractof donation, the donor is not liable for non-performance unless he has
committed grave fault.

73. Identify a true statement.

A.Fraud vitiates consent when it is decisive and substantial.

B. Article 1731 of the Civil Code of Ethiopia establishes the principle of sanctity of
contracts.

C.Contract Law is the product of democratization in Western Europe.

D. Contract law postdates propery law.

E. The role of contract law significantly reducs in a market economy.

Prepared by G-MANs NAE 2003- 2015 E.C Page 19

74. Identify the wrong statement.

A.Offeree's silence constitutes acceptance when the offer is to his exclusive interest.

B. A person who signs the contractual document without,however,reading and

understanding its content would be bound by such contractual document.

C. Consideration is a necessary requirement for the validity of contract.

D. Unilateral promise to contract is binding once accepted.

E. An agreement by the parties on certain matters and that they will continue to negotiate
towards final contract-agreement by principle-is a contract.

75. The binding effect of offer expires if:

A. The offeror dies.

B. The offeree makes a counter offer.

C. The market circumstances that affect the content of the offer changes.

D. The offeror concludes marriage.

E. The offeror is declared bankrupt.

76. Identify the wrong statement.

A. Legally stipulated written contract must be attested by at least two witnesses for validity
purposes.

B.Authenticity of signature on a written contract may be proved by witnesses who attested

the contract.

C.A contract may be invalidated after performance.

D.A contract term may stipulate grounds of unilateral cancellation of the contract.

E.There is no legal basis to demand the cancellation of a contract before its due date

Prepared by G-MANs NAE 2003- 2015 E.C Page 20

77. Consideration may be outside of the purview of contract law when:

A.The transaction relate to an obligation that is legally prohibited.

C.There is no sufficient and legitimate cause for the transaction.

D.The agreement is described as honorable pledge.

E.The transaction highly favors of one of the parties.

78. Contemporary Contract Laws usually contains rigorous limitations on freedom of

contract.One of the following does not indicate justifications for such limitations.

A.Labor protection.

B. Property right protection.

C.Consumer protection.

D.Public order and morality.

E.Possibility of obligation.

79. Which of one of the following means would the government use to regulate contract?

A.Introducing written form as a validity element of contract.

B. Broadening freedom of contract.

C.Defining contract as a consensual relation between parties.

D.Recognizing contract as a law between the parties.

E.Introducing liberal economic policy.

80. Which of the contract need to be in writing?

A. Employment contract.

B. Sale of Shares.

C.Exchange of peasant land holding rights.

D. Renting of a car.

E. Partition of corporeal chattels

Prepared by G-MANs NAE 2003- 2015 E.C Page 21

81. A voidable cotract may not be cured by:

A.Failing to claim invalidation within certain period of time.

B. Confirmation by the person whose consent was vitiated.

C.Redressing the damage.

D.By avoiding the vitiated provision of the contract.

E. By performing both sides of the obligation.

82. Set-off is possible when:

A.Both debts are money debts which are due and unrelated to tax or maintenance
obligation.

B.Both debts are fungible things measurable by the same unit of measurement.

C. Either or both obligations relate to a thing given in pledge.

D.The court raises the need to make set-off.

E.The nature of the obligations is the same

83. A suretyship certifier is:

A. A person who guarantees the effectiveness of the idemnity claim of a guarantor.

B. A person demanding assurance by the debtor.

C. Secondary guarantor.

D. Joint creditor.

E. Joint debtor.

Prepared by G-MANs NAE 2003- 2015 E.C Page 22

84. A joint owner may act as a sole owner in connection with:

A. Transfer of his/her share.

B. Sale of the thing co-owned.

C. Administration of the thing co-owned.

D. Mortgage of the thing co-owned.

E. Donation of the thing co-owned.

85. Discuss the distinction between joint guarantee and simple guarantee

One of the following is true about the effects of non-performance.

A. In obligation to give,the debtor may escape liability by showing that he has not been at
fault.

B.In obligation to do the best,the creditor can claim non-performance if he has not
obtained the result he expected.

C. Force majeure exists when unforeseen conditions have made the obligation of a debtor
more onerous than he foresaw.

D.Force majeure exists when a seller shows that he has been unable to deliver a fungible
good since the fungible good was consumed by a fire that broke out in his village.

E. In a contractof donation, the donor is not liable for non-performance unless he has
committed grave fault.

86. Identify a true statement.

A.Fraud vitiates consent when it is decisive and substantial.

B. Article 1731 of the Civil Code of Ethiopia establishes the principle of sanctity of
contracts.

C.Contract Law is the product of democratization in Western Europe.

D. Contract law postdates propery law.

E. The role of contract law significantly reducs in a market economy.

Prepared by G-MANs NAE 2003- 2015 E.C Page 23

87. Identify the wrong statement.

A.Offeree's silence constitutes acceptance when the offer is to his exclusive interest.

B. A person who signs the contractual document without,however,reading and

understanding its content would be bound by such contractual document.

C. Consideration is a necessary requirement for the validity of contract.

D. Unilateral promise to contract is binding once accepted.

E. An agreement by the parties on certain matters and that they will continue to negotiate
towards final contract-agreement by principle-is a contrac

88. Which of he following provisions of the FDRE Constitution gives constitutional

recognition to Contract?

A.Article 40(1&2)which recognizes the right to private property.

B.Article 40(3-6)which recognize public ownership of land.

C.Article 40(7)which appears to impose limitation on extent of public ownership of land.

D.Article 40(1&2)which recognizes the right to private property and Art 41(1&2)which
recognizes economics rights.

E. Article 55 which empowers the House of Peoples'Representatives to enact civil laws to

sustain one economic community.

89. Identify the wrong statement.

A. Legally stipulated written contract must be attested by at least two witnesses for validity
purposes.

B.Authenticity of signature on a written contract may be proved by witnesses who attested

the contract.

C.A contract may be invalidated after performance.

D.A contract term may stipulate grounds of unilateral cancellation of the contract.

E.There is no legal basis to demand the cancellation of a contract before its due date.

Prepared by G-MANs NAE 2003- 2015 E.C Page 24

90. Which of one of the following means would the government use to regulate contract?

A.Introducing written form as a validity element of contract.

B. Broadening freedom of contract.

C.Defining contract as a consensual relation between parties.

D.Recognizing contract as a law between the parties.

E.Introducing liberal economic policy.

91. Identify the wrong statement.

A. All agreements that create obligation of proprietary nature between the parties are
necessarily contractual obligations.

B. Unlawful motive may not necessarily be a sufficient condition to invalidate a contract.

C. A contract may not necessarilycreate bilateral obligation.

D. A court can never depart from clear provision of the contract even where such provision
is illogical.

E. In principle parties have a freedom of form under Ethiopian Contract Law.

92. What does 'written form' mean under Ethiopian Contract Law?

A. An offeror writes all the terms of the obligation in the written offer and the offeree sends
his acceptance in registered letter.

B. The terms of contract are written on a paper and all parties and witnesses to the
contract sign on it.

C. Both the offer and the acceptance are made in a registered letter.

D. The offer is signed by the offeror and at least one witness and likewise the acceptance is
signed by the offeree and signed by at least one witness.

E. The terms of contract are written on a paper and all parties to the contract sign such
paper in the presence of a public notary.

Prepared by G-MANs NAE 2003- 2015 E.C Page 25

93. Courts may not modify the terms of a contract when:

A. The contract is between persons having special relationship.

B. The contract is with public administration.

C. There is partial impossibility to perform of the contract.

D. The modification relates to the time of performance.

E. The condition of performance has been changed.

94. A voidable contract may be validated where:

A. Invalidation is not claimed within certain time.

B. Contract is performed.

C. The injury is calculable.

D. Parties fail to reach consensus on the content of remedial agreement.

E. The minor attains majority.

95. A contract of marriage shall be of no effect where:

A. Its copy is not deposited before court or officer of civil status.

B. It has a provision which impose obligation on third parties.

C. It is made orally in the presence of four witnesses.

D. It is made before the conclusion of marriage.

E. Either of the spouses is illiterate.

96. The Ethiopian General Contract Law provisions apply to the following obligation/s
whenever necessary EXCEPT:

A. Tax.

B. Maintenance.

C. Personal effect of marriage.

D. Contract of marriage.

E. Lending aid to a person in imminent and grave peril to his life or person

Prepared by G-MANs NAE 2003- 2015 E.C Page 26

97. While interpreting contractual provisions, Ethiopian Contract Law mandates a judge
to search for the:

A. Subjective intention of the debtor.

B. Objective intention of the debtor.

C. Subjective intention of the creditor.

D. Common intention of the parties.

E. Policy objective of the government.

98. Which of the following statement does not properly describe the relationship between
the FDRE Constitution and Contract?

A. Contract is a means of acquiring property.

B. The constitution recognizes freedom of contract.

C. The power to issue Contract Law is exclusively reserved to the House of Peoples
Representatives.

D. Contract does not apply to land resource transfer.

E. Government may be a party to a contract.

99. which of the following could not possibly deny a debtor his chance of raising defense of
force majeure?

A. Debtor's late notification to the creditor of the occurrence of force majeure.

B. The occurrence of force majeure after the due date.

C. The inconvenience to know the whereabouts of the creditor at the time of the occurrence
of the force majeure.

D. Creditor's failure to take measure to reduce loss due to non-bnsperformance.

E. Debtor's failure to give notification of occurrence of force majeure sgsibecause internet

connection and telephone connection were not available due to emergency measures taken
by the government.

Prepared by G-MANs NAE 2003- 2015 E.C Page 27

100. Which one of the following statements is true?

A. The provisions of a contract are as strong as legal provisions as far as the rights and
duties of the contracting parties are concerned.

B. The provisions of a contract are the same as legal provisions as both of them are
stipulated by the law-maker.

C. The Ethiopian law maker can make contracts on behalf of the contracting parties in
some exceptional circumstances.

D. Contracts are always expected to be interpreted by the executive branch of the

government.

E. B&C.

101. If contracting parties fail to determine place of performance a contract,

A. The contract will be invalidated.

B. The contract is void ab initio.

C. The contract will be performed at the place where it is convenient to the creditor.

D. A&B.

E. None.

NB: - it doesn’t include model exam, only exit exam questions

Prepared by G-MANs
Date 4/8/2016 E.C

Prepared by G-MANs NAE 2003- 2015 E.C Page 28