1. David buys a digital camera at a weekend market. When he gets home he decides to sell it at the next weekend market. David sold the digital camera but found out that it had been stolen. As David cannot recall who he sold the digital camera to, the true owner intends to sue David in conversion. Do you think the true owner will succeed?

(A) No, David is not guilty of conversion as he did not steal the digital camera.

(B) Yes, because David must have realised that it was stolen as it was sold at the weekend market.

(C) No, because he did not like the digital camera.

(D) No, because the true owner has found the digital camera.

2. James has agreed to cater for a function for Kate. Kate is entertaining 50 guests for a fundraiser and has charged them $50 each. A week before the date of the function James tells Kate he is unable to cater for her function. Which of the following statements is incorrect?

(A) James’ action constitutes an anticipatory breach

(B) James has terminated the contract

(C) Kate can elect to keep the contract on foot

(D) Kate can accept the breach, terminate the contract and sue for damages immediately