(a) What are the three principal elements in forming a valid contract, and discuss with case examples to illustrate when contracts could be decided in court as nullified, void, invalid and / or illegal. (20%) (b) Mary went into Milan Station in Tsimshatsui, a shop selling second-hand high-end merchandise for ladies. A sign was posted in front of a leather handbag hand-written with Gucsi 1960 Limited Edition the One and the Only One in Asia. Mary bought the handbag and received it with a simple receipt written down with Gusci 1960 and the price of HK$160,000.00. Mary showed her new handbag to her friend, Fontane, in the following evening at the Lantau Hotel during a party who, told Mary that she had the same handbag as a gift from her boyfriend the other day. Both Mary and Fontane were very angry as their handbag were after all not so unique. Mary felt that she was cheated because she thought that, when not being the One and the Only One in Asia, the bag could only have costed no more than HK$30,000.00. (i) Can Mary sue Milan Station for breach of contract? Discuss with different limbs of Marys claims against Milan Station and the respective strengths and weaknesses of each limb. (15%) (ii) Assuming that you are the Owner of Milan Station, develop your defence against Marys various limbs of claims against you. (15%)

Note: There is no need to consider any legal issues related to the Hong Kong Sale of Goods Ordinance.