02: Termination of contract.

Question 1

Severable contract.

Answer 1

A contract, such as a building contract, that provides for payment at various stages of the contractor’s progress.

Question 2

A contract, such as a building contract, that provides for payment at various stages of the contractor’s progress.

Answer 2

Severable contract.

Question 3

A severable contract is also known as a … contract.

Answer 3

divisible

Question 4

T/F: in a totally frustrated contract in which neither party has incurred any losses a deposit must be forfeited.

Answer 4

FALSE

Question 5

T/F: in a totally frustrated contract in which neither party has incurred any losses a deposit must be returned.

Answer 5

TRUE

Question 6

T/F: in a totally frustrated contract in which neither party has incurred any losses the balance need not be paid.

Answer 6

TRUE

Question 7

In a totally frustrated contract in which neither party has incurred any losses …

Answer 7

any deposit must be returned and any balance need not be paid.

Question 8

T/F: Anticipatory breach may be inferred from conduct.

Answer 8

TRUE

Question 9

T/F: Anticipatory breach must be explicit.

Answer 9

FALSE

It can be inferred from conduct.

Question 10

A victim of a breach of condition …

Answer 10

may treat the contract as discharged and sue for damages.

Question 11

Damage not ‘too remote’ must be that …

Answer 11

arising naturally from a breach

OR

in the reasonable contemplation of both parties

Question 12

T/F: damages for breach of contract are primarily intended to restore the injured party to the same position they were in at the time when the contract was made.

Answer 12

FALSE

Damages are intended to put the party in the position they would have been had the contract been performed.

Question 13

Damages are intended …

Answer 13

to put the party in the position they would have been had the contract been performed.

Question 14

T/F: A claimant is required to take every opportunity to mitigate their loss arising as a consequence of a breach of contract.

Answer 14

FALSE

A claimant is required to take only reasonable steps, not ones that carry undue risk or are discreditable.

Question 15

In assessing the amount of damages, it is assumed that a claimant will take …

Answer 15

all reasonable steps to mitigate their loss.

Question 16

A liquidated damages clause will not be enforced by the court if …

Answer 16

it is considered penal in nature.

i.e. out of all proportion to any legitimate interest of the injured party.

Question 17

A vendor suffering breach of contract by a buyer in respect of a unique item, for example a rare sports car, who subsequently sells the car to an alternative buyer at a higher price …

Answer 17

will be able to claim only nominal damages since no loss has been suffered.

Question 18

A vendor suffering breach of contract by a buyer in respect of an everyday item, for example a car in plentiful supply, who subsequently sells the car to an alternative buyer at a higher price …

Answer 18

may still claim for damages in respect of lost profits from the original buyer.

Question 19

A liquidated damages clause is only valid if …

Answer 19

it is not penal in nature and protects the legitimate interest of the injured party.

Question 20

T/F: Specific performance is awarded at the discretion of the court where damages would not be an adequate remedy.

Answer 20

TRUE

Question 21

T/F: Specific performance is likely to be more appropriate than damages in a contract involving personal services.

Answer 21

FALSE

equity rarely acts in personam. There is also the issue of supervision.

Question 22

T/F: Specific performance is likely to be awarded in a contract for the sale of land.

Answer 22

TRUE

Question 23

Specific performance is likely to be awarded in a contract for the sale of …

Answer 23

land

Question 24

T/F: A mandatory injunction often has the same result as specific performance but is less common.

Answer 24

TRUE

Question 25

A ... injunction often has the same result as specific performance but is less common.

Answer 25

mandatory

Question 26

A mandatory injunction often has the same result as ... but is less common.

Answer 26

specific performance

Question 27

A party breaching a restrictive covenant within a contract is likely to suffer a ... if the other party sues on the contract.

Answer 27

prohibitory injunction

Question 28

UTCA (1977) statutory test of reasonableness: Whether it is FAR* with regard to ATC which were or which ought to have been K to the parties when the contract was made.

Answer 28

fair and reasonable

Question 29

UTCA (1977) statutory test of reasonableness: Whether it is FAR with regard to ATC* which were or which ought to have been K to the parties when the contract was made.

Answer 29

all the circumstances

Question 30

UTCA (1977) statutory test of reasonableness: Whether it is FAR with regard to ATC which were or which ought to have been K* to the parties when the contract was made.

Answer 30

known

Question 31

UTCA (1977) statutory test of reasonableness: FAR* ATC KTP TCWM

Answer 31

fair and reasonable

Question 32

UTCA (1977) statutory test of reasonableness: FAR ATC* KTP TCWM

Answer 32

all the circumstances

Question 33

UTCA (1977) statutory test of reasonableness: FAR ATC KTP* TCWM

Answer 33

known to parties

Question 34

UTCA (1977) statutory test of reasonableness: FAR ATC KTP TCWM*

Answer 34

time contract was made

Question 35

T/F: In a contract between two businesses, a clause which limits liability for losses due to negligence is void, however reasonable it might appear.

Answer 35

FALSE only clauses attempting to exclude liability for death or personal injury resulting from negligence are void.

Question 36

The Unfair Contract Terms Act (1977) makes clauses attempting to exclude liability for ... void.

Answer 36

death or personal injury resulting from negligence

Question 37

T/F: A clause limiting liability for personal injury resulting from negligence in a contract between two private individuals is subject to the reasonableness test under the Unfair Contract Terms Act (1977)

Answer 37

FALSE The UTCA does not apply to contracts between private individuals.

Question 38

A company attempting to recover damages in respect of a potential lost contract of which the other party was not aware and might anyway not have been won ...

Answer 38

will not succeed as such damages are to remote from the breach.

Question 39

Specific performance will probably not be awarded in a contract for the performance of personal services due to the requirement for ...

Answer 39

supervision and quality assurance.

Question 40

Specific performance will probably not be awarded in a contract for the performance of building a house due to the requirement for ...

Answer 40

supervision and quality assurance

Question 41

T/F: Alternative dispute resolution may not be used once court proceedings have been instigated.

Answer 41

FALSE Alternative dispute resoution is actively encouraged even if court proceedings have begun.

Question 42

T/F: If a wedding venue is destroyed by fire a contract for its hire will be rendered frustrated.

Answer 42

TRUE see Taylor v Caldwell

Question 43

T/F: If the peformance of a contract becomes significantly more onerous or expensive than originally contemplated, it will be treated as frustrated.

Answer 43

FALSE

Question 44

If performance of a contract becomes illegal, due to for example a restriction on the sale of fireworks or firearms ...

Answer 44

then it will be treated as frustrated.

Question 45

If performance of a contract becomes onerous, due to for example an increase ini the price of a raw material or deteriorating international relations ...

Answer 45

then the contract will NOT be treated as frustrated.

Question 46

Terms within contracts between two businesses are generally governed by the ...

Answer 46

Unfair Contract Terms Act (1977)

Question 47

Terms within contracts between ... are generally governed by the Unfair Contract Terms Act (1977).

Answer 47

two businesses

Question 48

Terms within contracts between two individuals are generally governed by ...

Answer 48

no specific legislation.

Question 49

Terms within contracts between ... are generally governed by no specific legislation.

Answer 49

two individuals

Question 50

Terms within contracts between businesses and consumers are generally governed by ...

Answer 50

The Consumer Rights Act (2015)

Question 51

Terms within contracts between ... are generally governed by The Consumer Rights Act (2015).

Answer 51

businesses and consumers

Question 52

T/F: An exclusion clause in a business to business contract may be deemed void or be subject to a test of reasonableness.

Answer 52

TRUE under the Unfair Contract Terms Act (1977)

Question 53

T/F: Under contract law, provided substantial performance has been rendered, the other party may not seek redress.

Answer 53

FALSE only 'complete and exact' performance discharges a contract

Question 54

T/F: Breach of contract occurs in all cases where one party to a contract fails to perform their contractual obligations.

Answer 54

FALSE a contract may be frustrated, for example.