CL Flashcards

Question

Terms and representations

Answer 1

(A) Condition. The statement is likely to be a term of the contract because the salesperson should have known what the bike could do, and it's clearly important to me. It's a condition rather than a warranty because for me it goes to the root of the contract - it's why I bought the bike.

Answer 2

(A) Condition. There is a presumption in a commercial contract that time is of the essence.

Answer 3

Max clearly doesn't have the expertise to answer Adrienne's question, so his statement is unlikely to be a term of the contract.

Answer 4

(C) Innominate term. There is no way of knowing how serious the effect will be if the term is breached. Even though it's called a condition, its significance is going to depend on the seriousness of the breach and its consequences.

Answer 5

PAROL EVIDENCE RULE * Where there is a written contract, it is presumed to contain all the terms that have been agreed *Can't bring in external evidence to add to or vary the written terms

Answer 6

(C) is correct. (A) is incorrect because while the parol evidence rule applies only to written contracts, it does not require contracts to be in writing. (B) is incorrect because it does not limit the rule to written contracts; additionally, the rule applies not only to oral evidence of other terms, but rather to any (oral or written) external evidence.

Answer 7

B) is correct. Some exam questions merely want to ensure you know the magic words - the correct test. And these are the magic words for this test: when necessary to make the contract work and give it business efficacy.

Answer 8

All our necessary contract elements are present. I made an offer to buy a latte by ordering it. The barista accepted my offer by making the latte. Each of us gave consideration: I promised to pay (implied), and the barista made a latte. Why is this not void for vagueness for lack of a price term? A reasonable price was implied.

Answer 9

F D A C B E

Answer 10

The clause needs to be incorporated into the contract The clause has to cover what has happened Legislation prohibits some exclusion clauses

Answer 11

No. The exclusion was added after you made your contract (after you paid), it's onerous as it excludes all liability, and the merchant did nothing to bring it to your attention.

Answer 12

3 WAYS A TERM CAN BE INCORPORATED * By signature * By notice * By custom or course of dealing

Answer 13

UNFAIR CONTRACT TERMS ACT 1977 (UCTA) Between businesses UCTA * Some exclusions are void * Others are valid only if reasonable CONSUMER RIGHTS ACT 2015 (CRA) Between businesses and consumers

Answer 14

(A) and (C) are correct. The exclusions in (B) and (D) are void.

Answer 15

(A) is correct. This is a stricter standard than in a contract between businesses under the Unfair Contract Terms Act 1977, in which such a term will be upheld if reasonable. Remember too that reasonableness is the standard used to determine whether an exclusion is enforceable under UCTA if the exclusion is not void, but under the CRA, if an exclusion is not prohibited, we look to whether it is unreasonable. There is a chance an exam question could key in on this difference in terminology: UCTA = void/reasonable; CRA = prohibited/unfair.

Answer 16

1.C 2. B 3. B 4. D 5. E

Answer 17

(E) The MP has breached the sub judicie rule. Generally, MPs (and members of the House of Lords) have freedom of speech within Parliament under parliamentary privilege. However, out of respect to the separation of powers, the freedom of speech is limited by the sub judicie rule, which provides that, during debates, MPs (and members of the House of Lords) should not refer to cases currently ongoing before the courts. Here, the MP breached the sub judicie rule by referring to an ongoing case during the debate. (A) is incorrect because the royal prerogative belongs to the Crown and, in any event, an MP's freedom of speech in Parliament is limited by the sub judicie rule. (B) and (D) are incorrect because, again, an MP's freedom of speech in Parliament is subject to the sub judicie rule. (C) is incorrect because the doctrine of collective responsibility applies to government ministers, not Parliament. It requires ministers to support government policies before Parliament, despite their own views, and requires that policy discussions should be kept confidential.

Answer 18

(A) At the committee stage, the bill will be considered in a Committee of the Whole House. The committee stage for the passage of bills in the House of Commons can take place in one of two committees: a Public Bill Committee or a Committee of the Whole House. Bills of 'first-class constitutional importance', a category to which a bill to abolish the monarchy would qualify, are debated in a Committee of the Whole House. (B) is incorrect because bills of 'first-class constitutional importance' cannot be considered in a Public Bill Committee. (C), (D), and (E) are incorrect because those committees are not involved in the committee stage for bills.

Answer 19

(D) The Prime Minister's best option is to suspend collective responsibility and allow ministers to campaign on either side of the referendum. Collective responsibility requires government ministers to support government polices in public and before Parliament. However, the Prime Minister is able to 'set aside' or suspend collective responsibility, and this has happened at previous referendums. When this is done, ministers are able to campaign on different sides, meaning that they are allowed, unusually, to disagree with each other in public. (A) is incorrect because it would not be possible to maintain collective responsibility while allowing ministers to campaign on either side of the referendum. Collective responsibility requires unanimous support of a policy by the ministers. (B) and (C) are incorrect because the Prime Minister, rather than Parliament or the King, has the authority to suspend collective responsibility. (E) is incorrect because the Prime Minister has no power to sack an MP.

Answer 20

(C) The government can explain to Parliament why they still wish to ratify the treaty, and the House of Commons can hold a second vote. The power to ratify treaties is a royal prerogative power, but is regulated by a procedure laid down in statute. Ordinarily, the treaty is laid, with either House of Parliament having 21 days to vote against the treaty. If a House votes against ratifying and the government still wants the treaty ratified, it can explain to Parliament why, and then the House of Commons has a further 21 days to vote against ratifying the treaty. (A) and (B) are incorrect because the House of Lords does not get to vote the second time. (D) is incorrect because the House of Commons must be given an opportunity for a second vote. (E) is incorrect. Although there is an 'exceptional case' exception that allows for a treaty to be ratified without being laid before Parliament, the exception cannot be invoked to override the vote of either House of Parliament.

Answer 21

(B) Because the Bill is implementing a manifesto commitment of the government, the House of Lords is required by constitutional convention to grant a Second Reading to the Bill. Under the Salisbury Convention, the House of Lords will grant a Second Reading to a bill as a matter of course if the bill is implementing a commitment made by the party elected into government (here, the Conservative Party) in their manifesto. (A), (D), and (E) are incorrect because there are no such statutes. (C) is incorrect because of the requirements placed on the House of Lords by the Salisbury Convention.

Answer 22

(C) The Monarch will appoint the person who can command the confidence of the House of Commons as the next Prime Minister. By constitutional convention, the Prime Minister must be an MP who is able to command the confidence of the House of Commons. This is usually the leader of the political party with a majority of the seats in the House of Commons. As there are 650 seats in the House of Commons, a political party needs 326 seats to have a majority. Here, the party that were in opposition has won 450 seats and are now in the majority. The previous Prime Minister would therefore resign, and the Monarch would appoint the person who can command the confidence of the House of Commons (likely the Leader of the party that are now in the majority) as the next Prime Minister. (A) and (B) are incorrect because it is the person who commands the confidence of the House of Commons, not Parliament as a whole, who becomes Prime Minister. (B) and (D) are incorrect because it is the Monarch who formally appoints the Prime Minister. (E) is incorrect because the previous Prime Minister will need to resign under these circumstances.

Answer 23

(B) Constitutional conventions are rules which are not matters of law, but rather are derived from practice and can apply to the Monarch, government ministers, or MPs (among others). (A), (C), and (E) are incorrect because constitutional conventions are not "legal" rules but are merely conventions that are followed. (C) is also incorrect because some constitutional conventions do apply to MPs, while (E) is also incorrect because the courts cannot directly enforce constitutional conventions. (D) is incorrect because some constitutional conventions apply to the Monarch and government ministers.

Answer 24

(B) Under the royal prerogative, ministers may make decisions which may need to be formally approved by the Monarch. These powers are known as the ministerial prerogatives and are described as such because they are in substance exercised by ministers on behalf of the Crown. For some ministerial prerogative powers, the final approval of the decision still rests with the Monarch, but this is a formality. (A) is incorrect because it is too broad. Ministers need the formal approval of the Monarch for some decisions made under the royal prerogative, but not for all decisions. (C) and (D) are incorrect because ministers do not need the consent of the House of Commons or House of Lords to made a decision under the royal prerogative. (E) is incorrect because the Monarch has no power to override a minister's decision. Under the cardinal convention, the Monarch must ultimately act on ministerial advice, and this is shown by the fact that the Monarch's approval of some government decisions is a mere formality.

Answer 25

(A) The House of Commons may immediately send the Bill for the Royal Assent. Generally, when it comes to legislation, the House of Lords has the same powers as the House of Commons. However, under the Parliament Acts 1911-1949, if the House of Lords rejects a bill that has been approved by the House of Commons and the House of Commons passes the bill in the following session, only for it to be rejected again by the House of Lords, the Bill can nevertheless be sent for the Royal Assent. A year needs to have elapsed between the Bill being granted a Second Reading in the first session and being granted a Third Reading in the second session. Here, this condition grefore the Bill can he cent for Roval Accent (Blic incorrect has been met; at least a year passed between the Bill being passed in successive sessions of Parliament. Therefore, the Bill can be sent for Royal Assent. (B) is incorrect because under the facts, the House of Commons has already passed the Bill twice; it need not pass it a third time. (C) is incorrect because, as discussed, under the Parliament Acts 1911-1949, the Bill can be sent for the Royal Assent. (D) is incorrect because the House of Lords is entitled to disagree with the Bill; there is no convention requiring them to agree. (E) is incorrect because, as in (D), the House of Lords is not required to agree to the Bill. QUESTION

Answer 26

(B) The Secretary of State would be expected to correct the error as soon as possible. All government ministers owe a fundamental duty not to mislead Parliament. Should they do so inadvertently, they are expected to correct the error with Parliament as soon as possible. If a minister knowingly misleads Parliament, they would be expected to resign. Here, the Secretary of State inadvertently misled Parliament, since at the time of the debate, she did not know that the statistics were incorrect. Therefore, she would need to correct the error as soon as possible. (A) is incorrect because a minister would be expected to resign if it is discovered that they knowingly misled Parliament, which is not the case here. (C) is incorrect because the Secretary of State would be required to take further action. That is, she would be expected to correct the error as soon as possible. (D) is incorrect because the Secretary of State does not have the power to require Parliament to hold a Select Committee inquiry. (E) is incorrect because releasing the correct statistics to the public would be insufficient; the minister must go back to Parliament to correct the error.

Answer 27

(D) The Secretary of State should explain to Parliament what is happening within his department. Ministers are accountable and responsible for the actions of their department. This means that ministers have a duty to give an account to Parliament for operational failures, and to take responsibility for policy failures. 'Giving an account' means responding to criticisms and concerns raised by Parliament in a way which ensures that Parliament will continue to have confidence in the minister and the government. 'Taking responsibility' means that the minister must personally take the blame for the failure, which can ultimately include resignation. Because, here, the Secretary of State's department committed an operational failure, the Secretary of State would be expected to give an account; that is, explain to Parliament what is happening in his department. (A) is incorrect because ministers do not need to resign for all operational failures within their department, although they may need to resign for decisions that are considered to be policy failures. (B) is incorrect because blaming the civil servants is not an appropriate response to an operational failure (or a policy failure). (C) is incorrect because in the case of an operational failure, the minister cannot ignore Parliament, but instead must respond to its criticisms. (E) is incorrect because it is too broad. Ministers do not necessarily need to resign just because an MP has called for their resignation. Rather, as discussed, a minister may need to resign for a policy failure.

Answer 28

(C) The Secretary of State could be found in contempt of court. This is an example of one of the elements of the rule of law, in that, generally, no person is above the law. Here, the Secretary of State is bound by the law just like any other person. This means that he must comply with the terms of the court order against him, not continue with the preparations for the new railway line. As the Secretary of State has not complied with the order, he could be found in contempt of court. (A) is incorrect because, as discussed, government ministers are not above the law. (B) is incorrect because the Prime Minister, not the Monarch, can decide whether a minister should remain in their position. (D) is incorrect because it is not the best answer. Although it is likely that the Secretary of State could be required to answer questions in Parliament, that is a matter of politics, not law. (E) is incorrect because the Prime Minister cannot get involved with the judicial process in this way.

Answer 29

(A) The UK has a partial separation of powers in light of the overlap between the functioning and personnel of the three branches. The principle of the separation of powers provides that the executive, legislature, and judiciary are separate in terms of their function and their personnel and that, to some extent, the different branches serve as a check and a balance against each other. However, there is a substantial overlap between the executive and legislature. In terms of personnel, all government ministers must be members of the legislature and in function, the executive branch may pass secondary legislation under powers granted to it by the legislature. (B) is incorrect. It cannot be said that there is no separation of powers in the UK. Although the Monarch has a role in the executive, legislature, and judiciary, his role is almost exclusively formal. (C) is incorrect because, given the overlap between the branches, it cannot be said that there is a complete separation of powers. (D) is incorrect because not all power (for example, judicial and executive power) is vested in Parliament. Even some legislative powers are granted to the executive, as discussed above. (E) is incorrect because there is some separation of powers between the executive and judiciary. Although the Privy Council does exercise some executive and judicial functions, these are minimal.

Answer 30

(A) Under the postal rule, acceptance by mail creates a contract at the moment of posting, with a couple of exceptions not relevant here. Rejection, on the other hand, is effective when received. So, as the postal rule applies, there is a contract, because the friend's acceptance was posted before his rejection letter was received. (B) is incorrect because whether the friend paid for the bicycle is irrelevant. (C) is incorrect because when a rejection by post is followed by an acceptance by post, the postal rule will apply and there will be a contract if the acceptance is posted before the rejection is received. (D) is incorrect as the postal rule does apply to this scenario. (E) is incorrect because the fact that the bicycle owner did not read the rejection does not matter; the time of receipt is the relevant factor.

Answer 31

(C) For an offer to be validly accepted, the offeree must have communicated their acceptance of the offer to the offeror. Therefore (C) is the correct answer. (A) is incorrect because silence cannot constitute acceptance: a positive act is required unless both parties have agreed to dispense with the need for communication. (B) is incorrect because the nephew's actions were not enough to communicate his acceptance to the man. It is unclear why the nephew moved the car. (D) is incorrect as the terms of the offer seem to have been definite and certain: the subject matter and price to be paid are clear. (E) is incorrect because there is no suggestion that the parties did not intend to be legally bound. Even though the parties have a family relationship, it may not be close enough to constitute a domestic and social arrangement. Even if it was, the fact that they are acting in the course of business would be enough to rebut the presumption that they did not intend to be legally bound.QUESTION

Answer 32

(E) No contract was formed until 5 July. A response to an offer is not an acceptance if it seeks to change the terms of the offer. The buyer's 1 July order may have been an offer, but the seller added a term in its 2 July response (that the seller's standard terms had to be used), so that was a counteroffer and not an acceptance. The buyer's 3 July response did the same, insisting on the buyer's terms. Therefore, that response was a counteroffer as well. And the seller's 4 July response insisting on their terms was also a counteroffer as it did not accept the buyer's terms. However, the buyer will be held to have accepted these terms and a contract was formed when the buyer accepted the goods. Therefore, the seller's standard conditions apply. This is an example of the battle of forms in which the battle usually is won by the person who fires the last shot (that is, sends the last form). The other choices are incorrect for the reasons stated above. QUESTION

Answer 33

(A) Valid consideration must be sufficient, meaning that it must have some value even if very small. Wholly illusory consideration is not sufficient in the eyes of the law, and a promise to stop complaining would normally be considered to be illusory. (B) is incorrect. Since the parties are friends, there is a presumption that they did not intend to be legally bound as this is a social arrangement, but the fact that their contract is in writing is strong evidence that could rebut this presumption. (C) is incorrect because the law is not concerned with whether or not the parties have made a bad bargain, in other words, whether or not the consideration is adequate. (D) is incorrect because without sufficient consideration, all the elements for a valid contract are not present. (E) is incorrect because the courts are not interested in whether or not the consideration is adequate. However, the consideration must be sufficient, meaning that it must have some value, and here it does not.

Answer 34

(E) If an offer prescribes a method of communication, that method should be used unless the alternative method is no less disadvantageous to the offeror. In this case, leaving an answerphone message, when there is no guarantee that the offeror will listen to it, is unlikely to be considered to be an adequate alternative to an email to the sales associate, which was the requested method. (A) is incorrect because the offer has not been validly accepted, for the reasons just stated. (B) is incorrect because reliance on the contract does not make it valid in the absence of all the requirements for valid formation. (C) is incorrect because, whilst acceptance by telephone is a valid method of communication, in this particular scenario the requirement was for an email acceptance to the sales associate. (D) is incorrect because the problem with the valid purported acceptance was not that the message could have been heard by a third party, it is that acceptance by email was prescribed, and therefore had to be used for a valid acceptance.QUESTION

Answer 35

(A) To accept an offer of a unilateral contract by performance, the offeree must be aware of its existence. Therefore if the man finds the dog and is unaware of the reward when he returns it to the woman, he cannot claim it. The reward can be claimed in (B). The man is aware of the offer of the reward because he has seen the posters. The reward can be claimed in (C) because, even though the man found the dog before he saw the reward poster, the conduct required of him is the safe return which he does carry out. The reward can be claimed in (D because the man has accepted the offer by his conduct, in full awareness of it. A unilateral contract cannot be revoked or withdrawn once performance has begun. The woman may therefore not withdraw her offer, but will be obliged to pay the reward only when performance is complete. In this case, performance is complete because he returned the dog safely to her. The reward can be claimed in (E) because the dog has been safely returned to the woman as required by the reward notice. The shopkeeper was aware of the reward, and there can be no revocation of the offer by the removal of the notice as performance had been completed before the sign was taken down.

Answer 36

(B) The investor's communication was a request for an offer and the dealer's response was an offer. For a communication to be an offer, it must create a reasonable expectation in the offeree that the offeror is willing to enter into a contract on the basis of the offered terms. The investor's communication does not pass the test because it is clear on its face that he did not want to be bound by whatever price the dealer came up with, but rather wanted to find out what the dealer would offer. The dealer's communication, on the other hand, passes the test. Whilst it said nothing more than the price, it was sent in response to a request containing specific delivery terms and a specific quantity. Under the circumstances, the dealer's response would have created a reasonable expectation in the investor that the dealer was willing to enter into a contract under the terms of the two communications. (A) is wrong because, as indicated above, the investor's communication was not an offer because it did not indicate the requisite intent to be bound. Thus, the dealer's communication could not be an acceptance, because an acceptance must be in response to an offer. (C) and (D) are wrong because, as explained above, the dealer's communication was not merely a price quotation; given that it was sent in response to a very specific inquiry, it was sufficient to be an offer. (E) is wrong as there was no offer made by the investor capable of acceptance, and even though there has been an offer by the dealer, there has been no acceptance by the investor of the dealer's offer.

Answer 37

(B) The farmer can reject the pesticide as unfit for their purpose and/or claim damages. If a buyer makes known the purpose of goods and the seller provides goods not suitable for that purpose, the buyer may reject the goods and/or claim damages for breach of the term of fitness for purpose implied by the Sale of Goods Act 1979 ('SGA'). That is the case we have here. (A) is not correct. The SGA implies a term that goods shall be fit for the purpose for which the goods are generally used. From the facts, it appears the pesticide in question generally is used on fruit and that it is suitable for that use. Therefore, the implied term for quality is not breached here. (C) is not correct because we have no facts indicating that the dealer made any description. If they did, (C) would still be incorrect because breach of description is considered a breach of condition and so it entitles the innocent party to reject the goods. (D) is not correct both because the pesticide is of satisfactory quality for the purpose for which it is usually supplied (use on fruit) and because the GA implied term relating to satisfactory quality is a condition, breach of which entitles the innocent party to reject the goods. (E) is not correct because, whilst there may have been a breach of the SGA implied term relating to description if the seller described the pesticide as suitable for use on wheat, that term is a condition, breach of which entitles the innocent party to reject the goods.

Answer 38

(E) Marking a contract 'subject to contract' means that the parties do not yet intend to be legally bound. Negotiations have taken place, but the parties are in agreement that a legally binding agreement will follow, therefore (E) is the correct answer. (A) is incorrect because, whilst it is correct that in a commercial situation the parties are presumed to intend to be legally bound, this presumption is rebutted by the inclusion of the words 'subject to contract'. (B) is incorrect because all the elements of a valid contract are not present, as the parties lack legal intent. (C) is incorrect because, whilst a contract does not have to be in writing, there is no intention to be bound by terms agreed orally if they are stated to be 'subject to contract'. Also the draft contract is in writing, and even if there were verbal discussions as to the parties' intent to be legally bound, the written terms are likely to be definitive under the parol evidence rule. (D) is incorrect because a contract marked 'subject to contract' does not require execution by deed. Categories of contract that require execution as a deed include a conveyance by land or a contract that lacks consideration.

Answer 39

(D) An invitation to treat is an expression of willingness to negotiate, which falls short of a valid offer. (A) is incorrect because a counteroffer is a response to a valid offer, which terminates the original offer and renders it incapable of acceptance. As there is no valid offer in the question, there can be no counteroffer. (B) is incorrect because it states the definition of an offer, not an invitation to treat. (C) is incorrect because an invitation to treat falls short of a valid offer, it merely invites offers to be made. (E) is incorrect because where an agreement between parties remains 'subject to contract', they are in agreement, but until a formal contract is entered into, they do not intend to be contractually bound.

Answer 40

(E) When goods are supplied under a contract for services, all the statutory implied terms are implied by the Supply of Goods and Services Act 1982 ('SGSA'). These terms include conditions relating to the goods similar to those which would be implied by the Sale of Goods Act 1979 ('SGA') in the case of a sale of goods contract. They also include terms (which are 'innominate' terms) that the work will be carried out with reasonable care and skill, and that it will be carried out within a reasonable time if no time for performance has been agreed. (A), (B) and (C) are incorrect because the SGA has no relevance to this contract. (D) is incorrect because the SGSA implied terms relating to care and skill and time for performance are innominate terms, not conditions.

Answer 41

(D) The store owner's letter of 14 December was an acceptance. Whether the letter was an acceptance depends on whether the manufacturer's letter was an offer, because an acceptance is a manifestation of assent to an offer. For a communication to be an offer, it must create a reasonable expectation in the offeree that the offeror is willing to enter into a contract on the basis of the offered terms. There must be a promise, undertaking, or commitment to enter into a contract with certain and definite terms. Courts usually hold that if a statement is made broadly, such as in an advertisement or catalogue, it will not constitute an offer because it is not reasonable to expect that the sender intended to make offers to all who received the advertisement; rather, the courts usually find such advertisements to be invitations to treat seeking offers. However, price quotations (particularly from a manufacturer) may be considered as offers if given in response to a specific inquiry. The courts will look to the surrounding circumstances, and here a court would probably determine that the catalogue that the manufacturer sent was an offer because it was sent in response to the store owner's specific enquiries about prices on a specific computer and it included delivery terms and conditions of sale. (A) is incorrect because, although the letter called for payment in cash, payment by cheque is sufficient. Moreover, because the contract called for payment within 30 days of delivery, even if the cheque was not sufficient, the store owner still had time under the contract to obtain cash. (B) is incorrect because the mistake was unilateral. Generally, a unilateral mistake will not be grounds to rescind a contract unless the non-mistaken party knew or should have known of the mistake. Here, nothing in the facts indicates that the store owner knew of the mistake, and the mistake was not so large that it could be said that he should have known of it. (C) is incorrect because, as explained above, the manufacturer's catalogue was sent in response to the store owner's request for information and its terms for sale constituted an offer. (E) is incorrect because there is a presumption of legal intent in commercial situations that can only be rebutted by strong evidence to the contrary, and there is no evidence here to suggest that the owner did not intend to be legally bound.

Answer 42

VOID CONTRACT Has no effect Mistake makes a contract void 1. COMMON MISTAKE Both parties made the same mistake 2. MUTUAL MISTAKE Parties are mistaken about different things They are at cross purposes 3. UNILATERAL MISTAKE One party is mistaken The other party is aware or should be aware Illegal contracts are void

Answer 43

VOIDABLE CONTRACT Remains in effect unless rescinded by a party Duress and undue influence make a contract voidable DURESS One person applies illegitimate pressure to the other

Answer 44

Correct answer 1 - B Mutual mistake Correct This is a mutual mistake, as the parties are at cross purposes. This is not a common mistake as they did not make an identical mistake (such as both thinking the container existed when it had actually fallen off the container ship it was on and was lost before the contract was made). Correct answer 2 - C Unilateral mistake Correct Here, only Builder 2 was mistaken, because under the circumstances (same plans and one of three bids vastly different to the other two), the homeowner should have known of the mistake.

Answer 45

False. Be careful not to get lost in fact (if you did). The clear bad faith here would make the modification (and not the whole contract) voidable for economic duress.

Answer 46

UNDUE INFLUENCE One person abusing their influence over the other Undue influence does not require bad faith Undue influence is based on personal relationships between the parties Third party undue influence

Answer 47

1. Void for mistake 2. Voidable for undue influence 3. Valid contract 4. Valid contract

Answer 48

Answer: It refers to the ending of a contract, typically when all obligations have been fulfilled. Example: A contract concludes when its fixed term is completed.

Answer 49

Answer: It involves changing a contract, often leading to a new contract in place of the old one. Example: Modifying the terms of an employment contract before it ends naturally.

Answer 50

Answer: It's when parties mutually agree to end a contract, forming a new agreement that requires standard elements like consideration. Example: An employee and employer agreeing to terminate an employment contract early.

Answer 51

Answer: For a valid contract termination, all parties must offer consideration, which often involves sacrificing a right or obligation. Example: Both parties in an employment contract giving up rights (like work and payment) for early termination.

Answer 52

Answer: Challenges arise when one party has fully performed, leaving them with no room to offer consideration for changing the contract. Example: A buyer trying to avoid the final payment of a car after the seller has delivered it.

Answer 53

Answer: These contracts can bypass the need for consideration, as deeds don't require it. Example: Modifying a contract's terms or ending it without needing new consideration.

Answer 54

Answer: Equity uses waiver to address consideration issues, allowing one party to forego enforcement of a part of the contract. Example: A builder being granted extra time beyond the original deadline.

Answer 55

Answer: This occurs when all parties fulfill their contractual obligations. Example: A service provider completing their work and receiving the agreed payment.

Answer 56

Answer: It requires the full performance of obligations for contract discharge. Example: A sailor's contract not being fulfilled due to their death, resulting in no payment.

Answer 57

Answer: These concepts allow for payment even if full performance hasn't been achieved, under certain conditions. Example: A builder claiming payment for a substantially completed conservatory.

Answer 58

Answer: It's a principle allowing for reasonable payment for partial performance when there's no contract variation. Example: A cabinet-maker getting a reasonable amount for a half-finished table.

Answer 59

A: A contract can be discharged by breach if there is a breach of a condition or a serious breach of an innominate term, allowing the innocent party to treat the contract as discharged. Example: A decorator doing a poor job in violation of the Consumer Rights Act.

Answer 60

A: Terminating a contract stops future obligations but maintains rights and obligations accrued up to that point. Example: After terminating with the decorator, the customer doesn’t owe payment but can claim damages for the damaged carpet and the cost of removing the wallpaper.

Answer 61

A: In an entire contract, if the job isn’t finished, the service provider is not entitled to payment. Example: The decorator not entitled to payment for the unfinished job.

Answer 62

A: In contracts for the sale of goods, if the goods don’t conform to the contract, the buyer can terminate and claim a refund. Example: Returning 16-ounce hammers when 20-ounce hammers were ordered.

Answer 63

A: Anticipatory breach occurs when a party states in advance they won’t perform their obligations, allowing the other party to immediately terminate and claim damages. Example: A seller stating they won’t sell a boat as agreed, leading to immediate termination by the buyer.

Answer 64

A: Discharge by frustration happens due to an unforeseen event that makes the contract impossible to perform or radically alters its nature. The frustration occurs after the contract was formed. Example: Renting rooms for a procession that gets cancelled.

Answer 65

A: No, unexpected difficulties like hitting hard rock usually don’t amount to frustration in construction contracts. Example: A builder encountering hard rock while digging foundations does not discharge the contract.

Answer 66

A: It allows for the recovery of sums paid and expenses incurred before a contract is frustrated. Example: A portrait painter keeping part of the payment for expenses but returning the rest after the contract is frustrated due to the death of the council leader.

Answer 67

A: If a party gains a non-monetary benefit before frustration, they may have to pay for it. Example: Paying the builder's estate for the value of the partially built extension after the builder's death.

Answer 68

(D) is correct. I'm sure most of you got this right, but I still thought it worth your time to think about it again! I didn't specifically mention (A), but it's a possibility: the innocent party could choose to simply end the contract and not seek any remedy beyond that. But if they've incurred damages, they can terminate immediately and seek damages. Or they can choose to not terminate, urge the other party to perform, and bring a claim for breach when performance is due if the other party does not perform.

Answer 69

LAW REFORM 1 (FRUSTRATED CONTRACTS Аст) * All sums paid before discharge can be recovered. * All sums payable before discharge cease to be payable * But a party may retain the amount of expenses * A party may have to pay for a valuable benefit

Answer 70

(B) is correct. A contract will be frustrated if it becomes impossible or illegal to perform, or if performance becomes radically different from what the parties envisaged. Under the circumstances in (B), whilst the auto parts shop can still buy the radar detectors, they would not be able to sell them and that was the benefit the parties exepcted the auto parts shop to receive. Therefore, the contract has become frustrated. (A) is an example of mistake, because the subject matter of the contract was not in existence when the contract was made. (C) would not result in frustration because performance is not radically different - just more time consuming and expensive than anticipated.

Answer 71

A) is correct. If a contract is terminated for breach, all future obligations under the contract are discharged. Past obligations are not discharged, as that is what allows the nonbreaching party to sue for damages. As for present obligations, logically, if an obligation was not performed by the time the breach occurred, it would be discharged, and if it was already performed, it would not be discharged.

Answer 72

(C) is correct. An innocent party can terminate a contract if the other party repudiates the contract by not performing it, or by breaching a condition, or, in some circumstances, by breaching an innominate term. Breach of a warranty will give rise to a claim for damages, but is not a ground for terminating a contract. Thus, (A) and (B) are incorrect.

Answer 73

No. If the event was foreseeable or foreseen, the contract will not be discharged for frustration, even if the parties did not realise the true impact of the event. Again, the fact that the contract might be more difficult to perform - even a lot more difficult - is not a basis for discharge by frustration.

Answer 74

(C) is correct. If a sale of goods agreement is terminated because the goods are defective, the innocent party can refuse to pay for the goods but then must return them. They can also claim damages. (A) is incorrect because the merchant must pay for the goods if the merchant decides to keep them (but can seek damages for the defect). (B) is incorrect because even though the defect is minor, if the goods are not what were agreed to, that is a breach of condition, which justifies terminating the contract.

Answer 75

(D) £1,500

Answer 76

A: Damages aim to compensate the innocent party for their loss, not to punish the breaching party. Example: A customer finds a cheaper painter after a breach, thus not suffering any loss.

Answer 77

What are 'Expectation Damages' in contract law? A: Expectation damages aim to fulfill what the innocent party expected from the contract. Example: Claiming extra cost of a laptop and additional expenses due to a breach.

Answer 78

A: Damages can be either the cost to cure the defect or the difference in value between what was provided and what should have been. Example: Defective double glazing units leading to either replacement costs or the loss in value.

Answer 79

A: No, terminating a contract for breach doesn’t stop the innocent party from claiming damages. Example: Terminating a contract due to a defective product and claiming additional costs and losses.

Answer 80

A: It's claimed when it's difficult to determine expectation interest, covering costs incurred in reliance on the contract. Example: A TV company claiming expenses for a show canceled due to an actor’s breach.

Answer 81

A: Damages may be awarded in specific cases, especially when the contract's purpose was to provide enjoyment. Example: Holiday cases where the main purpose is enjoyment.

Answer 82

A: Damages are for losses that arise naturally from the breach or were in reasonable contemplation at the contract's formation. Example: Extra costs for a replacement laptop are claimable, but lost work might not be unless it was contemplated.

Answer 83

A: The innocent party must minimize their loss and can't claim damages for avoidable losses. Example: An electrician hiring a replacement van while his own van is being repaired.

Answer 84

A: Liquidated damages clauses are enforceable unless they are disproportionate penalties not protecting a legitimate interest. Example: A clause demanding double payment for late service fees may be a penalty.

Answer 85

(C) is correct. Hopefully you weren't tricked by the choices. The merchant is entitled to the different in value (£1 per vase) x 10 vases.

Answer 86

O (C) £110 (C) is correct. If you got this right, again, well done! If not, it's a good lesson that you must pay careful attention to the words in each question. Because the merchant paid in advance, he is entitled to a full refund of the £100 he paid, plus the difference between the contract price and what he had to pay to get similar goods.

Answer 87

(A) is correct. The key here is to remember the rule: damages are determined on the date of the anticipatory breach. Here, the contract price was £30 per kilo. On the date of the breach, the market price was £27 per kilo - £3 less per kilo than the contract price. Because damages are meant to put the innocent party in the position they would have been in if the contract was performed as promised, no damages would be owed. All the other figures are based on price differences on other dates that won't be used.

Answer 88

False. The loss of the wedding contract is almost certainly too remote. The fee is unusually large, and it is unlikely to have been in the parties' contemplation when the contract with Lucent was entered into. This is particularly true because Patrick ordered the lights online, so he is unlikely to have had an opportunity to tell Lucent why he needed them.

Answer 89

True. The loss of the income from the studio portraits is likely to be seen as flowing naturally from the breach. These are professional studio lights, and so it would be understood that they were needed for Patrick's business. There is no suggestion that the amount of the income is unusual.

Answer 90

True. Patrick is under a duty to mitigate his loss. He could either have bought alternative lights and cancelled his contract with Lucent (time will have been of the essence of Lucent's obligation to deliver the lights on the Friday), or he could have tried to hire some lights to tide him over. If he hasn't tried either of these things, then that could prevent him claiming from Lucent for the loss of income from the studio portraits.

Answer 91

True. The purpose of their contract with Patrick was to provide them with the enjoyment that they would expect to derive from their wedding photos. This is one of the unusual situations where non-pecuniary loss can be recovered in contract.

Answer 92

False. The purpose of the contract was to supply Patrick with lights, not to save him from stress and frustration. This is not a situation where non-pecuniary losses can be claimed in contract (however, if the incident had caused Patrick to suffer a medical condition, such as depression, then he might possibly be able to claim for personal injury - but he might have difficulty proving that his condition was caused by Lucent's breach, rather than other factors in his life).

Answer 93

An injunction is an order NOT to do something

Answer 94

No. Damages would be an adequate remedy. A court could award me the difference between the contract price and the price at the other shop, and then I would be in the same position as I would have been had the contract been carried out.

Answer 95

Yes. Although it's just an office desk, its age and artistry make it unique. Therefore, specific performance could be available.

Answer 96

A: Equitable remedies are non-monetary solutions used when damages are insufficient, typically to compel or prevent specific actions. Example: Specific performance and injunctions.

Answer 97

A: It's a court order requiring a party to fulfill their contractual obligations, not granted if damages are adequate or in personal service contracts. Example: Enforcing the sale of unique items like art or land.

Answer 98

A: Injunctions are orders preventing a party from doing something that breaches a contract. Example: Stopping a seller from opening a new restaurant in violation of a non-compete clause.

Answer 99

A: No, courts generally do not order these in personal service contracts due to practical and ethical issues. Example: An employee cannot be compelled to return to a job after wrongful dismissal.

Answer 100

A: They aim to prevent unjust enrichment in situations where there is no longer a contract but one party retains benefits. Example: Recovering payment after a contract is voided due to a common mistake.

Answer 101

A: It applies when the promised consideration in a contract completely fails. Example: Refunding payment for goods that are defective and valueless.

Answer 102

A: They are payments for partially completed services or goods, used as restitutionary remedies for unjust enrichment. Example: Paying a reasonable amount for a partially finished table when the cabinet maker abandons the job.

Answer 103

A: Equitable remedies are discretionary, based on fairness and practicality, and are not guaranteed. Example: Courts may refuse specific performance if it leads to undue hardship or is unfair.

Answer 104

A: Contracts to commit illegal acts or legal acts carried out illegally are void. Example: A contract for courier services becomes illegal if the courier drives drunk.

Answer 105

A: Courts can sever illegal parts of a contract if the rest of the contract can stand independently. Example: Severing an illegal non-compete clause from an employment contract.

Answer 106

A: Contracts that are immoral, even if not illegal, can be void. Example: Contracts relating to prostitution may be void due to immorality.

Answer 107

A: A misrepresentation is a false statement of fact or law that induces another party to enter a contract. Example: A seller falsely stating the condition of a house’s roof.

Answer 108

A: Fraudulent (knowingly false), negligent (without reasonable grounds for belief), and innocent (with reasonable grounds for belief). Example: Fraudulent misrepresentation would be knowingly selling a car with a hidden defect.

Answer 109

A: Rescission (contract treated as if it never existed) and damages (compensation for losses incurred). Example: Rescinding a contract due to misrepresented property conditions.

Answer 110

A: Affirmation after discovering falsehood, undue delay, impossibility of restitution, and rights acquired by a third party. Example: Unable to rescind a contract after using a product for an extended period despite knowing of its flaws.

Answer 111

A: Damages aim to put the innocent party in the position they would have been without the misrepresentation. Example: Claiming the difference in a car's value due to misrepresented mileage.

Answer 112

A: Any exclusion of liability must be reasonable; broad exclusions covering fraudulent misrepresentation are likely unreasonable. Example: An unreasonable clause might be one that attempts to exclude liability for knowingly false statements about a product's safety.

Answer 113

A: A void contract never had legal force, while a voidable contract remains valid until rescinded by the affected party. Example: A contract entered into by a minor is voidable, not void.

Answer 114

A: Mistake makes a contract void due to no proper agreement. Types include common mistake, mutual mistake, and unilateral mistake. Example: A contract is void if both parties mistakenly believe they are contracting for a ship that has already sunk.

Answer 115

A: Duress involves illegitimate pressure forcing another party into a contract, making it voidable. Example: A supplier demanding higher payment under threat of stopping supply constitutes economic duress.

Answer 116

A: Undue influence arises from abusing a trust relationship, making the contract voidable. Example: A nephew pressuring his elderly aunt into signing a contract is undue influence.

Answer 117

A: It occurs when undue influence is exerted by someone not a party to the contract. Example: A husband influencing his wife to enter a financial transaction with a bank.

Answer 118

A: Rescission can be prevented due to affirmation, delay, impossibility of restitution, or rights acquired by a bona fide third party.

Answer 119

A: Both parties believing a car exists for sale when it's actually been destroyed is a common mistake, rendering the contract void.

Answer 120

A: While both make a contract voidable, undue influence is based on personal relationships and doesn't require unlawful or bad faith conduct, unlike duress.

Answer 121

A: Prohibited terms are completely unenforceable against consumers, while unfair terms are unenforceable if they cause significant imbalance in the parties' rights and obligations. Example: A clause in a consumer contract requiring a large cancellation fee may be considered unfair and unenforceable.

Answer 122

A: CRA applies to consumer contracts, prohibiting certain exclusions like liability for death or quality of goods, and requires terms to be transparent and legible. Example: In consumer contracts, a term excluding liability for faulty goods would be prohibited under CRA.

Answer 123

A: It examines if including the clause in the contract was reasonable at the time the contract was made, focusing on negotiation freedom and fairness. Example: Allocation of risk in a construction project may be considered reasonable if freely agreed upon.

Answer 124

A: UCTA applies to business contracts and states that some exclusions are void, while others are valid if reasonable. Example: In business contracts, excluding liability for death or personal injury due to negligence is void under UCTA.

Answer 125

A: This rule states that any ambiguity in an exclusion clause is interpreted against the party relying on it. Example: An insurance policy's ambiguous exclusion of "load" was construed against the insurer to include passengers.

Answer 126

A: Exclusion clauses can be incorporated by signature, notice, or custom/course of dealing. Example: A shop's exclusion clause in small print behind the till may not be incorporated if unnoticed by the customer.

Answer 127

A: An exclusion clause is a term in a contract that limits or excludes liability for breach. Example: A construction contract may include clauses limiting liability to the price of the contract or to defects arising within the first 10 years.

Answer 128

A: Conditions are fundamental obligations in a contract, while warranties are less important. Breaching a condition may allow the innocent party to terminate the contract, whereas breaching a warranty typically leads to a claim for damages.

Answer 129

A: A term is part of the contract and affects the contractual obligations. A representation influences the decision to enter into the contract but is not a part of it. The importance of the statement and the expertise of the person making it help in determining if it's a term or representation.

Answer 130

A: Express terms are those explicitly stated in the contract, while implied terms are not specifically stated but included by law, custom, or necessity.

Answer 131

A: The Parol Evidence Rule states that when a contract is in writing, external evidence cannot be used to add to or change its written terms.

Answer 132

A: An example is the implied term of satisfactory quality in a contract for the sale of goods, as per the Consumer Rights Act 2015 or the Sale of Goods Act 1979.

Answer 133

A: Courts imply terms in a contract when necessary to make the contract work properly or to give business efficacy to the contract.

Answer 134

A: Innominate terms are neither conditions nor warranties. The classification and remedy depend on the breach's impact on the contract.

Answer 135

A: If a contract is uncertain or incomplete, it may be void for uncertainty. However, courts try to interpret or modify the contract to resolve the uncertainty if possible.

Answer 136

A: Severability means that if part of a contract is uncertain, courts may remove or ignore this part if the contract can still function without it, preserving the rest of the agreement.

Answer 137

A: The fundamental rule is that only parties to a contract can sue or be sued under it.

Answer 138

A: No, a third party cannot be compelled to fulfill contract terms because they are not in privity with the contract.

Answer 139

A: It allows a third party to enforce a contract if it expressly provides for their right or confers a benefit on them.

Answer 140

A: Agency is when one person (the agent) is authorized to enter into a contract on behalf of another person (the principal).

Answer 141

A: Assignment is the transfer of the benefit of a contract to another person.

Answer 142

A: Subrogation is a technical exception to privity, often used in insurance and guarantees, where a third party can enforce a contract in place of another.

Answer 143

A: Collateral contracts are separate agreements with a third party, allowing them to enforce certain aspects of the main contract.

Answer 144

A: In a trust, one party to a contract holds their rights under the contract on behalf of a third party, enabling the third party to benefit from the contract.

Answer 145

A: Challenges include the limitation of not allowing all rights and obligations under a contract to be transferred to third parties.

Answer 146

A: In this scenario, the brother cannot enforce the contract nor can he be compelled to work, as he is not a party to the contract between the client and the gardener.

Answer 147

A: Consideration is a requirement for a binding contract in English law, involving each party giving or promising something of value in return for the other party's obligations.

Answer 148

A: The two types of consideration are executory (a promise to do something) and executed (actually performing the promised action).

Answer 149

A: The rule of consideration movement states that consideration must move from the promisee (the person to whom a promise is made).

Answer 150

A: Sufficiency of consideration means it is recognized as valid by law, while adequacy refers to the economic value of the consideration, which need not be equal to what is received.

Answer 151

A: No, performing an existing duty is normally not sufficient consideration, except when additional obligations are taken on, practical benefits are conferred, or duties are owed to a third party.

Answer 152

A: No, past consideration, or actions already taken, cannot be used as consideration for new promises.

Answer 153

A: Accepting a lesser amount as full payment is not sufficient consideration unless there are new elements, like early payment or settlement of a disputed amount.

Answer 154

A: Promissory estoppel is used as a defense when it's unfair for a creditor to go back on a promise to accept less, suspending original rights temporarily and requiring inequitable circumstances for the creditor.

Answer 155

A: No, contracts made by deed do not require consideration.

Answer 156

A: When varying or terminating existing contracts, it's important to ensure valid consideration is present.

Answer 157

A: For an agreement to give rise to a binding contract, the offer has to be accepted by the offeree.

Answer 158

A: No, an offeree cannot accept an offer unless they are aware of it. This is especially relevant in unilateral contracts.

Answer 159

A: Most offers can be accepted either by performance (actually doing what the offer requests) or by a promise to perform.

Answer 160

A: Yes, the offeror can stipulate a specific method of acceptance, and the offer must be accepted in that manner, unless an alternative method is just as advantageous.

Answer 161

A: Generally, silence by the offeree cannot count as acceptance of an offer.

Answer 162

A: Acceptance must generally be communicated to the offeror, either by words or conduct, unless the offer specifically states otherwise.

Answer 163

A: The postal rule states that acceptance by post creates a contract at the moment of posting, unless the method is unreasonable or excluded by the offeror.

Answer 164

A: In commercial and business agreements, there is a presumption that the parties intend their agreement to be binding, unless evidence suggests otherwise.

Answer 165

A: Exceptions include contracts by minors (people under 18), people under mental incapacity, and intoxication.

Answer 166

A: A minor can be bound by a contract for necessary goods or services, and possibly for the acquisition of a permanent interest in property like land or shares.

Answer 167

A: Contract law involves agreements that the law will enforce. These agreements don't necessarily have to be in writing, and the parties may not always realize they are forming a contract.

Answer 168

A: Contracts are formed through an agreement (offer and acceptance), intention to create legal relations, and consideration.

Answer 169

A: Only a few types of contracts, like guarantees, land sales, and consumer credit agreements, must be in writing.

Answer 170

A: An agreement is typically formed by an offer by one party and its acceptance by another. An offer must indicate readiness to enter into a contract, be certain, and communicated to the offeree.

Answer 171

A: An offer shows intent to contract and is certain and communicated to the offeree, while an invitation to treat, such as an advertisement or price list, invites others to make an offer.

Answer 172

A: In unilateral contracts, offers are accepted by performing a requested act, not by promising to perform it.

Answer 173

A: An offer can be terminated by revocation by the offeror, rejection or counteroffer by the offeree, lapse of time, or by operation of law, including failure of a condition contained in the offer.

Answer 174

A: Generally, an offeror can revoke their offer at any time until it has been accepted, but not after acceptance. Exceptions include situations with a collateral contract not to revoke or unilateral contracts where performance has begun.

Answer 175

A: A counteroffer acts as both a rejection of the original offer, thereby terminating it, and as a new offer.

Answer 176

A: In commercial and business agreements, there is a presumption that the parties intend their agreement to be legally binding unless evidence suggests otherwise.

Answer 177

A: Contractual capacity refers to the ability to be bound by a contract. Minors, those under mental incapacity, or intoxication may not be fully bound by contracts, making some contracts voidable.

Answer 178

A: Contracts by deed don't require consideration and are used when there might be a problem with consideration in the agreement. They are often used for more formal agreements or where consideration might be unclear.