Diagnostic test

Diagnostic test

. According to the Court of Appeal in Pharmaceutical Society of GB v Boots [1953] 1 QB 401, which one of the following statements most accurately describes the normal process of contract formation in a self-service shop?

. In which one of the following circumstances is the acceptance ineffective because it does not comply with the prescribed method of acceptance in the offer?

. A offers to sell her car to B for £2,000. B replies: 'Can I pick it up tomorrow by any chance?' A responds: 'If you pay by cheque, then it must be cleared by my bank before you can drive the car away, but if you pay by cash, you can pick up the car immediately if you wish.' B replies: 'I accept your very generous offer. I'll pay by cheque but I need to collect the car immediately.' The next morning, B sends another message to A: 'OK. I can pay by cash.' B turns up to pay that afternoon, but A then refuses to sell her car to B because she has received a better offer from C. Which one of the following statements most accurately describes the legal position between A and B?

. A sends an email to B offering to sell her Ford Focus car to B for £5,000 and clearly states that the offer will be open for a week. On the fifth day, A receives an offer from C to buy the same car for £5,500. A then emails B to say that she now wants £5,500 for the car. On the sixth day, B replies to A's second email purporting to accept the original offer of £5,000. Which one of the following statements is true?

. A, presenting herself as a well-known figure, C, reaches a contract with B over the telephone. B believes that he is contracting with C. When B later discovers the fraud, he claims that the contract is void for his mistake as to the other party's identity but he is unsure which legal authority he should cite. Which one of the following pieces of advice given to B is true?

. Where an inessential term of the contract suffers from vagueness, it may be possible to sever that term and enforce the rest of the contract.

. A 'lockout' agreement, preventing a party from negotiating with any third party, even if no time limit is specified for those negotiations, is likely to be upheld by a court as enforceable due to the courts placing an implied duty on a party who had agreed to the lockout to negotiate in good faith with the party to that lockout for a reasonable period of time.

. In both Scammell & Nephew Ltd v Ouston [1941] AC 251 and British Steel Corp v Cleveland Bridge & Engineering Co [1984] 1 All ER 504, the contract was held to be void because the parties in both cases had failed to agree upon several essential aspects of the contract.

. A employs B as a consultant in her firm. B is paid £15,000 plus a 'discretionary bonus'. Over the past year, A's firm has doubled its profits and therefore A decides to pay an additional £8,000 to B for 'all of your help and hard work throughout the past year'. B is delighted and buys a new car in anticipation of the extra money being given to him. Subsequently, A changes her mind and refuses to pay the extra £8,000 to B. Which one of the following statements most accurately summarises the legal position?

. In which one of the following situations is the promise in question unlikely to be supported by a valid consideration?

. A contacts B, a friend, by telephone and asks him out to lunch adding that she (A) will pay. B agrees to meet A, saying that he (B) will pay for the wine. B arrives at the agreed restaurant the next day but A telephones to say that she must cancel the arrangement because of an urgent business meeting. B, who is a self-employed financial consultant, has taken a day off work for the lunch and, because he has lost a day's earnings as a consequence of A's cancellation, he seeks some redress (even if this is simply payment for his meal). Which one of these statements most accurately summarises the legal position?

. A is B's landlord. A offers to reduce the rent to B for six months because B is in financial difficulties. B is very pleased and pays the reduced rent for two months. At this point, A demands full payment of rent for those two months because B has won a large amount of money on the National Lottery. Which one of the following statements most accurately summarises the legal position between A and B?

. To enforce a contract according to the Contracts (Rights of Third Parties) Act 1999, a third party must show that it has provided consideration under the contract.

. The Contracts (Rights of Third Parties) Act 1999 preserves the promisee's right to enforce the promise but requires the promisee to pass any damages recovered from the promisor to the third party beneficiary.

. Which one of the following statements relating to the hypothetical applicability of the Contracts (Rights of Third Parties) Act 1999 to the facts of New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd, The Eurymedon [1975] AC 154 is true?

. To enforce a term under the Contracts (Rights of Third Parties) Act 1999, the third party must, according to the test of enforceability in s. 1, be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into.

. On 1 June, A contracts to sell a quantity of goods to B to be delivered by 1 July. On 15 June, as A is still making arrangements for the shipment of the goods, he receives a fax message from B stating that the goods are no longer wanted. Which one of the following statements concerning A's rights is true?

. A Ltd enters a contract with B Ltd, under which B Ltd is to develop a software product specifically tailored for A Ltd for a fixed price. Before B Ltd starts the development or incurs any expense under the contract, A Ltd cancels the contract, alleging a fundamental change of its business strategy. B Ltd ignores A Ltd's cancellation and continues to complete the development of the software. Supposing the performance of the contract will not enhance B Ltd's reputation, which one of the following statements most accurately summarise the legal position between the parties?

. Where a statement made by one party before the conclusion of the contract is found to be untrue, the innocent party's remedies may vary according to whether the statement is characterized as a term or a representation. If the statement is characterized as a term, which one of the following assertions relating to the innocent party's remedies is true?

. The party seeking to challenge the effectiveness of an exemption clause has the burden of establishing that the clause has not been incorporated into the contract and does not cover the other (breaching) party's liability in issue.

. A was travelling abroad for business purposes and hired a car from B company. The contract of hire exempted B from liability for 'any losses or damage suffered by the hirers, whether caused by our company's neglect or fault or not'. At the time of contracting, A made it clear that he wanted to leave his personal belongings in the car from time to time and B expressed no objection. When A parked the car outside a cinema, his personal belongings left in the car were stolen. It was discovered that this was solely attributed to the negligence of one of B's staff, who failed to repair the defective back door of the car. One of the legal questions arising from this case was whether the exemption clause covered B's negligence liability for the lost property. Which one of the following statements is probably true in respect of this legal question?

. The Unfair Contract Terms Act 1977 subjects every contract term falling within its scope to a reasonableness test.

. In applying the reasonableness test under s.11 of the Unfair Contract Terms Act 1977 to determine whether the term is a fair and reasonable one to have included, the courts make a broad assessment of the parties' relationship, considering factors such as the circumstances known to the parties at the time of contracting, as well as all relevant events subsequent to the contract's formation and the effect of those events on each party.

. The purpose of awarding contractual damages is generally to put the non-breaching party into the position it would have been in had the contract been performed as agreed.

. A agrees to repair B's broken mill shaft and to return it to B within a week. At the time of contracting, B points out that he has no spare mill shaft and that he will not be able to operate his mill until the repaired one has been returned. A does not return the repaired shaft until two weeks later. B sues A for breach of contract, claiming damages for the loss of profit during the second week, when his mill was closed as a result of A's delay. A argues that the damages claimed by B are too remote to be recoverable. Which one of the following statements concerning A's argument is true?

. A, the owner of a vessel, enters into an agreement with a charterer, B, for the charter of the vessel. A spends money preparing the vessel before B subsequently, in breach of contract, repudiates the agreement. However, A is then immediately able to enter into a new agreement with another charterer, C, and due to an upturn in the market rate, receives a much greater profit than that which she would have received under the agreement with B.
Regardless of the greater profit received, A will always be entitled to recover the wasted expenditure in reliance on the agreement with B.

. In Makdessi v Cavendish Square Holding BV [2015] UKSC 67, [2015] 3 WLR 1373, the Supreme Court stated that the scope of the penalty rule applies in circumstances concerning agreed damages clauses that are payable on breach and is not concerned with payments concerning primary contractual obligations.

. A enters into two similar contracts with C and D to import certain machinery. The importation of the machinery requires a licence from the government of A's country. In the contract with C, A guarantees to obtain a licence, whilst no such guarantee is given in the contract with D. A applies for two licences for the importation of the machinery but only one licence is granted. A allocates the licence to the contract with C and claims that the contract with D is frustrated. Which one of the following statements most accurately summarises the legal position between A and D?

. Which one of the following statements concerning the decision of the House of Lords in Bell v Lever Brothers Ltd [1932] AC 161 is true?

. A owns a tanker that has suffered a massive engine explosion. A finds out from an independent source that a ship owned by B is the closest vessel to the stricken tanker. B agrees to divert his vessel in order to render assistance to the crew of A's tanker, provided A will agree to a minimum hire charge of £50,000, 'irrespective of whether B's vessel is used or not'. A accepts B's offer but finds out within minutes that his tanker has already sunk with the loss of all hands. Which one of the following statements most accurately represents the legal position of A?

. Which one of the following statements is inconsistent with the decision in Couturier v Hastie (1856) 5 HL 673?

. Which one of the following principles was recognised and applied by the Court of Appeal in Edgington v Fitzmaurice (1885) 24 ChD 459?

. Which one of the following statements is incorrect in relation to the advantages for a party in bringing a claim alleging negligent misrepresentation under s. 2(1) of the Misrepresentation Act 1967 rather than at common law?

. A is considering buying B's house as an investment. By a fraudulent misrepresentation, B induces A to buy his house for £180,000 although its actual value is only £120,000. When A discovers the fraud two weeks later, the value of the house has been reduced to £80,000 due to serious damage caused by the collapse of a supporting wall. At this point, a buyer offers £80,000 for the house. A does not sell the house until three months later, when A only gets £75,000 for the house because of a general fall of the property market. A rescinds the contract with B for fraudulent misrepresentation and claims damages. Which one of the following statements most accurately calculates the damages to which A is entitled?

. A presumption of undue influence arises once it is shown that the relationship between two parties falls within certain recognised relationships or, on the facts, constitutes a relationship of trust and confidence.

. In which one of the following relationships is it not possible to disapprove the existence of trust and confidence between the parties by contrary evidence?

. According to Royal Bank of Scotland plc v Etridge (No. 2) [2002] UKHL 44, [2002] 2 AC 773, there is no longer a requirement to establish manifest disadvantage. Instead, the emphasis is on whether the nature and size of the transaction (contract) can be readily explained by the parties' relationship or calls for some explanation because it raises suspicion.

. If, in making a contractual agreement, one party has taken advantage of a relationship existing between the parties, the doctrine of undue influence might render the agreement voidable (liable to be set aside).

. A married couple live in a house owned by the wife and jointly own a family business. The husband persuades the wife to use the house as security to obtain loans from M Bank. In the loan application form, it is stated that the loan will be used for the purpose of the family business. A manager of M Bank interviews the couple in a branch of M Bank and is informed, during the interview, of their relationship and of the fact that the husband is responsible for the operation of the family business and that the wife has no active role. The manager then asks if the wife has received any independent advice on the application. The wife replies that she has a solicitor and will consult her about it. The wife then forgets to consult her solicitor. The next week, the application is approved and the wife and the manager sign a contract using the house as security of the loan. Five months later, the family business fails due to poor management and the couple is unable to repay the loan. M Bank then claims the wife's house. It has been established that the husband has unduly influenced the wife's decision to enter the security contract. Which one of the following statements most accurately summarises the legal positions of the parties?

. According to Royal Bank of Scotland plc v Etridge (No. 2) [2002] UKHL 44, [2002] 2 AC 773, there is no longer a requirement to establish manifest disadvantage. Instead, the emphasis is on whether the nature and size of the transaction (contract) can be readily explained by the parties' relationship or calls for some explanation because it raises suspicion.

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