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ICAEW Law 02: Termination of contract. > 02. STUDY MANUAL questions on Termination of contract. > Flashcards

02. STUDY MANUAL questions on Termination of contract. Flashcards

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1
Q

An interior designer having substantially performed their contract, despite there being some remaining snags …

A

is entitled to receive the contract price less a reasonable deduction for the defects and omissions.

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2
Q

T/F: Parties are discharged from their contract if altered circumstances render the contract fundamentally different in nature from what was orignally agreed.

A

TRUE

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3
Q

T/F: Parties are discharged if an event, for which neither party is responsible, occurs which renders performance impossible or futile.

A

TRUE

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4
Q

T/F: Parties who contract that something should be done are discharged if performance becomes sustantially more expensive or onerous.

A

FALSE

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5
Q

T/F: Parties who contract that something should be done are discharged if their assumption that certain conditions (which are fundamental to the contract), would continue, proves to be totally false.

A

TRUE

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6
Q

T/F: A caterer is likely to be able to claim damages in respect of their ordinary business if an oven supplier breaches their contract for the supply of a new oven.

A

TRUE

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7
Q

T/F: A caterer is likely to be able to claim damages in respect of a contract brought to the attention of an oven supplier if that supplier breaches their contract for the supply of a new oven.

A

TRUE

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8
Q

T/F: A caterer is likely to be able to claim damages in respect of a potentially lucrative contract if an oven supplier breaches their contract for the supply of a new oven.

A

FALSE

see Victoria Laundries v Newman

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9
Q

T/F: A garage whose customer deprives them of a £500 profit will not have damages awarded against them if they subsequently are able to make a £1,500 profit on the same car.

A

TRUE

The garage has fully mitigated their loss.

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10
Q

T/F: An exclusion clause written on a notice affixed to the glove box of a rented car will be enforceable.

A

FALSE

It has not been sufficiently incorporated into the contract at the time the agreement was made.

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11
Q

T/F: The frustration of a contract is a lawful excuse not to perform one’s obligations under it.

A

TRUE

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12
Q

T/F: An agreement between parties to a contract is a lawful excuse not to perform one’s obligations under it.

A

TRUE

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13
Q

T/F: The prevention of performance by the other party is a lawful excuse not to perform one’s obligations under it.

A

TRUE

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14
Q

T/F: An increase in the cost or complexity of performance is a lawful excuse not to perform one’s obligations under it.

A

FALSE

Such events DO NOT frustrate a contract.

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15
Q

… are a common law remedy designed to restore the injured party to the position they would have been had a contract been performed.

A

Damages

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16
Q

Damages are a … remedy designed to restore the injured party to the position they would have been had a contract been performed.

A

common law

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17
Q

Damages are a common law remedy designed to …

A

restore the injured party to the position they would have been had a contract been performed.

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18
Q

A loss outside the natural course of events will only be compensated if the exceptional circumstances are …

A

within the defendant’s knowledge at the time of making the contract.

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19
Q

In assessing the extent of recoverable losses, the claimant is expected to take … to mitigate their loss.

A

reasonable steps

20
Q

In assessing the extent of recoverable losses, the claimant is expected to take reasonable steps to …

A

mitigate their loss.

21
Q

A contractual term designed as a penalty clause is …

A

unenforceable.

22
Q

If a party is prevented from completing performance of their obligation by the other party, they may bring a … action to claim for the amount of work already done.

A

quantum meruit

23
Q

If a party is prevented from completing performance of their obligation by the other party, they may bring a quantum meruit action to claim for …

A

the amount of work already done.

24
Q

Situations which may give rise to the frustration of contracts:

A

Destruction of the subject matter.
Personal incapacity to perform a contract of personal service.
Government intervention.
Non-occurrence of an event which is the sole purpose of the contract.

25
Q

T/F: The Law Reform (Frustrated Contracts) Act 1943 requires ALL monies paid prior to frustration to be repaid.

A

FALSE

Compensation for any ‘valuable benefit’ obtained or for expenses incurred in the performance of a contract prior to frustration may be awarded by the court.

26
Q

T/F: A claimant must do ‘all that they can’ to reduce the amount of loss they suffer.

A

FALSE

They need only take reasonable steps.

27
Q

A claimant must take all … steps to mitigate their loss from a breach of contract.

A

reasonable

28
Q

When an anticipatory breach occurs the injured party may …

A

take action immediately (Hochster v De La Tour)

wait

29
Q

What is the rule established in Hadley v Baxendale regarding the remoteness of loss?

A

Damages will only be awarded for losses which:
-arise as a natural course of the breach
-were in the reasonable contemplation of both parties

30
Q

… interest is protected by awarding damages sufficient to put the claimant into the position they would have been had the contract been performed.

A

Expectation

31
Q

Expectation interest is protected by awarding damages sufficient to …

A

put the claimant into the position they would have been had the contract been performed.

32
Q

T/F: A court will never enforce a liquidated damages clause.

A

FALSE

So long as it is incorporated correctly and is not deemed to be a penalty clause it will be enforceable.

33
Q

UCTA: a clause excluding liability for death or personal injury resulting from negligence is …

A

void

34
Q

UCTA: a clause excluding liability for loss SHORT OF death or personal injury resulting from negligence is …

A

subject to a test of reasonableness

35
Q

UCTA: a clause excluding liability for the breach of the implied condition re. title is …

A

void

36
Q

T/F: In all cases where a party to a contract fails to perform their contractual obligations, they will be liable for breach of contract.

A

FALSE

the contract might be frustrated

37
Q

T/F: Provided a party to a contract substantially performs their contractual obligations, that is a sufficient discharge of the contract and the other party has no redress for those parts of the contract which were not performed.

A

FALSE

a claim may still be brought in respect of those parts of the contract not performed

38
Q

A party who has rendered partial performance and offered complete performance but been prevented will usually be able to claim for …

A

quantum meruit

see Planche v Colborn

39
Q

T/F: Where a party is in breach of contract, the other party may choose either to treat the contract as discharged (and sue for damages) or to affirm the contract.

A

FALSE

only upon a repudiatory breach (of condition) will the injured party be able to treat the contract as discharged

40
Q

T/F: Where a party causes an anticipatory breach of a contract, i.e., they indicate in advance that they have no intention of performing the contract, the other party may continue to incur costs in performing the contract and take action against the party in breach.

A

TRUE

41
Q

T/F: The courts will interpret any ambiguity in an exclusion clause in favour of the party not seeking to rely on it.

A

TRUE

42
Q

T/F: The Unfair Contract Terms Act (UCTA) 1977 applies to all contracts, provided at least one party is a commercial concern or business.

A

FALSE

The UCTA applies only to business to business contracts.

43
Q

T/F: In a claim for contractual damages, if the defendant can show that the claimant caused the loss, the ‘chain of causation’ will be said to have been broken and the defendant will not be liable.

A

TRUE

44
Q

T/F: A claim for damages based on wasted expenditure is nonetheless subject to the general rule that damages should not put the claimant in a better position than they would have been in if the contract had been performed.

A

TRUE

45
Q

A party engaging in moonlighting against a restrictive employment clause will most likely suffer …

A

a prohibitory injunction.

ICAEW Law 02: Termination of contract. (5 decks)

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