02: Termination of contract. Flashcards

1
Q

Severable contract.

A

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

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2
Q

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

A

Severable contract.

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3
Q

A severable contract is also known as a … contract.

A

divisible

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4
Q

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

A

FALSE

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5
Q

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

A

TRUE

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6
Q

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

A

TRUE

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7
Q

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

A

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

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8
Q

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

A

TRUE

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9
Q

T/F: Anticipatory breach must be explicit.

A

FALSE

It can be inferred from conduct.

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10
Q

A victim of a breach of condition …

A

may treat the contract as discharged and sue for damages.

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11
Q

Damage not ‘too remote’ must be that …

A

arising naturally from a breach

OR

in the reasonable contemplation of both parties

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12
Q

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.

A

FALSE

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

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13
Q

Damages are intended …

A

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

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14
Q

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

A

FALSE

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

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15
Q

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

A

all reasonable steps to mitigate their loss.

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16
Q

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

A

it is considered penal in nature.

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

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17
Q

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 …

A

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

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18
Q

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 …

A

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

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19
Q

A liquidated damages clause is only valid if …

A

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

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20
Q

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

A

TRUE

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21
Q

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

A

FALSE

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

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22
Q

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

A

TRUE

23
Q

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

A

land

24
Q

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

A

TRUE

25
Q

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

A

mandatory

26
Q

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

A

specific performance

27
Q

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

A

prohibitory injunction

28
Q

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.

A

fair and reasonable

29
Q

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.

A

all the circumstances

30
Q

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.

A

known

31
Q

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

A

fair and reasonable

32
Q

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

A

all the circumstances

33
Q

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

A

known to parties

34
Q

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

A

time contract was made

35
Q

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.

A

FALSE

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

36
Q

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

A

death or personal injury resulting from negligence

37
Q

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)

A

FALSE

The UTCA does not apply to contracts between private individuals.

38
Q

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 …

A

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

39
Q

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

A

supervision and quality assurance.

40
Q

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

A

supervision and quality assurance

41
Q

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

A

FALSE

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

42
Q

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

A

TRUE

see Taylor v Caldwell

43
Q

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

A

FALSE

44
Q

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

A

then it will be treated as frustrated.

45
Q

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

A

then the contract will NOT be treated as frustrated.

46
Q

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

A

Unfair Contract Terms Act (1977)

47
Q

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

A

two businesses

48
Q

Terms within contracts between two individuals are generally governed by …

A

no specific legislation.

49
Q

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

A

two individuals

50
Q

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

A

The Consumer Rights Act (2015)

51
Q

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

A

businesses and consumers

52
Q

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

A

TRUE

under the Unfair Contract Terms Act (1977)

53
Q

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

A

FALSE

only ‘complete and exact’ performance discharges a contract

54
Q

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

A

FALSE

a contract may be frustrated, for example.