c3 - questions Flashcards
Esther agreed to bake and freeze 100 birthday cakes for her friend Jane, who was planning to open a small shop selling home-baked products, at a total price of £200. When Esther had frozen 60 cakes, she learned that Jane had been unable to secure a lease of the retail premises. She telephoned Jane to confirm that she had baked 60 cakes and was all ready to bake the last 40, but Jane said she had decided to go back to teaching instead. Esther feels very let down and wants nothing more to do with Jane. Which of the following best describes the legal position?
Select one:
a. Jane is in breach of contract and Esther can sue for damages or bring a quantum meruit claim for £120 in respect of the 60 cakes already prepared Correct
b. Esther has no cause of action against Jane because she can still use or sell the cakes, so she has not suffered any loss
c. Esther can recover the agreed sum of £200 from Jane because she would have been entitled to this sum had Jane not been in breach of contract
d. Esther has no cause of action against Jane because she could have avoided any loss by waiting until Jane had secured the lease
A - Jane has prevented complete performance and so Esther’s offer to perform is sufficient discharge of her obligations. She is entitled to be paid for duties already completed.
frustrated contracts - should any deposits/money paid before the frustrating event be repaid?
yes - any money paid before the frustrating event must be repaid
frustrated contracts - do any sums payable cease to be payable or are they still payable
yes - any sums due for payment under the contract cease to be payable
frustrated contracts - can money be retained by a party?
money can be retained which covers the expenses incurred, provided they were incurred in the performance of the contract and before the contract was frustrated
frustrated contracts - what happens if either party has obtained a valuable benefit?
the court may in its’ discretion order the party to share the benefit
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.
T or F
true
Which term best describes a contract, such as a building contract, that provides for payment at various stages of the contractor’s progress?
Select one:
a. A segmented contract
b. A divided contract
c. A partial contract
d. A severable contract
D
Trevor was engaged as a manager of Boyband and his contract contained a clause that he could not manage any other music band without the consent of Boyband. Boyband then discovered he had also been managing Boy2Man and bought an action against him for breach of contract. Which of the following is the most likely equitable remedy to be granted in addition to damages?
Select one:
a. A mandatory injunction
b. Specific Performance
c. A prohibitory injunction
d. A quantum meruit award
C
Are the following statements true or false?
Anticipatory breach may be implied from conduct and need not be explicit.
True A
False B
Where an innocent party elects to treat a contract as discharged, they waive the right to claim damages from the party in default.
True C
False D
A D
They may treat the contract as discharged and sue for damages
Are the following statements true or false?
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.
True A
False B
The claimant is required to take every opportunity to mitigate their loss arising as a consequence of a breach of contract.
True C
False D
B - damages are intended to put the party in the position they would have been in had the contract been performed
D - the claimant is required to take only reasonable steps, not ones which carry undue risk or that are discreditable
can mental distress/damages for enjoyment be recoverable?
only when the principal purpose of the contract is the provision of enjoyment
think: holidays!
The Unfair Contract Terms Act 1977 renders some exclusions void and others subject to the
reasonableness test:
Requirements
In a contract between two businesses, is a clause which limits liability for losses due to negligence void, however reasonable it might appear?
Yes A
No B
Is a clause limiting liability for personal injury resulting from negligence in a contract between two private individuals subject to the reasonableness test?
Yes C
No D
B - clauses which exclude liability for negligence are only void if unreasonable
D - a contract between two private individuals is not subject to UCTA
Which of the following descriptions best describes the statutory test of reasonableness under the Unfair Contract Terms Act 1977?
A Whether an ordinary person in the normal course of business would consider the clause to be reasonable in all the circumstances
B Whether it is fair and reasonable, with regard to all the circumstances which were, or which ought to have been known to the parties when the contract was made
C Whether it is fair and reasonable with regard to all the circumstances which were known to or in the reasonable contemplation of the parties
D Whether it is fair and reasonable to exclude liability, having regard to the relative bargaining strengths of the parties
B
they will also take into account:
-parties’ relative bargaining strengths
-any inducement offered
-whether the innocent party knew/should have known of the term
The equitable remedy of specific performance can be awarded in cases involving:
Requirements
The performance of personal services
True A
False B
A contract to build a house
True C
False D
B D
SP awarded in cases where:
- no supervision is required (aka not a building contract)
- no personal service
- damages are not adequate
Which of the following statements in relation to contractual remedies is incorrect?
A Specific performance is awarded at the discretion of the court where damages would not be an adequate remedy.
B Specific performance is likely to be more appropriate than damages in a contract involving personal services.
C Specific performance is likely to be awarded in a contract for the sale of land.
D A mandatory injunction often has the same result as specific performance but is less common
B - SP unlikely to be awarded when personal services are involved
