Contract Formation

Question 1

Is a contract void if it offends public policy?

Answer 1

Yes

Question 2

Can the law intervene in a contract?

Answer 2

Yes (courts or legislation) may intervene to imply terms into a contract - sometimes to protect the weaker person

Question 3

Does consideration need to be adequate or sufficient?

Answer 3

Sufficient (have an identifiable value)

Consideration does not need to be adequate so courts wouldn’t get involved

Question 4

When would the innocent party treat a contract as discharged?

Answer 4

If there is a serious breach (i.e. Repudiatory breach)

Question 5

What are the rules for remoteness of damages?

Answer 5

1) arise naturally from the breach

2) be reasonably foreseeable in the eyes of both parties the time the contract was formed

Question 6

What is the final test for the validity of exclusion clauses ?

Answer 6

The reasonableness test under UCTA

Question 7

Who does the UCTA relate to?

Answer 7

Regulate exclusion clauses where one party is acting in the course of business (insurance contracts aren’t involved)

Question 8

Where must a company keep their written resolutions and minutes of GMs? And for how long?

Answer 8

Any place (doesn’t have to be registered office) as long as it’s notified to Registrar and it must be available for inspection

It must be kept for 10 years

Question 9

What can a court do in regard to variation of class rights ?

Answer 9

ONLY CONFIRM OR CANCEL

Question 10

What sanctions may be given to those that provide financial assistance (loans for the purposes of purchasing fully paid shares)?

Answer 10

Fine, imprisonment and civil liability

Question 11

Can one request that a decision should not be based solely on automatic processes (i.e. Automatic credit scoring)?

Answer 11

Yes

Question 12

Will an exclusion clause be incorporated into an unsigned contract, even if the other party has not read the clause, when the party seeking to rely on the clause has given reasonable notice of its existence?

Answer 12

Yes

Question 13

What is considered when measuring the monetary amount for damages?

Answer 13

• only financial losses can be recovered
• non-financial losses may be claimed where the contract is one for the provision of enjoyment
• injured party must take all reasonable steps to mitigate loss (but defendant must prove this)

Question 14

What happens when Y is discharged from a contract re X’s position?

Answer 14

X is liable to Y for any contractual obligations on his part which had arisen before Y pulled out of the contract