SQE Dispute Resolution Flashcards
A publisher is considering bringing a claim against a company which owns a chain of bookshops. The parties agreed in writing that the company would purchase books at a reduced price from the publisher, but in return would only stock books supplied exclusively by the publisher in its bookshops. The publisher has obtained evidence that the bookshops are stocking books published by its competitors. This is causing the publisher loss.
What is the purpose of damages likely to be in this case?
A. To put the publisher in the position they would have been in had the negligent act not occurred.
Option b: To put the publisher in the position they would have been in had the nuisance not occurred.
Option c: To put the publisher in the position they would have been in had the parties been acting in the course of business.
Option d: To put the publisher in the position they would have been in had the contract been properly performed.
Option e: To put the publisher back to the position they were in before the contract was entered into.
Option D is correct. The cause of action is likely to be breach of contract, given the written agreement between the parties and the alleged breach of its terms causing loss. The purpose of damages in these cases is to put the claimant (here, the publisher) in the position they would have been in had the contract been properly performed.
Option A is wrong. This is the purpose of damages in negligence cases, but the cause of action is more likely to be breach of contract on these facts.
Option B is wrong. This is the purpose of damages in nuisance cases, but the cause of action is more likely to be breach of contract on these facts.
Option C is wrong. The question of whether the parties were acting in the course of business can be relevant to implied contractual terms but is not relevant to the purpose of damages in a breach of contract claim.
Option E is wrong. This is the purpose of damages in misrepresentation cases, but the cause of action is more likely to be breach of contract on these facts.
A company is owed a significant amount of money by a partnership in relation to an alleged failure to comply with a contract to supply services. The partners are adamant they do not owe the money, arguing that the company is in breach of the contract concerning the implied term of reasonable care and skill.
The contract has no dispute resolutions provisions.
Negotiations and mediation fail to resolve the dispute.
What advice should the solicitor give to the company in these circumstances?
A. As mediation has failed, the company must start arbitration proceedings.
Option b: There is no alternative but to start court proceedings immediately.
Option c: Other forms of ADR may be considered.
Option d: As mediation has failed, there is no need to consider other forms of ADR.
Option e: As the court will stay any court proceedings that are started, the company must propose another form of ADR to the partnership.
Option C is the best advice. Other forms of ADR may be considered. Just because negotiation and mediation have failed does not mean that there is no need to consider other forms of ADR (making option D wrong).
Option A is wrong. There is no contractual obligation requiring the company to start arbitration proceedings as the contract has no dispute resolution provision. Arbitration would be another form of ADR to consider as per option C.
As detailed above, option B is wrong as there are alternatives to consider instead of starting court proceedings immediately.
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Option E is wrong. Whether or not the court stay the proceedings for ADR depends on the application of Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 where it was held that a court can lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process provided that does not impair the very essence of the claimant’s right to proceed to a judicial hearing, and it is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost.
A company is owed a significant amount of money by a partnership in relation to an alleged failure to comply with a contract to supply goods. The partners are adamant they do not owe the money, arguing that the company is in breach of contract of an implied term as to quality. Negotiations to resolve the matter have failed, as has mediation, and the company has not received the outstanding monies.
What advice should the solicitor give to the company before issuing proceedings?
A. As it has not been possible to resolve the dispute, there is no alternative but to resort to litigation and issue proceedings.
Option b: Civil litigation is governed by the Civil Process Rules, which dictate the procedure that must be adopted when pursuing a claim through the courts.
Option c: The only advantage of litigation is that a final decision will be made by the judge but the disadvantage is the increased cost.
Option d: Once a judgment has been given, the parties must write to the High Court for permission to enforce the judgment.
Option e: Once a claim has entered the litigation process, it must follow all five stages up to and beyond the trial.
Option A sets out the best advice as litigation is the only means of resolving the dispute in the absence of agreement. Option B is wrong as the procedure is governed by the Civil Procedure Rules and not the Civil Process Rules. Option C is not the best advice as there are other advantages to litigation over ADR including the availability of full disclosure of documents. Option D is wrong as the successful party does not have to write to the High Court for permission to enforce the judgment – this is the procedure required to enforce a decision in arbitration. Option E is wrong as most claims are settled well before a trial.
A client runs a business providing educational software to colleges of further education to improve their assessment processes. However, complaints have been received from one college that the assessments are not being correctly recorded and the principal has indicated they will not be renewing the contract. It becomes apparent to the client there may be errors in the system. The client has a number of other colleges that are considering using the system.
Which of the following statements describes the client’s best option for resolving the matter and why?
A. Mediation because it is a cheaper and faster option than litigation.
Option b: Mediation because it takes place in private and will ensure that other colleges do not become aware of the dispute.
Option c: Mediation because it is more likely that the parties will preserve their business relationship.
Option d: Arbitration because the decision is binding on both parties.
Option e: Arbitration because an expert on information technology can determine the dispute.
Option B is correct as the client has a number of other colleges that are considering using the system and it is unlikely they will do so if they become aware of the problems with the software. Although speed and cost are advantages of mediation over litigation, they are not the most important issues here, so option A is not the best answer. Option C is wrong because the college are not looking to renew the contract, so maintaining the business relationship is immaterial in this instance. The statement in D is correct but the binding nature of any decision is both an advantage and a disadvantage. Option E is also not the best answer for the reasons already stated, although it is an advantage of arbitration as a means of resolving the dispute.
A company client seeks advice in relation to a contract for the sale of curtains to a wedding venue. The customer strongly disputes payment on the basis that the curtains supplied did not match the fabric of the sample provided. The client instructs their solicitor to issue proceedings against the customer.
Which of the following best describes the approach that should be taken by the client.
A. The client may issue proceedings against the customer immediately with confidence that sanctions will not be imposed.
Option b: The client may choose whether to follow a pre-action protocol or whether to rely upon the Practice Direction for Pre-Action Conduct and Protocols.
Option c: As the only purpose of the pre-action protocols is to assist the parties in settling cases without litigation, the client need not comply as agreement is unlikely.
Option d: Unless the limitation period is about to expire, the client should write to the customer with concise details of the claim and disclose key documents.
Option e: When trying to resolve matters, all possible steps should be taken by the client to effect this but only proportionate costs need be incurred.
Option D is correct. According to the Practice Direction on Pre-Action Conduct and Protocols, these are the steps with which the claimant should usually comply before issuing a claim. Option A is wrong as there are a number of sanctions that the court could impose if a party fails to comply with the practice direction or a relevant pre-action protocol. These include penalties relating to costs and interest.
Option B is wrong as the client cannot choose which route to take. The Practice Direction only applies if there is no specific protocol in relation to the particular dispute. Option C is wrong as assisting the parties in settling cases without litigation is not the ‘only’ purpose of the protocols and the parties should comply even if agreement seems unlikely.
Option E is also wrong as the client is required to take ‘reasonable and proportionate steps’ to try and resolve the matter, not ‘all’ steps, although it is correct that the costs incurred in doing so should be proportionate.
A company manufactures chocolate bars. Last year, the company entered into a contract with the defendant for the purchase of 10,000kg of cacao beans. When the cacao beans were delivered to the company, they were found to be mouldy.
Which of the following best describes the company’s cause of action?
A. Breach of contract.
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Option b: The tort of negligence.
Option c: Product liability.
Option d: That the cacao beans were not delivered exercising reasonable care and skill.
Option e: That the cacao beans are mouldy.
Option A is the best answer. The company entered into a contract with the defendant for the purchase of 10,000kg of cacao beans. If there was no express term as to the standard of quality the cacao beans should have met when delivered, the implied term that the cacao beans should have been of satisfactory quality will apply. As they were found to be mouldy, that term has been breached.
Options B and C are not the best answer. The claim will be made in contract, not tort.
Option D is wrong. The claim concerns the sale of the cacao beans and the condition that they should have been in on delivery.
Option E is not the best answer. That the cacao beans are mouldy is the factual basis for saying that the cacao beans should have been of satisfactory quality and therefore that the contract has been breached.
The parties to a complex, high value commercial claim for damages in the High Court are considering whether or not to stay the proceedings and take part in mediation.
Which of the following best describe the features of mediation which the parties should take into account?
A. The mediation may take many months to arrange. It is held in public. Any agreement reached must be limited to an award of damages.
Option b: All discussions which take place during mediation are confidential. It is an informal, relatively quick and cheap procedure. The parties must return to court if settlement is reached to advise the court of the settlement terms and obtain the court’s approval.
Option c: The mediation may take many months to arrange. All discussions which take place during mediation are confidential. It is an informal, relatively cheap procedure. Creative commercial solutions may form part as part of any settlement reached but these cannot be included in any court order.
Option d: The mediation can be arranged quickly. All discussions which take place during mediation are confidential. It is an informal, relatively cheap procedure compared to arbitration or litigation. It may help to preserve the business relationship between the parties. Creative commercial solutions may form part of any settlement reached and these can be included in a court order made by consent to end the proceedings.
Option e: The mediation can be arranged quickly. All discussions which take place during mediation are confidential. It is an informal, relatively cheap procedure compared to arbitration or litigation. It may help to preserve the business relationship between the parties. Any agreement reached must be limited to an award of damages or any other provision that the court has power to order.
Option D is the best answer as it accurately describes the characteristics of mediation.
Option A not the best answer. The mediation may take as little as a few days or weeks to arrange. It is held in private. Creative commercial solutions beyond just the award of damages. may form part as part of any settlement reached. See the feedback to the correct option D.
Option B is not the best answer. It is correct that all discussions which take place during mediation are confidential and that it is an informal, relatively quick and cheap procedure. However, there is no obligation on the parties return to court if settlement is reached to advise the court of the settlement terms and obtain the court’s approval. By way of information, the court’s approval is only required to terms concerning children or a protected party (see Unit 2). See the feedback to the correct option D.
Option C not the best answer. The mediation may take as little as a few days or weeks to arrange. It is correct that all discussions which take place during mediation are confidential and that it is an informal, relatively cheap procedure. It is correct that creative commercial solutions may form part as part of any settlement reached. However, such terms can be included in a court order made by consent to end the proceedings (known as a Tomlin Order – see Unit 2). See the feedback to the correct option D.
Option E is not the best answer. It is correct that the mediation can be arranged quickly. It is also correct that all discussions which take place during mediation are confidential and that it is an informal, relatively cheap procedure compared to arbitration or litigation. It is correct that mediation that may help to preserve the business relationship between the parties. However, any agreement reached does not have to be limited to an award of damages or any other provision that the court has power to order. Creative commercial solutions may form part of any settlement reached and these can be included in a court order made by consent to end the proceedings (known as a Tomlin Order – see Unit 2). See the feedback to the correct option D.
A client runs a publishing business best known for releasing high-profile and celebrity autobiographies. However, the most recent high-profile release received numerous complaints due to the quality of the printing which included missing pages and discoloured photographs. The client is furious with the printers and is very embarrassed. They advise that they will not be using their services again. The client is keen to preserve their excellent reputation within the industry.
Which of the following statements describes the client’s best option for resolving the matter?
A. Mediation, because it is a cheaper and faster option than litigation.
Option b: Mediation, because it is more likely that the parties will preserve their business relationship.
Option c: Arbitration, because an expert on printing and book binding can determine the dispute.
Option d: Litigation, because if successful it will provide public vindication.
Option e: Mediation, because it takes place in private.
Option D is the best answer. The client is keen to maintain their public reputation within the industry. Although speed and cost are advantages of mediation over litigation, they are not the most important priorities identified by the client, so option A is not the best answer.
Option B is wrong because the client is not looking to use the printers again, so maintaining the business relationship is not a factor in this case.
Option C is also not the best answer for the reasons already stated (although the appointment of an expert as an arbitrator is an advantage of arbitration as a means of resolving the dispute). Arbitration proceedings are conducted in private, and the arbitral award is usually confidential to the parties.
Option E is also not the best answer given the reasons above.
On 31 January [4 years ago], the claimant was knocked down whilst crossing the road when he was hit by a speeding vehicle. The driver did not stop after the accident and the claimant cannot remember anything about the vehicle which hit him.
The claimant was unsure whether he had a valid claim for damages and consulted a solicitor about his accident on 7 February [3 years ago]. The solicitor told him the same day that he had a claim against the driver of the vehicle.
On 30 July [3 years ago], a woman informed the claimant’s solicitor that she had witnessed the accident and identified the vehicle as one owned by a local supermarket.
A claim form and particulars of claim were issued and served on the supermarket on the 20 January [this year]. The supermarket is defending the claim on the basis that the limitation period for bringing the claim has expired. What advice should be given to the claimant regarding the limitation period?
A. The limitation period is three years from the date of the accident and so the limitation period expired last year on 31 January.
Option b: The limitation period is six years from the date of the accident and so the claim form was issued before the limitation expired.
Option c: The limitation period began to run when the claimant discovered the identity of the defendant on 30 July [3 years ago] and so the claim form was issued on 20 January [this year] before the limitation expired on 30 July [this year].
Option d: The limitation period is three years from the date the claimant received legal advice that he had a claim against an unknown driver and so the limitation period expired on 7 February [this year] after the claim form was issued on 20 January [this year].
Option e: The limitation period is six years from the date the claimant received legal advice that he had a claim against an unknown driver and so the claim form was issued before the limitation expired.
Option C is correct, meaning the other options are wrong.
Where in any action, whether for negligence, nuisance or breach of statutory duty, the claimant claims damages for personal injuries, the basic period of limitation is only three years. However, this period runs from the date on which the cause of action accrued; or the date, if later, of the claimant’s knowledge. The expression ‘date of knowledge’ means the first date when the claimant knew, or might reasonably be expected to have known, certain specific facts. These include the seriousness of his injury, its cause, and the identity of the defendant. So, whilst the cause of action arises when the accident happens on 31 January [4 years ago], it is not until 30 July [3 years ago] that the claimant has sufficient knowledge to bring the personal injury claim when the owner of the vehicle that knocked him over was identified. The limitation period therefore expired on 30 July [this year] after the claim form was issued on 20 January [this year].
Last year, a supermarket rejected a delivery of vegetables from its supplier, claiming that most of the goods were damaged. Whilst the supplier accepted that a small percentage of the vegetables were unsellable, it still demanded payment for the remaining goods in full, namely £155,000.
The parties attempted to resolve their dispute at a mediation but that failed. The supermarket claims that the mediation was unsuccessful because of the supplier’s antagonistic behaviour towards the mediator. The supplier denies this and says that the mediation failed due to the supermarket’s inflexible approach.
Proceedings were started by the supplier. The supermarket defended the claim and counterclaimed for damages. At trial, the judge determined that the supplier was in breach of contract and that it should pay damages to the supermarket.
Which of the following best describes how the trial judge should approach the issue of costs?
A. The trial judge must order that the supplier, as the unsuccessful party, should pay the supermarket’s costs of successfully defending the claim and making its counterclaim.
Option b: The supermarket can be ordered to pay or contribute towards the supplier’s costs if the supplier can establish, by way of admissible evidence, that the supermarket’s inflexible approach to the mediation caused it to fail and that otherwise the mediation would have had a reasonable prospect of succeeding.
Option c: The supermarket can compel the mediator to give evidence of the supplier’s antagonistic behaviour during the mediation. If the trial judge accepts that evidence, the supplier will be ordered to pay compensation to the mediator, as well as the full costs of the mediation.
Option d: Evidence of what happened during the mediation is inadmissible. So, even if both parties agree to give that evidence, the trial judge should refuse to hear it.
Option e: Evidence of what happened during the mediation is irrelevant to the issue of costs. So, even if both parties agree to give that evidence, the trial judge should refuse to hear it.
Option B is the best answer. One party may be ordered to pay or contribute towards the other party’s costs if it can be established by way of admissible evidence that its conduct caused mediation to fail where otherwise the mediation would have had a reasonable prospect of succeeding.
Option A is wrong. The award of costs is discretionary. By way of information, CPR, r 44.2(1)(a) provides that the court has discretion as to whether costs are payable by one party to another. Sub-paragraph (2) then states that if the court decides to make an order about costs, the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party, but the court may make a different order. See the feedback to the correct option B.
Option C is wrong. By way of information, a party to a mediation cannot compel the mediator to give evidence in subsequent proceedings. Moreover, the court has no power to order a party in these circumstances to pay compensation to the mediator, nor require one party to pay the full costs of the mediation. See the feedback to the correct option B.
Option D is wrong. Evidence of what happened during the mediation is admissible where both parties agree to waive confidentiality. So, if both parties agree to give that evidence, the trial judge should hear it. See the feedback to the correct option B.
Option E is wrong. Evidence of what happened during the mediation is relevant in these circumstances. Where both parties agree to waive confidentiality and give that evidence, the trial judge should hear it. See the feedback to the correct option B.
A claimant instructs a solicitor in respect of a complex breach of contract claim. The claimant’s solicitor writes to the defendant with concise details of the claim and the defendant’s solicitor responds two months later. The defendant denies the claimant’s allegations with reasons and details a counterclaim. The claimant’s solicitor writes to the defendant again and suggests a joint settlement meeting, however the defendant turns this down and suggests that, on reflection, mediation may be more appropriate.
Has the defendant complied with the Practice Direction on Pre-Action Conduct and Protocols (PDPAC)?
A. Yes, because the defendant has responded within six months of receiving details of the claim.
Option b: Yes, because the defendant has responded within three months of receiving details of the claim.
Option c: No, because the defendant has refused to attend a joint settlement meeting.
Option d: No, because the defendant has not responded within 14 days of receiving details of the claim.
Option e: No, because the defendant has not taken all steps possible to try to resolve the dispute.
Option B is correct because under the PDPAC the defendant must provide a response within a reasonable time. For complex cases the response should be provided within three months maximum. On the facts, the claim is complex and the defendant has responded within two months, so they have complied with the PDPAC.
Option A is wrong because the defendant has up to three months to respond once they receive details of the claim, as explained above.
Option C is wrong because the defendant is not obliged to engage with any alternative dispute resolution (ADR) and negotiation that is suggested, however they must give it consideration. Here, the defendant has reflected on the suggestion and suggested mediation instead.
Option D is wrong because this is a complex claim; in a straightforward claim a response should be provided within 14 days, however in this case it would be reasonable for the defendant to respond within three months.
Option E is wrong because parties are expected to take only reasonable and proportionate steps to try to resolve the matter, rather than being expected to take all steps possible.
In a contractual dispute between a company and a firm, liability is not admitted. The firm writes to the company to request that the parties enter mediation.
The company asks their solicitor if ignoring the mediation request could affect their prospects of winning should the claim proceed to trial.
What advice should the solicitor provide to the company?
A. The company’s prospects of winning would not be affected because the trial judge must not be made aware of any failure to engage with ADR until the issues of liability and the award of any damages have been dealt with.
Option b: The company’s prospects of winning could be affected because either party may make the trial judge aware of failure to engage with ADR at the start of the trial.
Option c: The company’s prospects of winning could be affected because the trial judge must take failure to engage with ADR into account when ruling on liability.
Option d: The company’s prospects of winning would not be affected because the trial judge must never be made aware of failure to engage with ADR, even when dealing with costs.
Option e: The claimant’s prospects of winning could be affected because failure to engage with ADR is considered when the trial judge decides on the amount of any damages to award.
Option A is correct because the trial judge will not be made aware of any failure to engage with ADR until after the judge has dealt with issues of liability and damages. That makes options B, C and E wrong.
Option D is wrong because although the trial judge must not be made aware of a failure to engage with ADR until after they have dealt with liability and damages (the correct option A), they can be made aware when dealing with costs. Failure to engage with ADR may impact a subsequent order for costs.
A claimant commences proceedings against a defendant. On their directions questionnaire both parties request a stay for a period of one month whilst they enter into mediation. The court agrees and makes an order accordingly. One mediation meeting takes place, but there are delays and the parties wish to extend the stay by a period of one month.
Which of the following statements best describes what the court will do?
A. The court may extend the stay but only for one month more.
Option b: The court may extend the stay for such specified period as it thinks fit.
Option c: The court must extend the stay for such specified period as it thinks fit.
Option d: The court may not extend the stay for any specified period.
Option e: The court must hold a hearing to ascertain why the initial stay was inadequate.
Option B is correct because there is no fetter on the court’s ability to grant or extend a stay in the proceedings for the purpose of settlement discussions. Provided both parties wish to continue to attempt to resolve the matter through mediation the court would be very unlikely to try to get them back into litigation. By way of information see CPR rules 3.1(2)(f) and 26.5(4)).
Option A is wrong because this suggests a fetter on the court’s ability to grant a stay.
Option C is wrong because the court has this power at its discretion. The language in CPR 3.1(2)(f) and 26.5(4) is permissive, not mandatory.
Option D is wrong because this is the opposite description to the court’s powers to grant or extend a stay pursuant to CPR 3.1(2)(f) and 26.5(4).
Option E is wrong because whilst the court has the power to require the parties to explain their position, it is unlikely to do so and does not have to do so.
A solicitor was instructed on 30 January by a client to collect a debt. The debt has been outstanding for some time because the client had forgotten to chase the debtor for payment. The limitation period for the debt expires on 4 February the same year.
What would be the best course of action for the solicitor to take on behalf of the man at this time?
A. Write to the debtor setting out the nature of the proposed claim and await a response.
Option b: Write to the debtor asking that they agree to take no issue in relation to limitation until the steps required by the relevant pre-action protocol have taken place.
Option c: Write to the debtor proposing a form of alternative dispute resolution that might settle the dispute without commencing proceedings.
Option d: Issue proceedings and serve them immediately on the debtor.
Option e: Issue proceedings and then ask the debtor to agree to apply to the court to stay the proceedings.
Option E is the best answer. By way of information, paragraph 17 of the Practice Direction on Pre-Action Conduct and Protocols states, “This Practice Direction and the pre-action protocols do not alter the statutory time limits for starting court proceedings. If a claim is issued after the relevant limitation period has expired, the defendant will be entitled to use that as a defence to the claim. If proceedings are started to comply with the statutory time limit before the parties have followed the procedures in this Practice Direction or the relevant pre-action protocol, the parties should apply to the court for a stay of the proceedings while they so comply.” This is the best step the solicitor can take next to protect the client’s cause of action and so the solicitor is acting in the client’s best interests.
Option A is not the best answer. Writing to the defendant setting out the nature of the proposed claim and waiting for a response will see the limitation period expire on 4 February. The defendant will then be entitled to use that as a defence to the claim. See the feedback to the correct option E.
Option B is not the best answer. Writing to the defendant asking that they agree to take no issue in relation to limitation until the pre-action steps required by the PD have taken place will see the limitation period expire on 4 February. The defendant will then be entitled to use that as a defence to the claim. See the feedback to the correct option E.
Option C is not the best answer. Writing to the defendant proposing a form of alternative dispute resolution that might settle the dispute without commencing proceedings will see the limitation period expire on 4 February. The defendant will then be entitled to use that as a defence to the claim. See the feedback to the correct option E.
Option D is not the best answer. As per the feedback to option C, it is correct that proceedings should be issued but it is unnecessary to incur the expense of serving the proceedings. The claimant should next write to the defendant seeking agreement to stay the proceedings in order for the parties to follow the procedures in the PD.
A woman is considering taking legal action against one of her neighbours. The neighbour has begun to use part of their garage as a micro-brewery and their activities are generating noxious smells that are making the woman unwell. The neighbour has refused to stop and told the woman that she intends to expand the brewery to the entire garage.
Should the woman be advised to resolve the dispute by mediation?
A. Yes, because litigation is considered the last resort.
Option b: No, because arbitration would be more appropriate than mediation in this case.
Option c: Yes, because the involvement of an independent third party may help the parties to resolve a dispute.
Option d: Yes, because the decision of a mediator would be binding on the parties.
Option e: No because the woman requires an injunction.
Option E is correct. Mediation would not be the best next step before involving the court as the woman needs an injunction to stop the nuisance that is making her unwell. On the facts, “The neighbour has refused to stop and told the woman that she intends to expand the brewery to the entire garage.” However, mediation may be appropriate once any injunction has been granted.
Option A is wrong. Whilst it is correct that litigation is considered the last resort, mediation would not be appropriate as an injunction is required.
Option B is wrong because the woman needs an injunction and that is not an available remedy in arbitration proceedings.
Option C is wrong. Whilst it is correct that the involvement of an independent third party (as in mediation) may help parties to resolve a dispute, mediation is not appropriate on the facts as an injunction is required.
Option D is wrong. Mediation is not appropriate on the facts as an injunction is required. Note that whilst a mediator will aim to help the parties reach a mutually agreed solution a mediator cannot impose a solution via a binding decision.
A kitchen company is considering issuing proceedings against an oven manufacturer. The company claims that they entered a written contract with the manufacturer to pay £10,000 for 20 ovens to be used in its showrooms. The company paid the purchase price but the manufacturer failed to deliver the ovens. The company seeks repayment of the purchase price, and compensation for the loss of profits it experienced when its showrooms could not open. The company estimates its loss of profits to be £30,000.
Would a claim of this nature be treated as unspecified?
A. No, because the purchase price repayment is a specified sum so the entire claim will be treated as specified.
Option b: Yes, because the court will need to investigate to determine the amount payable for the purchase price repayment and loss of profits.
Option c: No, because the claimant has estimated its loss of profits so the court will not need to investigate to determine the amount payable.
Option d: No, because the purchase price repayment and the loss of profits are fixed amounts of money so the claim will be treated as specified.
Option e: Yes, because the claim is a mixture of specified and unspecified amounts so the entire claim will be treated as unspecified.
Option E is correct. The repayment of the purchase price is a specified amount, but the loss of profits is an unspecified amount. Where a claim is a mixture of specified and unspecified amounts, the entire claim will be treated as unspecified.
Option A is wrong. Although the purchase price repayment is a specified sum, the claim will be treated as unspecified for the reasons given above.
Option B is wrong. Although it is correct that the claim will be treated as unspecified, the court will not need to investigate to determine the amount payable for the purchase price repayment as this is a fixed amount due under an express contractual term.
Option C is wrong. Even though the claimant has put forward some figures in respect of the loss of profits, the court will still need to conduct an investigation to determine the amount of money payable as the loss of profits is not fixed.
Option D is wrong. The purchase price repayment is a specified amount, but the loss of profits is an unspecified amount for the reasons given above.
A claimant manufactures men’s shirts. On 6 February 2020, the claimant entered into a contract with a defendant for the purchase of 50 rolls of material. The material was delivered to the claimant by the defendant on 8 April 2020. When these rolls were inspected by the claimant on 19 April 2020, nearly all of them were found to be faulty.
What is the latest date the claimant must issue proceedings against the defendant for limitation purposes?
A. 19 April 2026.
Option b: 8 April 2026.
Option c: 19 April 2023.
Option d: 8 April 2023.
Option e: 6 February 2026.
Option B is correct. As the client’s claim is for breach of contract, under the Limitation Act 1980 it will have 6 years from the date of breach within which to bring its claim. In a contract for the sale of goods, the date of breach will usually be the date of delivery (being, logically, the first point at which the buyer has defective goods in his hands, contrary to the seller’s contractual obligations).
Option A is wrong because in a breach of contract claim the cause of action accrues at the date of the breach of contract, not when that breach is discovered.
Options C, D and E are wrong as under the Limitation Act 1980 the limitation period for a breach of contract claim is 6 years from the date of the breach.
