Terms MCQs Flashcards
Question 1
A client, a private landlord, employed a builder to supply and fit a new kitchen in one of
the properties she lets out. The agreed price was £10,000 payable on completion. Before the
work was finished the client sacked the builder because his workmanship was substandard.
The builder denies this allegation and has sued the client for loss of profit.
Which of the following statements best describes the client’s legal position?
A If the builder had been in breach of the statutory implied term that the building work
had to be performed with reasonable care and skill, the client was entitled to sack him.
B The client was not entitled to sack the builder because the statutory implied term that
the building work had to be performed with reasonable care and skill is classified as
a warranty.
C Unless the builder had committed a very serious breach of the statutory implied term
that the building work had to be carried out with reasonable care and skill, the client
was wrong to dismiss him.
D The term implied by statute that the building work had to be performed with
reasonable care and skill imposes strict liability and so if the workmanship was in any
way defective the client was justified in sacking the builder.
E If the workmanship was substandard the builder had breached an implied condition
of the contract and so the client had a choice whether to affirm the contract or dismiss
the builder.
Answer
Statement C is correct as the term implied by s 13 of the SGSA 1982 is an innominate term.
The term implied is that work/ service in a business- to- business contract will be carried out with
reasonable care and skill.
Statements A, B and E are wrong as the term implied by s 13 of the SGSA 1982 is innominate.
Statement D is wrong as the term implied by s 13 of the SGSA 1982 does not impose strict
liability.
Question 2
A client employed an estate agent to sell his house. It was agreed that the estate agent
would be paid 1% commission on the sale price of the property if the estate agent finds a
buyer for it.
Which of following statements best describes the client’s legal position?
A The client may withdraw his house from the market without being liable to pay
commission.
B The client made an offer of a unilateral contract, which cannot be revoked once the
estate agent has started to market the house.
C The contract is one for work and materials and terms relating to both goods and
services will be implied by statute.
D The contract is a bilateral contract for the provision of a service, which must be carried
out with reasonable care and skill.
E If the client withdraws his house from the market the estate agent can sue him for
breach of an implied promise to allow the estate agent the chance to earn commission.
Answer
Statement A is correct. The common intention of the parties must have been that the client
should be able to withdraw the house from the market without liability for breach.
Statements B and E are wrong as it would not be implied (as it does not go without saying)
that your client must keep his house on the market just so the estate agent can earn
commission.
Statement C is wrong as the estate agent will simply be providing a service.
Statement D is wrong as it is a unilateral contract ie a promise in return for an act. The
estate agent is not bound to find a buyer for the house and the client is only bound to pay
commission if he does so.
Question 3
A client bought and paid for an exercise bicycle from a company for £500 (including free
delivery). Two weeks after the bicycle had been delivered to the client’s home, the client
discovered it was inherently faulty; the pedals kept jamming. The client wants to reject the
bicycle and get a full refund.
If the client decides to sue the company, which of the following statements describes
the most likely outcome?
A The company will have to repair or replace the defective bicycle as appropriate.
B The client can reject the bicycle, get a refund plus any extra money it will cost to buy a
similar bicycle elsewhere.
C The client cannot reject the bicycle but will be entitled to a partial refund of the price to
cover the cost of repair.
D The client cannot reject the bicycle but the company must repair it without undue delay.
E The client can reject the bicycle but will only get a partial refund to reflect the use he
has had of the bicycle.
Answer
B is the correct statement. The company has breached the terms implied by ss 9 and 10 of the
CRA 2015 (ie satisfactory quality and fitness for purpose) and liability is strict. The client could
exercise the short- term right to reject (CRA 2015, ss 20 and 22) as the client has only had the
bicycle two weeks ie less than 30 days. The client would be entitled to a full refund and to
claim damages if it will cost more to buy a similar bicycle elsewhere.
A is wrong because the right to repair or replacement goods (CRA 2015, s 23) only applies
when the short- term right to reject has been lost.
C and D are wrong as the client is still able to exercise the short- term right to reject.
E is wrong because if the client exercises the short- term right to reject the client will be entitled
to a full refund notwithstanding two weeks’ use of the bicycle.
Question 1
A client took his heavy goods vehicle (HGV) into the garage for a service. New brakes
were fitted but as the client drove the HGV back to the depot the brakes failed. As a result
the HGV was damaged and the client was injured. As yet the cause of the brake failure is
unknown.
The contract with the garage does not contain any express terms about the quality of the new
brakes or the level of service in fitting them but purports to exempt the garage from liability ‘for
any loss or damage caused by defective parts or workmanship howsoever caused’.
Which of the following statements best describes the client’s potential legal position in
relation to the garage and/ or the employee who fitted the brakes?
A If the brakes were inherently defective the garage will not be in breach of contract
because there are no express terms promising that the brakes would be of a
certain quality.
B If the brakes were not fitted properly the client can sue either the garage or employee
for breach of the statutory implied term to carry out work with reasonable care
and skill.
C If the client sues the garage for breach of contract, the garage will be liable for the
personal injury but will not be liable for damage to the HGV if the exemption clause
is reasonable.
D If the client sues the garage for breach of the implied term to exercise reasonable care
and skill the garage will be liable for damage to the HGV and the personal injury as
the exemption clause does not specifically refer to negligence.
E If the brakes were inherently defective and the garage is sued for breach of the
implied terms as to quality and fitness the garage will be liable for the damage to the
HGV and the personal injury caused.
Answer
The correct statement is C. Whatever the breach (SGSA 1982, s 4 or s 13) the exemption
clause will be subject to the reasonableness test (UCTA 1977, s 7 or s 2(2)). The clause is not
purporting to exclude liability for personal injury.
A is wrong. Notwithstanding that there were no express terms regarding the quality of the
brakes fitted, terms as to quality and fitness fall to be implied under statute. The relevant
statute would be the SGSA 1982. The contract was one for work and materials.
B is wrong as the client does not have a contract with the employee.
D is wrong. Although very clear words are needed to exclude liability for negligence,
‘workmanship howsoever caused’ is likely to cover it. The garage will be liable for the
personal injury in any event as the clause is not purporting to exclude liability for it.
E is wrong. The garage will be liable for the injury as the clause is not purporting to exclude
liability for that (contra proferentem rule). The garage will only be liable for the damage if the
clause does not pass the reasonableness test.
Question 2
A client, a sole trader, ordered new machinery from a large company for use in their
business and to be delivered on 14 December. The company was three months late
delivering the machinery. The signed contract was made on the company’s written standard
terms, which included a clause stating that the company would not be liable for late
delivery of the machinery.
Which of the following best describes the client’s potential legal position in relation to
the company?
A The exemption clause is part of a signed written contract. As a result, the company will
not be liable for late delivery.
B The exemption clause may not be reasonable, in which case the company would be
liable for breach.
C The exemption clause is valid at common law and so the company will not be liable for
late delivery. The reasonableness or otherwise of the clause is irrelevant.
D The exemption clause is valid at common law and reasonable so the client can
terminate the contract and claim damages.
E The exemption clause is valid at common law but automatically void under statute and
the company would be liable for late delivery.
Answer
B best describes the client’s legal position. The contract is on the seller’s written standard
terms, in which case s 3 of the UCTA 1977 will apply and the exemption clause will be
valid if reasonable (so C and E are wrong). Due to all the circumstances including the
apparent disparity in the bargaining positions of the parties the clause may well be deemed
unreasonable.
A is wrong as the clause may be unreasonable on the facts.
D is wrong because if the clause was reasonable the company would not be liable for late
delivery.
Question 3
A client bought a new computer from a commercial retailer for their personal use at home.
Three weeks later the computer broke down due to an inherent manufacturing fault. When
the client reported the problem the retailer denied liability on the basis it had effectively
excluded liability: there was a clear notice at the payment point that said ‘The Seller
accepts no liability for defective goods unless the defect is reported within 7 days of
purchase’.
Which of the following statements best describes the client’s potential legal position in
relation to the retailer?
A The retailer will not be in breach of the statutory implied term of satisfactory quality as it
could not reasonably have known of the defect.
B The retailer would be liable for breach of the terms of quality and fitness implied by
statute.
C The client will not be able to exercise the short- term right to reject the computer as the
client will be deemed to have accepted it.
D The client may be entitled to reject the computer and get a refund; but they cannot
require the retailer to repair or replace it free of charge.
E The retailer will not be liable for breach of any statutory implied terms as the fault was
not reported within seven days of purchase.
Answer
The correct statement is B.
As the client bought the computer for their personal use from a trader the CRA 2015 will
apply. Section 9 is the implied term regarding satisfactory quality and s 10 is fitness for
purpose. Both terms will have been breached due to the inherent defect and liability cannot
be excluded or restricted.
A is wrong as s 9 of the CRA 2015 imposes strict liability.
C is wrong as the short- term right to reject lasts for 30 days. Acceptance is a bar to rejecting
goods under the SGA 1979.
D is wrong because the remedies of repair and replacement are available under the
CRA 2015.
E is wrong because the terms implied by ss 9 and 10 of the CRA 2015 are non- excludable
(CRA 2015, s 31) and so the retailer will be liable.
A painter goes to a shop, which has been trading for several years, for the first time. The painter hires a set of ladders and signs a collection slip setting out the agreed period and costs. After making payment and as he leaves the shop he sees a notice on the shop wall (‘the Notice’) which states:
“No liability is accepted for defective products hired.”
Does the Notice form part of the contract between the painter and the shop for the hire of the ladders?
A. No, because the contents of the Notice are not incorporated into the contract.
B. Yes, because the Notice constitutes reasonable notice of its terms.
C. Yes, because the painter agrees to the terms of the Notice by signing the collection slip.
D. Yes, because having traded for several years, the shop will be able to prove a consistent course of dealing.
E. No, because the Notice constitutes a mere representation.
A - No, because the contents of the Notice are not incorporated into the contract.
A recruitment company wishes to buy a small kettle from a retail company (‘the Retailer’) for the use of its employees.
When the office manager of the recruitment company first visits the Retailer’s premises the kettle is not in stock. The Retailer therefore orders one from the wholesalers and the office manager later returns to the Retailer to collect it.
After being used twice the kettle does not work.
What claim does the recruitment company have?
A. The kettle is not of satisfactory quality under the Consumer Rights Act 2015.
B. The kettle is not fit for particular purpose under the Consumer Rights Act 2015.
C. The kettle is not of satisfactory quality under the Sale of Goods Act 1979.
D. The kettle is not fit for particular purpose under the Supply of Goods (Implied Terms) Act 1973.
E. The kettle is not of satisfactory quality under the Supply of Goods and Services Act 1982.
C - The kettle is not of satisfactory quality under the Sale of Goods Act 1979.
A landscaper contracts with a building merchant for the supply of resin. At the time of sale, the landscaper told the building merchant that it required the resin to create a road surface for a client’s heavy agricultural vehicles. The building merchant supplies resin that is only suitable for light domestic vehicles and it cracks when it is first driven on by a large agricultural vehicle.
Which of the following best explains whether the landscaper has a remedy under the Sale of Goods Act 1979?
Select one alternative:
Yes, because the resin does not correspond with the building merchant’s description.
Yes, the resin was not fit for the particular purpose made known by the landscaper.
Yes, the resin is not of satisfactory quality or fit for the particular purpose made known by the landscaper.
No, there is no breach. Satisfactory quality is assessed by the standard the reasonable person would expect.
Yes, the resin was not of satisfactory quality as it was not fit for all purposes for which resin is commonly supplied.
Yes, the resin was not fit for the particular purpose made known by the landscaper.
This is a contract law question on the topic of terms of a contract, specifically the Sale of Goods Act 1979. The landscaper has made known a particular purpose for which the resin is being bought. Where the seller sells goods in the course of a business and the buyer expressly (or impliedly) makes know to the seller a particular purpose for which the goods are being bought, there is an implied term that they are fit for that purpose. This term is breached as the contractor has supplied resin that is not suitable for this purpose and cracks when used for this purpose. The resin is not sold by description. There is no indication that it is not of satisfactory quality if used for its intended purpose by light domestic vehicles.
