The Law of Contract

Question 1

What makes an offer capable of acceptance?

Answer 1

a statement of intention to be bound by the terms stated

Question 2

What is the remedy that must always be considered by the court, where a contract is breached?

Answer 2

Damages

Question 3

What is a final and unqualified assent to the terms of an offer called?

Answer 3

Acceptance

Question 4

True or false, goods may be sold subject to a retention of title clause. Once the buyer takes delivery of the goods the ownership in the goods automatically passes to them?

Answer 4

False

Question 5

True or false, the ownership of goods sold subject to a retention of title clause usually passes when the goods have been both delivered and paid for?

Answer 5

True

Question 6

True or false, Mark sells goods to John under a retention of title clause. Mark will not be able to recover payment for the goods if John becomes insolvent?

Answer 6

False

Question 7

True or false, a retention of title clause provides protection against the seller’s insolvency?

Answer 7

False

Question 8

True or false, the duties under a contract may only be transferred under a contract of novation?

Answer 8

True

Question 9

True or false, the duties under a contract may be transferred without the consent of the party to whom the duties are owed?

Answer 9

False

Question 10

True or false, the duties under a contract may be transferred by being assigned?

Answer 10

False

Question 11

True or false, it is never possible to transfer duties under a contract?

Answer 11

False

Question 12

What are examples of enforceable restraints?

Answer 12

A restraint which protects one party’s trade secrets
A restraint which, in terms of time and geographical area, protects one party’s legitimate interest
A restraint which is in the interest of the public

Question 13

What are examples that do not constitute offers capable of acceptance?

Answer 13

Mere supply of information
A declaration of intent
Invitation to treat

Question 14

When a court is due to award damages for a breach of contract, what do they expect from the injured party?

Answer 14

They expect the injured party to have mitigated their loss

Question 15

In contract law, what constitutes an offer?

Answer 15

A client emails the tax practitioner asking for them to complete their tax return of £100

Question 16

When one party to an offer suggests a lower price, what does this mean for the offer?

Answer 16

This will constitute a new offer

Question 17

A company offers to buy the trade and assets of another company subject to the clearance from HMRC. True or false, the offer is automatically terminated if HMRC refuse clearance?

Answer 17

True

Question 18

True or false, the sale of goods act 1979 and the supply of goods and services act 1982 contain terms why may be implied into a contract between a tax adviser and his client for tax advice?

Answer 18

False, only the Supply of Goods and Services Act 1982

Question 19

How is the court likely to view a restraint of trade clause that limits an ex employee from working in the whole of Europe for the next 50 years?

Answer 19

The restraint of trade clause will be unenforceable if held to be contrary to public policy
The clause will be seen as unreasonable in geographical area and timescale
The remainder of the employment contract will be valid

Question 20

A contract between a homeowner and a business for the construction of a house extension, (subject to agreed plans by the local authority) for £10,000, will be completed when?

Answer 20

The work is finished according to the agreed plans, and the homeowner has paid the builder

Question 21

What is a frustrated contract?

Answer 21

Where due to subsequent changes in circumstances brought about by neither party, a contract has become impossible to perform. The parties are excused from performing.

Question 22

What is a retention of title (Romalpa clause)?

Answer 22

Where the contract for the sale of goods provides that the seller continues to be the legal owner of the goods with legal ownership only passing when the goods are paid for

Question 23

What are factors that make a contract voidable by the innocent party?

Answer 23

Misrepresentation
Duress and undue influence

Question 24

What are factors that make a contract void?

Answer 24

Mistake
Illegal/contrary to public policy contracts

Question 25

What is novation?

Answer 25

Where a party to a contract is prepared to consent to the other party transferring its duties and obligations under the contract, and a separate contract is entered into