Contract Law Revision

Contract Law Quiz

Test yourself on the principles of contract law.

This quiz selects 50 random questions from the Ipsa Loquitur Contract Law question bank, so the quiz will be different each time you take it. To take all the questions on a particular subject, visit that subject's revision page.

1 / 50

Bob offers to sell Arthur a wedding dress for $400. Arthur responds by asking if the veil is included for that price. What is the legal nature of Arthur's response?

It is a counter-offer which terminates the offer

It has no legal effect

It is an acceptance of the offer

2 / 50

On Saturday, Roger offers to sell Tyrone a car. He asks him to respond by next Thursday if he accepts. Tyrone sends Roger a letter by post on Monday agreeing to the deal, but it does not arrive until Friday. Has Tyrone accepted the offer?

3 / 50

When is a liquidated damages clause void under the penalty clause rule?

If it is not a genuine pre-estimate of the innocent party's damages

If it is at least partially designed to punish the breaching party for their breach

All liquidated damages clauses are void under this rule

If it is completely out of proportion to the innocent party's legitimate interests

4 / 50

A claimant suing for breach of contract can claim both the market difference measure and the reliance loss measure at the same time. True or false?

5 / 50

Complete this sentence: The defence of undue influence renders the contract...

Terminated

Void ab initio

Voidable

6 / 50

When establishing the defence of undue influence, how does the claimant demonstrate 'Type 2A' presumed influence?

By showing they were in a relationship with the defendant in which they reposed large amounts of trust and confidence

By showing that the claimant was vulnerable to or dependent on the defendant because of some other reason, such as mental illness, ill health or age

By providing evidence of real threats or pressure to enter into the contract

By showing that they had a special relationship with the defendant in which high trust normally exists

7 / 50

Marty purchases a package holiday from his friend Emmett. Emmett states that the contract will be agreed on his standard terms, and hands Marty a copy of these terms for him to read. On the front page, in large font and bold red letters, is an exclusion clause. Marty pretends to read it, but because he is illiterate, he does not understand any of it. Emmett does not know Marty is illiterate. Marty agrees to contract on the those terms. Has Emmett taken reasonable steps to give notice to Marty?

8 / 50

What two matters must the defendant prove to establish promissory estoppel?

It would be inequitable to enforce the original terms of the contract

The defendant provided consideration for a clear and unequivocal promise to vary the contract

The defendant changed their position in reliance on a clear and unequivocal promise to vary the contract

The defendant suffered detriment in reliance on a clear and unequivocal promise to vary the contract

9 / 50

Hannah is applying for a loan for the family business. Her girlfriend Celestine tells the bank that she will act as surety for the loan. The money is to be advanced to a company which Hannah and Celestine hold joint shares in. The bank is aware that Celestine is Hannah's girlfriend and that she has shares in the company, but they are not aware that Hannah has unduly influenced Celestine. They grant the loan. Can Celestine rely on the defence of undue influence against the bank?

No, because the money is being advanced for Celestine's interests as well as Hannah's

Yes, because they are not entitled to assume Celestine has a role in the business

No, because the bank has no actual knowledge of the undue influence

Yes, because they should have investigated further the relationship between the two women

No, because joint shareholders are liable for company debts

10 / 50

What are the three requirements of frustration?

The party seeking to establish frustration must have performed all of their outstanding obligations

A frustrating event made performance impossible

The frustrating event was not foreseeable

The frustrating event preceded the formation of the contract

The frustrating event is not the fault of the party seeking to establish the defence

A frustrating event made performance unreasonable, unduly onerous or excessively expensive

11 / 50

Can the innocent party prove that a misrepresentation caused them to enter the contract if they had the opportunity to verify the statement, but did not?

12 / 50

What two conditions must be met for an agreement to be sufficiently certain to form a contract?

There must be clear evidence of intention to be legally bound

The parties must have at least agreed to agree the core terms of the contract

The main, essential and important terms of the contract must be clear

All reasonably relevant terms have been agreed

The intention to contract must be expressed sufficiently precisely that a clear meaning can be given to it

13 / 50

For an exclusion or limitation clause to be incorporated into a contract at common law, when must reasonable notice of the clause be given to the other party?

At any time

Within a reasonable period of entering the contract

Before the contract is entered into

When the other party asks

14 / 50

The parties in a case reached an agreement for the claimant to do some work, but that agreement was stated to be subject to contract. Despite a written contract never being signed, the parties have begun performing as if there were a contract. Do the terms of the 'subject to contract' agreement apply?

Yes

Only if there is no applicable remedy in restitution

Only if the parties appear to have waived the 'subject to contract' stipulation

No

15 / 50

Richard offers to sell Michael a book. Richard knows that Michael believes that the book is signed by the author. Richard did nothing to make him believe this, but nor does he correct Michael. Michael relies on his belief that the book is signed when deciding to buy it. Can Michael rely on the defence of misrepresentation?

16 / 50

When will the courts imply a term into a contract in fact? (Two answers)

Where the term is necessary for a contract of a defined type

If an officious bystander would think that the term was an obviously fair one to include

If the term is necessary to give the contract the business efficacy intended

Where it is fair, just and equitable to include the term

If an officious bystander would think it obvious that the parties would have agreed to the term if asked

17 / 50

Jubedul lets his office know that he is selling his pet cat Bianca for £50, and that if anyone would like to buy her they should let him know. Liz, his co-worker, immediately calls his work phone and leaves a message on his answering machine saying she will buy the cat. Jubedul never listens to the message. An hour later, Micah tells Jubedul in person that she will buy the cat. Who has validly accepted Jubedul's offer to buy Bianca?

Both

Neither

Micah

Liz

18 / 50

If a third party has gained the right to rely on a contract's terms under the Contract (Rights of Third Parties) Act 1999, when do the original parties require their consent to vary or terminate the contract?

When the promisor becomes aware that the third party has relied on the term

When the third party communicates assent to the term to the promisee

When the third party suffers some detriment as a result of the contract

When the third party relies on the term such that it would be inequitable to vary or rescind

When the third party communicates assent to the term to the promissor

When the third party has relied on the term and it was reasonably foreseeable that they would

19 / 50

Rod advertises on a website saying he is looking to pay someone to look after his hamster for the weekend. Rosie responds, agreeing. The two draw up a written agreement, which includes a clause saying that it is binding in honour only. Is this agreement a valid contract?

20 / 50

John is a Government official who is under a duty to give a license to anyone who fills out the proper application form. Paul fills in the form and offers to give John £300 if he gets a license. John agrees. Have both parties provided consideration?

21 / 50

Clarence offers to sell Pam a table and chairs set for $300. He adds that if Pam does not respond to him within the week, he will assume that she has accepted. Pam does not respond within the week, nor does she positively indicate acceptance in any other way. Has Pam accepted the offer?

22 / 50

Alfred contracts with Zin to help deal with the communications side of his business. The contract between them states that Zin is not liable for damages resulting from her handling of messages 'howsoever caused'. Will the courts interpret this wording as wide enough to potentially cover negligence?

No

The law is not clear

Yes

23 / 50

When establishing the defence of undue influence, how does the claimant demonstrate the category of presumed influence established in Malik (Deceased) v Shiekh?

By showing they were in a relationship with the defendant in which they reposed large amounts of trust and confidence

By showing that the claimant was vulnerable to or dependent on the defendant because of, for example, mental illness, ill health or age

By providing evidence of real threats or pressure to enter into the contract

By showing that they had a special relationship with the defendant in which high trust normally exists

24 / 50

In what four circumstances is an offer terminated without the offeror having to withdraw it?

Where a specific or reasonable amount of time passes without acceptance

Where the offeree makes a counter-offer

Where the offeree rejects it

Where the offeror dies (personal performance contracts only)

Where the offeree acts unconscionably in relation to the offer

Where the same offer is made to a third-party where that offer is incompatible with the original offer being accepted

Where the offeror dies (any contract)

25 / 50

When will the courts imply a customary term into a contract?

If the parties agreed that the customs of their trade or industry would apply to the contract or their dealings

If the practice is clearly established, notorious, reasonable and not contradicted by other contractual terms

If the practice is universally-used and reasonable

If the practice is universally-used, reasonable and not contradicted by other contractual terms

If the practice is clearly established, notorious and reasonable

26 / 50

Emmy purchases a new fish tank filter from Lee. The filter is defective, and it shuts down. Emmy's incredibly rare and expensive fish die as a result. Lee argues that he should not be liable as it was unforeseeable that the breach would cause such a high degree of loss. Is he correct?

27 / 50

Complete this sentence: The defence of economic duress renders the contract...

Void ab initio

Terminated

Voidable

28 / 50

Does the claimant need to establish that but for the threat, they would not have entered into the contract if they are trying to prove duress to the person?

29 / 50

When will the breach of an innominate term entitle the innocent party to terminate the contract?

If it appears that the parties intended breach of that term to result in termination

If the term is fundamental to the contract

If the breach is significant and substantial

If the breach is so serious that it substantially deprives the innocent party of the contract’s whole benefit

30 / 50

When is the hypothetical fee measure of damages available in contract?

Where the market difference and cost of cure measures are unavailable

Where the defendant has profited from the breach

Where the defendant has breached a proprietary or quasi-proprietary right

Where the market difference measure would grant no damages

31 / 50

Where a claim is made by a third party under the Contract (Rights of Third Parties) Act 1999, which three defences can the defendant rely on?

Any defence they have against the other party to the contract even if it is unconnected to the particular contract

Any defence they have against the other party to the contract in connection to the contract which is relevant to the term relied on

Any defence not expressly excluded by the contract

Any defence they would have had directly against the third party if the third party had been a contract party

Any defence which relates to damages rather than equitable relief

Any defence the contract provides they may rely on

32 / 50

When can an offer be revoked?

An offer cannot be revoked

At any time, so long as the offer does not state it will remain open for a particular amount of time

At any time

33 / 50

Sean offers to sell his collection of nerdy T-Shirts to Chris, for £40. Chris accepts, saying that his father will provide the money. Have Sean and Chris both provided consideration?

34 / 50

When is an existing contract discharged? (Three answers)

Where one of the parties entered into the contract under duress

Where one of the parties entered into the contract by mistake

Where the contract is frustrated

Where both parties have fully performed

Where the parties agree to discharge the contract

Where the parties agree to discharge the contract and provide consideration

35 / 50

Celestine is an elderly woman whose eye-sight is failing. Her niece, Laura, persuades her to sign a document claiming that it will authorise Laura to remove £50 for Celestine's bank account to enable her to pay Celestine's bills. In reality, it is a contract transferring Celestine's house to Laura. Celestine did not bother to read it as she trusts Laura (who has helped her out with bills before) and her eyesight makes reading very difficult. Can Celestine rely on the defence of non es factum?

36 / 50

Alice contracts Bill to install new fans in her restaurant. Bill completes the work defectively, causing a fan to fall on Alice's head. She suffers a brain injury and develops depression as a result. Can Alice recover damages for her mental illness and emotional distress?

37 / 50

Annabelle tells the swim team she is coaching that she will give £500 to the first of them that swims the English Channel. Ricardo swims the English Channel the next day, and then calls Annabelle asking for the money. Is Annabelle obliged to pay him?

38 / 50

Fatima is looking to sell an antique doll, which is worth £3000. Paul offers to buy it for £5. Fatima accepts, as she is in a hurry to get rid of the doll as it spooks her. Have both parties provided consideration?

Yes

No, because Paul's consideration is inadequate

The law is unclear

39 / 50

What is the doctrine of contra proferentem?

Ambiguous exclusion and limitation clauses should be interpreted in the manner most favourable to consumers

Ambiguous exclusion and limitation clauses are invalid against consumers

Exclusion and limitation clauses should not be implied into contracts with consumers

Ambiguous exclusion and limitation clauses should be interpreted against the party seeking to rely on them

Exclusion and limitation clauses should be interpreted not to cover negligence, where possible

40 / 50

Under the Contract (Rights of Third Parties) Act 1999, in what two scenarios can a third-party to a contract enforce the terms of that contract?

Where the contract expressly says they can

Where the contract purports to confer a benefit on them, assuming no evidence of contrary intention

Where the non-enforcement of the contract causes the third party damage

Where the contract does not expressly or implicitly rule out third party enforcement

41 / 50

In which three scenarios must an exclusion or limitation clause satisfy the requirement of reasonableness under the Unfair Contract Terms Act 1977 before it can be enforced?

Where it purports to exclude for personal injury, death, economic loss or property damage caused by negligence

Where the clause was specifically negotiated

Where it purports to exclude for economic loss or property damage caused by negligence

Where the clause purports to exclude liability against a consumer

Where the clause purports to exclude liability for misrepresentation

Where the parties have contracted on one party's standard written terms

42 / 50

What three elements must an innocent party show to establish the defence of economic duress?

The innocent party's will was completely overborne by the other party's actions

The innocent party had no practical choice but to submit

The innocent party had no legal choice but to submit

But for the other party's actions, the innocent party would not have entered into the contract

The other party subjected him to illegitimate pressure

The other party's actions were the sole cause of the innocent party entering into the contract

43 / 50

Arthur contracts for a private car from Celestine, stressing that he needs to arrive before three o'clock. He does not explain the reason why, which is that if he is late he will miss a meeting with an important client and lose a valuable deal. Celestine drives painfully slowly and does not get Arthur to his destination on time. Arthur loses the deal. Can Arthur recover damages for the lost contract?

44 / 50

Phil makes a contract with Ingrid for his old shed to be torn down in exchange for £200. His next-door neighbour Andrew, who thinks the shed is an eye-sore, says he will pay Ingrid an extra £100 for taking down Phil's shed. Ingrid accepts and takes down the shed. Has Ingrid provided consideration for Andrew's promise?

Yes

The law is unclear

No

45 / 50

In which two scenarios can a person rely on the defence of undue influence against a third-party?

Where the third-party knew of circumstances from which a reasonable person would suspect undue influence

Where the third-party did not take reasonable steps to investigate whether there might be undue influence

Where the third-party has actual knowledge of the undue influence

Where the third-party is also acting for the undue influencer in the transactions

Where the third-party is a lending bank

46 / 50

Complete this sentence: Damages are assessed according to the circumstances existing...

At the time litigation is initiated, unless this would be unjust

At the time litigation is initiated

At the time of the breach, unless this would be unjust

At the time of the breach

47 / 50

In promissory estoppel, what three factors are relevant when determining whether it would be inequitable to renege on a promise?

The defendant has not suffered any detriment

The promise was obtained by abusing the defendant's position

It was foreseeable at the time of contracting that the defendant might need to alter the contract in future

The defendant is now able to pay any sums owed

The defendant has a counter-claim against the claimant

The promise was extracted by lies

48 / 50

In which of the three following circumstances would the defence of common mistake apply?

The parties are unaware that the buyer of goods already has the relevant property interest they are trying to buy

One party has misrepresented their identity to the other party

The parties are unaware that the contract is impossible to perform at the time they enter into the contract

The subject matter of the contract is worth considerably less than the parties believe

One party has made a reasonable mistake as to the identity of the other party, and the other party knew this

A difference in the quality of the goods makes the subject matter of the contract an essentially different kind of thing than was intended

The parties believe the subject matter of the contract to have a particular important quality which it does not

49 / 50

When establishing the defence of undue influence, how does the claimant demonstrate actual influence?

By showing they were in a relationship with the defendant in which they reposed large amounts of trust and confidence

By providing evidence of real threats or pressure to enter into the contract

By showing that they had a special relationship with the defendant in which high trust normally exists

By showing that the claimant was vulnerable to or dependent on the defendant because of some other reason, such as mental illness, ill health or age

50 / 50

When the courts imply a term in law, they are seeking to give effect to the parties' intentions. True or false?

Your score is

CONTRACT LAW

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