Practice question bank 361
Question 11
A term may be implied into a contract by
(i) Statute
(ii) Trade practice unless an express term overrides it
(iii) The court, to provide for events not contemplated by the parties
(iv) The court, to give effect to a term which the parties had agreed upon but failed to express because
it was obvious
(v) The court, to override an express term which is contrary to normal custom
A (ii) and (iii) only
B (i), (ii) and (iv) only
C (i), (iv) and (v) only
D (i), (ii), (iv) and (v) only (2 marks)
Question 12
Which of the following describes liquidated damages?
A A specific sum payable in the event of a breach of contract
B A genuine pre-estimate of losses payable in the event of breach of contract
C A sum equal to the amount of work done plus an element of profit that is payable in the event of a
breach of contract (1 mark)
Question 13
Which of the following statements in relation to damages for breach of contract is correct?
A In order to claim damages an innocent party is required to take reasonable steps to mitigate their
losses
B Damages are not payable in relation to mental distress
C Damages to rectify a defect are still payable even if they are wholly disproportionate to the size of
the breach
D Damages in the form of a penalty clause are valid and enforceable (2 marks)
Question 14
In January Elle offered to buy Jane's boat for £3,000. Jane immediately wrote a letter to Elle saying 'For a
quick sale I would accept £3,500. If you are not interested please let me know as soon as possible.' Elle
did not see the letter until March when she returned from a business trip but then replied. 'I accept your
offer. I trust that if I pay £3,000 now, you can wait until June for the remaining £500.' On receiving the
letter, Jane attached a 'sold' sign to the boat but forgot to reply to Elle.
Required
(a) State the nature of Jane's letter to Elle (2 marks)
(b) State whether Elle's reply at the end of March had lapsed through the passing of time. (2 marks)
(c) State whether Jane has a valid contract with Elle for the sale of the boat. (2 marks)
(Total = 6 marks)