370 Practice answer bank
Answer 8
C Consideration must be sufficient but not necessarily adequate. It must have some identifiable value
to be sufficient.
Syllabus area B1(f)Answer 9
C Past consideration is sufficient to create liability on a bill of exchange – this is one of the few
exceptions to the rule on past consideration. Suffering loss or detriment is valid consideration.
Impossible or illegal acts are not valid consideration.
Syllabus area B1(e)Answer 10
B Particularly unusual or onerous terms must be highlighted. Previous consistent dealings can be
enough to incorporate terms into a contract. A person is deemed to have read a contract if they
have signed it.
Syllabus area B2(c)Answer 11
B Courts will not imply factors outside the contemplation of the parties or override an express term.
Syllabus area B2(b)Answer 12
B Liquidated damages is a genuine pre-estimate of losses payable in the event of a breach of
contract. A penalty clause is a fixed amount payable on breach of contract.
Syllabus area B3(c)Answer 13
A Innocent parties are required to mitigate their losses. Damages are payable in respect of mental
distress – although the scope of such payments is limited. Damages that are wholly
disproportionate to the breach are not payable (Ruxley Electronics and Construction Ltd v Forsyth
1995 ). Penalty clauses are void and not enforceable.
Syllabus area B3(c)Answer 14
(a) Elle's offer of £3,000 is an offer so therefore Jane's letter forms a counter-offer,
which has the effect of terminating Elle's offer: Hyde v Wrench 1840.
(b) There is nothing to indicate that Jane's (counter) offer is not still open in March. An offer may be
expressed to last for a specified time. It then expires at the end of that time. If, however, there is no
express time limit set, it expires after a reasonable time.
(c) Following Butler Machine Tool Co v Ex-Cell-O Corp (England) 1979, the counter-offer introduces
new terms (price). The price is therefore £3,500. As to date of payment, it would appear that the
attachment of a 'sold' sign to the boat is confirmation that the revised terms proposed by Jane are
acceptable.