Chapter 5 Multiple choice questions

. Where an agreement is made in a social or domestic context what is the general rule relating to intention to create legal relations?

The courts presume the parties intended to create legal relations.

Social or domestic agreements are never legal binding because the parties cannot create legal relations.

All social or domestic agreements are legally binding.

The courts presume the parties did not intend to create legal relations.

. Business agreements sometimes use 'honour clauses'. What does an honour clause mean in an agreement?

It is a clause covering business ethics.

The clause means that the agreement is not legally enforceable.

The clause means that the agreement is enforceable in the courts.

The directors of a company are personally liable for the agreement.

. In which type of agreement is the intention to create legal relations presumed to exist?

Agreements between friends or family.

Commercial or business agreements.

All written agreements.

The intention to create legal relations is never presumed in an agreement.

. Which one of the following statements is incorrect?

A contract with a minor for necessaries is binding on the minor.

Certain types of contract are voidable by a minor.

A loan to a minor is unenforceable.

All contracts with minors are unenforceable in the courts.

. What is meant by executory consideration?

Consideration provided by an executor

Where there is a promise to do something in the future.

Where consideration has already been completed.

The exchange of consideration.

. Fred finds George's lost dog. George is so pleased he promises to give Fred £350. George has failed to give Fred the £350 promised. Can Fred enforce the promise?

Yes, because Fred did something in return for the £350.

Yes, because it is a unilateral contract.

No, because the promise to pay was made after the act in returning the dog and past consideration is not good consideration.

No, because the dog was only worth £50.

. Which of the following statements is correct?

Consideration must be of adequate value.

Performance of a duty imposed by law is good consideration.

Consideration must always be greater than £1.

Consideration must be sufficient. It must have some measurable and material value.

. In which case did the court decide that the performance of existing contractual duties can sometimes amount to consideration where the promisor gains some benefit?

Williams v Roffey Bros & Nicholls (Contractors) Ltd.

Stilk v Myrick

Foakes v Beer

Chappell v Nestle Co Ltd.

. Jens agrees to pay JC Builders £5000 on completion of the building works. Before the work is completed JC Builders agree to accept an early payment of £4,000 in full settlement for the work. JC Builders have now completed the work and have demanded the extra £1,000. Are JC Builders likely to succeed in their claim?

No, a promise to accept payment of a smaller sum of money than owed is enforceable in the above scenario.

Yes, provided the agreement was in writing.

No, because JC builders continued working after a payment was made.

Yes, because the doctrine of promissory estoppel would apply.

. Which Act of Parliament gives persons, who are not one of the parties to a contract, the right to enforce the contract in certain circumstances?

Contracts Act 1999.

Benefit of Contracts Act 1999.

Contracts (Rights of Third Parties) Act 1999.

Rights of Third Parties Act 1999.

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