Chapter 6 Multiple choice questions

. A term may be implied into a contract by:
(a) The courts
(b) Statute
(c) Trade custom
(d) A term can never be implied, it must always be expressed by the parties

(a) and (b) only

(a) (b) and (c) only

(d)

(b)

. A pre contractual statement that induces the making of a contract is known as?

A condition

Trader's hype

A warranty

A representation

. The Unfair Contract Terms Act 1977 governs exemption clauses in which type of contract?

Contracts between businesses.

All contracts where one party is a trader and the other party is a consumer.

Contracts between private persons.

It applies to exemption clauses in all types of contracts.

. Which one of the following statements is true?

If a condition in a contract is breached the injured party may treat the whole contract as discharged.

If a warranty in a contract is breached the injured party may treat the whole contract as discharged.

If a condition in a contract is breached the injured party may claim damages but must continue with the contract otherwise he will be in breach of contract.

If a warranty in a contract is breached the injured party has no remedy.

. Where a term of a contract is worded broadly to cover a number of potential breaches and it is not possible to decide whether breach of the term would have important or trivial consequences that term is described as:

A condition

A representation.

A warranty.

An innominate term.

. Hari is in York for the first time and decides to leave his bag containing his £300 camera at Train Ltd's left luggage lockers for the day. He places his bag in the locker and after inserting the £10 fee, the door locks and a ticket issued. The ticket states that Train Ltd are not liable for any loss, damage or theft to items valued over £100 left in lockers. Hari's locker is broken into by Fred and his camera is stolen. Can Hari claim £300 from Train Ltd?

No, because the exemption clause states the limit is £100.

No, because his camera has been stolen by someone other than Train Ltd.

Yes, because the exemption clauses are only valid if they are signed.

Yes, because the exemption clause was dispensed after the contract was made.

. Where a person acting in the course of a business includes a term in a contract which excludes liability for death and personal injuries through negligence, the term is:

Binding on the parties.

Invalid.

Invalid unless it is reasonable.

Only valid if it is brought to the attention of the other party.

. Which one of the following statements relating to a Business to Business contracts is true?

Under the Unfair Contract Terms Act 1977 the party seeking to rely on the exemption clause must prove it is reasonable.

A standard term in a contract will always be regarded by the courts as unreasonable.

Under the Unfair Contract Terms Act 1977 the party seeking to have the exemption clause set aside must prove it is unreasonable.

Exemption clauses can never be set aside in written contracts.

. Which one of the following statements is incorrect?

A restraint of trade clause in a contract of employment may restrict an employee's freedom to contract both during and after the termination of his employment.

In some circumstances where severance is possible a court will strike out an unreasonable part of a restraint of trade and allow the reasonable part of the clause to be enforced.

A restraint of trade clause may be valid if the person seeking to enforce it can show it is reasonable in the circumstances.

If a restraint of trade clause is too wide the courts can change its wording it to make it reasonable.

. What is a solus agreement?

A contract that is not legally binding.

A contract made with only one other party.

A contract that contains an invalid clause.

A contract where one party agrees to buy goods from only one supplier (usually in return for a discount).

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