Chapter 27 Self-test questions

. Which of the following will be deemed to be a regulated mortgage contract?
Please select all that apply.

A legal charge of a landlord'shouse, in which he will allow his son to live whilst at university.

A legal charge over a businessman's home to secure funding for his business.

An individual who takes out a mortgage to purchase a field on which to graze her horses, secured by a charge on the field.

A person who purchases a small hotel in Scunthorpe, and borrows money secured on that hotel.

. Which of the following will NOT be subject to regulation under the FSMA 2000?

A business loan of £15,000 to a two-man building partnership

A business loan of £30,000 to a sole trader building merchant.

A second mortgage of £30,000 taken out by a sole trader building merchant secured on his home.

A buy to let mortgage secured on the rental property acquired by a corporate landlord as an investment. .

. Factors affecting the creation of a mortgage may have differing effects on the contract itself. Match the factor to the best available remedies.

The mortgage will be void provided that the mistake was not the mortgagor's own

.

The mortgage will be void from the outset

.

The equitable doctrine entitles the wronged party to rescind the mortgage

.

The exploitation of the relative weakness of one party, which is derived from some social or transactional disability, merits the court's intervention to set aside the mortgage

. It is possible for a bank's security over the co-owned family home to be set aside as a result of undue influence exerted by a husband against his wife.

False

True

. It is the presence of a relationship of trust and confidence that is the essential element of a claim for undue influence.

True

False

. In which of the following situations would a bank be put on inquiry to ensure the absence of undue influence?
Please select all that apply.

The bank advances money to the husband and wife jointly for their apparent 'joint' purposes.

The bank advances money to the husband and wife jointly for the husband's purposes.

The bank advances money to a company whose shares are held by the husband and wife equally.

The bank advances money to a company whose shares are held by the husband and wife equally and the wife is a company director and the company secretary.

. Once the lender has insisted upon and the (wife) guarantor has received legal advice in accordance with the Etridge guidelines, her right to the defence of undue influence is lost.

True

False

. Which of the following would not be a clog on the equity of redemption?

A sells land to B, leaving the purchase money outstanding, but secured by a mortgage to A. B grants A an option to repurchase the land for the original sale price.

A purchases land with a mortgage from B redeemable within twenty five years. One of the clauses of the mortgage contract is that B shall have the option to purchase the land from A (at a set price) at any time within twenty five years.

A purchases land with a mortgage from B redeemable within twenty five years. Three years later, A has fallen into arrears. B agrees to waive the arrears in consideration for the granting of an option for B to purchase the land from A at a set price.

. For a term to be found oppressive or unconscionable, the plaintiff must show that the bargain, or some of its terms, was unfair and unconscionable: it is not enough to show that, in the eyes of the court, it was ____________.

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