Chapter 8 Self-test questions

The relative degrees of the parties knowledge is a test used that may assist in establishing whether a statement is a ____ or a representation.

Which of the following is NOT a method used by the courts to identify a term from a representation?

The relative degrees of the parties' knowledge.

The parties' non-expressed intentions as to the classification of the term.

The party's reliance on the statement.

The timing of the statement.

Assurances (in the form of a statement) made in negotiations, which are not specifically identified as terms of a contract, even though the assurance induced the agreement, can never be considered a term. Instead, they will be considered a representation.

True

False

It is unrealistic in many instances to expect all the terms of a contract to be _________. As such, some many be implied into the contract.

Terms are implied into contracts:
i) By the courts.
ii) By statue.
iii) By custom.
iv) With reference to the previous dealing's of the parties.

ii only.

i, ii, and iv.

i, iii, and iv.

All of the above.

If a statement is made during the course of negotiations, and the agreement is subsequently reduced into writing, statements made prior to the contract will be viewed as representations.

True

False

The courts may imply terms into a contract as a matter of ____ or a matter of law.

A warranty can be classified as:

A lesser term.

A term that may only be identified following assessment of the consequences of a breach.

The most important term in a contract.

Not a term of a contract at all.

Express terms are, naturally, those that have been expressed in some form and are typically found in contractual documents: in correspondence between the parties, or they may be identified from the oral negotiations between the parties (for example).

True

False

The case Shirlaw v Southern Foundaries established that if the term is so obvious that it 'goes without saying' then the term may be implied into the agreement. The case The Moorcock established the _______ _______ route of implying terms into a contract.

Which of the following is NOT a valid method of including an exclusion clause into a contract?

Incorporating it at the agreement stage of negotiations.

Bringing the term to the other party's attention.

Including the exclusion clause on the back of a receipt provided when purchasing food.

Highlighting the term in red in a standard form contract.

The courts will only imply terms through custom where such terms have been used in prior contractual agreements between the parties.

True

False

A ________ is a lesser term of a contract, breach of which only allows for the recovery of damages.

What will be the effect where the nature of an exclusion clause is misrepresented by the party wishing to rely on it?

It will fail to protect the party attempting to rely on it.

The misrepresentation will reduce any award by the court by 50%.

It will have no impact where the party has signed a document containing the clause.

A misrepresentation in this respect will not affect the application of the exclusion clause.

A warranty is a lesser term of a contract. If breached the remedy of damages for any loss may be claimed but the injured party is not entitled to repudiate the contract.

True

False

A _________ is an important term of the contract, often described as a term that goes to the 'heart of the contract.' A breach enables the injured party to claim damages and he/she has the option to bring the contract to an end.

Where the courts interpret an exclusion clause contra proferentem, what does this mean?

The clause will not be applied if not fair to all parties.

The clause is interpreted against the party who wishes to rely on it.

The clause will not be applied where a statute prevents its application.

The clause will only be given effect where a statute specifically allows for its application.

A condition is an important term in the contract. Breach of a condition allows the innocent party to claim damages and choose to end the contract.

True

False

An ________ _______ is a term of the contract whereby one party seeks to remove or restrict a liability or legal duty that would otherwise exist.

Which of the following is not a type of term?

A warranty.

A condition.

An Innominate / Intermediate term.

A representation.

The identification of the status of an innominate term (as a condition or warranty) involves the courts adopting a 'term-based' approach.

True

False

For an exclusion clause to be incorporated into a contract, it must be included at the _________________ stage of formation.

Which of the following is the only CORRECT statement?

If a condition is broken the contract must always be repudiated.

On an alleged breach of condition the consequences of the breach itself may be examined for confirmation that in fact a condition has been broken.

While courts acknowledge conditions and warranties, in practice they largely ignore them and concentrate on the 'innominate' or 'intermediate' term.

A condition is a vital stipulation, the breach of which may give rise to a right to repudiate the contract.

If a party has signed a document held to be a contract, provided he/she had been given an opportunity read it, he/she was bound by the terms.

True

False

The courts have traditionally interpreted exclusion clauses _____ ___________, and thereby against the party wishing to rely on it.

Which of the following is the only CORRECT statement?

A warranty is a subsidiary term whose breach will affect the vital purpose of the contract.

When deciding whether a term is a condition or a warranty the court must consider the entire nature of the contract.

Poussards v Spiers (1876) is the case usually used to illustrate warranties.

While a breach of a warranty will normally not allow a contract to be repudiated, in certain circumstances it can.

Exclusion clauses are of such importance that they may be incorporated into the contract at any stage of the dealings between the parties.

True

False

Exclusion clauses attempt to exclude a claim for loss or damage, and exempt liability for breach. However ____________ clauses seek to reduce exposure to claims by limiting liability to (for example) a monetary claim for damages; to a fixed sum; and for any consequential losses.

Which one of the following statements defines an express contractual term?

One made by a party with expert knowledge.

One set out explicitly in words or writing.

One not constrained by statutory regulation.

One whose breach gives the innocent party the right to repudiate the contract.

Unusual exclusion clauses must be brought to the other party's attention.

True

False

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