Chapter 22 Self-test questions

. Which of the following may amount to a breach of contract? Select all that apply.

X dies of a heart attack before he is able to fulfill his contractual obligations

X supplies Y with a performance that is in some way defective

X expressly refuses to perform a particular contractual obligation

X makes it impossible for him to perform his contractual obligations

. English law adopts one of two different strategies when determining whether a breach of contract suffices to entitle the innocent party to terminate further performance of the contract. The first and traditional approach places the focus on the nature of the term broken (that is, it is a condition); whilst a more recent approach has regard to the seriousness of the consequences of the breach. Why has English law ended up with this multiple-strategy approach? Select all that apply.

Because there is a tension in the law between a concern for certainty and a concern for fairness

Because it was considered that the law would be more coherent if the legislative approach to this topic was mirrored by the common law

Because the courts have not always found it easy to distinguish between a condition and a warranty

Because the imposition of strict liability in the case of breach was deemed too harsh

. Under English law, parties have the right to agree to classify a particular term or number of terms as conditions should they wish. In some circumstances, this may lead to the unusual result that the innocent party gains a right to terminate on breach of a minor term (which has been classified as a condition). Given the multiple uses of the word 'condition', parties must be careful in such an instance to make it absolutely clear that the term has been classified as a condition. In which of the following cases did this issue cause problems?

Hong Kong Fir v. Kawasaki Kisen Kaisha [1962] 2 QB 26

Lombard North Central Plc v. Butterworth [1987] QB 527

L Schuler AG v. Wickman Machine Tool Sales Ltd [1974] AC 235

Financings Ltd v. Baldock [1963] 2 QB 104

. Intermediate terms are now rather widespread and tend be invoked by the judge as the default rule wherever the judge is not compelled by statute, binding authority, or the parties themselves to conclude that the term is a condition. However, not all the case law can be said to support this assumption. Indeed a number of cases have even drawn attention to reasons why the default rule should be that terms, not classified by the parties, ought not to be classified as intermediate or innominate. What is the main reason for the adoption of this approach?

The innominate term category does not serve the need for commercial certainty

The innominate term category is not for general use, but only for terms that cannot be classified as conditions or warranties

The innominate term category ignores the standards of the trade under which most standardised terms have already been categorised as conditions or warranties

. Which of the following characterizations of termination for breach distinguish English law from that of other systems? Select all that apply

The attention paid by judges to the bona fide nature of the breach

The consideration given to the seriousness of the consequences of breach

The freedom of parties to decide between themselves the importance of their contractual terms

The considerable emphasis on termination as a remedy

. Asahi is employed by the Larder family to give their son remedial lessons in A-level Law at home. It is agreed that, for a period of three months prior to the exams, Asahi will come to the Larder home at 6pm each Thursday to tutor the A-level student for one hour at a time. Asahi is to be paid £20 per hour, plus travel expenses, at the end of each month. Six months before the start of the exams, the Larders' son decides to drop Law in order to concentrate on his four other A-Levels. His parents inform Asahi that he is no longer needed. Asahi maintains that the Larders are not entitled to break their contract in this way. He travels to the Larders' house each Thursday at 6pm. He knocks at their door and waits patiently on the doorstep for one hour before making his way home again. After a month of doing this, Asahi brings a claim in debt for the sum which he maintains is owed to him under the contract. What defence(s), if any, do the Larders have to such a claim? Select all that apply.

They may argue that Asahi has not taken reasonable steps to mitigate his losses

They may argue that Asahi has no legitimate interest in performance of the contract

They may argue that Asahi cannot be held to have 'performed' the contract in the absence of at least passive participation by the repudiating party

No defence is available in the face of a party who decides to affirm a repudiated contract

. Why did the unsuccessful respondent in the case of White & Carter Councils Ltd v. McGregor [1962] AC 413 not argue that the appellants had no 'legitimate interest' in performance of the contract?

Because he knew that no fetter on the right of a party to affirm a repudiated contract would be accepted by the court

Because this was a claim in debt and therefore the 'legitimate interest' exception was of no relevance on the facts

Because he did not know that such an option was open to him at the time

Because it was clear on the facts of this case that damages would not have provided an adequate remedy

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