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Chapter 10 Multiple choice questions
Return to Contract Law Concentrate 5e Student Resources
Chapter 10 Multiple choice questions
Quiz Content
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not completed
.
A presumption of undue influence arises once it is shown that the relationship between two parties falls within certain recognised relationships or, on the facts, constitutes a relationship of trust and confidence.
True
correct
incorrect
False
correct
incorrect
*
not completed
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Which
one
of the following statements in relation to 'actual undue influence' is
true
?
The party seeking to rely upon actual undue influence must show that there is a relationship of trust and confidence between him/her and the other party.
correct
incorrect
The party seeking to rely upon actual undue influence must show that there is a manifest disadvantage resulting from the contract.
correct
incorrect
The party seeking to rely upon actual undue influence must show that his/her free will to enter or to decline the contract has been overcome by the influence of the other party.
correct
incorrect
An action for actual undue influence will fail if it is shown that the party seeking to rely upon actual undue influence would have entered the contract anyway.
correct
incorrect
*
not completed
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In a case of evidential undue influence, the defendant may avoid a finding that the influence is undue by showing that there is no intention to commit a wrong or bad faith on its part.
True
correct
incorrect
False
correct
incorrect
*
not completed
.
In which
one
of the following relationships is it
not
possible to disapprove the existence of trust and confidence between the parties by contrary evidence?
The relationship between an unmarried couple.
correct
incorrect
The relationship between solicitor and client.
correct
incorrect
The relationship between army and soldier.
correct
incorrect
The relationship between bank and customer.
correct
incorrect
*
not completed
.
It is still the law that the party seeking to rely upon evidential undue influence must show manifest disadvantage on its part.
True
correct
incorrect
False
correct
incorrect
*
not completed
.
According to
Royal Bank of Scotland plc
v
Etridge (No. 2)
[2002] UKHL 44, [2002] 2 AC 773, there is no longer a requirement to establish manifest disadvantage. Instead, the emphasis is on whether the nature and size of the transaction (contract) can be readily explained by the parties' relationship or calls for some explanation because it raises suspicion.
True
correct
incorrect
False
correct
incorrect
*
not completed
.
A married couple live in a house owned by the wife and jointly own a family business. The husband persuades the wife to use the house as security to obtain loans from M Bank. In the loan application form, it is stated that the loan will be used for the purpose of the family business. A manager of M Bank interviews the couple in a branch of M Bank and is informed, during the interview, of their relationship and of the fact that the husband is responsible for the operation of the family business and that the wife has no active role. The manager then asks if the wife has received any independent advice on the application. The wife replies that she has a solicitor and will consult her about it. The wife then forgets to consult her solicitor. The next week, the application is approved and the wife and the manager sign a contract using the house as security of the loan. Five months later, the family business fails due to poor management and the couple is unable to repay the loan. M Bank then claims the wife's house. It has been established that the husband has unduly influenced the wife's decision to enter the security contract. Which
one
of the following statements
most accurately
summarises the legal positions of the parties?
M Bank is entitled to claim the house because M Bank has not unduly influenced the wife's decision to enter into the security contract.
correct
incorrect
M Bank is entitled to claim the house because it has not been put on inquiry since the application form stated that the loan was to be used for the family business partly owned by the wife. The security contract was thus to the advantage of the wife.
correct
incorrect
M Bank is not entitled to claim the house because it has not taken reasonable steps to ensure that the wife entered the security contract freely and with the knowledge of the implications of the transaction.
correct
incorrect
M Bank is not entitled to claim the house because it has been put on inquiry because the couple informed the manager during the interview that the wife had no active role in the family business.
correct
incorrect
*
not completed
.
If duress or undue influence is established, prima facie the agreement will be voidable (liable to be set aside).
True
correct
incorrect
False
correct
incorrect
*
not completed
.
In
one
which of the following major cases was there a successful claim of economic duress?
Williams
v
Roffey Bros & Nicholls (Contractors) Ltd
[1991] 1 QB 1.
correct
incorrect
B & S Contracts & Design Ltd
v
Victor Green Publications Ltd
[1984] ICR 419.
correct
incorrect
Pao On
v
Lau Yiu Long
[1980] AC 614.
correct
incorrect
MWB Business Exchange Centres Ltd
v
Rock Advertising Ltd
[2016] EWCA Civ 553, [2017] QB 604.
correct
incorrect
*
not completed
.
If a party claiming economic duress fails to protest, it risks the possibility that they will have affirmed and therefore lost the right to avoid liability.
True
correct
incorrect
False
correct
incorrect
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