Chapter 4 Multiple choice questions

. To enforce a contract according to the Contracts (Rights of Third Parties) Act 1999, a third party must show that it has provided consideration under the contract.

True

False

. Which one of the following statements relating to the test of enforceability in s. 1 of the Contracts (Rights of Third Parties) Act 1999 is true?

A third party must be in existence at the time the contract is made.

Where a contract expressly provides that it shall not be enforced by third parties, the 1999 Act will not apply.

S. 1 submits enforceability of a term by a third party to a statutory test of reasonableness.

A third party seeking to rely on s. 1(1)(b) (i.e. contract purports to confer a benefit on that party) must prove that the contracting parties intend the contract to be enforceable by it.

. The Contracts (Rights of Third Parties) Act 1999 abolishes the common law doctrine of privity of contract.

True

False

. Which one of the following statements relating to the hypothetical applicability of the Contracts (Rights of Third Parties) Act 1999 to the facts of New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd, The Eurymedon [1975] AC 154 is true?

The 1999 Act would have been applicable to The Eurymedon because the Himalaya clause expressly gave the stevedore the right to enforce the clause.

The 1999 Act would have been applicable to The Eurymedon because the Himalaya clause purported to confer a benefit on the stevedore and there was no indication in the contract that the parties did not intend the clause to be enforced by the stevedore.

The 1999 Act would not have been applicable to The Eurymedon because the stevedore was not employed by the carriers at the time the contract was made.

The 1999 Act would not have been applicable to The Eurymedon because the stevedore did not provide any consideration for the Himalaya clause.

. According to s. 2(1) of the Contracts (Rights of Third Parties) Act 1999, in which one of the following circumstances may the contracting parties lose their rights to vary or cancel a contract term granting a third-party rights without that third party's consent?

The third party has actual knowledge of the existence of the contract and the term.

The third party sends the promisor a letter to communicate its assent to the term and the letter is lost in transit.

The third party communicates its assent to the term to the promisor.

A court holds it is unreasonable for the term to be varied or cancelled by application of a reasonableness test contained in s. 2(1).

. The Contracts (Rights of Third Parties) Act 1999 preserves the promisee's right to enforce the promise but requires the promisee to pass any damages recovered from the promisor to the third party beneficiary.

True

False

. Where a promise is made for the benefit of a third party and the promisee expressly declares itself to be a trustee, on behalf of the third party, of a right to enforce the promise, the third party may enforce the promise against the promisor in its own right.

True

False

. A employs B Ltd to build a conservatory for her house. C, a self-employed glass supplier, indicates to A that, if B buys glass from him, he guarantees that his glass is of high quality and suitable for the conservatory. A instructs B to buy glass from C. B then enters into a contract with C for the purchase of glass, which does not mention A or her conservatory. The glass supplied by C proves to be defective. A attempts to claim damages from C. Which one of the following statements are likely to be true?

A is not entitled to claim damages from C, because A is not a party to the contract for the sale of glass between B and C.

A is entitled to claim damages from C, because the Contracts (Rights of Third Parties) Act 1999 applies.

For A to have any rights against C, the contract between B and C must expressly confer such a right on A.

A is entitled to claim damages from C, because there is a separate contract between A and C in respect of the quality of the glass supplied by C.

. A contacts B's company to hire a minibus to transport A and a group of other people to London. Due to the negligence of one of B's employees, the minibus breaks down in transit and A and other passengers have to pay a much higher fee to hire several taxis to complete the journey. A claims the difference between the total taxi fees and the hire from B. Which one of the following statements most accurately summarises the legal position between A and B?

A is entitled to the difference, because the difference is the loss actually suffered by A as a result of B's breach.

A is entitled to the difference, because A has contracted on behalf of other passengers and is entitled to recover damages for loss suffered by them.

A is not entitled to the difference, because it is not the loss actually suffered by A.

A is not entitled to the difference, because all that B is liable for is to refund the hire.

. To enforce a term under the Contracts (Rights of Third Parties) Act 1999, the third party must, according to the test of enforceability in s. 1, be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into.

True

False

Chapter 4 Multiple choice questions

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