Chapter 6 Multiple choice questions

. The Unfair Contract Terms Act 1977 subjects every contract term falling within its scope to a reasonableness test.

True

False

. A purchases an electric oven for her bakery business from the B company. Before the contract is made, A is given a document that contains the following clause: 'A purchaser is entitled to return any goods within 12 days of purchase and receive a full refund. However, if the returned goods are not defective in any way then the customer must pay a £10 handling charge.' A does not read the conditions before buying the oven and now wants to return the oven immediately because she has decided to emigrate abroad. Which one of the following statements most accurately summarises the position?

A has not been given reasonable notice of the clause and is therefore not bound by it.

Because B is not in breach of contract, he is entitled to impose the £10 handling charge.

Under the Unfair Contract Terms Act 1977 s. 6, B has no right to impose the £10 handling charge.

Under the Unfair Contract Terms Act 1977 s. 3, B has no right to impose the £10 handling charge as A is dealing according to his (B's) written standard terms of business.

. The party seeking to challenge the effectiveness of an exemption clause has the burden of establishing that the clause has not been incorporated into the contract and does not cover the other (breaching) party's liability in issue.

True

False

. A was travelling abroad for business purposes and hired a car from B company. The contract of hire exempted B from liability for 'any losses or damage suffered by the hirers, whether caused by our company's neglect or fault or not'. At the time of contracting, A made it clear that he wanted to leave his personal belongings in the car from time to time and B expressed no objection. When A parked the car outside a cinema, his personal belongings left in the car were stolen. It was discovered that this was solely attributed to the negligence of one of B's staff, who failed to repair the defective back door of the car. One of the legal questions arising from this case was whether the exemption clause covered B's negligence liability for the lost property. Which one of the following statements is probably true in respect of this legal question?

The clause did not cover B's negligence liability, because the word 'negligence' was not used.

The clause did cover B's negligence liability because the words used in that clause were wide enough to cover such liability.

The clause did cover B's negligence liability because the word 'neglect' used in that clause was a synonym of negligence.

The clause did not cover B's liability for negligence, because negligence was not the only ground of B's liability for the lost property.

. A buys a train ticket from a self-service machine for the purpose of travelling to an important business meeting. The ticket contains the following clause printed on its face in large, red letters: 'No liability in negligence is accepted for injury or death caused to passengers whilst travelling on this train.' Which one of the following statements is most likely to be true in relation to the exclusion clause?

The clause is subject to the reasonableness test under the Unfair Contract Terms Act 1977 s. 11.

The clause is binding upon A because it has been reasonably drawn to his attention.

The clause is not binding upon A, either because it has not been incorporated into the contract or because it is otherwise automatically unenforceable under the Unfair Contract Terms Act 1977.

The clause is not binding upon A because it is particularly onerous and, consequently, has not been reasonably brought to A's attention.

. For the purposes of the Consumer Rights Act 2015, if the parties have not raised the question of the fairness of a term as an issue and have not indicated an intention to do so, a court has no power to raise the issue itself.

True

False

. A booked a business trip at the Metropole Hotel, Moscow, with B Ltd. The contract (supplied on B Ltd's standard terms) contained a highlighted clause allowing B Ltd to relocate A to another hotel if the Metropole has been overbooked. Which one of the following statements most accurately describes the enforceability of that clause?

The clause is subject to the test of reasonableness according to the Unfair Contract Terms Act 1977, s. 7.

The clause is subject to the test of reasonableness according to the Unfair Contract Terms Act 1977, s. 3.

The clause is unenforceable against A according to the Unfair Contract Terms Act 1977, s. 7.

The clause is unenforceable against A according to the Unfair Contract Terms Act 1977, s. 3.

. In applying the reasonableness test under the Unfair Contract Terms Act 1977 to commercial contracts, the courts generally take a non-interventionist approach. In which one of the following cases was this approach not applied?

George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803.

Watford Electronics Ltd v Sanderson CFL Ltd [2001] EWCA Civ 317, [2001] 1 All ER (Comm) 696.

Monarch Airlines Ltd v London Luton Airport Ltd [1997] CLC 698.

Photo Production Ltd v Securicor Transport Ltd [1980] AC 827.

. In applying the reasonableness test under s.11 of the Unfair Contract Terms Act 1977 to determine whether the term is a fair and reasonable one to have included, the courts make a broad assessment of the parties' relationship, considering factors such as the circumstances known to the parties at the time of contracting, as well as all relevant events subsequent to the contract's formation and the effect of those events on each party.

True

False

. Which one of the following statements in relation to the question whether a contractual provision is unfair for the purposes of the Consumer Rights Act 2015 is incorrect?

In assessing whether a term is unfair it is necessary to take into account all the circumstances existing when the term was agreed, together with all the other terms of the contract or any other contract on which it depends.

The question whether a notice causes a 'significant imbalance' is one of substance and requires consideration of the particular provision in the context of the contract as a whole.

In deciding whether a term is unfair, it is necessary to take into account the nature of the subject matter of the contract.

A court must assess a term specifying the main subject matter of the contract for fairness, even if that term is transparent and prominent.

Chapter 6 Multiple choice questions

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