Chapter 6 Multiple-choice questions

. The basic distinction between a representation and a term is that a term involves a promise to achieve a certain result, whereas a representation involves a promise to use reasonable care and skill to achieve a certain result.

True

False

. The parol evidence rule asserts that, if the contract is written, then that writing is the whole contract and the parties cannot use implied terms to add to, vary or contradict that writing.

True

False

. Which one of the following terms is most likely to have been successfully incorporated into the contract?

A clause in a timesheet that is signed by both parties.

A clause on the back of a scratch card given free with a newspaper, on the front side of which card is printed 'subject to the terms on the back'.

A highlighted clause in a ticket issued by an automatic machine outside a car park.

An onerous clause in small print on the back page of a written agreement.

. Under the Supply of Goods and Services Act 1982, the suppliers of services are not bound to guarantee outcomes of services but are only bound to carry out the services with reasonable care and skill.

True

False

. Where a statement made by one party before the conclusion of the contract is found to be untrue, the innocent party's remedies may vary according to whether the statement is characterized as a term or a representation. If the statement is characterized as a term, which one of the following assertions relating to the innocent party's remedies is true?

The innocent party may terminate the contract.

The innocent party is not entitled to claim damages unless it proves the misstating party's fault.

The innocent party is generally entitled to damages for expectation losses.

The innocent party may recover all those losses that are directly caused by the misstating party.

. Where the parties insert an 'entire agreement clause' into their written contract, which one of the following statements relating to the effect of such a clause is true?

The clause prevents the parol evidence rule from operating.

The clause excludes all extrinsic evidence, including oral evidence of a collateral contract, from the admissible evidence of the contract terms.

The clause does not prevent the court from substituting terms in a collateral contract for inconsistent written terms.

The clause will automatically prevent any claim being brought for misrepresentation.

. Terms implied in law do not depend on any intention imputed to the parties. It suffices if the term is a reasonable one according to the particular circumstances of the contract in question.

True

False

. Jimmy Jeanz is a famous brand of jeans. It has a contract to supply a retailer, House of Jeans, with stock of its jeans. In a sale of goods contract of this type, the jeans must be of satisfactory quality (SGA 1979, s. 14(2)). Which one of the following statements is a correct application of this provision?

House of Jeans can return any jeans and claim a full refund if it struggles to sell the Jimmy Jeanz jeans in its shops due to low demand.

House of Jeans can return a faulty pair of jeans even if the defect has been brought to its attention at the time of the sale and a lower sale price has been agreed.

If the colour of the jeans fades after only one washing, the seller has the right either to give a full refund or to issue a credit note.

If all the zippers in a batch of 100 jeans are broken, House of Jeans is entitled to return all these jeans and claim a full refund.

. Which of the following approaches might be applied by the courts post-Marks & Spencer plc v BNP Paribas Securities Services Trust Co. (Jersey) Ltd [2015] UKSC 72, [2016] AC 742 in connection with the implication of a term in fact into a contract? [Please select all that apply.]

A term can be implied if the parties would have definitely agreed upon it had they been asked about it by an officious bystander at the time of contracting.

It will often be appropriate for a court to first construe the express words of a contract before considering whether a term should be implied.

A term will be implied into a commercial contract whenever the court considers it fair to do so.

An appropriate question to ask is whether the implication of a term would give "business efficacy" to the contract.

. A, the owner of a large chain of off-licences, wishes to purchase 100,000 bottles of Liebzig white wine from B, a wine wholesaler. A states his particular wish to purchase wine of a 2007 vintage because this appears to offer the best mix of quality and value. In B's opinion, the wine is of the correct vintage but, as there are no labels on the bottles, he advises A to verify this fact independently. A purchases the wine but subsequently discovers that the wine was produced in 2009, an inferior vintage. A and B cannot agree whether the vintage of the wine was a term of the contract. Which one of the following statements probably summarises the legal position between the parties?

The vintage is a term of the contract because A has clearly attached special importance to that issue.

Because B tells A to verify the vintage independently, it is clear that there is no intention that the vintage would be a term of the contract.

The vintage is a term of the contract because this is a condition precedent for the contract to come into existence.

The vintage is not a term of the contract because A and B are equally experienced and knowledgeable on such issues.

. Which of the following statements relating to the rules of interpretation laid down by Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 898 are true? [Please select all that apply.]

Interpretation of contract should be made in accordance with principles of commercial common sense.

Interpretation of contracts should take account of both the factual background and the state of the law that would reasonably have been available to the parties at the time of the contract.

As a general rule, a court may have recourse to pre-contractual negotiations to explain the meaning that the parties must be taken to have intended for their contractual document.

The literal meanings of separate words may sometimes yield to the commercial meaning of the document reasonably understood as a whole.

. Where a contract has the effect of producing a result that the court considers surprising or unreasonable, the court need not uphold the contract's terms even if the language within the contract is clear and unambiguous.

True

False

. The decision of the Supreme Court in Wood v Capita Insurance Services Ltd [2017] UKSC 24, [2017] AC 1173 confirms interpretation is a unitary exercise whereby textualism and contextualism are not conflicting paradigms.

True

False

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