Chapter 10 Multiple Choice Questions

. A contract will not be frustrated if one party is ……… in causing the frustrating event.

. The absolute contracts rule was abolished in ………, in which case the owners of a hall were not obliged to provide a hall after the hall had burnt down.

. It is impossible to frustrate a lease.

True

False

. In Fibrosa SA v Fairbairn Lawson Combe Barbour (1943), the House of Lords? Please select all that apply.

overruled Chandler v Webster.

recognized that a party can recover money paid in advance of a frustrating event, if the consideration for that payment has totally failed.

approved Chandler v Webster.

denied recovery of money paid in advance of a frustrating event, and reaffirmed the common law rule that frustration only affects the parties' future obligations.

. James pays a haulage company £1,000 in advance of its carrying his cider from London to Scotland on 20 March. In January, Scotland declares itself an independent state and makes it illegal to import certain types of goods from England that may compete with traditional Scottish products. Cider is on the list of banned goods. The haulage company has incurred £400 of expenses in adapting its truck to carry the casks of cider and James has wasted expenses of £2,000 if the delivery is not made in time, because the cider will go off. The total amount payable under the contract was £3,000. Which one of the following statements is true?

The contract is frustrated, but James remains liable to pay the £3,000 because he did not stipulate in the contract that it should not be payable if the contract were to be frustrated.

The contract is frustrated and James can recover the £1,000 paid in advance, but the haulage company will definitely be able to deduct its expenses of £400.

The contract is frustrated and James can recover the £1,000 paid in advance, but the haulage company is unlikely to be allowed to deduct its full expenses of £400.

The contract is not frustrated, because it is possible for the haulage company to perform its contract and deliver the casks to Scotland by disguising them as whiskey.

. The common law rule in Chandler v Webster excused the parties from performing their ……… obligations.

. Section 1(2) of the Law Reform (Frustrated Contracts) Act 1934 provides that? Please select all that apply.

all money paid in advance of discharge of the contract is recoverable.

money payable in advance of discharge of the contract can only be recovered if there is a total failure of consideration.

the court has a discretion to award expenses incurred, up to the limit of advance payments due or received.

sums payable before the frustrating event cease to be payable.

. Dan agrees to replace the tiles on Rebecca's roof for £2,000. Dan replaces three-quarters of the roof and leaves the rest for the next day. There is an overnight storm and Rebecca's house is destroyed.

The contract is frustrated and Dan can claim a just sum under s. 1(3) of the Law Reform (Frustrated Contracts) Act 1934, because he conferred a valuable benefit on Rebecca by replacing three-quarters of her roof.

Dan is entitled to the full £2,000 because he has taken all reasonable efforts to perform his side of the agreement.

Dan should not have left the roof half-finished and, because his negligence caused the frustrating event, he cannot rely on the contract being frustrated.

The contract is frustrated, but Dan cannot claim a just sum for the work done under s. 1(3) of the Law Reform (Frustrated Contracts) Act 1934, because the frustrating event destroyed his work and so there is no valuable benefit to Rebecca.

. The parties in Fibrosa v Fairbairn (1943) agreed to prolong the contract in the event of war, demonstrating that they foresaw the risk of war, and so the contract should not have been frustrated.

True

False

. Under the common law, a party has to repay an advance payment where there has been a total failure of consideration, but cannot recover expenses incurred in performing a frustrated contract.

True

False

. Match the case to the frustrating event put forward in the case.

Davis Contractors v Fareham UDC (1956)

.

Fibrosa v Fairbairn (1943)

.

Graves v Cohen (1930)

.

Taylor v Caldwell (1863)

. Why was the contract in Maritime National Fish Ltd v Ocean Trawlers Ltd (1935) not frustrated?

Because it was a case of self-induced frustration.

Because the trawler could be put to other uses, so the purpose was not wholly frustrated.

Because the trawler operator had enough licences to give one to the St Cuthbert but chose instead to allocate the licences to its own trawlers.

Because, whilst frustration can exceptionally apply to a lease, it can never apply to a licence.

. An agreement to sell specific goods is avoided under s. 7 of the SoGA 1979 if the goods perish after risk passes to the buyer.

True

False

. ……… is an alternative means of settling a dispute, and, in contrast to litigation in the courts, it is private and the parties have more control over the rules of procedure.

. The contract in Jackson v Marine Insurance Co Ltd was frustrated because the ship was delayed for six months.

True

False

Quiz Content