Chapter 8 Multiple Choice Questions

. A party is not bound by a contract if he entered it under a mistake.

True

False

. A void contract has never been a contract and never will be.

True

False

. There is a strong presumption in correspondence contracts that the person named in the correspondence is the person with whom the other party intends to contract.

False

True

. Which of the following form part of Lord Phillips' five principles in The Great Peace (2002) in relation to common mistake? Please select all that apply.

There must be a common assumption as to the existence of the state of affairs.

The non-existence of the state of affairs must render the performance of the contract impossible.

The non-existence of the state of affairs must not be attributable to the fault of either party.

The common assumption must be communicated orally by one party to the other.

. The £50,000 compensation payment in Bell v Lever Bros (1932) was:

recoverable, because the two employees did not realize that their employment contracts could be terminated without compensation by reason of their speculation activity in breach of contract.

valid, but the employment contract was void because the two employees did not realize that their employment contracts could be terminated without compensation by reason of their speculation activity.

valid, because the employer's mistake in relation to its ability to terminate the employees' employment contract was not fundamental.

recoverable, because the employer did not realize that he was entitled to terminate the employees' employment contract without paying compensation on account of the employee's speculation in breach of contract.

. The contract in Smith v Hughes was:

void, because the racehorse trainer thought that the oats were old and made a mistake of quality, but not a mistake as to the terms of the contract.

sent for retrial, because the judge had not made it clear to the jury that there was a difference between finding that the farmer mistakenly believed that the oats were old and that he mistakenly believed that it was a term of the contract that the oats were old.

sent for retrial, because the judge had not made it clear to the jury that there was a difference between finding that the racehorse trainer mistakenly believed that the oats were old and that he mistakenly believed that it was a term of the contract that the oats were old.

voidable, because the racehorse trainer made a fundamental mistake in believing that the farmer promised that the oats were old when, in fact, they were new.

. The contract in Hartog v Colin & Shields (1939) was void because:

the objective agreement was to sell the skins per pound, but the buyer knew that the seller subjectively meant to sell them per piece.

the objective agreement was to sell the skins per piece, but the seller was mistaken because he subjectively intended to sell per pound.

the buyer and seller had different subjective intentions: the buyer wanted to buy per pound but the seller wanted to sell per piece.

the seller subjectively intended to sell the skins per pound and knew that the buyer subjectively intended to buy the skins per pound.

. Mr Hudson's contention that he had good title to the car in Shogun Finance v Hudson (2003) included which of following arguments? Please select all that apply.

Section 27 of the Hire Purchase Act 1964 provided an exception to the common law rule that a person could not give title when he himself has no title.

The purported contract between the rogue and the finance company was void.

The contract between the rogue and the finance company was voidable, due to the rogue's fraudulent misrepresentation, and the finance company had failed to rescind it before title passed to Mr Hudson.

The contract between the rogue and the finance company was voidable, due to the rogue's fraudulent misrepresentation, and the finance company had rescinded it before title passed to Mr Hudson.

. A contract valid at common law nevertheless used to be potentially voidable in ………, but that is no longer good law after The Great Peace established that the common law rule established in Bell v Lever Bros (1932) was the sole rule.

. A common mistake between the parties must be ……… in order to make the contract void.

. The doctrine of common mistake deals with circumstances in which the parties make a mistake about the facts at the time of contracting, but the doctrine of ……… deals with circumstances in which the facts change after contracting.

. Ben advertises 'Bat for sale'. Adam offers to buy the bat and Ben accepts. Adam subjectively believes that Ben intends to sell a cricket bat but Ben subjectively intends to sell his pet bat. The advert was placed in Ben's pet shop window.

Adam has made a common mistake because his subjective belief differs from Ben's subjective belief.

Adam has made a communication mistake because his subjective belief differs from the objective agreement for the sale of a pet, but the contract is not void because Ben did not know of or cause this mistake.

There is no communication mistake because neither Adam nor Ben spoke about their respective beliefs about the meaning of 'bat'.

Ben should have known that the word 'bat' was ambiguous and capable of having two meanings, and so he is bound by Adam's interpretation.

. Which of the following features contributed to the court finding that the contract in Scriven Bros v Hindley and Co was void? Please select all that apply.

The defendant thought that he was bidding for hemp, when he was objectively bidding for tow.

The defendant thought that he was bidding for tow, when he was objectively bidding for hemp.

The owner negligently misled the buyer by marking both hemp and tow with the same shipping mark.

The buyer was at fault for not examining the lot being sold properly.

. A buyer who knows that the other party has made a mistake and tries to 'snap up' an offer will be bound by the terms subjectively intended by the other party.

True

False

. The decision of the Court of Appeal in Lewis v Averay is difficult to reconcile with the majority decision of the Court of Appeal in ………, because, in both cases, the seller checked the rogue's identity before letting him take the car away, but in the first case, the contract was voidable, and in the second case, the contract was void.

. Cundy v Lindsay (1878) is still good law and a contract in writing will be presumed to be between the parties identified in the writing.

True

False

Quiz Content