CLL234
1. Betty signed a consignment of wool from Barlambs Ltd signing the letter to give the impression that the order came from Cosy Knitwear, a prestigious knitwear manufacturer; a firm well known and trusted by Barlambs Ltd. Barlambs only conducted business with certain companies within the area, Cosy knitwear being one of them. Betty turned out to be a rogue. Would the contract be valid?
The contract would not be void by reason of the caveat emptor rule
The contract will be void on the grounds of illegality.
The contract will be void due to lack of consideration
The contract will be void as Barlambs wool had only intended to do business with Cosy Knitwear. There was therefore a mistake concerning the identity of the other party to the contract.
2. An operative mistake can be classified into three areas: Common mistake; mutual mistake and unilateral mistake. Which of the following statements is incorrect?
A common mistake will occur where there has been a mistake about the existence of the subject matter of the contract at the time that the contract was formed.
An operative mistake will render a contract voidable at common law.
A mutual mistake will occur where the parties are at cross-purposes over the meaning of the contract.
A unilateral mistake will be recognised where the claimant can show that he intended to contract with a person other than the one with whom he actually did contract with.
3. When will the courts presume that there has been undue influence is the signing of a contract?
In all contracts made between a married couple (or a co-habiting partner).
Where there is a fiduciary relationship with the party against whom the undue influence is alleged.
The courts will not presume undue influence. The party alleging undue influence must prove it has occurred.
Where the contract is oral.
4. The possible remedies for negligent misrepresentation in a non-consumer contract are:
Specific performance.
Rescission only.
Damages only.
Rescission and damages.
5. Misrepresentation in a contract makes the contract:
Void
Illegal.
Voidable
Unenforceable.
6. Which of the following statements is incorrect?
The presence of duress makes a contract void.
Duress is where a party has entered into a contract after one party has threatened physical violence or serious economic coercion.
Undue influence is where a party has entered into a contract after excessive persuasion
The presence of undue influence makes a contract voidable.
7. An operative mistake in a contact makes the contract:
Void
Illegal.
Unenforceable.
Voidable
9. Which case is authority for the fact where the subject matter of a contract is of a quality different to that anticipated, the mistake will not be sufficient to render the contract void, unless both parties are mistaken and the mistake concerns the existence of some quality which makes the thing without the quality essentially different from the thing that it was believed to be?
Kings Norton Metal Co Ltd v Edridge, Merrett,& Co Ltd
Bell v Lever Brothers Ltd [
K. Challaram and Sons Ltd. v. Messrs. Costain (West Africa ) Ltd
Shogun finance Ltd v Hudson
10. Which one of the following statements is incorrect?
Misrepresentations cover false statements and half truths.
A statement which is true when it is made but becomes false before the contract is completed may amount to a misrepresentation.
To be actionable the misrepresentation must be the only reason that persuaded the other party to enter into the contract.
To be actionable the misrepresentation must be the only reason that persuaded the other party to enter into the contract.
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