Contract & Tort

Question 1

What are the common law rules for an exclusion clause to be valid?

Answer 1

1) Clause must have been properly incorporated into the contract via:
- Signature
- Notice
- Course of dealings between parties

2) Wording of the clause must cover the loss suffered

Question 2

Exceptions to past consideration

Answer 2

1) The act constituting the consideration must have been done at the promisor’s request;
2) There must have been an understanding between the parties that the act would be remunerated; and
3) The payment or benefit must have been legally enforceable had it been promised at the same time that the act was performed.

Question 3

English law does not recognise a promise to accept part payment of a debt. What are the exceptions to this? (6)

Answer 3

• Debt is uncertain and disputed in good faith
• Unliquidated claims
• Earlier payment or at a different place
• Payment made by a third party
• Payment is made by different means at the request of creditor
• A composition with creditors - agreement between debtor facing financial difficulties and their creditors

Question 4

When does a claimant’s action break the chain of caustion?

Answer 4

When the claimant acted entirely unreasonably

Question 5

What must damage be caused by for the Occupiers’ Liability Acts to apply?

Answer 5

The state of the premises

Question 6

What test or tests must am exclusion clause pass to be effective?

Answer 6

The common law rules and then the statutory tests

Remember:
- common law -> signature, notice, course of dealings
- statutory - UCTA 1977

Question 7

What does the UCTA test of reasonableness require?

Answer 7

The term must have been a:
- fair and reasonable one to be included having regard to the circumstances
- which were or ought to have been
- known to or in the contemplation of the parties when the contract was made

Question 8

What does the UCTA provide that the courts must consider in addition to the other factors when deciding whether a limitation clause is reasonable?

Answer 8

• The resources available to the party relying on the limitation of liability clause and
• whether it was open to them to protect themselves using insurance

Question 9

What action can a party take from entering into a contract as a result of a misrepresentation from he third party?

Answer 9

The party can sure the dealer for damages under tort (tort of deceit) only

Question 10

Under the Consumer Protection Act (CPA), damages can be recovered for property damage of how much?

Answer 10

Exceeding £275

Question 11

Which nuisance requires there to be a continuing state of affairs?

Answer 11

Private nuisance

Question 12

What is private nuisance?

Answer 12

An unlawful interference with the claimant’s use of land.

Interference is unlawful when it is substantial and unreasonable

Question 13

When there is a break in the chain of causation, what is the effect on the defendant’s liability?

Answer 13

The defendant is not liable for that injury

Question 14

Can a solicitor who used to deal with civil claims but now deals with criminal law, act for clients in a civil case?

Answer 14

Yes, provided the solicitor is sufficiently up to date to deal with the case in a competent and timely manner

Question 15

In a case of part payment of debt where there appears to be economic duress, and the party pays and waits a long time to bring a claim, what would the courts likely find?

Answer 15

That the customer affirmed the contract

Question 16

What is the Consumer Protection Act 1987 about?

Answer 16

It creates a regime for strict liability for damage caused by defective products

Question 17

Fault doesn’t need to be proved under the CPA 1987 but what does?

Answer 17

That there was a defect in the product

Note: a product may cause injury but not be defective

Question 18

Under the CPA, when is a product defective?

Answer 18

If its safety is not such as persons generally are entitled to expect

Question 19

What types of damage are excluded from coverage under the CPA 1987?

Answer 19

• Damage to the defective product itself
• Damage to business property
• Property damage which does not exceed £275

Question 20

Defenses under the CPA

Answer 20

1) There was no defect when the product was first put into circulation

2) D did not supply the product in the course of a business
- not acting in the course of a business and
- D was not the producer of the product, or was not acting with a view to profit

3) State of the Art defense

4) Contributory negligence

5) No exclusion of liability

Question 21

When can D not rely on the State of the Art defense?

Answer 21

Where the product carries a known risk of containing a defect but the state of scientific and technical knowledge would be unable to detect that defect before supply

Question 22

What is the time limits for claims of a breach of contract under a deed?

Answer 22

12 years

Question 23

Contracts that must be made in a deed to be enforceable

Answer 23

• Promises where nothing is received in return
• Conveyance of land

Question 24

What is the purpose of damages in contract?

Answer 24

To put the innocent party in the position in which they would have been if the contract had been performed

Question 25

Damages for injury to feelings such as mental distress, loss of enjoyment and disappointment will not usually be awarded, except in what contracts?

Answer 25

Consumer contracts in which the sole purpose was enjoyment (i.e, the provision of a holiday)

Question 26

Where a breach is awarded but no actual loss is proven, can any damage be awarded?

Answer 26

Yes Nominal damages

Question 27

When may a restitution be sought?

Answer 27

To prevent unjust enrichment where no contract remedy is available

Question 28

What does restitution require?

Answer 28

Require the payment of money or the turnover of property - restitution required for services: quantum meruit - restitution for goods: quantum valebat

Question 29

Quantum merit

Answer 29

Restitution in relation to services, requiring payment of reasonable remuneration of work undertaken

Question 30

Quantum valebat

Answer 30

Restitution in relation to goods, requiring reasonable payment for the value of the goods

Question 31

Under the Contracts (Right to Third Parties) Act 1999 when may a third party enforce a term of a contract?

Answer 31

- the contract expressly provides so - the contract confers a benefit to the third party with the apparent intent to allow them to enforce it Note: the third-party or their class MUST BE CLEARLY IDENTIFIED. The rights CANNOT BE IMPLIED

Question 32

What contracts are excluded from the Contracts (Right to Third Parties) Act 1999?

Answer 32

- Employment contracts - A company’s articles of association

Question 33

If a third party has rights under a contract, when will the parties not be able to change it to the detriment of the third party? (3)

Answer 33

- Third party has agreed to the terms benefiting them - Has relied on the term, which the promisor is aware of OR - Promisor should have foreseen that the third party would rely on the term and the third party did

Question 34

When is time under the contract a condition and when is it a warranty?

Answer 34

- condition: time is stated - otherwise a warranty

Question 35

What are the remedies for a breach of condition?

Answer 35

Terminate contract and sue for damage

Question 36

What are the remedies for breach of warranty

Answer 36

Sue for damages But cannot terminate contract

Question 37

What is the parol evidence rule?

Answer 37

External evidence cannot add to, subtract from, contradict, or vary the terms of a written contract

Question 38

What are the remedies available for misrepresentation? (2)

Answer 38

- Rescission - Damages

Question 39

What is the effect of rescission as a remedy for misrepresentation?

Answer 39

Puts parties in the position they would be in if the misrepresentation was not made

Question 40

When is rescission as a remedy for misrepresentation not available?

Answer 40

- Innocent party affirms and/or waits too long after finding out to bring a claim - It is impossible to restore the parties back to the position they would be in if the representation was not made - A bona fide third-party purchaser for value has gained rights in subject matter and not aware of the misrepresentation

Question 41

What is the effect of damages for fraudulent, negligent, and innocent misrepresentation?

Answer 41

- Fraudulent: recover all losses incurred from the transaction - Negligent: can recover similar damages - Innocent: court’s discretion to award damages in lieu of rescission ( under MA)

Question 42

Can an actionable misrepresentation be about a future event? Why or why not?

Answer 42

No It requires a false statement of fact or law A statement of fact related to information past or present

Question 43

When can silence be an actionable misstatement? (3)

Answer 43

- in contracts uberrimae fidei (such as when only one party has access to relevant info) - Partial disclosure would be misleading - an earlier representation has become untrue

Question 44

What misrepresentation is created by the misrepresentation act?

Answer 44

Negligent misrepresentation

Question 45

What does MA 1967 say on the burden of disproving negligence?

Answer 45

- It is on the party making the representation (likely D) that is required to prove that they had reasonable grounds for believing , and did believe, until the contract was entered into That the facts represented were true

Question 46

What is meant by waiver in discharging a contract?

Answer 46

A promise not to enforce the other party’s obligation

Question 47

Does the waiving party had a right to reinstate the original obligation?

Answer 47

Yes By giving reasonable notice UNLESS the other party’s detrimentally relied on the waiver

Question 48

When does a non-breaching party have an immediate right to terminate the contract and/or sue for an anticipatory breach?

Answer 48

Where the breach goes to a condition of the contract.

Question 49

When is radically different performance a ground for frustration?

Answer 49

When the radical different is fundamental to the contract and The supervening event that makes it radically different was not considered by the parties when making the contract

Question 50

What is the purpose of damages in contract for the sale of goods?

Answer 50

To put the non-breaching party in the position they would have been in if the contract were properly performed

Question 51

An innocent party has a duty to mitigate damages by taking reasonable steps to minimize their loss, except for when?

Answer 51

When the claim is for a debt

Question 52

When will specific performance no longer be granted?

Answer 52

- The person unreasonably delayed seeking the remedy to the detriment of the other party Or - Engaged in unconscionable behavior with respect to the contract in question (unclean hands)

Question 53

Types of damages

Answer 53

- Expectation interest / loss of bargain - Reliance interest - Cost of cure - Non-monetary loss: loss amenity, loss of reputation - Nominal damages - Punitive damages

Question 54

Where there is no previous authority establishing the existence of a duty of care (novel duty), what 3 criteria have to be determined for a duty of care to arise?

Answer 54

1) Foreseeable risk of harm to C 2) A relationship of sufficient proximity between C and D 3) Whether it is fair, just, and reasonable in all circumstances to impose a duty of care

Question 55

Defenses to nuisance

Answer 55

- Prescription: continuously carried for at least 20 years - Statutory authority -> whether it permits nuisance too -

Question 56

What’s the rule with money in frustration of contracts?

Answer 56

Money paid before the frustrating event is recoverable And Money payable before the frustration even ceases to be payable

Question 57

Categories included under the term 'dependent' in relation to the Fatal Accidents Act

Answer 57

- Spouse / former spouse / person living as spouse or civil partner for at least 2 years before death - Parent / ascendant / person treated as a parent - Child / descendant / person treated as a child - Person who is, or is the issue of -> brother, sister, uncle, aunt

Question 58

The rule in Rylands v Fletcher

Answer 58

D is strictly liable where they: 1) bring onto their land something likely to cause harm if it escapes 2) use of land is non-natural (unusual) 3) the thing escapes and 4) foreseeable damage results (knew or ought reasonable to have known)

Question 59

Things taken into consideration when deciding whether an interference is unlawful

Answer 59

- Great intensity and long duration - Character of the neighborhood - C’s abnormal sensitivity will not be found to be nuisance - Malice - Reasonable care does not stop liability for nuisance - Where there is physical damage or encroachment, court doesn’t need to balance C’s rights with D’s

Question 60

Remedies to nuisance

Answer 60

- Injunction -> force D to stop - Damages -> compensate - Abatement -> self-help

Question 61

Cost of cure damages

Answer 61

Reasonable cost of putting C in the position they would have been in had the contract been properly performed

Question 62

Expected damages

Answer 62

Umbrella principle for damages

Question 63

Reliance damages

Answer 63

Wasted expenditure incurred in reliance to a contract

Question 64

The two different measures of damages in construction contracts

Answer 64

1) How much it would cost to cure a defect And 2) The difference in value between what was contracted for and what the innocent party actually received

Question 65

What is the doctrine of res ipsa loquitor?

Answer 65

“The thing speaks for itself”

Question 66

What 3 conditions must be satisfied for the doctrine of res ipsa loquitor to apply?

Answer 66

1) absence of explanation for how incident occurred 2) thing that caused accident must have been under D’s control 3) accident would not normally happen if proper care had been taken

Question 67

Courts are usually reluctant to interfere with the presumed intent of the contracts, is there any scenario in which they may be prepared to imply a term into a contract?

Answer 67

Yes Where it is necessary to give a contract “business efficacy” So to make them work in the way intended and contracted by the parties

Question 68

Can an innocent party recover pre-contractual costs where the other party breaches or repudiates a contract?

Answer 68

Yes If those costs were reasonable foreseeable Or Known to the breaching party at the time of the contract Note: reliance loss may still be recovered even when profit cannot be proven, where loss flows from the breach

Question 69

What is the legal position on a contract made face-to-face / in person where one party is impersonating someone else?

Answer 69

The law presumes that the seller intended to deal with the person physically present, regardless of any false identity Voidable not void typically

Question 70

What is the test for whether a liquidated damage clause can be enforceable from breach of contract!?

Answer 70

Whether it: - Serves a legitimate commercial And -Imposes a detriment that is not extravagant or unconscionable in relation to that interest

Question 71

When is the character of the neighborhood relevant?

Answer 71

When considering loss of amenity NOT tangible damage