1
Q
Front
A
Back
2
Q
An online ad says: “First 50 customers who click ‘Buy’ get a laptop for 1 SEK—guaranteed.” A customer clicks ‘Buy’ and pays, but the seller refuses. Is the ad likely an offer or invitation to treat?
A
Likely an offer if it’s clear, definite, and promises to be bound upon performance; performance/acceptance completes the contract. If it’s mere sales puff or lacks definiteness, it’s invitation to treat. Rule: Clear advertisement with definite promise = offer; performance = acceptance.
3
Q
Parties email a draft deal and never sign. They nevertheless begin performance: goods delivered, invoices paid for 2 months. When a dispute arises, one party says ‘no signature, no contract.’ Outcome?
A
A contract can be formed without a signature if the parties’ words and conduct show agreement on essential terms. If they perform as if bound (deliver, pay, start work) despite an unsigned draft, the court can infer acceptance by conduct. So the deal is enforceable on the agreed essentials (and any incorporated terms).
4
Q
A buyer posts an acceptance letter as the offer contemplated post. Before it arrives, the seller emails: “I revoke.” The buyer’s letter is lost. Is there a contract, and when (if at all) was it formed?
A
Under the postal rule, acceptance is effective when properly posted, but revocation is only effective when received. So if the offeree posted a valid acceptance before receiving the revocation, a contract forms at posting. The offeror is bound despite the later-arriving withdrawal.
5
Q
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
A
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
6
Q
Seller quotes on its terms (including a price-escalation clause). Buyer sends a purchase order on its own terms (no escalation). Seller signs and returns buyer’s acknowledgement slip and ships. Costs rise; seller claims extra. Which terms govern?
A
In a battle of forms, a purported acceptance on different terms is a counter‑offer, and the contract is on the terms last accepted by conduct (‘last shot’). If one party sends its terms last and the other proceeds without objection (e.g., takes delivery/pays), that conduct usually accepts those terms. So the operative terms are the last set put forward and accepted by performance.
7
Q
Two firms agree on ‘shipment on the Aurora from Shanghai’. Unknown to both, two ships named Aurora sail a month apart. Each party reasonably had a different ship in mind. Enforceable contract?
A
No. If the parties are not ad idem on a fundamental term and each understanding is reasonable, there is no true agreement and the contract is void. Rule: A valid contract requires agreement on the same thing on the same sense.
8
Q
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
A
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
9
Q
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
A
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
10
Q
Fraudster buys goods using a stolen identity. The contract is a written finance/hire-purchase agreement naming the real person. Fraudster resells to an innocent third party before the fraud is discovered. Can the finance company recover the goods?
A
Yes, if identity was fundamental in a written contract with a named person: the contract can be void for mistake, so title never passes to the fraudster or third party. Rule: Where a contract is made in writing with a specific named person, a mistake as to identity can render the contract void , preventing title from passing. This contrasts with face-to-face contracts (e.g.
11
Q
Parties orally agree: “We will negotiate in good faith and not talk to anyone else until we reach agreement.” No time limit is stated. One party walks away and sells to a third party. Is the ‘good faith negotiation’ promise enforceable?
A
Generally no: bare agreements to negotiate in good faith are unenforceable for uncertainty. A lock-out can be enforceable only if sufficiently certain (e.g., fixed period). Rule: Agreements to negotiate (even in good faith) are not enforceable under English law.
12
Q
Parties discuss a service contract. Client asks Consultant to start work immediately ‘so we don’t lose time’, but negotiations later collapse and no contract is concluded. Consultant has delivered valuable work. What claim/value basis is most likely available?
A
Consultant may recover a reasonable sum on a restitutionary basis (quantum meruit) for work done at the other party’s request in anticipation of a contract that never materialised. When work is done at another party’s request in anticipation of a contract that never materialises, the performing party may recover a reasonable sum (quantum meruit), even though no contract existed. Therefore, apply the rule to the facts and conclude whether a binding contract/remedy exists.
13
Q
Parties email a draft deal and never sign. They nevertheless begin performance: goods delivered, invoices paid for 2 months. When a dispute arises, one party says ‘no signature, no contract.’ Outcome?
A
A contract can be formed without a signature if the parties’ words and conduct show agreement on essential terms. If they perform as if bound (deliver, pay, start work) despite an unsigned draft, the court can infer acceptance by conduct. So the deal is enforceable on the agreed essentials (and any incorporated terms).
14
Q
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
A
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
15
Q
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
A
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
16
Q
An agent signs a contract in their own name; the third party has no idea there is a principal. Later, the principal tries to ‘ratify’ and enforce the contract against the third party. Can the principal ratify in these circumstances?
A
Ratification lets a principal adopt an unauthorized act, treating it as authorized from the outset, but it must be timely and cannot prejudice third‑party rights. So if circumstances have changed or rights have intervened, ratification may be barred. If validly ratified, the principal becomes bound as if the agent had authority.
17
Q
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
A
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
18
Q
An agent signs a contract in their own name; the third party has no idea there is a principal. Later, the principal tries to ‘ratify’ and enforce the contract against the third party. Can the principal ratify in these circumstances?
A
Ratification lets a principal adopt an unauthorized act, treating it as authorized from the outset, but it must be timely and cannot prejudice third‑party rights. So if circumstances have changed or rights have intervened, ratification may be barred. If validly ratified, the principal becomes bound as if the agent had authority.
19
Q
A collector agrees to sell a rare coin worth £10,000 for £10 because they urgently need cash. Later they regret it and claim lack of consideration. Does ‘too cheap’ mean no consideration?
A
Consideration requires something of value in the eyes of the law and must move from the promisee, but it need not be adequate. So even a small benefit/detriment can support the promise as long as it is real and not illusory. Without consideration (and absent a deed/estoppel), the promise is not enforceable.
20
Q
A company asks a consultant to secure a key introduction. Consultant does so. After the deal closes, the company promises a £50k bonus for that introduction, then refuses. Is the act ‘past consideration’ or can it support the promise?
A
Past consideration is generally not good consideration, but an earlier act can count if it was done at the promisor’s request with an understanding of payment. So if the service was requested and both contemplated remuneration, a later promise can be enforceable. Otherwise the promise is gratuitous and not binding.
21
Q
A company asks a consultant to secure a key introduction. Consultant does so. After the deal closes, the company promises a £50k bonus for that introduction, then refuses. Is the act ‘past consideration’ or can it support the promise?
A
Past consideration is generally not good consideration, but an earlier act can count if it was done at the promisor’s request with an understanding of payment. So if the service was requested and both contemplated remuneration, a later promise can be enforceable. Otherwise the promise is gratuitous and not binding.
22
Q
A parent already has a statutory duty to maintain a child. Another party promises to pay £200/month if the parent keeps the child ‘well cared for and happy’. Later they stop paying, arguing no consideration. Is there consideration?
A
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
23
Q
A contractor agrees to pay a subcontractor extra to finish on time because delay would trigger a penalty clause and replacement would be costly. Subcontractor is already bound to do the work. Contractor later refuses the extra. Is there consideration for the variation?
A
Past consideration is generally not good consideration, but an earlier act can count if it was done at the promisor’s request with an understanding of payment. So if the service was requested and both contemplated remuneration, a later promise can be enforceable. Otherwise the promise is gratuitous and not binding.
24
Q
A written contract contains a ‘No Oral Modification’ clause requiring signed written variations. Parties later agree orally to reschedule payments and act on it. One party later insists the oral variation is invalid because of the NOM clause. What is the likely outcome under the document?
A
Under the Supreme Court approach, NOM clauses are generally enforceable, so oral variations are usually ineffective unless requirements are met. Rule: Where a party promises extra payment to secure performance of an existing contractual duty, that promise is enforceable if: 1. The promisor obtains a practical benefit , and 2.
25
Debtor owes £50,000. Creditor agrees (in writing) to accept £40,000 immediately in ‘full and final settlement’. Debtor pays £40,000. Creditor later sues for the £10,000. Is the waiver binding without fresh consideration?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
26
Debtor owes £50,000. Creditor agrees (in writing) to accept £40,000 immediately in ‘full and final settlement’. Debtor pays £40,000. Creditor later sues for the £10,000. Is the waiver binding without fresh consideration?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
27
A contractor agrees to pay a subcontractor extra to finish on time because delay would trigger a penalty clause and replacement would be costly. Subcontractor is already bound to do the work. Contractor later refuses the extra. Is there consideration for the variation?
Past consideration is generally not good consideration, but an earlier act can count if it was done at the promisor’s request with an understanding of payment. So if the service was requested and both contemplated remuneration, a later promise can be enforceable. Otherwise the promise is gratuitous and not binding.
28
Debtor owes £50,000. Creditor agrees (in writing) to accept £40,000 immediately in ‘full and final settlement’. Debtor pays £40,000. Creditor later sues for the £10,000. Is the waiver binding without fresh consideration?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
29
Creditor tells Debtor: ‘Pay half now and I will not enforce the rest.’ Debtor pays half relying on the promise. Later Creditor sues for the balance. Assume there was no fresh consideration. What equitable doctrine might restrict Creditor, and what are key limits?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
30
Creditor tells Debtor: ‘Pay half now and I will not enforce the rest.’ Debtor pays half relying on the promise. Later Creditor sues for the balance. Assume there was no fresh consideration. What equitable doctrine might restrict Creditor, and what are key limits?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
31
Creditor tells Debtor: ‘Pay half now and I will not enforce the rest.’ Debtor pays half relying on the promise. Later Creditor sues for the balance. Assume there was no fresh consideration. What equitable doctrine might restrict Creditor, and what are key limits?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
32
Creditor tells Debtor: ‘Pay half now and I will not enforce the rest.’ Debtor pays half relying on the promise. Later Creditor sues for the balance. Assume there was no fresh consideration. What equitable doctrine might restrict Creditor, and what are key limits?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
33
Creditor tells Debtor: ‘Pay half now and I will not enforce the rest.’ Debtor pays half relying on the promise. Later Creditor sues for the balance. Assume there was no fresh consideration. What equitable doctrine might restrict Creditor, and what are key limits?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
34
Debtor owes £50,000. Creditor agrees (in writing) to accept £40,000 immediately in ‘full and final settlement’. Debtor pays £40,000. Creditor later sues for the £10,000. Is the waiver binding without fresh consideration?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
35
Creditor tells Debtor: ‘Pay half now and I will not enforce the rest.’ Debtor pays half relying on the promise. Later Creditor sues for the balance. Assume there was no fresh consideration. What equitable doctrine might restrict Creditor, and what are key limits?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
36
Creditor tells Debtor: ‘Pay half now and I will not enforce the rest.’ Debtor pays half relying on the promise. Later Creditor sues for the balance. Assume there was no fresh consideration. What equitable doctrine might restrict Creditor, and what are key limits?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
37
Parties orally agree: “We will negotiate in good faith and not talk to anyone else until we reach agreement.” No time limit is stated. One party walks away and sells to a third party. Is the ‘good faith negotiation’ promise enforceable?
Generally no: bare agreements to negotiate in good faith are unenforceable for uncertainty. A lock-out can be enforceable only if sufficiently certain (e.g., fixed period). Rule: A long-standing commercial relationship does not automatically create an implied contract .
38
Creditor tells Debtor: ‘Pay half now and I will not enforce the rest.’ Debtor pays half relying on the promise. Later Creditor sues for the balance. Assume there was no fresh consideration. What equitable doctrine might restrict Creditor, and what are key limits?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
39
Creditor tells Debtor: ‘Pay half now and I will not enforce the rest.’ Debtor pays half relying on the promise. Later Creditor sues for the balance. Assume there was no fresh consideration. What equitable doctrine might restrict Creditor, and what are key limits?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
40
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
41
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
42
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
43
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
44
A carrier breaches a shipping contract with Seller, but the economic loss is suffered by Buyer (title already passed). Seller sues for Buyer’s loss. Can Seller recover substantial damages for that third‑party loss?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
45
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
46
A buyer wants the court to order delivery of a unique asset rather than money damages. What remedy is this, and when is it generally available?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
47
Debtor owes £50,000. Creditor agrees (in writing) to accept £40,000 immediately in ‘full and final settlement’. Debtor pays £40,000. Creditor later sues for the £10,000. Is the waiver binding without fresh consideration?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
48
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
49
A contract between A and B states: ‘B shall pay £5,000 to C on completion.’ C is named. B refuses to pay. Can C sue B directly, and when might this be excluded?
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
50
Creditor tells Debtor: ‘Pay half now and I will not enforce the rest.’ Debtor pays half relying on the promise. Later Creditor sues for the balance. Assume there was no fresh consideration. What equitable doctrine might restrict Creditor, and what are key limits?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
51
A contract has an ‘entire agreement’ clause. Buyer later sues for misrepresentation based on pre‑contract statements. Seller argues the clause bars the claim. Does an entire agreement clause alone exclude misrepresentation liability?
A false statement of fact inducing a contract can be misrepresentation, giving rescission and potentially damages depending on type (fraudulent/negligent/innocent). If the representee relied on the statement and it was material, the contract is voidable and may be unwound unless barred (affirmation, lapse, third‑party rights). So the buyer can usually rescind and may claim damages if the misrep is fraudulent or negligent.
52
A customer pays at a hotel reception. Only after entering the room do they see a sign excluding liability for theft. A theft occurs due to the hotel’s negligence. Is the exclusion clause incorporated?
An exclusion clause must be incorporated (signature, reasonable notice, or consistent course of dealing) before or at contracting. If the term was hidden or only provided after the contract formed, it won’t be incorporated against the other party. Even if incorporated, it may still be controlled by statutory reasonableness/unfairness rules.
53
A customer pays at a hotel reception. Only after entering the room do they see a sign excluding liability for theft. A theft occurs due to the hotel’s negligence. Is the exclusion clause incorporated?
An exclusion clause must be incorporated (signature, reasonable notice, or consistent course of dealing) before or at contracting. If the term was hidden or only provided after the contract formed, it won’t be incorporated against the other party. Even if incorporated, it may still be controlled by statutory reasonableness/unfairness rules.
54
A customer pays at a hotel reception. Only after entering the room do they see a sign excluding liability for theft. A theft occurs due to the hotel’s negligence. Is the exclusion clause incorporated?
An exclusion clause must be incorporated (signature, reasonable notice, or consistent course of dealing) before or at contracting. If the term was hidden or only provided after the contract formed, it won’t be incorporated against the other party. Even if incorporated, it may still be controlled by statutory reasonableness/unfairness rules.
55
A customer pays at a hotel reception. Only after entering the room do they see a sign excluding liability for theft. A theft occurs due to the hotel’s negligence. Is the exclusion clause incorporated?
An exclusion clause must be incorporated (signature, reasonable notice, or consistent course of dealing) before or at contracting. If the term was hidden or only provided after the contract formed, it won’t be incorporated against the other party. Even if incorporated, it may still be controlled by statutory reasonableness/unfairness rules.
56
A tribunal issues an award, but the respondent argues it never consented to the arbitration clause. On enforcement, can a national court re-examine consent, or must it defer to the tribunal?
Court can and must be satisfied there was a valid arbitration agreement; consent is foundational. Awards won’t be enforced without clear consent. Public policy refusal is narrow and merits aren’t re-tried.
57
A customer pays at a hotel reception. Only after entering the room do they see a sign excluding liability for theft. A theft occurs due to the hotel’s negligence. Is the exclusion clause incorporated?
An exclusion clause must be incorporated (signature, reasonable notice, or consistent course of dealing) before or at contracting. If the term was hidden or only provided after the contract formed, it won’t be incorporated against the other party. Even if incorporated, it may still be controlled by statutory reasonableness/unfairness rules.
58
A customer pays at a hotel reception. Only after entering the room do they see a sign excluding liability for theft. A theft occurs due to the hotel’s negligence. Is the exclusion clause incorporated?
An exclusion clause must be incorporated (signature, reasonable notice, or consistent course of dealing) before or at contracting. If the term was hidden or only provided after the contract formed, it won’t be incorporated against the other party. Even if incorporated, it may still be controlled by statutory reasonableness/unfairness rules.
59
A customer pays at a hotel reception. Only after entering the room do they see a sign excluding liability for theft. A theft occurs due to the hotel’s negligence. Is the exclusion clause incorporated?
An exclusion clause must be incorporated (signature, reasonable notice, or consistent course of dealing) before or at contracting. If the term was hidden or only provided after the contract formed, it won’t be incorporated against the other party. Even if incorporated, it may still be controlled by statutory reasonableness/unfairness rules.
60
A clause is drafted in detailed legal language, but the surrounding commercial background suggests a different reading. Can a court prioritise context over text, or is there a fixed hierarchy?
A contract can be formed without a signature if the parties’ words and conduct show agreement on essential terms. If they perform as if bound (deliver, pay, start work) despite an unsigned draft, the court can infer acceptance by conduct. So the deal is enforceable on the agreed essentials (and any incorporated terms).
61
A clause is drafted in detailed legal language, but the surrounding commercial background suggests a different reading. Can a court prioritise context over text, or is there a fixed hierarchy?
A contract can be formed without a signature if the parties’ words and conduct show agreement on essential terms. If they perform as if bound (deliver, pay, start work) despite an unsigned draft, the court can infer acceptance by conduct. So the deal is enforceable on the agreed essentials (and any incorporated terms).
62
A clause is drafted in detailed legal language, but the surrounding commercial background suggests a different reading. Can a court prioritise context over text, or is there a fixed hierarchy?
A contract can be formed without a signature if the parties’ words and conduct show agreement on essential terms. If they perform as if bound (deliver, pay, start work) despite an unsigned draft, the court can infer acceptance by conduct. So the deal is enforceable on the agreed essentials (and any incorporated terms).
63
A clause is drafted in detailed legal language, but the surrounding commercial background suggests a different reading. Can a court prioritise context over text, or is there a fixed hierarchy?
A contract can be formed without a signature if the parties’ words and conduct show agreement on essential terms. If they perform as if bound (deliver, pay, start work) despite an unsigned draft, the court can infer acceptance by conduct. So the deal is enforceable on the agreed essentials (and any incorporated terms).
64
A contract is silent on an essential practical point; without a term, performance would be unworkable. One party asks the court to imply a term. What is the test—fairness or necessity?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
65
A contract is silent on an essential practical point; without a term, performance would be unworkable. One party asks the court to imply a term. What is the test—fairness or necessity?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
66
A contract is silent on an essential practical point; without a term, performance would be unworkable. One party asks the court to imply a term. What is the test—fairness or necessity?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
67
Two businesses agree core terms (service + commission) but omit when commission is payable. One party later says ‘too uncertain, no contract’. What is the court’s approach if intention to be bound is clear?
Commercial agreements are presumed intended to create legal relations, while domestic/social arrangements are presumed not to (unless rebutted). So you look for objective indicators like formality, reliance, written terms, and the context to see if legal enforceability was intended. If intention is rebutted (or established), the agreement will be treated as non‑binding (or binding) accordingly.
68
A contract is silent on an essential practical point; without a term, performance would be unworkable. One party asks the court to imply a term. What is the test—fairness or necessity?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
69
A customer pays at a hotel reception. Only after entering the room do they see a sign excluding liability for theft. A theft occurs due to the hotel’s negligence. Is the exclusion clause incorporated?
An exclusion clause must be incorporated (signature, reasonable notice, or consistent course of dealing) before or at contracting. If the term was hidden or only provided after the contract formed, it won’t be incorporated against the other party. Even if incorporated, it may still be controlled by statutory reasonableness/unfairness rules.
70
A large IT supplier caps liability at £100k in standard terms for a public authority customer who had little ability to negotiate. A foreseeable software defect causes multi‑million loss. Is the cap enforceable?
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
71
A contract includes a liquidated damages clause ‘£10k per week of delay.’ The contract is later terminated for repudiation. Does the clause automatically apply after termination?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
72
A contract is silent on an essential practical point; without a term, performance would be unworkable. One party asks the court to imply a term. What is the test—fairness or necessity?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
73
A customer pays at a hotel reception. Only after entering the room do they see a sign excluding liability for theft. A theft occurs due to the hotel’s negligence. Is the exclusion clause incorporated?
An exclusion clause must be incorporated (signature, reasonable notice, or consistent course of dealing) before or at contracting. If the term was hidden or only provided after the contract formed, it won’t be incorporated against the other party. Even if incorporated, it may still be controlled by statutory reasonableness/unfairness rules.
74
A customer pays at a hotel reception. Only after entering the room do they see a sign excluding liability for theft. A theft occurs due to the hotel’s negligence. Is the exclusion clause incorporated?
An exclusion clause must be incorporated (signature, reasonable notice, or consistent course of dealing) before or at contracting. If the term was hidden or only provided after the contract formed, it won’t be incorporated against the other party. Even if incorporated, it may still be controlled by statutory reasonableness/unfairness rules.
75
Company hires a worker via an agency, but the company controls how and when the work is done day-to-day. The worker claims employment rights against the company. What is the key control-based principle?
Status depends heavily on control over how the work is done; supplying equipment or some instructions is not enough. A worker may be treated as employee of the party exercising real control. A worker supplied with equipment remains the employee of the supplier unless control has fully passed to the hirer.
76
A large IT supplier caps liability at £100k in standard terms for a public authority customer who had little ability to negotiate. A foreseeable software defect causes multi‑million loss. Is the cap enforceable?
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
77
A large IT supplier caps liability at £100k in standard terms for a public authority customer who had little ability to negotiate. A foreseeable software defect causes multi‑million loss. Is the cap enforceable?
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
78
A consumer mortgage has a complex exchange-rate mechanism affecting repayments. The term is grammatically clear but the economic impact isn’t explained. Can the term escape unfairness review as a ‘core price term’?
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
79
A written contract contains a ‘No Oral Modification’ clause requiring signed written variations. Parties later agree orally to reschedule payments and act on it. One party later insists the oral variation is invalid because of the NOM clause. What is the likely outcome under the document?
Under the Supreme Court approach, NOM clauses are generally enforceable, so oral variations are usually ineffective unless requirements are met. Rule: ( Unfair terms and consumer protection) : National courts must have the power to assess the fairness of contractual terms and provide effective remedies. National procedural rules cannot deprive consumers of the protection guaranteed by EU law.
80
Supplier breaches a contract to deliver components. Buyer claims the profit it would have made from reselling the finished products. What is the standard measure of contractual damages?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
81
A written contract contains a ‘No Oral Modification’ clause requiring signed written variations. Parties later agree orally to reschedule payments and act on it. One party later insists the oral variation is invalid because of the NOM clause. What is the likely outcome under the document?
Under the Supreme Court approach, NOM clauses are generally enforceable, so oral variations are usually ineffective unless requirements are met. Rule: (Expectation Damages) Where a defendant breaches a contractual obligation, the claimant may recover cost of cure damages if they have a legitimate interest in performance, even if the economic loss is small. Loss of amenity or preference for performance can justify cost-based damages.
82
A tribunal issues an award, but the respondent argues it never consented to the arbitration clause. On enforcement, can a national court re-examine consent, or must it defer to the tribunal?
Court can and must be satisfied there was a valid arbitration agreement; consent is foundational. Awards won’t be enforced without clear consent. Public policy refusal is narrow and merits aren’t re-tried.
83
A long-term contract is breached. Between breach and trial, market conditions change dramatically affecting value. When assessing damages, can the court take later market changes into account?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
84
A contract is silent on an essential practical point; without a term, performance would be unworkable. One party asks the court to imply a term. What is the test—fairness or necessity?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
85
A contract is silent on an essential practical point; without a term, performance would be unworkable. One party asks the court to imply a term. What is the test—fairness or necessity?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
86
Company suffers loss due to negligent advisers and settles. Majority shareholder then sues advisers personally for loss in share value and lost dividends. Is this personal claim allowed?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
87
A surveyor negligently assures a buyer there will be no aircraft noise; after purchase the buyer suffers distress and inconvenience. Can contractual damages cover distress where the contract wasn’t mainly for pleasure?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
88
Buyer misses a resale opportunity because Seller delivered late. Seller had no knowledge Buyer planned an immediate resale. Is lost resale profit recoverable?
Only if the loss was reasonably foreseeable as arising naturally in the ordinary course, or was within the parties’ contemplation (Hadley v Baxendale). If not in ordinary contemplation and no special knowledge, it’s too remote. Damages for distress may be recovered where: The contract or duty is intended to protect a client from distress, anxiety, or loss of privacy , or Such distress is a foreseeable consequence of the breach within the scope of the retainer.
89
A seller knows (because buyer told them) that a machine breakdown will halt the buyer’s factory until a part arrives. Seller delivers late; buyer claims shutdown losses. Recoverable?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
90
A seller knows (because buyer told them) that a machine breakdown will halt the buyer’s factory until a part arrives. Seller delivers late; buyer claims shutdown losses. Recoverable?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
91
Buyer misses a resale opportunity because Seller delivered late. Seller had no knowledge Buyer planned an immediate resale. Is lost resale profit recoverable?
Only if the loss was reasonably foreseeable as arising naturally in the ordinary course, or was within the parties’ contemplation (Hadley v Baxendale). If not in ordinary contemplation and no special knowledge, it’s too remote. ( Remoteness in Contract) The test for remoteness in contract is whether the loss was not unlikely (i.e.
92
Charterer returns a ship late. Owner loses a very lucrative follow-on charter at an unusually high rate. Is that extraordinary loss automatically recoverable if foreseeable?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
93
Buyer misses a resale opportunity because Seller delivered late. Seller had no knowledge Buyer planned an immediate resale. Is lost resale profit recoverable?
Only if the loss was reasonably foreseeable as arising naturally in the ordinary course, or was within the parties’ contemplation (Hadley v Baxendale). If not in ordinary contemplation and no special knowledge, it’s too remote. Damages are recoverable only for losses that the defendant can reasonably be taken to have assumed responsibility for.
94
Buyer misses a resale opportunity because Seller delivered late. Seller had no knowledge Buyer planned an immediate resale. Is lost resale profit recoverable?
Only if the loss was reasonably foreseeable as arising naturally in the ordinary course, or was within the parties’ contemplation (Hadley v Baxendale). If not in ordinary contemplation and no special knowledge, it’s too remote. Loss is recoverable if: It is of a kind foreseeable at the time of contracting ( Hadley v Baxendale ), and It is a type of loss the defendant can reasonably be taken to have assumed responsibility for ( The Achilleas ).
95
Buyer misses a resale opportunity because Seller delivered late. Seller had no knowledge Buyer planned an immediate resale. Is lost resale profit recoverable?
Only if the loss was reasonably foreseeable as arising naturally in the ordinary course, or was within the parties’ contemplation (Hadley v Baxendale). If not in ordinary contemplation and no special knowledge, it’s too remote. ( Scope of Duty/Assumption of Responsibility) In professional negligence, damages are recoverable only for losses within the scope of the defendant’s duty , i.e.
96
Buyer misses a resale opportunity because Seller delivered late. Seller had no knowledge Buyer planned an immediate resale. Is lost resale profit recoverable?
Only if the loss was reasonably foreseeable as arising naturally in the ordinary course, or was within the parties’ contemplation (Hadley v Baxendale). If not in ordinary contemplation and no special knowledge, it’s too remote. (Remoteness) The governing test for remoteness is whether the loss is of a kind for which the contract-breaker can reasonably be taken to have assumed responsibility , applying Hadley v Baxendale as the general rule , not a rigid formula.
97
Seller breaches supply contract. Buyer could cover immediately at market price but instead waits weeks and buys at a higher price. Can Buyer recover the extra increase caused by waiting?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
98
Seller breaches supply contract. Buyer could cover immediately at market price but instead waits weeks and buys at a higher price. Can Buyer recover the extra increase caused by waiting?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
99
Seller breaches supply contract. Buyer could cover immediately at market price but instead waits weeks and buys at a higher price. Can Buyer recover the extra increase caused by waiting?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
100
A surveyor negligently assures a buyer there will be no aircraft noise; after purchase the buyer suffers distress and inconvenience. Can contractual damages cover distress where the contract wasn’t mainly for pleasure?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
101
A surveyor negligently assures a buyer there will be no aircraft noise; after purchase the buyer suffers distress and inconvenience. Can contractual damages cover distress where the contract wasn’t mainly for pleasure?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
102
A surveyor negligently assures a buyer there will be no aircraft noise; after purchase the buyer suffers distress and inconvenience. Can contractual damages cover distress where the contract wasn’t mainly for pleasure?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
103
A promoter hires a venue for a concert that is then cancelled due to the venue’s breach. The promoter claims wasted marketing spend rather than lost profit. When are reliance (wasted expenditure) damages available?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
104
Claimant claims reliance damages, but evidence shows the contract would have been loss-making even if performed. Can claimant still recover full wasted expenditure?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
105
A tribunal issues an award, but the respondent argues it never consented to the arbitration clause. On enforcement, can a national court re-examine consent, or must it defer to the tribunal?
Court can and must be satisfied there was a valid arbitration agreement; consent is foundational. Awards won’t be enforced without clear consent. Public policy refusal is narrow and merits aren’t re-tried.
106
A developer breaches a restrictive covenant but the claimant can’t show direct financial loss. Claimant seeks a ‘reasonable fee’ for releasing the covenant. What are these damages and when are they awarded?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
107
A developer breaches a restrictive covenant but the claimant can’t show direct financial loss. Claimant seeks a ‘reasonable fee’ for releasing the covenant. What are these damages and when are they awarded?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
108
A retail car park is free for 2 hours. Signage clearly states an £85 charge for overstaying. Driver overstays by 20 minutes. Is the charge automatically an unenforceable penalty because it’s not a genuine pre-estimate of loss?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
109
A contract includes a liquidated damages clause ‘£10k per week of delay.’ The contract is later terminated for repudiation. Does the clause automatically apply after termination?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
110
A developer breaches a restrictive covenant but the claimant can’t show direct financial loss. Claimant seeks a ‘reasonable fee’ for releasing the covenant. What are these damages and when are they awarded?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
111
A retail car park is free for 2 hours. Signage clearly states an £85 charge for overstaying. Driver overstays by 20 minutes. Is the charge automatically an unenforceable penalty because it’s not a genuine pre-estimate of loss?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
112
Before the delivery date, Buyer emails: ‘We will not take delivery under any circumstances.’ Seller immediately sues. Is the claim premature, and what choices does the innocent party have?
Not premature. Clear repudiation before performance due is anticipatory breach. Innocent party may accept repudiation and sue immediately, or affirm and wait for performance date.
113
A buyer wants the court to order delivery of a unique asset rather than money damages. What remedy is this, and when is it generally available?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
114
A buyer wants the court to order delivery of a unique asset rather than money damages. What remedy is this, and when is it generally available?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
115
Before the delivery date, Buyer emails: ‘We will not take delivery under any circumstances.’ Seller immediately sues. Is the claim premature, and what choices does the innocent party have?
Not premature. Clear repudiation before performance due is anticipatory breach. Innocent party may accept repudiation and sue immediately, or affirm and wait for performance date.
116
A sale contract labels delivery date as a ‘condition’. Seller delivers one day late; Buyer suffers no real loss but wants to reject goods. Can Buyer reject?
Yes if it is truly a condition: conditions require strict compliance and breach gives the innocent party a right to terminate/reject even if consequences are minor. Where a contractual term is a condition , it must be strictly complied with . Any deviation, however minor, entitles the innocent party to reject the goods , even if the breach causes no practical disadvantage.
117
A sale contract labels delivery date as a ‘condition’. Seller delivers one day late; Buyer suffers no real loss but wants to reject goods. Can Buyer reject?
Yes if it is truly a condition: conditions require strict compliance and breach gives the innocent party a right to terminate/reject even if consequences are minor. Whether a term is a condition or warranty depends on its true construction and importance , not merely the label used by the parties. Courts will avoid an interpretation that allows termination for trivial breaches unless clearly intended.
118
A written contract contains a ‘No Oral Modification’ clause requiring signed written variations. Parties later agree orally to reschedule payments and act on it. One party later insists the oral variation is invalid because of the NOM clause. What is the likely outcome under the document?
Under the Supreme Court approach, NOM clauses are generally enforceable, so oral variations are usually ineffective unless requirements are met. Rule: Where a contractual term is neither clearly a condition nor a warranty, it may be an intermediate (innominate) term . The right to terminate depends on the seriousness of the breach , not the label of the term.
119
A commodities sale contract states shipment ‘by 1 June’. Seller ships 2 June; market price has moved against buyer. Buyer wants to terminate even if loss is small. How are time clauses treated in mercantile contracts?
Time clauses in mercantile contracts are typically treated as conditions; breach can entitle the innocent party to terminate/reject, even if loss is small. In mercantile contracts, time clauses are generally conditions , not warranties. Breach of a condition entitles the innocent party to terminate immediately , even if the breach causes little or no loss.
120
After a serious breach, the innocent party terminates. The breaching party argues termination wipes out all liabilities. Correct?
Termination for breach ends future primary obligations but does not erase accrued rights, including the right to claim damages for prior breach. Termination (or “rescission” in this context) for breach is prospective, not retrospective . It releases parties from future obligations but does not wipe out accrued rights , including claims for damages.
121
Before the delivery date, Buyer emails: ‘We will not take delivery under any circumstances.’ Seller immediately sues. Is the claim premature, and what choices does the innocent party have?
Not premature. Clear repudiation before performance due is anticipatory breach. Innocent party may accept repudiation and sue immediately, or affirm and wait for performance date.
122
Before the delivery date, Buyer emails: ‘We will not take delivery under any circumstances.’ Seller immediately sues. Is the claim premature, and what choices does the innocent party have?
Not premature. Clear repudiation before performance due is anticipatory breach. Innocent party may accept repudiation and sue immediately, or affirm and wait for performance date.
123
Before the delivery date, Buyer emails: ‘We will not take delivery under any circumstances.’ Seller immediately sues. Is the claim premature, and what choices does the innocent party have?
Not premature. Clear repudiation before performance due is anticipatory breach. Innocent party may accept repudiation and sue immediately, or affirm and wait for performance date.
124
During litigation, one party refuses mediation without good reason (or ignores a proposal). They later win at trial. Can the court still penalize them in costs?
Yes. Unreasonable refusal to mediate (including silence) can lead to adverse cost consequences. Rule: A court may penalise a successful party in costs for unreasonably refusing ADR , but there is no general duty to mediate .
125
A clause is drafted in detailed legal language, but the surrounding commercial background suggests a different reading. Can a court prioritise context over text, or is there a fixed hierarchy?
A contract can be formed without a signature if the parties’ words and conduct show agreement on essential terms. If they perform as if bound (deliver, pay, start work) despite an unsigned draft, the court can infer acceptance by conduct. So the deal is enforceable on the agreed essentials (and any incorporated terms).
126
A licensing statute is breached in forming a service contract. One party argues the whole contract is void and all payment claims fail. Does illegality automatically invalidate the contract, and what is severance?
Illegality doesn’t automatically invalidate. Where the illegality is regulatory rather than fundamental, and the illegal part can be severed without rewriting the bargain, the rest may remain enforceable. US federal courts must give substantial weight to the federal policy favouring arbitration .
127
A licensing statute is breached in forming a service contract. One party argues the whole contract is void and all payment claims fail. Does illegality automatically invalidate the contract, and what is severance?
Illegality doesn’t automatically invalidate. Where the illegality is regulatory rather than fundamental, and the illegal part can be severed without rewriting the bargain, the rest may remain enforceable. Illegality does not automatically invalidate a contract .
128
A licensing statute is breached in forming a service contract. One party argues the whole contract is void and all payment claims fail. Does illegality automatically invalidate the contract, and what is severance?
Illegality doesn’t automatically invalidate. Where the illegality is regulatory rather than fundamental, and the illegal part can be severed without rewriting the bargain, the rest may remain enforceable. (severability): An arbitration clause is severable from the main contract.
129
A tribunal issues an award, but the respondent argues it never consented to the arbitration clause. On enforcement, can a national court re-examine consent, or must it defer to the tribunal?
Court can and must be satisfied there was a valid arbitration agreement; consent is foundational. Awards won’t be enforced without clear consent. Public policy refusal is narrow and merits aren’t re-tried.
130
Two non‑UK parties choose English law in their contract even though the transaction is performed entirely abroad. One party later argues the choice is invalid because English law has no connection. Under the document’s principle, is the choice respected?
Yes. An express choice of law is generally respected if genuine and not contrary to mandatory rules/public policy, even if the chosen law has no real connection. Where an arbitration agreement contains no express or implied choice of law , the governing law will generally be the law of the seat of arbitration , as the system with the closest connection.
131
Two non‑UK parties choose English law in their contract even though the transaction is performed entirely abroad. One party later argues the choice is invalid because English law has no connection. Under the document’s principle, is the choice respected?
Yes. An express choice of law is generally respected if genuine and not contrary to mandatory rules/public policy, even if the chosen law has no real connection. An express choice of law in a contract will be respected if it is bona fide, legal, and not contrary to public policy — even if the chosen law has no real connection to the transaction.
132
A Danish supplier sells to a Greek buyer; delivery is in Greece. Under Brussels I Recast, where can the supplier sue, absent a jurisdiction clause?
Under the general jurisdiction rule, a defendant is sued in the courts of their domicile, with special jurisdiction exceptions (e.g., place of performance in contract). So you identify the defendant’s domicile first and only then consider whether a special head (like performance place) applies. The chosen forum must fit one of the recognized jurisdiction bases.
133
A licensing statute is breached in forming a service contract. One party argues the whole contract is void and all payment claims fail. Does illegality automatically invalidate the contract, and what is severance?
Illegality doesn’t automatically invalidate. Where the illegality is regulatory rather than fundamental, and the illegal part can be severed without rewriting the bargain, the rest may remain enforceable. Although English law governed the contract, the place of performance was Spain .
134
A Danish supplier sells to a Greek buyer; delivery is in Greece. Under Brussels I Recast, where can the supplier sue, absent a jurisdiction clause?
Under the general jurisdiction rule, a defendant is sued in the courts of their domicile, with special jurisdiction exceptions (e.g., place of performance in contract). So you identify the defendant’s domicile first and only then consider whether a special head (like performance place) applies. The chosen forum must fit one of the recognized jurisdiction bases.
135
A buyer wants the court to order delivery of a unique asset rather than money damages. What remedy is this, and when is it generally available?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
136
A claim is brought in England, but most evidence, witnesses, and the dispute’s center of gravity are in another country. Defendant asks English court to stay proceedings. What test applies?
Forum non conveniens: English courts may stay if another forum is clearly more appropriate and substantial justice can be done there. English courts may stay proceedings where another forum is clearly more appropriate , unless the claimant can show that a stay would deny substantial justice . This case establishes the modern common law test for forum non conveniens.
137
A written contract contains a ‘No Oral Modification’ clause requiring signed written variations. Parties later agree orally to reschedule payments and act on it. One party later insists the oral variation is invalid because of the NOM clause. What is the likely outcome under the document?
Under the Supreme Court approach, NOM clauses are generally enforceable, so oral variations are usually ineffective unless requirements are met. Rule: The corporate veil will be pierced only in exceptional cases , if at all. It cannot be used simply to rewrite contracts or impose liability on persons who were never contracting parties .
138
A Danish supplier sells to a Greek buyer; delivery is in Greece. Under Brussels I Recast, where can the supplier sue, absent a jurisdiction clause?
Under the general jurisdiction rule, a defendant is sued in the courts of their domicile, with special jurisdiction exceptions (e.g., place of performance in contract). So you identify the defendant’s domicile first and only then consider whether a special head (like performance place) applies. The chosen forum must fit one of the recognized jurisdiction bases.
139
A tribunal issues an award, but the respondent argues it never consented to the arbitration clause. On enforcement, can a national court re-examine consent, or must it defer to the tribunal?
Court can and must be satisfied there was a valid arbitration agreement; consent is foundational. Awards won’t be enforced without clear consent. Public policy refusal is narrow and merits aren’t re-tried.
140
A contract has an ‘entire agreement’ clause. Buyer later sues for misrepresentation based on pre‑contract statements. Seller argues the clause bars the claim. Does an entire agreement clause alone exclude misrepresentation liability?
A false statement of fact inducing a contract can be misrepresentation, giving rescission and potentially damages depending on type (fraudulent/negligent/innocent). If the representee relied on the statement and it was material, the contract is voidable and may be unwound unless barred (affirmation, lapse, third‑party rights). So the buyer can usually rescind and may claim damages if the misrep is fraudulent or negligent.
141
A Danish supplier sells to a Greek buyer; delivery is in Greece. Under Brussels I Recast, where can the supplier sue, absent a jurisdiction clause?
Under the general jurisdiction rule, a defendant is sued in the courts of their domicile, with special jurisdiction exceptions (e.g., place of performance in contract). So you identify the defendant’s domicile first and only then consider whether a special head (like performance place) applies. The chosen forum must fit one of the recognized jurisdiction bases.
142
A tribunal issues an award, but the respondent argues it never consented to the arbitration clause. On enforcement, can a national court re-examine consent, or must it defer to the tribunal?
Court can and must be satisfied there was a valid arbitration agreement; consent is foundational. Awards won’t be enforced without clear consent. Public policy refusal is narrow and merits aren’t re-tried.
143
A Danish supplier sells to a Greek buyer; delivery is in Greece. Under Brussels I Recast, where can the supplier sue, absent a jurisdiction clause?
Under the general jurisdiction rule, a defendant is sued in the courts of their domicile, with special jurisdiction exceptions (e.g., place of performance in contract). So you identify the defendant’s domicile first and only then consider whether a special head (like performance place) applies. The chosen forum must fit one of the recognized jurisdiction bases.
144
A tribunal issues an award, but the respondent argues it never consented to the arbitration clause. On enforcement, can a national court re-examine consent, or must it defer to the tribunal?
Court can and must be satisfied there was a valid arbitration agreement; consent is foundational. Awards won’t be enforced without clear consent. Public policy refusal is narrow and merits aren’t re-tried.
145
A tribunal issues an award, but the respondent argues it never consented to the arbitration clause. On enforcement, can a national court re-examine consent, or must it defer to the tribunal?
Court can and must be satisfied there was a valid arbitration agreement; consent is foundational. Awards won’t be enforced without clear consent. Public policy refusal is narrow and merits aren’t re-tried.
146
Seller breaches supply contract. Buyer could cover immediately at market price but instead waits weeks and buys at a higher price. Can Buyer recover the extra increase caused by waiting?
A liquidated damages clause is enforceable if it is a genuine pre‑estimate or protects a legitimate interest; an extravagant or unconscionable penalty is not. So you compare the stipulated sum to the likely loss and the interest the clause protects at the time of contracting. If it is penal, the court will refuse enforcement beyond ordinary damages.
147
A webshop shows ‘Terms apply’ as a small link at the bottom of the page. The exclusion clause is buried and very harsh. Customer clicks ‘Pay’ without opening the link. Term incorporated?
Only if reasonable notice of the term was given before or at contracting. Particularly onerous/unusual terms need especially clear and prominent notice; mere buried link may be insufficient. An exclusion clause cannot be relied upon if it is misrepresented , even if the document is signed.
148
A limitation clause caps liability at £5,000 for a supplier who knew the likely loss could be £500,000 and could cheaply insure. In B2B, what test governs enforceability?
Exclusion/limitation clauses are construed strictly and (in many contexts) must pass a reasonableness/unfairness test. So if the clause is wide, unexpected, or heavily one‑sided, a court may interpret it narrowly or strike it down under the statute. The party relying on the clause bears the burden of showing it is effective and reasonable where required.
149
Respondent claims it never signed the arbitration clause but participated in the arbitration without objecting until the end. On enforcement, can the court still refuse?
A contract can be formed without a signature if the parties’ words and conduct show agreement on essential terms. If they perform as if bound (deliver, pay, start work) despite an unsigned draft, the court can infer acceptance by conduct. So the deal is enforceable on the agreed essentials (and any incorporated terms).
150
Creditor agrees to accept £20k instead of £25k if paid by Monday. Debtor pays Monday. Creditor sues for £5k. Is paying earlier a recognized ‘fresh consideration’ here?
Part payment of an undisputed debt is not good consideration for a promise to waive the balance, unless an exception applies (e.g., different time/place/method or third‑party payment). So paying less than the amount due (even early) usually does not discharge the rest if the creditor did not receive fresh consideration. The creditor can still claim the remaining balance (subject to any true promissory estoppel on the facts).
151
Contract breach causes loss that is foreseeable in general but extremely large in scale. Under the ‘assumption of responsibility’ approach, what additional question may limit recovery?
Contract damages aim to put the claimant in the position as if the contract had been performed, but only losses within the remoteness test are recoverable. Loss is recoverable if it arises naturally or was within the parties’ reasonable contemplation at contracting (and must be proved with reasonable certainty). So unforeseeable or speculative losses are not compensable.
Business Law
flashcards
Decks in class (30)
# Cards
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Lecture 124
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Lecture 2 examples24
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Lecture 2 PIL46
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Lecture 2 common law/equity31
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Lecture 2 EU and civil29
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Lecture 3 facts41
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Lecture 3 case like27
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Lecture 4 overall15
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Lecture 4 examples17
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Lecture 5 overall38
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Lecture 5 examples23
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Lecture 6 core theory23
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Lecture 6 examples23
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Lecture 7 core theory21
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Lecture 7 examples14
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Lecture 8 core theory21
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Lecture 8 examples14
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Force Majure16
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Lecture 4 extras21
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Session 3 all cases36
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Session 4 all cases18
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Session 5 all cases26
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Session 6 all cases37
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Chats missar26
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EU things10
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Last deck149
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DAY BEFORE EXAM151
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HEJ151
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De302
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H0
