Contract law worksheet with answers

Which elements are generally needed to form a contract?

1. AA witness for each party
2. BAn offer and an acceptance, with the intention to be legally bound
3. CA written document signed by both parties and certified by a notary
4. DA payment made in advance

A counter-offer has which effect on the original offer?

1. AIt has no effect at all
2. BIt accepts the original offer
3. CIt rejects and ends the original offer
4. DIt makes the original offer irrevocable

A term that the parties did not state, but which a court reads into the contract, is:

1. AA condition precedent
2. BA collateral warranty
3. CAn express term
4. DAn implied term

In Hadley v Baxendale, damages are recoverable for losses that:

1. AArise naturally from the breach or were in the reasonable contemplation of both parties
2. BThe claimant suffered only after the trial
3. CWere caused in any factual sense by the breach, however unusual and unforeseeable they were
4. DWere caused by a third party

Under the Law Reform (Frustrated Contracts) Act 1943, money paid before a frustrating event is generally:

1. APaid into court for distribution
2. BLost, because the loss must lie where it falls once the contract is frustrated
3. CPayable twice, as a penalty
4. DRecoverable, though the court may let the payee keep some for expenses

An offer says acceptance must be made "by notice in writing to us". The offeree posts an acceptance, which is lost. Under Holwell Securities v Hughes:

1. AA contract was formed when the offeree decided to accept
2. BA contract was formed when the letter was posted
3. CThere is no contract, because actual notice was required
4. DThe contract is void for common mistake

A flat is hired for two days to watch a coronation procession, which is cancelled because the King is ill. The contract does not mention the procession. In Krell v Henry:

1. AThe hirer had to pay as the risk was his
2. BThe contract was void for common mistake
3. CThe contract was not frustrated, because the flat was still available
4. DThe contract was frustrated, because the procession was its foundation

A council writes that it "may be prepared to sell" a house to a tenant and invites a formal application. The tenant applies, then the council changes its policy. In Gibson v Manchester City Council, the House of Lords held:

1. AA contract was formed when the council's letter was sent to the tenant
2. BThere was no contract, because the letter was not an offer
3. CThe council was bound by estoppel to sell
4. DA contract was formed when the tenant applied