Contract law worksheet with answers

Rescission of a contract means:

1. ACorrecting the wording of a written contract
2. BEnding the contract for the future only and claiming damages for lost profits
3. CSetting the contract aside so the parties return to their original positions
4. DOrdering a party to perform as promised

Under the contra proferentem rule, an ambiguous term is interpreted:

1. AIn favour of the party who drafted it
2. BAs if it were not part of the contract
3. CIn favour of the stronger party
4. DAgainst the party who relies on it

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

1. AA collateral warranty
2. BAn express term
3. CA condition precedent
4. DAn implied term

A customer signs a contract containing an exclusion clause without reading it. Absent fraud or misrepresentation, the clause is generally:

1. AIncorporated, because a signature binds the signer
2. BVoid for unilateral mistake
3. CIncorporated only if it was explained orally
4. DNot incorporated, because it was not read

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

Damages for breach of contract are generally meant to:

1. AGive the innocent party a profit beyond their loss
2. BPut the innocent party in the position as if the contract had been performed
3. CPunish the party in breach
4. DReturn both parties only to the position they were in before the contract was made

A chartered ship is returned late, and the owner loses a very profitable follow-on charter. In The Achilleas, the House of Lords held the charterer was liable:

1. AFor the whole profit lost on the follow-on charter, as it was foreseeable
2. BOnly for the market rate difference during the overrun period
3. CFor no loss, because late return is not a breach
4. DFor punitive damages, because the delay was deliberate

A buyer specifically asks a surveyor to check aircraft noise at a property. The surveyor negligently reports no problem. In Farley v Skinner:

1. AOnly the difference in market value was recoverable
2. BThe buyer had to sell the house before claiming
3. CDamages for discomfort were recoverable, as peace of mind was an important object of the obligation
4. DNo damages were recoverable, because damages for distress or discomfort are always excluded in contract