Contract law worksheet with answers

Rescission of a contract means:

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

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

1. AAgainst the party who relies on it
2. BIn favour of the party who drafted it
3. CIn favour of the stronger party
4. DAs if it were not part of the contract

Which English statute allows a third party to enforce a contract term in some cases?

1. AMisrepresentation Act 1967
2. BLaw Reform (Frustrated Contracts) Act 1943
3. CContracts (Rights of Third Parties) Act 1999
4. DUnfair Contract Terms Act 1977

What is an exclusion clause?

1. AA term that limits or excludes one party's liability
2. BA term that excludes third parties from the contract
3. CA clause allowing termination at any time
4. DA term that excludes a party from paying VAT

A court will imply a term in fact into a commercial contract only if:

1. AIt is usual in contracts in other industries
2. BIt would benefit the weaker party
3. CIt is necessary for business efficacy or so obvious it goes without saying
4. DIt would be reasonable and fair to both parties, even if it is not necessary

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

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

A husband who has left his wife signs a note promising to transfer the house to her if she pays off the mortgage. She does. In Merritt v Merritt, the promise was:

1. AUnenforceable, because she gave no consideration
2. BUnenforceable, because it was a domestic arrangement between husband and wife
3. CEnforceable, because separated spouses are presumed to intend legal relations
4. DEnforceable only because it was made by deed

A pays B money to bet on shares using insider information, which is illegal. The bet never happens and A wants the money back. In Patel v Mirza, the Supreme Court held:

1. AA could recover only half the money
2. BA could recover the money, applying a policy-based approach to illegality
3. CThe money passed to the state as illegal proceeds
4. DA could not recover, because no claim can be founded on an illegal agreement