Contract law worksheet with answers

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

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

Rescission of a contract means:

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

Which elements are generally needed to form a contract?

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

An actor withdraws from a TV film and the company cannot prove what profit the film would have made. It may claim:

1. APunitive damages to deter the actor
2. BOnly nominal damages of a small sum
3. CIts estimated profits from the film, even if they are purely speculative
4. DIts wasted expenditure, including costs incurred before the contract

Frustration of contract occurs when:

1. AAn unforeseen event makes performance impossible or radically different
2. BPerformance becomes more expensive or more difficult than either party expected
3. COne party regrets the bargain
4. DThe contract was badly drafted

What is consideration in common law contracts?

1. ASomething of value given in exchange for a promise
2. BCareful thought before signing
3. CThe written form of a contract
4. DThe intention to create legal relations shown by both parties

A distribution agreement says it is not a formal or legal agreement and is "binding in honour only". In Rose and Frank v Crompton, the court held:

1. AThe agreement was void as illegal
2. BThe agreement was binding despite those words
3. CThe agreement was a deed and binding
4. DThe agreement itself was not legally binding

A carrier, knowing a small company depends on its deliveries to supply a major customer, refuses to continue unless paid a higher minimum price. The company agrees as it has no alternative. In Atlas Express v Kafco:

1. AThe new agreement was binding, as the carrier's continued performance was a practical benefit
2. BThe new agreement was not binding, due to economic duress
3. CThe new agreement was binding as a free variation
4. DThe carrier committed a crime of extortion