CILEx L3 Contract Law Fundamentals 3

Question 1

What is 'promissory estoppel'?

Accepted Answer

An equitable doctrine preventing a party from going back on a promise that another has relied upon

Answer

Promissory estoppel prevents a party who has made a clear and unequivocal promise (not to enforce their strict legal rights) from going back on that promise where the other party has relied upon it (Central London Property Trust v High Trees [1947]).

Question 2

What is a 'condition' in a contract?

Accepted Answer

A term so important that breach entitles the innocent party to treat the contract as discharged

Answer

A condition is a fundamental term of the contract. Breach of a condition entitles the innocent party to treat themselves as discharged from the contract and claim damages (or affirm the contract and claim damages).

Question 3

What distinguishes a 'warranty' from a 'condition' in contract law?

Accepted Answer

A warranty is a minor term; breach only gives rise to damages, not discharge

Answer

A warranty is a less important term of a contract. Breach of a warranty only entitles the innocent party to claim damages; they cannot treat themselves as discharged from further performance.

Question 4

What is an 'innominate term'?

Accepted Answer

A term that is neither a condition nor a warranty; the remedy depends on the consequences of the breach

Answer

Innominate (or intermediate) terms are terms whose classification depends on the consequences of the breach. If the breach goes to the root of the contract, it is treated as a condition; if minor, as a warranty (Hong Kong Fir Shipping v Kawasaki [1962]).

Question 5

What is the 'parol evidence rule'?

Accepted Answer

Extrinsic evidence cannot be used to add to, vary, or contradict the terms of a written contract

Answer

The parol evidence rule provides that where a contract has been reduced to writing, extrinsic evidence (such as prior negotiations or oral statements) cannot be admitted to contradict, vary, or add to the written terms.

CILEx Level 3 Practice Test

CILEx Level 3 Practice Test

CILEx L3 Contract Law Fundamentals 3