CILEx L3 Contract Law Fundamentals 4

Question 1

What is 'misrepresentation' in contract law?

Accepted Answer

A false statement of fact made by one party that induces the other to enter the contract

Answer

Misrepresentation is a false statement of existing fact (not law or opinion) made by one contracting party to the other, which induces that party to enter the contract.

Question 2

What remedy is available for fraudulent misrepresentation?

Accepted Answer

Rescission of the contract and damages in the tort of deceit

Answer

Fraudulent misrepresentation (Derry v Peek [1889]) entitles the innocent party to rescind the contract and claim damages in the tort of deceit, including all losses flowing from the fraudulent statement.

Question 3

What is 'common mistake' in contract law?

Accepted Answer

Both parties make the same fundamental mistake about a matter that goes to the root of the contract

Answer

Common mistake occurs where both parties share the same fundamental mistake about a matter of fact that goes to the root of the contract, such as the existence of the subject matter (Couturier v Hastie [1856]).

Question 4

What is the effect of duress on a contract?

Accepted Answer

A contract entered into under duress is voidable at the option of the innocent party

Answer

Duress (including economic duress) makes a contract voidable, meaning the innocent party may elect to rescind it. The contract is valid unless and until rescinded.

Question 5

What is 'undue influence'?

Accepted Answer

Equitable doctrine allowing a contract to be set aside where one party improperly influenced the other's decision

Answer

Undue influence is an equitable doctrine that allows a court to set aside a transaction where one party has used their position of influence to improperly override another party's free will (Allcard v Skinner [1887]).

CILEx Level 3 Practice Test

CILEx Level 3 Practice Test

CILEx L3 Contract Law Fundamentals 4