CILEx L6 Advanced Contract Law 2

Question 1

What is the 'Interfoto' principle on incorporation of onerous terms?

Accepted Answer

A particularly onerous or unusual clause must be fairly and reasonably brought to the attention of the other party or it will not be incorporated

Answer

In Interfoto Picture Library v Stiletto Visual Programmes [1989] QB 433, the Court of Appeal held that a particularly onerous or unusual clause will not be incorporated by general notice — sufficiently explicit steps must be taken to draw it to the other party's attention.

Question 2

What is the significance of Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2008] for remoteness?

Accepted Answer

The parties' assumed responsibility for a type of loss at the time of contracting, not just foreseeability, determines recoverability

Answer

In The Achilleas [2008] UKHL 48, the House of Lords (Lord Hoffmann and Lord Hope) introduced an 'assumption of responsibility' gloss to Hadley v Baxendale — the question is whether the defendant had assumed responsibility for the type of loss in the context of the contract.

Question 3

What is the doctrine of 'frustration by supervening illegality'?

Accepted Answer

Where performance of the contract becomes illegal after formation due to a change in the law, the contract is frustrated

Answer

Frustration by supervening illegality arises where a change in the law after contract formation makes performance unlawful. The contract is discharged, with the Law Reform (Frustrated Contracts) Act 1943 governing the financial consequences.

Question 4

What did Robinson v PE Jones (Contractors) Ltd [2011] EWCA Civ 9 decide about concurrent liability in contract and tort?

Accepted Answer

A building contractor owes no duty in tort to their employer (as opposed to a third party) in respect of pure economic loss arising from defective work where the only loss is to the building itself

Answer

In Robinson v PE Jones, the Court of Appeal held that a building contractor owes no Hedley Byrne duty in tort to the employer for pure economic loss from defective work — the Defective Premises Act 1972 and contract law provide the appropriate remedies.

Question 5

What is the rule in Hadley v Baxendale [1854] and how does it limit damages?

Accepted Answer

Only losses arising naturally or in the reasonable contemplation of the parties as a probable consequence of breach at the time of contracting are recoverable

Answer

The rule in Hadley v Baxendale [1854] 9 Exch 341 provides two limbs: (1) losses arising naturally from the breach, and (2) losses within the reasonable contemplation of both parties at the time of contracting. Both limit recovery by excluding unforeseeable losses.

CILEx Level 6 Practice Test

CILEx Level 6 Practice Test

CILEx L6 Advanced Contract Law 2