SQE1 Contract Law

Question 1

Which case established that an advertisement for a product (such as the Carbolic Smoke Ball) could constitute a binding unilateral offer?

Accepted Answer

Carlill v Carbolic Smoke Ball Co [1893]

Answer

Hyde v Wrench [1840]

Answer

Fisher v Bell [1961]

Answer

Partridge v Crittenden [1968]

Question 2

What is the legal effect of a counter-offer on the original offer?

Accepted Answer

It terminates the original offer, which cannot then be accepted

Answer

It suspends but does not terminate the original offer

Answer

It automatically becomes the binding contract

Answer

It requires the original offeror to accept or reject in writing

Question 3

In contract law, what does 'consideration' mean?

Accepted Answer

Something of value given by each party in exchange for the other's promise

Answer

The parties' intention to create legal relations

Answer

The formal writing and signature of the contract

Answer

The time allowed for acceptance of an offer

Question 4

Under the Misrepresentation Act 1967, which type of misrepresentation allows the innocent party to claim both rescission and damages?

Accepted Answer

Both fraudulent and negligent misrepresentation under s.2(1)

Answer

Innocent misrepresentation

Answer

Negligent misrepresentation under s.2(1)

Answer

Fraudulent misrepresentation

Question 5

What principle was established in Hadley v Baxendale (1854) regarding damages for breach of contract?

Accepted Answer

Damages are limited to losses that were reasonably foreseeable at the time of contract formation

Answer

The innocent party can always recover all losses caused by the breach

Answer

Only the value of the contract price can be recovered

Answer

Consequential losses can never be recovered

Question 6

Which doctrine allows a court to imply a term into a contract on the basis that it is so obvious it goes without saying?

Accepted Answer

The officious bystander test

Answer

The business efficacy test

Answer

Both the officious bystander and business efficacy tests

Answer

The contra proferentem rule