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Q. What are the express terms of a contract? Which of the following is correct?
1. An express term is a term which is actually stated orally or in writing, as distinct from an implied or assumed term2. An express term is one that is included into a contract by legislation
3. Express terms can only be those that have actually been put in writing
4. Express terms are any terms that are so obvious they do not have to be stated
Ans. An express term is a term which is actually stated orally or in writing, as distinct from an implied or assumed term
Q. What is the contra proferentum rule and how does this apply to exclusion clauses? Which of the following is correct?
1. The contra proferentum rule applies so that an exclusion clause is always interpreted by a court against the party relying on it2. The contra proferentum rule basically means that an exclusion clause is contrary to the interests of consumers and therefore unenforceable as a term
3. Contra proferentum refers to the ability of consumer law to set a contrary term to that of the parties within a contract
4. The contra proferentum rule means that the party relying on the exclusion clause must be able to prove that the other party agreed to it, otherwise it is not enforceable
Ans. The contra proferentum rule means that the party relying on the exclusion clause must be able to prove that the other party agreed to it, otherwise it is not enforceable
Q. Can terms be contained elsewhere than the main contract? Which of the following is correct?
1.Terms cannot be implied from other documents, only those documents which have been attached to the main contract can be considered to contain terms of the contract2.Legislation in Australia prohibits the incorporation of notices etc. which are not contained in the main sighted and signed contract
3.If notices are placed near the contracting parties, then these automatically become part of the main contract, and any terms contained will apply, simply by the fact that the contracting party must have read those notices
4. A contract may refer to other documents or notices which contain terms or conditions; however these other documents must have been brought to the notice of the party to whom they apply
Ans. A contract may refer to other documents or notices which contain terms or conditions; however these other documents must have been brought to the notice of the party to whom they apply
Q.What are the express terms of a contract? Which of the following is correct?
1. An express term is a term which is actually stated orally or in writing, as distinct from an implied or assumed term2. An express term is one that is included into a contract by legislation
3. Express terms can only be those that have actually been put in writing
4. Express terms are any terms that are so obvious they do not have to be stated
Ans. An express term is a term which is actually stated orally or in writing, as distinct from an implied or assumed term
Q.What are the exceptions to the parol evidence rule? Which of the following is correct?
1. The parol evidence rule may not apply where one of the parties can demonstrate that the terms have caused some disadvantage to themselves2. The parol evidence rule will be discarded if it can be demonstrated that there were lengthy discussions taking place before the contract was written up
3. The exceptions are that there could be customary rules not referred to, that the contract was not entirely in writing or even that some of the words are ambiguous and need further clarification outside the written contract
4. The parol evidence rule is only a guide; a court in modern times can always look behind the agreement to determine what should be the ‘equality of the bargain’
Ans. The exceptions are that there could be customary rules not referred to, that the contract was not entirely in writing or even that some of the words are ambiguous and need further clarification outside the written contract
Q.What is the contra proferentum rule and how does this apply to exclusion clauses? Which of the following is correct?
1. The contra proferentum rule applies so that an exclusion clause is always interpreted by a court against the party relying on it2. The contra proferentum rule basically means that an exclusion clause is contrary to the interests of consumers and therefore unenforceable as a term
3. Contra proferentum refers to the ability of consumer law to set a contrary term to that of the parties within a contract
4. The contra proferentum rule means that the party relying on the exclusion clause must be able to prove that the other party agreed to it, otherwise it is not enforceable
Ans. The contra proferentum rule means that the party relying on the exclusion clause must be able to prove that the other party agreed to it, otherwise it is not enforceable
Q.How might a contract be discharged under frustration? Which of the following is correct?
1. A contract is discharged for frustration where the parties are deadlocked through disagreement and are unable to settle their differences2. A contract is discharged for frustration where a party suffers a difficult situation which makes the contract more expensive or difficult to carry out
3. Frustration occurs when an unforeseen event occurs which makes it impossible to perform the original contract, where the parties did not make provision for this and it is now unjust to enforce the original agreement
4.The parties may predict that something might happen to prevent a contract from being carried out, in this case when that event occurs the contract is then frustrated
Ans. The contra proferentum rule means that the party relying on the exclusion clause must be able to prove that the other party agreed to it, otherwise it is not enforceable
Q.What is the duty to mitigate losses? Which of the following is correct?
1. Mitigation of losses is the notice given to the party causing the fault that they must desist or they run the risk of being sued2. Mitigation of losses means that the party suffering the breach must end the contract immediately
3. Mitigation of losses is a court order requiring the defaulting party to compensate the party which suffered the losses from the breach
4. The duty to mitigate is where a party suffering the loss must take reasonable steps to lessen the impact and losses occurring as a result of the breach
Ans. The duty to mitigate is where a party suffering the loss must take reasonable steps to lessen the impact and losses occurring as a result of the breach
Q.What is the duty to mitigate losses? Which of the following is correct?
1. Mitigation of losses is the notice given to the party causing the fault that they must desist or they run the risk of being sued2. Mitigation of losses means that the party suffering the breach must end the contract immediately
3. Mitigation of losses is a court order requiring the defaulting party to compensate the party which suffered the losses from the breach
4. The duty to mitigate is where a party suffering the loss must take reasonable steps to lessen the impact and losses occurring as a result of the breach
Ans. The duty to mitigate is where a party suffering the loss must take reasonable steps to lessen the impact and losses occurring as a result of the breach
Q.What is the duty to mitigate losses? Which of the following is correct?
1. Mitigation of losses is the notice given to the party causing the fault that they must desist or they run the risk of being sued2. Mitigation of losses means that the party suffering the breach must end the contract immediately
3. Mitigation of losses is a court order requiring the defaulting party to compensate the party which suffered the losses from the breach
4. The duty to mitigate is where a party suffering the loss must take reasonable steps to lessen the impact and losses occurring as a result of the breach
Ans. The duty to mitigate is where a party suffering the loss must take reasonable steps to lessen the impact and losses occurring as a result of the breach
Q.What is specific performance and when can this remedy be awarded? Which of the following is correct?
1. Specific performance can only be awarded where an employment contract exists and the person is refusing to carry out their employment obligations2. Specific performance can always be awarded by a court, a party would not have entered the contract if they believed they could not perform the contract
3. Specific performance is a court order that a party carry out their contractual obligations, it will not be awarded as a remedy where the court has supervised the performance or if it is unfair or unreasonable
4. Specific performance is an order for the party breaching the contract to hand over the exact amount of money that the innocent party would have received, if the contract had been performed
Ans. Specific performance is a court order that a party carry out their contractual obligations, it will not be awarded as a remedy where the court has supervised the performance or if it is unfair or unreasonable
Q.What happens if a contract is breached? Which of the following is correct?
1. If there is a breach of the contract the contract is considered at an end and each party is permitted to take back their property, but damages will not usually be awarded, except in unusual circumstances2. Once a contract is breached then usually the innocent party can sue for damages and is not bound to fulfil any further obligations under the agreement
3. The only remedy available to an innocent party for breach of contract is damages
4. If a contract is breached, then the innocent party must apply to a court for an order declaring that a breach has occurred, otherwise no remedy is available to that innocent party
Ans. Once a contract is breached then usually the innocent party can sue for damages and is not bound to fulfil any further obligations under the agreement
Q.How is authority given to an agent? Which of the following is correct?
1. The authority of an agent can be implied by the position the agent holds, or by their actual appointment by a principal2.An agent can only have that authority that has been granted to them by principal under contract
3. An agent can only be appointed in each of the states of Australia through a written agreement
4. An agent can assume authority, if they do something on behalf of another, and that other person accepts what the agent has done, then the agent is said to have assumed a valid power of representation – this is how agents are appointed
Ans. The authority of an agent can be implied by the position the agent holds, or by their actual appointment by a principal
Q.Commercial and business agreements are intended to be legally binding and enforceable in a court of law? Which of the following is correct?
1. Commercial and business agreements are no different to any other contracts, every contract must be assessed to see if there was an intention to be legally bound, there are no first presumptions2.The first presumption regarding business and commercial agreements is that the parties intended the agreement to be an enforceable contract
3. If the parties to a business agreement state that the contract is binding, then it is legally enforceable, otherwise if no statement is made, then the contract is presumed not to be legally binding
4. Business agreements are presumed to be legally binding, but only if they have been put in writing and signed
Ans. If the parties to a business agreement state that the contract is binding, then it is legally enforceable, otherwise if no statement is made, then the contract is presumed not to be legally binding
Q.Are there different classifications of a contract? Which of the following is correct?
1. Essentially a contract is either formal or informal, which is important since informal contracts cannot then be enforceable2.The only distinction between contracts are express contracts and implied contracts
3. Contracts are only classified as enforceable or unenforceable, even though different names may be given to different contracts
4. There are a number of different classifications of a contract, besides formal and informal, they can be express or implied, void or voidable to name but a few classifications
Ans. There are a number of different classifications of a contract, besides formal and informal, they can be express or implied, void or voidable to name but a few classifications
Q.Are there some contracts which must be in writing? Which of the following is correct?
1. For an agreement to be binding it must be put in writing, there are no exceptions2.Serious contracts must be put in writing, otherwise the parties run the risk of having an unenforceable contract
3. Contracts are only classified as enforceable or unenforceable, even though different names may be given to different contracts
4. Statute law, in particular the Statute of Frauds, has abolished the need to put contracts into writing
Ans. Some contracts must be placed in writing, e.g. where there is no consideration, where statute requires the contract to be in writing, e.g. for a transfer of land
Q.When might a party be prevented from rescinding a contract for misrepresentation? Which of the following is correct?
1. If the parties to a contract have commenced the operation of the contract and the falsity comes to light, then this is considered to be too late, action is only possible before the contract begins to operate2.Rescission requires that the parties be able to return to their original situation before the misrepresentation, if the misrepresentation is accepted, or a long time has elapsed or another party receives rights under the contract, rescission may not be possible
3.A party may be prevented from rescinding the contract for misrepresentation where it can be demonstrated that the person suffering the misrepresentation should have sought advice on the veracity of the statements made to them
4. Rescission will not be available to a person suffering the misrepresentation where they have had prior dealings with the same contractor who made the misrepresentations
Ans. Rescission requires that the parties be able to return to their original situation before the misrepresentation, if the misrepresentation is accepted, or a long time has elapsed or another party receives rights under the contract, rescission may not be possible
Q.What is misrepresentation? Which of the following is correct?
1. Misrepresentation is any statement made in the lead up to the making of a contract, which turns out not to be true2.Misrepresentations are mistaken statements leading to the making of a contract, a party can claim the defence of mistake should misrepresentation be claimed by another party
3. Misrepresentations are any statement, whether or not they induced another party to enter the contract, which turns out not to be true Misrepresentation refers to false
4. Misrepresentation refers to false statements as to fact, made before a contract was formed, which were intended to induce another to enter into a contract
Ans. Misrepresentation refers to false statements as to fact, made before a contract was formed, which were intended to induce another to enter into a contract
Q.What is common law illegality? Which of the following is correct?
1. Common law determines that some agreements may be void, but this does not necessarily make them unenforceable as they would be under statute2.If a contract is illegal under common law it is possible to apply to a court who can validate the contract, thereby overcoming the impediments set out in common law
3. Where the common law determines that a contract is against public interest in some manner then the agreement is void or at least unenforceable
4. Common law illegality only applies to taxation offences, tax avoidance agreements are voided, even though not covered by legislation
Ans. Common law determines that some agreements may be void, but this does not necessarily make them unenforceable as they would be under statute
Q.What is delegated legislation? Which of the following is correct?
1. In each State, and the Commonwealth, there is the ability for local authorities to make their own statutes or Acts; this takes the pressure off the Parliament in having to pass laws continually2.Delegated legislation allows a Minister in each government portfolio to pass their own laws for particular purposes
3. The Commonwealth and State governments sends out delegates to various parts of Australia, who then make rules for local bodies such as local councils
4. Various bodies such as local government and statutory authorities have the right to make rules and regulations under a delegated authority given by a Parliamentary statute
Ans. Various bodies such as local government and statutory authorities have the right to make rules and regulations under a delegated authority given by a Parliamentary statute
Q.What is trespass to goods under tort law? Which of the following is correct?
1.Trespass of goods only relates to interference of the true owner’s goods, if interference is against goods which are not actually owned by the possessor, then there can be no trespass2.Trespass to goods involves any touching or handling of goods without permission is enough to invoke trespass, though destruction of goods will lead to more severe forms of trespass
3. Trespass requires that the goods must have actually been touched, pushed or interfered with by direct contact by the trespasser
4.Trespass to goods is the direct, intended and unjustified interference with someone else’s possession of goods
Ans. Trespass to goods is the direct, intended and unjustified interference with someone else’s possession of goods
2.Australia operates under a common law system, the same system found in all other modern countries, it refers to a system of law which is ‘accepted’ by the people of each country
3. Australia operates under a common law system whereby legal principles are developed by the courts through case law and there is a use of an adversarial system for solving disputes
4. Common law is a separate legal branch to criminal law; it refers to laws that are not civil laws
Ans.Australia operates under a common law system whereby legal principles are developed by the courts through case law and there is a use of an adversarial system for solving disputes
2.Parliament passes statute or legislation which is referred to statutory law, this law can overrule the common law
3. Parliament does not make law, it is there to govern the country, it is the courts through the common law system that makes law
4. The Parliament of Australia makes laws, the States then adopt those laws into their own individual States
Ans.Parliament can review all decisions made by courts, if they are unhappy with any decision they can pass a motion through both houses to declare a court’s decision as invalid
2.A third party with a dispute can sue an agent who in turn can sue the principal if there is a problem with the contract created by the agent
3. The agency relationship is an exception to the doctrine of privity of contract in that a third party can enforce an agreement made by an agent against the principal
4. A principal will only be liable for authorised transactions made on their behalf by an agent
Ans.The agency relationship is an exception to the doctrine of privity of contract in that a third party can enforce an agreement made by an agent against the principal
2.The Panorama case dealt with a company secretary who acted on behalf of a company. Under new legislation if a company secretary does something which is contrary to their employment, the company cannot be liable under contract
3.The case of Panorama was important because a court conclusively held that a person occupying an officer’s position in the company can be assumed to be an agent, and consequently bind the company in any of their actions
4.Under the Panorama case, the court found that for a company to be liable, a person who purports to act on their behalf must be officially appointed as an agent in order to make them liable for any contracts with outsiders
Ans.The case of Panorama was important because a court conclusively held that a person occupying an officer’s position in the company can be assumed to be an agent, and consequently bind the company in any of their actions
2.The parties to a tattslotto syndicate could never have intended a commercial relationship, none of the elements of a contract were present. It cannot be intended to be enforceable in a court of law
3.Under the case of Trevey v Grubb, a court found that tattslotto clubs are purely social and agreements from that association cannot be enforced in a court of law
4. In this case, while the agreement was a social and friendly one, objectively the circumstances are such that the expectations and understandings were that the parties were bound to share the winnings – it was more than a social agreement Trevey v Grubb
Ans.In this case, while the agreement was a social and friendly one, objectively the circumstances are such that the expectations and understandings were that the parties were bound to share the winnings – it was more than a social agreement Trevey v Grubb
2.The parties to a contract must demonstrate they intend their agreement will be enforceable in a court of law
3.All contracts by definition are enforceable in a court of law, and have an intention for legal relations; otherwise they are not agreements
4. For an intention to create legal relations the parties must actually write this into their contract in order for it to be enforceable in a court of law
Ans.For an intention to create legal relations the parties must actually write this into their contract in order for it to be enforceable in a court of law
2.Once a party is considered to be a stronger party in relation to any contracted matter, the courts will automatically void the contract, there is no need to make any further considerations on the validity of the contract
3.Undue influence is the same as the use of duress, a person is considered to be the using force to gain an inappropriate agreement
4. Undue influence is the use of pressure so that the act of entering the contract was not free and voluntary but only due to that pressure, then the contract may be set aside by the court as not a voluntary agreement
Ans.Undue influence is the use of pressure so that the act of entering the contract was not free and voluntary but only due to that pressure, then the contract may be set aside by the court as not a voluntary agreement
2.If a person contracting asks a question and there is refusal to answer, then this silence is a misrepresentation
3.If a statement made previously becomes untrue due to new circumstances, then the failure to disclose the new situation can be misrepresentation
4. It is the responsibility of a purchaser or another party to check all facts as they pertain to the contract, silence can therefore never be misrepresentation
Ans.If a statement made previously becomes untrue due to new circumstances, then the failure to disclose the new situation can be misrepresentation
2.A contract may be illegal and therefore void, or the agreement may become illegal due to a change in law or circumstances and consequently void and discharged
3.Illegal contracts are possible, while they may not be enforced, they are still valid and not discharged once they become illegal
4.If a contract was a legal one, before legislation was introduced to make the subject matter illegal, then the agreement remains valid and is not discharged
Ans.A contract may be illegal and therefore void, or the agreement may become illegal due to a change in law or circumstances and consequently void and discharged
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