Contract Formation and Terms in Sales: Master the Essentials

Question 1

What is an implied term in a contract?

Accepted Answer

A term that arises by operation of law or custom

Answer

A term expressly included in the contract

Answer

A term that is included only if the parties agree

Answer

A term that cannot be excluded by agreement

Question 2

What is a warranty in a contract of sale?

Accepted Answer

A promise by the seller that the goods are free from defects

Answer

A statement by the buyer that the goods are fit for a particular purpose

Answer

A condition that the goods will be delivered on time

Answer

An undertaking by the seller to repair or replace defective goods

Question 3

What is a key difference between a condition and a warranty in a contract of sale?

Accepted Answer

A condition gives the buyer the right to rescind the contract, while a warranty does not

Answer

A condition is a minor breach, while a warranty is a serious breach.

Answer

A condition is a promise, while a warranty is a statement of fact.

Answer

There is no difference between a condition and a warranty.

Question 4

What are the essential requirements for the validity of a contract of sale?

Accepted Answer

Offer, acceptance, consideration, capacity, legality, and sufficient certainty

Answer

Offer, acceptance, consideration, and legality

Answer

Offer, acceptance, consideration, and genuineness

Answer

Offer, acceptance, consideration, and intention

Question 5

What is the parol evidence rule?

Accepted Answer

A rule that prevents the admission of extrinsic evidence to contradict or vary the terms of a written contract

Answer

A rule that allows the admission of extrinsic evidence to clarify the terms of a written contract

Answer

A rule that prohibits the admission of oral evidence to contradict a written contract

Answer

A rule that requires all contracts to be in writing

Question 6

What is the doctrine of frustration of contract?

Accepted Answer

A principle that permits a party to rescind a contract if it becomes impossible or impracticable to perform due to unforeseen circumstances

Answer

A principle that allows a party to rescind a contract if the other party breaches a condition

Answer

A principle that allows a party to rescind a contract if the other party misrepresents a material fact

Answer

A principle that allows a party to rescind a contract if the contract is illegal

Question 7

What is the purpose of the Sale of Goods Act 1979?

Accepted Answer

To codify the law relating to the sale of goods in England and Wales

Answer

To apply to all contracts for the sale of goods

Answer

To apply only to contracts for the sale of consumer goods

Answer

To be repealed

Question 8

What is the main objective of the Consumer Rights Act 2015?

Accepted Answer

To provide additional protection to consumers in England and Wales

Answer

To apply only to contracts for the sale of goods

Answer

To apply only to contracts for the sale of services

Answer

To replace the Sale of Goods Act 1979

Question 9

Under the Statute of Frauds, which of the following sales transactions must be in writing to be legally enforceable?

Accepted Answer

Sale of goods valued at £10,000 or more

Answer

Sale of a used automobile

Answer

Sale of groceries

Answer

Sale of company shares

Question 10

In a contract of sale, who is legally bound to deliver the goods to the other party?

Accepted Answer

Seller

Answer

Buyer

Question 11

Which of the following is NOT a statutory warranty in a sale contract under the Sale of Goods Act 1979?

Accepted Answer

Warranty of quality

Answer

Warranty of title

Answer

Warranty of description

Answer

Warranty of fitness for a particular purpose

Question 12

When is an offer considered to have been effectively communicated?

Accepted Answer

When it is received

Answer

When it is posted

Answer

When it is accepted

Answer

When it is revoked

Question 13

What is the primary purpose of the parol evidence rule?

Accepted Answer

To prevent contractual terms being modified by subsequent oral agreements

Answer

To ensure that all contractual terms are in writing

Answer

To exclude implied terms from contracts

Answer

To provide evidence of the parties' intentions

Question 14

In the context of sales contracts, the principle of 'caveat emptor' places the primary responsibility for ensuring the quality of goods upon:

Accepted Answer

Buyer

Answer

Seller

Answer

Manufacturer

Answer

Carrier

Question 15

In international trade, the term 'CIF' in a contract of sale typically means that:

Accepted Answer

Cost, Insurance, and Freight

Answer

Cost, Insurance, and Fees

Answer

Cost, Including Freight

Answer

Cost, Including Fees

Question 16

Which of the following is not an essential element of a valid contract of sale under the Sale of Goods Act 1979?

Accepted Answer

Method of payment

Answer

Agreement

Answer

Consideration

Answer

Capacity

Question 17

Which of the following statements about warranties in a contract of sale is correct?

Accepted Answer

A warranty is an express or implied undertaking that the goods will meet a certain standard of quality.

Answer

A warranty is a promise that the seller will do or refrain from doing something.

Answer

A warranty is a description of the goods.

Answer

A warranty is a term of the contract that can be varied by the parties.

Question 18

The parol evidence rule prevents the introduction of extrinsic evidence to:

Accepted Answer

Vary or contradict the terms of a written contract

Answer

Explain the meaning of an ambiguous term in a written contract

Answer

Prove fraud or mistake in the formation of a written contract

Answer

Establish the existence of a separate oral agreement that is collateral to a written contract

Question 19

A contract that is voidable is:

Accepted Answer

Valid until it is set aside by a court

Answer

Valid and enforceable from the outset

Answer

Neither valid nor enforceable

Answer

Void from the beginning

Question 20

In a sale of goods transaction, what is a direct legal consequence of a breach of contract?

Accepted Answer

Damages

Answer

Rescission of the contract

Answer

Specific performance of the contract

Answer

Injunction to prevent further breach

Question 21

Which of the following is NOT an essential element for the formation of a valid contract of sale under English law?

Accepted Answer

Delivery of the goods

Answer

Agreement on the price

Answer

Capacity of the parties

Answer

Identification of the subject matter

Question 22

Which implied term is NOT implied into contracts of sale under the Sale of Goods Act 1979?

Accepted Answer

Implied warranty of authority

Answer

Implied warranty of merchantability

Answer

Implied warranty of title

Answer

Implied warranty of fitness for purpose

Question 23

Which of the following is an example of an express warranty in a contract of sale?

Accepted Answer

The seller guarantees that the car is in good condition.

Answer

The law implies that the car is in good condition.

Answer

The buyer assumes that the car is in good condition.

Question 24

Which of the following is NOT a factor that can affect the validity of a contract?

Accepted Answer

The age of the parties

Answer

Mistake

Answer

Misrepresentation

Question 25

Which of the following is NOT a way to terminate a contract of sale?

Accepted Answer

Novation

Answer

Rescission

Answer

Breach

Answer

Frustration

Question 26

Which of the following is NOT a benefit of using a standard form contract?

Accepted Answer

It is more likely to be tailored to the specific needs of the parties.

Answer

It provides certainty.

Answer

It saves time and money.