Terms of Contracts: Master the Essentials of Contract Law

Question 1

Which of the following is an example of a condition?

Accepted Answer

A term that goes to the root of the contract

Answer

A term that is not essential to the contract

Answer

A term that is implied by law

Answer

A term that is incorporated by reference

Question 2

Which of the following is a statutory term implied into all contracts for the sale of goods in UK law?

Accepted Answer

Sale of Goods Act 1979

Answer

Consumer Protection Act 1987

Answer

Competition Act 1998

Answer

Property Act 1925

Question 3

In a service contract, the party providing the services is known as the:

Accepted Answer

Contractor

Answer

Client

Answer

Supplier

Answer

Vendor

Question 4

Implied terms are terms:

Accepted Answer

Automatically incorporated by law into the contract

Answer

Explicitly stated in the contract

Answer

Exclusively found in written contracts

Answer

Negotiated through discussions between the parties

Question 5

Conditions in a contract are terms:

Accepted Answer

That are fundamental to the contract

Answer

That are minor or unimportant

Answer

That are irrelevant to the performance of the contract

Answer

That are only enforceable if they are in writing

Question 6

Warranties in a contract are:

Accepted Answer

Promises

Answer

Statements of opinion

Answer

Terms implied by the court

Answer

Conditions that are essential to the contract

Question 7

Misrepresentation can make a contract:

Accepted Answer

Voidable

Answer

Void

Answer

Unenforceable

Answer

Legally binding

Question 8

Which of the following is NOT a defence to a claim of misrepresentation?

Accepted Answer

Fraudulent misrepresentation

Answer

Change of position by the defendant

Answer

Negligence of the person who was misled

Answer

The representee's awareness of the truth

Question 9

In a contract between a company and a supplier for the purchase of goods, which term is most likely to be implied?

Accepted Answer

The goods will meet satisfactory quality standards.

Answer

The goods will be delivered within 30 days of the order.

Answer

The supplier is responsible for any damages caused by the goods.

Answer

Either party can terminate the contract without notice.

Question 10

Which of the following is the most accurate description of an implied term in a contract?

Accepted Answer

A term that is not explicitly stated but is inferred from the circumstances of the contract.

Answer

A term that is written into the contract and cannot be altered by the parties.

Answer

A term that is agreed upon by the parties during the negotiation process.

Answer

A term that is automatically included in all contracts, regardless of the specific circumstances.

Question 11

Which of the following factors is not considered by a court when determining whether to imply a term into a contract?

Accepted Answer

The personal relationship between the parties.

Answer

The presumed intentions of the parties.

Answer

The conduct of the parties during the formation of the contract.

Answer

The nature and purpose of the contract.

Question 12

What is the primary distinction between a condition and a warranty in a contract?

Accepted Answer

Breach of a condition gives the innocent party the right to terminate the contract, while breach of a warranty does not.

Answer

Breach of a warranty gives the innocent party the right to terminate the contract, while breach of a condition does not.

Answer

Conditions are more important than warranties.

Answer

Warranties are more important than conditions.

Question 13

Which of the following is an example of an express term in a contract? Select the option that refers to a term that is clearly stated in the written agreement.

Accepted Answer

A term included in a written agreement

Answer

A term implied by the courts

Answer

A term that is not stated in writing but is required by law

Question 14

Which of the following is NOT a criterion for implying a term into a contract? Choose the option that does not represent a necessary condition for implying a term.

Accepted Answer

Unconscionability

Answer

Necessity

Answer

Obviousness

Answer

Reasonableness

Question 15

What is the legal consequence of breaching a warranty? Choose the option that describes the remedy available to the innocent party.

Accepted Answer

The innocent party can claim damages

Answer

The innocent party can terminate the contract

Answer

The contract is void

Answer

The innocent party has no legal remedy

Question 16

Doctrine of Privity of Contract:

Accepted Answer

Prevents third parties from enforcing a contract

Answer

Applies to all types of contracts

Answer

Has been abolished in the UK

Answer

Only applies to contracts for the sale of goods

Question 17

Time Limit for Bringing a Claim for Breach of Contract in the UK:

Accepted Answer

6 years

Answer

12 years

Answer

15 years

Answer

There is no time limit

Question 18

What is the main purpose of equitable implied terms in contract law?

Accepted Answer

To ensure fairness and justice for both parties within the contract.

Answer

To clarify the meaning of express terms agreed upon by the parties involved.

Answer

To provide a remedy in the event of a contract breach.

Answer

To protect the rights of consumers specifically.

Question 19

What is the primary purpose of the Statute of Frauds?

Accepted Answer

To prevent fraud by requiring specific contracts to be written.

Answer

To ensure all contracts are legally binding.

Answer

To eliminate implied terms in contracts.

Question 20

Legal Significance of a Condition in a Contract:

Accepted Answer

Fundamental term; breach entitles the innocent party to terminate the contract

Answer

Less important term; breach only entitles the innocent party to damages

Answer

Term implied by law

Answer

Term agreed upon by the parties to the contract

Question 21

Collateral Term vs. Warranty:

Accepted Answer

Collateral term: not essential to the main purpose of the contract; warranty: essential to the main purpose of the contract

Answer

Warranty: given by the seller to the buyer; collateral term: given by the buyer to the seller

Answer

Collateral term: implied by law; warranty: agreed upon by the parties

Answer

No difference between a collateral term and a warranty

Question 22

Significance of the Parol Evidence Rule:

Accepted Answer

Prevents written contracts from being varied by oral evidence

Answer

Prevents oral contracts from being varied by written evidence

Answer

Prevents both written and oral contracts from being varied by any type of evidence

Answer

Has no significance in English law

Question 23

What is the primary role of courts in relation to contracts?

Accepted Answer

To act as impartial judges, resolving disputes and enforcing contracts according to the law.

Answer

To alter contracts they deem unfair or unclear, giving priority to the parties' intentions.

Answer

To serve as mediators, assisting negotiations between parties who cannot reach an agreement on their own.

Question 24

Which approach is NOT used to determine the intention of the parties in a contract?

Accepted Answer

Equity

Answer

Literal rule

Answer

Golden rule

Answer

Mischief rule

Question 25

An express term in a contract is one that:

Accepted Answer

Is explicitly agreed upon by the parties

Answer

Is implied by law

Answer

Is customary in the relevant industry

Answer

Is stated solely in written form

Question 26

Identify an example of an implied term:

Accepted Answer

A term that is automatically implied by law

Answer

A term that is explicitly stated in the written contract

Answer

A term that is agreed upon verbally between the parties

Answer

A term that is commonly practiced in the relevant industry

Question 27

Which type of contract is typically executed under seal?

Accepted Answer

Deed (a formal document with a seal or signature)

Answer

Simple contract (a less formal agreement)

Answer

Bilateral contract (involving mutual promises)

Answer

Unilateral contract (involving a promise in exchange for an act)

Question 28

An express term of a contract is one that:

Accepted Answer

Is clearly stated in the contract document

Answer

Is implied by law

Answer

Is agreed upon by the parties but not written down

Answer

Is implied by custom or usage

Question 29

A contract condition is a term that:

Accepted Answer

Goes to the heart of the contract and allows the innocent party to terminate the contract if breached

Answer

Is a less important term that gives rise to a claim for damages if breached

Answer

Is implied by law and cannot be varied by the parties

Answer

Is stated explicitly in the contract and is always binding

Question 30

Which of the following is an example of an exclusion clause?

Accepted Answer

A clause that limits the liability of one or both parties

Answer

A clause that sets out the payment terms

Answer

A clause that defines the scope of the contract

Answer

A clause that specifies the place of performance

Question 31

Which of the following is NOT a form of alternative dispute resolution?

Accepted Answer

Trial by jury

Answer

Negotiation

Answer

Mediation

Answer

Arbitration

Question 32

In contract law, consideration is the legally binding exchange of something of value. Which of the following is NOT a valid form of consideration?

Accepted Answer

A promise to fulfill an existing legal obligation

Answer

A monetary payment

Answer

A promise to perform a specific service

Answer

The transfer of ownership of a valuable object

Question 33

Which of the following is NOT a formal requirement for a valid contract?

Accepted Answer

Consideration must be in writing

Answer

There must be an offer and acceptance

Answer

There must be an intention to create legal relations

Answer

The parties must have the legal capacity to contract

Question 34

Which type of term is implied into a contract by law, regardless of whether the parties have expressly agreed to it?

Accepted Answer

Implied term

Answer

Condition

Answer

Express term

Answer

Warranty

Question 35

A breach of which type of term gives the innocent party the right to rescind the contract?

Accepted Answer

Condition

Answer

Implied term

Answer

Express term

Answer

Warranty

Question 36

Which of the following is an example of an implied term of fitness for purpose?

Accepted Answer

A contract for the purchase of a new car implies that the car is fit for driving

Answer

A contract for the purchase of a painting implies that the painting is original

Answer

A contract for the purchase of a used car implies that the car is in good condition

Question 37

Which of the following defenses to a breach of contract claim is based on the idea that the contract was entered into under pressure?

Accepted Answer

Duress

Answer

Frustration

Answer

Misrepresentation

Answer

Mistake

Question 38

Which of the following is a benefit of using standard form contracts?

Accepted Answer

They can save time and money

Answer

They can be easily customized

Answer

They are always fair and balanced

Answer

They are legally binding on all parties

Question 39

Which of the following is considered an 'express term' in a contract?

Accepted Answer

A statement made verbally or in writing by one party to the other

Answer

A term implied by the legal system

Answer

A term implied by the customs of a specific trade or industry

Question 40

Which of the following is NOT considered a 'condition' in a contract?

Accepted Answer

A minor term

Answer

A term fundamental to the contract

Answer

A term that, if breached, entitles the other party to terminate the contract

Answer

A term vital for the contract's execution

Question 41

Which of the following is a condition that goes to the root of the contract?

Accepted Answer

Fundamental term

Answer

Innominate term

Answer

Warranty

Answer

Condition precedent

Question 42

The term 'implied by fact' refers to a term that:

Accepted Answer

Is necessary to give the contract business efficacy

Answer

Is implied by custom and practice

Answer

Is implied by statute

Question 43

A warranty is a term that:

Accepted Answer

Breach of which gives rise to damages

Answer

Cannot be excluded by agreement

Answer

Is implied into all contracts

Answer

Breach of which entitles the innocent party to terminate the contract

Question 44

The parol evidence rule prevents the introduction of evidence:

Accepted Answer

That contradicts or adds to a written contract

Answer

That is inadmissible on grounds of hearsay

Answer

That is relevant to the formation of the contract

Answer

That is privileged

Question 45

The exclusion of an implied term is possible:

Accepted Answer

Only if it is done by express agreement

Answer

Only if it is done for a valuable consideration

Answer

Only if it is done in writing

Answer

In no circumstances

Question 46

A term implied into a contract by the courts based on the previous conduct of the parties is known as:

Accepted Answer

A term implied by a course of dealing.

Answer

A term implied by statute.

Answer

A term implied by custom.

Answer

A term implied in fact.

Question 47

The 'parol evidence rule' generally prevents:

Accepted Answer

The use of extrinsic evidence to vary or contradict the terms of a written contract.

Answer

The use of written evidence to prove the existence of a contract.

Answer

The use of oral evidence to interpret ambiguous terms in a written contract.

Question 48

A clause in a contract for the sale of goods states that the goods will be delivered by a specific date. What type of term is this?

Accepted Answer

Condition

Answer

Warranty

Answer

Representation

Answer

Innominate term

Question 49

Which of the following is NOT a way in which terms can be implied into a contract?

Accepted Answer

Through express agreement of the parties

Answer

By the courts, based on the facts of the case

Answer

By custom

Answer

By statute

Question 50

The Sale of Goods Act 1979 implies a term into contracts for the sale of goods that the goods will be of:

Accepted Answer

Satisfactory quality

Answer

Unique design

Answer

The lowest possible price

Answer

Perfect condition

Question 51

A term in a contract excludes liability for personal injury caused by negligence. Is this term likely to be enforceable?

Accepted Answer

No, it is likely to be unenforceable under the Unfair Contract Terms Act 1977

Answer

Yes, as long as both parties agreed to it

Answer

Yes, because parties are free to agree to any terms they choose

Question 52

Which of the following best describes an 'express term' in a contract?

Accepted Answer

A term that is specifically stated by the parties, either orally or in writing

Answer

A term that is implied by law into certain types of contracts

Answer

A term that is not explicitly stated but is understood to be part of the contract

Question 53

A contract for the sale of a house includes a term stating that the completion date is 'of the essence'. This means:

Accepted Answer

Time is a condition of the contract, and a breach could allow the innocent party to terminate

Answer

The completion date is flexible and can be changed by agreement

Answer

Time is not important and a delay will not be considered a breach

Question 54

Which of the following is most likely to be considered an 'innominate term'?

Accepted Answer

A term requiring one party to use 'reasonable endeavors' to achieve a particular outcome

Answer

A term stating the price of the goods being sold

Answer

A term specifying the delivery date for the goods

Question 55

In the context of contract law, what is a 'boilerplate' clause?

Accepted Answer

A standard clause used in many contracts to deal with common issues

Answer

A clause that is illegal and unenforceable

Answer

A clause that is specifically negotiated and tailored to the particular contract

Question 56

What is the main difference between a condition and a warranty in a contract?

Accepted Answer

A breach of condition allows the innocent party to terminate the contract, while a breach of warranty only allows for damages

Answer

Conditions are implied terms, while warranties are express terms