Master Contract Terms: Express, Implied, and Exclusion Clauses

Question 1

Which of the following is a key characteristic of express terms in a contract?

Accepted Answer

They are explicitly stated and agreed upon by the parties.

Answer

They are implied by law and do not require direct agreement.

Answer

They can only be written or oral, not both.

Answer

They are not legally binding unless notarized.

Question 2

Which of the following is NOT a commonly recognized implied term in a contract?

Accepted Answer

Absolute ownership of the goods purchased

Answer

Fitness for a particular purpose

Answer

Warranty of merchantability

Answer

Duty of good faith and fair dealing

Question 3

Which of the following is NOT a factor considered when evaluating the validity of an exclusion clause?

Accepted Answer

Signature of both parties on the clause itself

Answer

Clarity and unambiguous language used

Answer

Reasonableness of the clause considering the circumstances

Answer

Prominent placement of the clause in the contract.

Question 4

Distinguish between a condition and a warranty in a contract.

Accepted Answer

A condition is a fundamental term, breach of which entitles the innocent party to terminate the contract, while a warranty is a less significant term.

Answer

A warranty is a fundamental term, breach of which entitles the innocent party to terminate the contract, while a condition is a less significant term.

Answer

A condition and a warranty have no meaningful distinction in contract law.

Answer

A warranty is a term that guarantees the quality of the goods sold, while a condition is not.

Question 5

What is the legal effect of a contract that is considered void?

Accepted Answer

It is treated as if it never existed and has no legal force.

Answer

It is still valid and enforceable.

Answer

It is voidable at the option of one of the parties.

Answer

It is only void if it is not in writing.

Question 6

Which of the following is NOT an element of an express term in a contract?

Accepted Answer

It is implied by law or custom

Answer

It is written or spoken

Answer

It is agreed upon by both parties

Answer

It is intended to be binding

Question 7

An exclusion clause is a term in a contract that:

Accepted Answer

Limits or excludes the liability of one party

Answer

Adds additional obligations to the contract

Answer

Defines the subject matter of the contract

Answer

Terminates the contract if a breach occurs

Question 8

In which of the following situations would an exclusion clause NOT be effective?

Accepted Answer

When the breach of contract was caused by negligence

Answer

When the other party was not aware of the exclusion clause

Answer

When the exclusion clause was not drafted clearly

Answer

When the exclusion clause is reasonable

Question 9

True or False: An exclusion clause can completely exclude liability for death or personal injury.

Accepted Answer

False

Answer

True

Question 10

Which of the following is NOT a type of implied warranty in a contract for the sale of goods?

Accepted Answer

Warranty against infringement

Answer

Warranty of merchantability

Answer

Warranty of fitness for a particular purpose

Answer

Warranty of title

Question 11

What is the main purpose of an exclusion clause in a contract?

Accepted Answer

To limit or exclude liability for breach of contract

Answer

To extend liability for breach of contract

Answer

To invalidate the entire contract

Answer

To create new obligations for the parties

Question 12

Which of the following factors is NOT considered by courts when interpreting exclusion clauses?

Accepted Answer

The size of the print used in the clause

Answer

The wording of the clause

Answer

The context of the contract

Answer

The parties' intentions

Question 13

What is the legal principle known as 'privity of contract'?

Accepted Answer

Only the parties to a contract can sue or be sued on it

Answer

Third parties can sue or be sued on a contract if they are named in it

Answer

Third parties can sue on a contract if they are intended to benefit from it

Answer

Privity of contract is no longer a valid legal principle

Question 14

What is the key distinction between a void contract and a voidable contract?

Accepted Answer

A void contract is invalid from the outset, while a voidable contract is valid until it is set aside by a court

Answer

A voidable contract is invalid from the outset, while a void contract is valid until it is set aside by a court

Answer

Void and voidable contracts are the same thing

Answer

There is no distinction between void and voidable contracts

Question 15

What is the main reason for signing a contract?

Accepted Answer

To confirm the signer's identity and indicate their willingness to be legally bound by the contract.

Answer

To simply fulfill a formality without any legal implications.

Answer

To prove that the signer fully understands and agrees to all the terms of the contract.

Answer

For a signature to be legally valid, it must be witnessed by a notary public.

Question 16

Which of the following is NOT a type of express term?

Accepted Answer

Implied term

Answer

Written term

Answer

Verbal term

Answer

Standard term

Question 17

Which of the following is an example of a term implied by the Sale of Goods Act 1979?

Accepted Answer

The seller must deliver the goods within a reasonable time.

Answer

The seller must provide the buyer with a warranty.

Answer

The buyer must pay for the goods in advance.

Question 18

Which of the following is NOT a type of exclusion clause?

Accepted Answer

Cautionary clause

Answer

Exemption clause

Answer

Limitation of liability clause

Answer

Force majeure clause

Question 19

Which of the following is a key factor in determining the validity of a contract?

Accepted Answer

The parties' capacity to contract

Answer

The location of the contract

Answer

The amount of money involved

Answer

The type of contract

Question 20

What is the primary purpose of an exclusion clause in a contract?

Accepted Answer

To limit or exclude the liability of one or both parties

Answer

To provide a legal framework for resolving disputes

Answer

To add additional rights and obligations to the contract

Answer

To define the scope and nature of the contract performance

Question 21

What is the purpose of the parol evidence rule?

Accepted Answer

To prevent the introduction of extrinsic evidence that contradicts or varies the terms of a written contract.

Answer

To create a new contract that replaces the existing written contract.

Answer

To provide evidence of the parties' intentions at the time the contract was formed.

Answer

To allow the parties to introduce extrinsic evidence to clarify the terms of a written contract.

Question 22

Which principle is considered a foundation of contract law?

Accepted Answer

Pacta sunt servanda: agreements must be kept

Answer

Res ipsa loquitur: the thing speaks for itself

Answer

Stare decisis: let the decision stand

Answer

Caveat emptor: let the buyer beware

Question 23

What distinguishes a condition from a warranty in a contract?

Accepted Answer

A condition is a fundamental term whose breach gives rise to a right to terminate the contract, while a warranty is a less significant term whose breach only entitles the non-breaching party to damages.

Answer

A condition is a term that is implied by law, while a warranty is a term that is expressly agreed upon by the parties.

Answer

A condition is a term that must be performed before the contract can come into effect, while a warranty is a term that must be performed after the contract has come into effect.

Answer

A condition is a term that is essential to the purpose of the contract, while a warranty is a term that is not essential to the purpose of the contract.