Contract Law Mock Examination

DATE:

TIME ALLOWED: ONE HOUR

There are 50 marks available for this examination. It has two parts:

Part 1 Multiple Choice Questions (MCQs) (10 marks).

You must attempt all questions.

For each MCQ, there are four suggested “answers” of

which only ONE is the most appropriate answer. So, for
example, if you decide the answer to Question 1 is A, write
“Q 1: A” in your answer.

Part 2 Written Question (40 marks).

This part contains two questions. You must attempt one question.

INSTRUCTIONS TO CANDIDATES

Write your name on the front cover of your answer book.

This is a closed book assessment.

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PART 1: MULTIPLE CHOICE QUESTIONS (10 MARKS)

Each of the five questions in Part 1 is worth two marks.

QUESTION 1

Which ONE of the following statements is CORRECT?

A. Social and domestic agreements are never binding because the parties do not
intend them to have legal consequences.

B. There is an irrebuttable presumption that parties to commercial agreements

intend them to be legally enforceable.

C. In relation to intention to create legal relations the law operates on rebuttable

presumptions.

D. To bind a principal to a contract an agent must have actual authority (express or

implied).

QUESTION 2

For which ONE of the following propositions of law is the case of Carlill v
Carbolic Smoke Ball Company NOT an authority?

A. An offer may be made to all the world, and accepted by anyone who performs
the stipulation contained within it.

B. Acceptance of an offer should usually be notified, but the language and nature
of the transaction may show that notice of acceptance is not required.

C. Offers of unilateral contracts cannot be revoked once the act of acceptance has
started.

D. An offer must show an intention to be legally bound, rather than being “mere
puff”.

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QUESTION 3

Which ONE of the following statements about unilateral contracts is CORRECT?

A. A unilateral contract has only one party to it.

B. A unilateral contract is a contract in which only one party is bound to do

anything.

C. No consideration is required to enforce a promise contained in a unilateral

contract.

D. At an auction, the fall of the auctioneer’s hammer forms a unilateral contract.

QUESTION 4

Dickinson v Dodds is authority for which ONE of the following propositions of

law?

A. Revocation may be communicated by a reliable third party.

B. The offeror can only revoke an offer by appointing an agent to revoke it on their
behalf.

C. An offer can be revoked by conduct.

D. An offer may lapse after a specified period or on the occurrence of a specified

condition, or, if none, after a reasonable time.

QUESTION 5

Where a variation of a contract involves a promise of extra payment which ONE

of the following statements is CORRECT?

A. No consideration is required to enforce the promise of extra payment.

B. Performance of an existing contractual duty can never be sufficient

consideration.

C. The promise of extra payment can only be enforced if it was made under
duress.

D. A practical benefit may be consideration for a promise of extra payment, but if

the promise was made under duress the variation may be set aside.

TOTAL PART 1: 10 MARKS

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 PART 2 WRITTEN QUESTIONS (40 MARKS)

ANSWER ONE OF THE FOLLOWING TWO QUESTIONS

QUESTION 1 (40 marks)

Assume the date is Wednesday 4 November 20XX.

Colin Wade owns C &W, a retailer with several shops in West London.

He rang a supplier, Marquin, yesterday morning (3 November), having expected

delivery of a consignment of leather jackets which had not arrived. Marquin had said
in the call that it was looking for an extra £4,000 before it was prepared to go ahead
on the consignment, as it could not do them at the price it had originally stated.
Marquin said its own supplier had increased its wholesale prices at short notice, and
that it had to pass the costs on to keep a profit margin. Colin said that as far as he
was concerned it was too late to change the price and he expected Marquin to
deliver the goods.

Set out below in Documents A, B, C and D is the correspondence which had passed
between the parties

Colin says he had decided to buy the jackets after not getting any response to his
enquiry of 27 October. He had posted the letter on 28 October with a first class
stamp but Marquin says it did not receive it until Monday 2 November - after the 30
October cut-off date - and had ignored it because the jackets had been sent off to
Camden Market.

Advise Colin explaining his legal position.

To do this you must:

 Explain what is needed for a binding contract.

 Define important terms and cite relevant authorities.
 Analyse the legal effect of each document to decide whether, or not,
there was a contract between Colin and Marquin for the sale of the
jackets.

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Document A – email of 23 October 20XX

From: Colin Wade, C & W Date: 23/10/20XX

To: Marquin Ltd

I have a copy of your September 20XX clothing catalogue. I’m interested in buying
250 of the men’s leather jackets (50 small, 100 medium, 50 large and 50 extra-
large) from the Bufflecuir range. Could you give me a price and a delivery date?

Document B – letter of 26 October 20XX

Dear Mr Wade, 26/10/20XX

Thank you for your enquiry. We could do you 250 Bufflecuir as set out in your e-
mail at an all-in price of £27,500. They are available for collection straight away
from our Finchley depot. Please reply by close of business on Friday 30 October if
you want to go ahead, as we’ll be putting them through Camden Market the next
week otherwise.

Yours sincerely,

p.p. Marquin Ltd

Document C – email of 27 October 20XX

From: Colin Wade, C & W Date: 27/10/20XX

To: Marquin Ltd

Thanks for your letter of yesterday, received this morning. Would you be able to
knock a bit off the price if I were to collect them and pay cash?

Document D – letter of 28 October 20XX

Dear Sir / Madam 28/10/20XX

Further to my e-mail of yesterday, I have decided I do want to go ahead with the

purchase of the 250 Bufflecuir jackets. I enclose cheque for £27,500. Would you
please be able to deliver them to my Chiswick store on Monday 2 November, to
save me a trip to Finchley?

Yours sincerely

Colin Wade
C&W

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QUESTION 2 (40 marks)

Rohan is a keen cyclist who runs his own business repairing bicycles. He rents a
small lock-up workshop from Hansaj. Six months ago he met with Hansaj. and
explained that he had been suffering financial difficulties and might have to close his
business. Hansaj, realising that he would have difficulty finding another tenant for the
workshop agreed to reduce the rent by £50 per month.

Two months ago, Rohan managed to negotiate a lucrative contract to service and
repair the bicycles of the Chester cycling club.

Yesterday Rohan met Sheila at his friend Krishna’s house. Sheila, Krishna’s cousin,
had cycled round to the house. On the way there, however, there was a problem with
the cycle’s brakes and she had been unable to change gear properly. Sheila was
worried about riding the cycle in its current condition and so asked Rohan to have a
look at it for her. He repaired the cycle relatively quickly, but Sheila was so grateful
she said she would send him £30. Rohan was surprised. He said that he had been
happy to help out but thanked her, saying the money would come in useful.

Hansaj has just found out about Rohan’s lucrative contract and is now demanding he
resume paying the original rent. He is also demanding the sum of £100 being the
difference between the original rent and reduced rent for the past two months.

Rohan has not received £30 from Sheila.

Advise Rohan:
 whether he will have to resume paying the original rent, and is liable to
pay the sum of £100 to Hansaj; and
 whether he is entitled to £30 from Sheila.

To do this you must:

 Define consideration.
 Explain the common law position in relation to part payment of a debt.
 Explain the doctrine of promissory estoppel.
 Explain if, and when, a past act may be consideration.
 Apply the law to the facts and cite relevant authorities.

TOTAL PART 2: 40 MARKS

TOTAL FOR PAPER: 50 MARKS

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