QUESTION: 17

A breach of representation by party A in a contract would allow party B to do what?

rescind the contract
claim damages
rescind the contract and claim damages
nothing - this is not a fundamental breach

Answer(s): C

Explanation:

A breach of representation is a major/ fundamental breach and allows the innocent party to rescind the contract and claim damages. A Breach of Representation is when you provide false information about who you are- this might have been a fundamental reason as to why the contract went ahead. If it turns out not to be true, the other party has the right to cancel the contract and claim damages.
See p.126

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QUESTION: 18

Alan has an ongoing contract with a supplier for the provision of gardening tools to his horti-culture business. He has been working with the supplier for over 20 years and has recently discovered that the supplier committed a breach in a warranty 3 years ago. Can Alan claim damages?

yes- the breach has occurred and a contract is in place
yes- Alan can claim damages and rescind the contract
no- Alan could only claim if the breach was of a condition, not a warranty
no- Alan cannot claim because the breach was so long ago

Answer(s): A

Explanation:

"Yes- A Breach has occurred and a contract is in place" - this is the correct answer. Claims against warranties can be made up to six years from the date the contract is breached. Option 2 isn't correct as a breach in warranty does not allow you to rescind the contract. Options 3 and 4 are incorrect because Alan CAN claim damages. There's a useful table about warranties and conditions on p. 127

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QUESTION: 19

If a party is to 'repudiate' a contract, what does this mean?

the party is cancelling the contract as it is no longer needed
the party is using the break-clause to end the contract
the party indicates they no longer intend to fulfil their contractual obligations, usually in response to a breach
the party gives notice that they anticipate that they will not be able to fulfil their future obligations

Answer(s): C

Explanation:

"the party indicates they no longer intend to fulfil their contractual obligations, usually in response to a breach". This is the definition of 'repudiate' given on p. 128 Before the exam check you understand the difference between repudiate, rescind and revoke. These are all ways contracts can end but are slightly different.

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QUESTION: 20

Which of the following statements about 'Specific Performance' are TRUE? Select TWO.

Orders for Specific Performance can be a lengthy and costly process
Orders for Specific Performance can be a cheap and quick way to remedy a breach in contract
If a party is ordered to complete a 'Specific Performance' and doesn't, they can be ar-rested
The innocent party must mitigate all losses

Answer(s): A,C

Explanation:

1+3 are correct. Specific Performance tend to go through the courts so this is a lengthy and costly process. Because it's mandated by the courts it means that if the offending party doesn't comply, this is a criminal offence and they can be arrested. Option 2 is incorrect as it is the opposite of option 1. Option 4 is incorrect because there is no need for the innocent party to mitigate any losses. See p.
132 for more information on Specific Performance

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