Deck 9: Contract Law 3: Enforcement of the Contract

Question 1

In a legal context, 'duress' is:

A)Where one of the parties is mistaken about the legal consequences of a contract.
B)A factor that renders a contract void.
C)A factor that makes a contract voidable at the election of the innocent party.
D)Where one party compels another not to enter into a contract by threatening physical harm.

Answer 1

C

Question 2

A contract will not be enforceable where a court finds a 'lack of formality', that is:

A)The contract does not meet the necessary formal requirements, for example it is not in writing.
B)Either the purpose of the contract or the performance of the contract is illegal.
C)One of the parties lacks the legal capacity to enter into a contract.
D)One of the parties has not entered into the contract willingly.

Answer 2

A

Question 3

A contract will not be enforceable where a court finds a 'lack of legality', that is:

A)The contract does not meet the necessary formal requirements, for example it is not in writing.
B)Either the purpose of the contract or the performance of the contract is illegal.
C)One of the parties lacks the legal capacity to enter into a contract.
D)One of the parties has not entered into the contract willingly.

Answer 3

B

Question 4

A contract may not be enforceable where a court finds a 'lack of consent', that is:

A)The contract does not meet the necessary formal requirements, for example it is not in writing.
B)Either the purpose of the contract or the performance of the contract is illegal.
C)One of the parties lacks the legal capacity to enter into a contract.
D)One of the parties has not entered into the contract willingly.

Question 5

Which of the following will not necessarily make a contract unenforceable?

A)A lack of consent by one of the parties.
B)The contract is not drafted by a lawyer.
C)The purpose of the contract is illegal.
D)One of the parties lacks contractual capacity.

Question 6

A 'voidable' contract is one that:

A)Is effective and enforceable only if the court declares it to be so.
B)Is effective and enforceable unless terminated by either party to the contract.
C)Is effective and enforceable unless terminated by the innocent party.
D)Is effective and enforceable unless terminated by the court.

Question 7

Which of the following statements is not true of non est factum?

A)It literally means not my document.
B)It refers to a claim that a written and signed contract contains terms or has legal consequences of which one of the parties was unaware as a result of a disability or disadvantage.
C)It renders a contract void and unenforceable.
D)A court will usually find non est factum where a party to a contract has signed the contract without reading it.

Question 8

Where parties to a contract have a pre-existing relationship and one party has a degree of influence or dominance over the other and the stronger party takes advantage of that influence so that the weaker party does not exercise their independent judgement, the contract will be voidable by the weaker party because of:

A)Unilateral mistake.
B)Common mistake.
C)Duress.
D)Undue influence.

Question 9

Kieran threatens to burn down Scott's house unless Scott agrees to sell his vintage Ford Cortina to Kieran for $10,000.Scott agrees, but then sells the car to Jermaine for $50,000.What can Kieran do?

A)Nothing.The agreement between Kieran and Scott is unenforceable due to duress.
B)Nothing.The agreement between Kieran and Scott is unenforceable due to undue influence.
C)Sue Scott for breach of contract.
D)Sue Jermaine for breach of contract.

Question 10

Which of the following is not a circumstance likely to make a contract unenforceable?

A)Lack of consent.
B)Lack of capacity.
C)Lack of legality.
D)Lack of informality.

Question 11

Which of the following scenarios would not be likely to render a contract unenforceable because of a presumed lack of consent by one of the parties?

A)A mistake about a fundamental aspect of the agreement which mistake is unfairly taken advantage of by the other party.
B)A contract entered into as a result of inappropriate pressure applied by one party to the other.
C)Where a party entered into a contract because the other party unfairly used his influence to coerce the consent.
D)Where a party entered into a contract knowing that they did not have sufficient funds to meet the agreed price for the goods or services.

Question 12

Which of the following is not a type of mistake that will make a contract unenforceable?

A)Unilateral mistake by one party that the other party knows of and takes advantage of.
B)Common mistake by both parties.
C)Mutual mistake by both parties.
D)A mistake as to the market value of the property that is the subject of the contract.

Question 13

Which of the following will not make a contract unenforceable?

A)A lack of consent by one of the parties.
B)A lack of capacity by one of the parties.
C)Common mistake by both of the parties.
D)A change of mind by one of the parties.

Question 14

Clementine agreed to sell her designer evening gown to Miranda.Unfortunately at the time the agreement was made the gown, which had been sent to the drycleaners, had been destroyed as a result of a fire at the dry-cleaning premises.In the circumstances the contract between Clementine and Miranda is:

A)Void for unilateral mistake.
B)Void for common mistake.
C)Void for mutual mistake.
D)Void for duress.

Question 15

Which of the following is not a scenario where a contract will be void due to unconscionable conduct?

A)One party has unfairly taken advantage of a special weakness or disadvantage of the other party.
B)The parties to the contract were in a pre-existing special relationship where one party had a degree of influence or dominance over the other that they used to their advantage.
C)One party compelled the other to enter into the contract by threatening harm.
D)One party made a mistake relating to a fundamental aspect of the contract of which the other party was unaware.

Question 16

Which of the following is not a special weakness or disadvantage which could make a contract unenforceable due to unconscionability?

A)An inability to read English.
B)A lack of education.
C)Intoxication.
D)A tendency to procrastinate.

Question 17

Which of the following is not a personal circumstance a court is likely to find amounts to a 'special weakness or disadvantage' on the part of a contracting party?

A)An inability to speak or read English.
B)Poverty.
C)Being in love.
D)Possessing a timid personality.

Question 18

A contract will be void due to 'unconscionable conduct' where:

A)One party has unfairly taken advantage of a special weakness or disadvantage of the other party.
B)One party has used their own special weakness to gain an unfair advantage.
C)One party has a special weakness or disadvantage although the stronger party is unaware of that weakness or disadvantage.
D)One of the parties has a special weakness or disadvantage although there is no evidence that the other party has used it to derive an unfair benefit.

Question 19

Which of the following is most likely to make a contract unenforceable?

A)Lack of writing.
B)Lack of consent.
C)Lack of enthusiasm.
D)Lack of value.

Question 20

Which of the following is least likely to be unenforceable due to undue influence?

A)A contract between a parent and their child.
B)A contract between a lawyer and their client.
C)A contract between a doctor and their patient.
D)A contract between two good friends.

Question 21

A 'condition' is:

A)A term of the contract that is of fundamental importance.
B)A term of the contract of lesser importance, in the absence of which the party favoured by the term would have entered into the contract anyway.
C)A term of a contract that is not able to be categorised as a fundamental term or as a term of lesser importance, without which the party would still have entered into the contract.
D)An unenforceable term that the court will sever from a contract in the event of a dispute.

Question 22

Alexei verbally orders a birthday cake from Ng's bakery.Alexei orders it for 'the 3rd of the month' but Alexei meant the following month and Ng thought Alexei meant this month.Which of the following is the best answer?

A)The contract is void for mutual mistake.
B)There is common mistake and the contract is voidable.
C)There is unilateral mistake on the part of each party and the contract is void.
D)The contract is enforceable by either party.

Question 23

'Quantum meruit' is:

A)The amount of damages assessed by the court and payable to the innocent party in the event of breach of contract.
B)The court's assessment as to the merit of the arguments presented by the opposing parties to the litigation.
C)Part payment in proportion to the amount of work actually competed pursuant to a contract.
D)The right to enforce payment of a contract price even where the contract has only been partially performed.

Question 24

Niko orders a steak in a restaurant.When the waiter returns, he regretfully informs Niko that there is no more steak.Instead, he offers Niko a lamb chop.Niko accepts as he is hungry and does not want to make a fuss.At the end of the meal, he refuses to pay the bill, claiming that the restaurant was in breach of its contract to serve him the steak that he ordered.Which is correct?

A)The restaurant is in breach of the statutory implied term relating to description.
B)The restaurant is in breach of an express term of the contract.
C)The restaurant is in breach both of an implied term as to description of goods and of an express term of the contract.
D)Niko accepted the restaurant's offer of a lamb chop instead of steak, and therefore has no legal remedy.

Question 25

Which of the following statements is not true of 'indirect loss' arising from a breach of contract?

A)Indirect loss is loss that is not caused directly by the breach or would not ordinarily be expected to result from the breach.
B)Indirect loss entitles a plaintiff to an award of special, abnormal or extraordinary damages.
C)Indirect loss is only recoverable if it can be shown that the parties had the possibility of such loss in mind when the contract was formed.
D)Indirect loss is loss incurred by the plaintiff that flows naturally from the breach according to the ordinary course of events.

Question 26

In breach of her contract with Leaverpond Rovers football team, Assistant Manager Leah publishes an autobiography revealing the secret coaching methods of Team Manager Wafael.What type of remedy is Leaverpond Rovers least likely to seek?

A)Injunction.
B)Exemplary damages.
C)Nominal damages.
D)Liquidated damages.

Question 27

'Liquidated damages' are:

A)Damages awarded to a plaintiff who has not suffered any actual loss as a result of a breach of conduct.
B)An award of damages to the plaintiff in an amount above and beyond mere compensation, intended by the court to penalise or punish the defendant.
C)A pre-estimate of the quantity of damages one party will be entitled to in the event of breach by the other party.
D)Damages payable to the plaintiff that cannot be easily calculated in advance.

Question 28

'Exemplary damages' are:

A)Damages awarded to a plaintiff who has not suffered any actual loss as a result of a breach of conduct.
B)An award of damages to the plaintiff in an amount above and beyond mere compensation, intended by the court to penalise or punish the defendant.
C)A pre-estimate of the quantity of damages one party will be entitled to in the event of breach by the other party.
D)Damages payable to the plaintiff that cannot be easily calculated in advance.

Question 29

'Nominal damages' are:

A)Damages awarded to a plaintiff who has not suffered any actual loss as a result of a breach of conduct.
B)An award of damages to the plaintiff in an amount above and beyond mere compensation, intended by the court to penalise or punish the defendant.
C)A pre-estimate of the quantity of damages one party will be entitled to in the event of breach by the other party.
D)Damages payable to the plaintiff that cannot be easily calculated in advance.

Question 30

Benjamin is contracted to advertise exclusively for the fashion brand, Racoz.In breach of his contract, he fronts various advertising campaigns for rival brand Polar Laugh Raulen.Racoz sues Benjamin for breach of contract, seeking an injunction.The request by Racoz will not be granted if:

A)Benjamin has a past history of breaching the contracts that he has entered into.
B)An award of damages would not be adequate.
C)Benjamin has already gambled away the monies he received from Polar Laugh Raulen.
D)Racoz has behaved unfairly or unconscionably.

Question 31

Which of the following contracts is least likely to be void or voidable due to lack of consent?

A)JJ is Tom's mentor at work.JJ uses his influence over Tom to get him to enter into a contract.
B)Dean threatens to dismiss his employee Matt if Matt does not enter into a contract with Dean.
C)Cameron convinces Kris to sign a contract after six hours of exhausting negotiations.
D)Kristian and Duane enter into a contract for the sale of a television set at a time when Duane is obviously intoxicated.

Question 32

Christian agrees to sell five hundred footballs to Anderson.However, Anderson subsequently refuses to accept the footballs.Which of the following is not one of the statutory remedies available to Christian?

A)An order for specific performance compelling Anderson to accept delivery.
B)Compensation for any expenses incurred as a result of Anderson's refusal to accept delivery.
C)The right to resell the footballs to another buyer.
D)The right to retain possession of the footballs until Christian is paid.

Question 33

In which of the following circumstances will an injunction not be granted?

A)Where the defendant has engaged in an ongoing breach of contract.
B)Where the defendant has threatened to breach the contract.
C)Where the defendant has behaved unfairly or unconscionably.
D)Where an award of damages would be adequate.

Question 34

The Australian Consumer Law prohibits unfair terms in:

A)Contracts.
B)Consumer contracts.
C)Standard from contracts.
D)Consumer contracts that are standard form contracts.

Question 35

'Rescission' is:

A)The cancellation of a contract and the restoration of the parties to their original positions.
B)A court order requiring a party to perform the terms of the contract.
C)An order severing certain unenforceable terms from a contract and requiring performance of the remaining terms.
D)A declaration that a contract is valid and enforceable.

Question 36

An 'intermediate term' is:

A)A term of the contract that is of fundamental importance.
B)A term of the contract of lesser importance, in the absence of which the party favoured by the term would have entered into the contract anyway.
C)A term of a contract not able to be categorised as a fundamental term or as a term of lesser importance, without which the party would still have entered into a contract.
D)An unenforceable term that court will sever from a contract in the event of a dispute.

Question 37

Kenneth enters into a contact to purchase a watch from Cole.Cole then breaches the contract by refusing to hand over the watch to Kenneth.Which of the following is the most likely circumstance in which an order for specific performance will be granted?

A)The watch is handmade and unique.
B)The watch is extremely valuable.
C)The watch has been promised by Kenneth as a birthday present for his daughter.
D)A similar watch can be obtained from another watch shop.

Question 38

Damages awarded to a plaintiff in an amount above and beyond mere compensation, and intended by the court to penalise or punish the defendant, are called:

A)Compensatory damages.
B)Exemplary damages.
C)Liquidated damages.
D)Nominal damages.

Question 39

Which of the following circumstances will not give rise to an entitlement on the part of a plaintiff to damages?

A)Any breach of the contract by the defendant, whether total, partial, actual or anticipatory.
B)A breach of a collateral contract by the defendant.
C)Fraudulent or negligent misrepresentation by the defendant.
D)An innocent misrepresentation by the defendant.

Question 40

In what circumstances will a court refuse to grant an order for specific performance?

A)Where the breach of contract is a failure to provide unique goods to a buyer.
B)Where the defendant is in breach of contract.
C)Where damages are not an appropriate remedy.
D)Where the plaintiff has acted unfairly or unconscionably.

Question 41

X contracts with Y to purchase 1000 sacks of grain to be delivered on 1 September.Y however delivers the grain to X on 8 September and as a result of a drop in grain prices during the delay, X can only sell the grain at half the price that he would have been able to if Y had delivered the grain on time.The loss to X arising out of the breach of contract is classified as:

A)Indirect loss.
B)Consequential loss.
C)Direct loss.
D)Nominal loss.

Question 42

Nathanial enters into a contract to purchase a large bottle of organic suntan lotion from Josh's website for his girlfriend Janice.Josh fails to deliver the suntan lotion.Can Janice enforce the contract?

A)Yes, because she is Nathanial's friend and is thus legally able to act on his behalf.
B)Yes, because a contract can be enforced by anyone.
C)No, because the contract has not been breached.
D)No, because she is not a party to the contract.

Question 43

Which of the following is not a generally recognised way parties might voluntarily agree to end a contract?

A)Both parties agree to mutually release each other from any future obligations.
B)The party who has performed their obligations unilaterally releases the other party from complete performance of their obligations.
C)The parties mutually agree to replace the existing agreement with a new agreement.
D)One of the parties communicates their intention to the other party to voluntarily end the contract.

Question 44

Which of the following is not a requirement of frustration of contract?

A)A supervening event has made performance of the contract completely impossible or impossible to perform as originally intended by the parties.
B)Neither party caused the supervening event.
C)It would be unfair to both parties if the parties were not compelled to proceed with the contract.
D)The contract did not provide for the supervening event, either expressly or by implication.

Question 45

Which of the following statements is not true concerning an injunction?

A)An injunction is a court order forbidding someone from engaging in particular conduct that constitutes a breach of law or infringes the legal rights of another.
B)An injunction may be sought by a plaintiff to prevent a defendant from engaging in a threatened or anticipated breach of conduct.
C)An injunction may be sought by a plaintiff to prevent the defendant from engaging in an actual ongoing breach of conduct.
D)An injunction differs from an order for specific performance because an injunction compels a defendant to actually perform the contract.

Question 46

Mickey and Rourke want to voluntarily terminate their contract by agreement.How can they do so?

A)The parties can mutually agree to replace the existing agreement with a new agreement in different terms.
B)Each party can release the other party from their contractual obligations.
C)By replacing the existing agreement with a new agreement in different terms or by releasing each other from their contractual obligations.
D)They are unable to do so.A contract can only be terminated by performance, breach or frustration.

Question 47

Which of the following statements is true of 'direct loss' arising from a breach of contract by a defendant?

A)It is loss that is not caused directly by the breach or would not ordinarily be expected to result from the breach.
B)It entitles a plaintiff to an award of special, abnormal or extraordinary damages.
C)It is only recoverable if it can be shown that the parties had the possibility of such loss in mind when the contract was formed.
D)It is loss incurred by the plaintiff that flows naturally from the breach according to the ordinary course of events.

Question 48

Johnny rents equipment from Doe at a rate of $500 per month.The term of the contract is 2 years.Six months into the term, the equipment is destroyed in a lightning strike, and Johnny has to rent new equipment from another supplier.Is Johnny entitled to recover the six payments he has already paid to Doe?

A)No, because the contract with Doe has been frustrated and payments made before the frustrating event cannot be recovered.
B)Yes, because the contract with Doe has been frustrated and a frustrated contract is void ab initio.
C)No, because the contract with Doe has been breached by Johnny's failure to keep the equipment safe and Doe is therefore entitled to keep the payments.
D)Yes, because the contract with Doe has been breached by Doe's failure to provide equipment for the full two years and therefore Doe must pay Johnny damages.

Question 49

When can a person who is not a party to a contract enforce the contract?

A)When they are a beneficiary under an insurance contract.
B)Any time: contracts can be enforced by anyone.
C)Never, according to the doctrine of privity of contract.
D)When they have suffered harm as a result of the breach.

Question 50

Rescission is remedy that is not available where the breach of contract involves:

A)Complete non-performance.
B)Breach of a condition.
C)Fraudulent misrepresentation.
D)Breach of a warranty.

Question 51

What is the doctrine that prevents a person from suing or being sued for breach of a contract to which they are not a party?

A)The doctrine of novation.
B)The doctrine of reception.
C)The doctrine of privity of contract.
D)The doctrine of conditional contracts.

Question 52

Where one party breaches a contract, the other party is under an obligation to 'mitigate' their loss.This means the other party:

A)Is obliged to take all reasonable steps to minimise their loss.
B)Has no duty to take any positive action to avoid future harm arising from the breach.
C)Must provide the party in breach with all necessary records and information relevant to quantification of their loss and damage.
D)Must do whatever is necessary to minimise loss arising from the breach.

Question 53

A party will have only partially performed a contract where:

A)They have made no effort at all to perform their contractual obligations.
B)Their actual performance is completely different to what they were required to do under the contract.
C)Prior to the time for performance they clearly indicate that they will not be performing their obligations.
D)They have complied with some of the terms of the contract but breached one or more of the other terms.

Question 54

Supervening events that may lead to frustration of a contract are not likely to include:

A)Unexpected destruction of the subject matter of the contract.
B)A party to the contract dying where the contract requires the party to perform a personal service.
C)An unexpected change in the law making performance of the contract illegal.
D)A change in the conditions under which one of the parties is obliged to perform their obligations, even if that change is only slight.

Question 55

Famke leases her business premises from Jansen under a five year lease.Three years into the five year lease, Famke informs Jansen that she does not need the premises any longer and leaves.Jansen leaves the premises vacant for one and a half years, and then advertises for and finds a new tenant, who rents the premises for the same rent as that paid by Famke.Jansen then sues Famke for breach of contract, and seeks damages.Which of the following is most likely?

A)Jansen will be able to recover damages equal to one and a half years of rent because that is the amount of his loss as a result of Famke's breach of contract.
B)Jansen will be able to recover damages equal to two years of rent because that is the amount of his loss as a result of Famke's breach of contract.
C)Jansen will be able to recover damages equal to rent for the period between Famke's departure and how long it should have taken to find a new tenant if he had started looking immediately.
D)Jansen will not be able to recover any rent from Famke since he has waited too long to commence proceedings.

Question 56

In which of the following circumstances will a court make an order of specific performance?

A)Where the contract is one that requires the defendant to provide a personal service.
B)Where the defendant has failed to deliver certain goods to the plaintiff however those goods are readily available from another supplier.
C)Where damages will be an adequate remedy.
D)Where a contract is for the sale of goods that are unique or rare or have a special or particular value.

Question 57

A plaintiff in an action for breach of contract will be least likely to be awarded damages if the defendant has:

A)Totally failed to perform.
B)Breached a collateral contract.
C)Made a fraudulent misrepresentation.
D)Performed their contractual obligations.

Question 58

Keith enters into a written contract to purchase drilling equipment from Justin.Subsequently, Justin requests that the price and terms of delivery be changed, and Keith agrees to Justin's request.A new contract is drawn up and signed by the parties.The original contract between Keith and Justin has been:

A)Breached.
B)Novated.
C)Frustrated.
D)Voided.