Question 1

In which of the following cases can a clause exempting business liability for death or personal injury through negligence be enforced?

Accepted Answer

A)  A notice in big letters at the entrance to a swimming pool. 
B)  A contract for a rental car which needs to be signed by the customer before the contract can be completed. 
C)  A salesman of company B Ltd informing the directing manager of company A Ltd. 
D)  Never. D

Question 2

Sudbury & Jones plc, an investment bank, has purchased a set of three cars for its managing directors from Benson's Dealership Ltd for both private and business use. Benson's agrees to let Sudbury & Jones have the cars at a reduced price in return for the insertion of a term excluding their liability for the breach of any implied term as to condition or quality or fitness for purpose. Within a month, while one of the directors is on holiday in Switzerland, his car catches fire due to the faulty installation of the cooling radiator, causing irreparable damage. Can Sudbury & Jones challenge the exemption clause and claim damages?

Accepted Answer

A)  Yes, Sudbury & Jones purchased the cars as consumers. The clause is unenforceable under Part 1 CRA, which provides that certain terms, including as to satisfactory quality and fitness for purpose, are to be 'treated as included'. 
B)  Yes, when Sudbury & Jones purchased the cars it dealt as a consumer. The clause is outright invalid under UCTA. 
C)  Sudbury & Jones did not purchase the cars as consumers. The term is only invalid if it is not reasonable under section 6(3). UCTA. 
D)  No, neither UCTA nor CRA are applicable. C

Question 3

Which of the following statements is true?

Accepted Answer

A)  Under CRA, the CMA and other 'regulators' may apply to the courts for an injunction against the future use of specific unfair terms. The CMA cannot intervene for past use of unfair terms. 
B)  Under CRA, the CMA can challenge both the future use of an unfair term and seek damages for past infringements. 
C)  Under the Unfair Contract Terms Act 1977 (UCT
A) , the CMA may challenge unreasonable terms in consumer contracts and unreasonable indemnities. A

Question 4

Michael has bought a new bicycle and decides to sell his old one to Jerome for £250. Michael tells Jerome that he will only sell under the condition that he will not be held liable for any personal injury Jerome sustains as a result of any defects in the bicycle. A month after the sale, the frame collapses while Jerome is riding the bicycle and he breaks his leg. Jerome asks Michael to cover his hospital bills, but Michael reminds him of the exemption agreed to before the completion of the sale. Can Michael rely on this exemption of personal injury?

Accepted Answer

A)  No, the exemption was not agreed to in writing. 
B)  No, UCTA prohibits exemptions for liability for death or personal injury. The clause is invalid. 
C)  No, a clause excluding or limiting the legal liability of a seller in the event of the death or personal injury of the consumer is considered indicatively unfair under CRA and not binding. 
D)  Yes.

Question 5

Anglia Airways offers flights from London's Stansted Airport to several destinations in Europe. In a bid to win over more customers, Anglia has decided to contract the services of Luxor Drivers, which will provide a shuttle service to Anglia's passengers between the main parking lot at Stansted Airport and the terminal in which Anglia operates. Clause 15 of the contract states that all chauffeurs hired out by Luxor Drivers shall be regarded as employees of Anglia Airways and that Anglia Airways is responsible for all claims arising in connection with the driving of the chauffeurs. In which of the following situations will the clause be subjected to the control of UCTA?

Accepted Answer

A)  A chauffeur crashes a shuttle bus into a passenger's parked car. The owner of the car sues Anglia Airways. Anglia sues Luxor Drivers. Luxor Drives relies on the clause. 
B)  A chauffeur accidentally hits a pedestrian with the shuttle bus. The pedestrian later dies in hospital. His widow sues Anglia Airways. Anglia sues Luxor Drivers. Luxor Drivers relies on the clause. 
C)  A chauffeur crashes a shuttle bus into a baggage transport owned by Anglia. Anglia Airways sues Luxor Drivers. Luxor Drivers relies on the clause. 
D)  All of the options given are correct.

Question 6

Which of the following statements is true?

Accepted Answer

A)  For a term to be a non-reviewable 'core' term under CRA, it must be a 'core' provision or part of the 'essential' bargain. 
B)  A term may be 'core' under CRA, and thus exempt from control, even if it relates to only part of a contract party's remuneration, and even if it is not an 'essential' part of the bargain. 
C)  Terms which allow a trader to increase its price without giving the consumer the right to cancel the contract relate to the adequacy of the price or remuneration, and thus are 'core' non-reviewable terms under CRA.

Question 7

Under CRA, a term 'isunfair if, contrary to the requirement of good faith, it causes a significant imbalance in the party's rights and obligations under the contract to the detriment of the consumer' (Section 62(4))). Which of the following statements is true?

Accepted Answer

A)  A term is only unfair if there is procedural unfairness. 
B)  A term is unfair even if there is no procedural unfairness; substantive unfairness may be enough. 
C)  A term is only unfair if there is procedural unfairness, substantive unfairness is merely an indication of procedural unfairness.

Question 8

The main statutory restrictions on unfair contract terms are to be found in UCTA and CRA. Which of the following statements about their sphere of application is true?

Accepted Answer

A)  While CRA only deals with unfair terms in consumer contracts, UCTA applies to both consumer and business-to-business contracts. 
B)  Both UCTA and CRA deal with consumer contracts. CRA also deals with business-to-business contracts. 
C)  Both UCTA and CRA apply to consumer contracts as well as business-to-business contracts. 
D) Only UCTA deals with unfair terms in business-to-business contracts. CRA deals only with consumer contracts.

Question 9

Which of the following statements is true?

Accepted Answer

A)  The existence of direct control over terms means that it is no longer necessary to consider whether a term is incorporated or is wide enough to cover the events in question. 
B)  Direct statutory control over terms has reduced the need to manipulate the questions of incorporation and interpretation in order to avoid unfairness. 
C)  Only the party seeking to invalidate the term can sue under UCTA and CRA

Question 10

The main application of UCTA is to terms 'excluding or restricting' specific types of liability. However, UCTA also counters attempts to evade its control by expanding the definition of what counts as a term which excludes or restricts liability. Which of the following terms escapes UCTA's control?

Accepted Answer

A)  Terms that make claims more difficult to prove. 
B)  Terms allowing one party the discretion to give substantially different performance from that reasonably expected by the other contract party. 
C)  Terms that exclude or restrict (i) a duty of care in negligence, or (ii) the implied obligations under the Sale of Goods Act 1979. 
D)  None of the options given is correct.

Question 11

Which of the following statements is true?

Accepted Answer

A)  In both UCTA and CRA, the burden of proving unreasonableness/unfairness is on the party challenging the term. 
B)  In both UCTA and CRA, the burden of proving reasonableness/fairness is on the party wishing to enforce the term. 
C)  In UCTA, the burden of proving unreasonableness is on the party challenging the term. In CRA, the burden of proving fairness is on the party wishing to enforce the term (the supplier). 
D)  CRA is neutral as to which party must prove unfairness. In UCTA, the burden of proving reasonableness is on the party wishing to enforce the term.

Question 12

Which of the following statements about the Consumer Rights Act 2015 (CRA) is true?

Accepted Answer

A)  A term which is not in plain and intelligible language is automatically invalid. 
B)  A price variation clause is a 'core' term and automatically immune from review for unfairness. 
C)  A consumer contract tainted by an unfair term may nevertheless continue to bind the contract parties if it is capable of continuing in existence without the unfair term. 
D)  All of the options given are correct.

Question 13

Which of the following statements about the reasonableness test under UCTA is false?

Accepted Answer

A)  The reasonableness test does not apply to terms that limit or exclude liability for personal injury or death caused by negligence. 
B)  The reasonableness test does not apply to terms that limit or exclude liability for breach of implied terms as to title to goods, but does apply to terms that limit or exclude liability for breach of other statutory implied terms 
C)  The reasonableness test does not apply to terms that limit or exclude liability for breach of contract.

Question 14

Walter owns a small supermarket in Derby. He contracts with International Foods Ltd for the provision of ice cream snacks which he will sell in his shop. Under the contract, Walter may lease an ice-cream freezer on a very favourable term. Clause 203 of the contract, which Walter has signed but has not read in detail, states: 'In the event of any repairs, the lessee will be required to ship the freezer to the lessor and bear all shipment costs'. In the middle of the summer, the freezer breaks down and Walter asks International Foods to fix it. International Foods tells Walter to ship the freezer to their factory headquarters and reminds him that he must bear the shipment costs which are substantial. Is Walter bound by this clause?

Accepted Answer

A)  Yes. 
B)  No, it has not been validly incorporated. 
C)  No, it is unreasonable and invalid under UCTA. 
D)  No, it is unfair and not binding under CRA.

Question 15

Schedule 2 CRA contains a list of indicatively unfair terms. Which of the following from that list is an example of procedural unfairness?

Accepted Answer

A)  Terms which have the object or effect of requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation (Para 6). 
B)  Terms which have the object or effect of irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract (Para 10). 
C)  Terms which have the object or effect of giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract (Para 16). 
D)  All of the options given are correct.

Exam 11: Direct Control Over Terms

In which of the following cases can a clause exempting business liability for death or personal injury through negligence be enforced?

Which of the following statements is true?

Which of the following statements is true?

Under CRA, a term 'isunfair if, contrary to the requirement of good faith, it causes a significant imbalance in the party's rights and obligations under the contract to the detriment of the consumer' (Section 62(4) ) ) . Which of the following statements is true?

The main statutory restrictions on unfair contract terms are to be found in UCTA and CRA. Which of the following statements about their sphere of application is true?

Which of the following statements is true?

The main application of UCTA is to terms 'excluding or restricting' specific types of liability. However, UCTA also counters attempts to evade its control by expanding the definition of what counts as a term which excludes or restricts liability. Which of the following terms escapes UCTA's control?

Which of the following statements is true?

Which of the following statements about the Consumer Rights Act 2015 (CRA) is true?

Which of the following statements about the reasonableness test under UCTA is false?

Schedule 2 CRA contains a list of indicatively unfair terms. Which of the following from that list is an example of procedural unfairness?