Contract Law Quiz

What is a vitiating factor in contract law?

• A factor that strengthens a contract

• A factor that undermines the validity of a contract

• A factor that makes a contract legally binding

• A factor that has no effect on a contract

Answer explanation

A vitiating factor in contract law is a factor that undermines the validity of a contract, making it potentially unenforceable. This distinguishes it from factors that strengthen or validate a contract.

What does rescission of a contract mean?

• Continuing with the contract

• Modifying the contract terms

• Setting aside or cancelling the contract

• Enforcing the contract

Answer explanation

Rescission of a contract refers to setting aside or cancelling the contract, effectively nullifying its terms and obligations. This is the correct choice, as it directly defines the legal action of rescission.

Arran buys a car based on the seller's statement that it has never been in an accident. Later, he discovers the seller was aware that it might have had significant accident damage. What type of misrepresentation might this be?

• Innocent misrepresentation

• Negligent misrepresentation

• Fraudulent misrepresentation

• Economic duress

Answer explanation

This is fraudulent misrepresentation because the seller knowingly made a false statement about the car's accident history, intending to deceive Arran.

Which of the following is not a vitiating factor?

• Misrepresentation

• Economic duress

• Breach of contract

• Fraudulent misrepresentation

Answer explanation

Breach of contract is not a vitiating factor; it refers to the failure to perform contractual obligations. In contrast, misrepresentation, economic duress, and fraudulent misrepresentation can invalidate consent.

In the case of Smith v Land and House Property what was the misrepresentation about?

• The condition of the house

• The desirability of the tenant

• The location of the property

• The price of the house

Answer explanation

In Smith v Land and House Property, the misrepresentation was about the desirability of the tenant. The seller claimed the tenant was desirable, which influenced the buyer's decision.

Beth is told by an estate agent that a house has no history of flooding. After purchasing the house, she finds out it has flooded multiple times. The estate agent had assumed this but made no checks. What can Beth claim?

• Breach of contract

• Innocent misrepresentation

• Negligent misrepresentation

• Fraudulent misrepresentation

Answer explanation

Beth can claim negligent misrepresentation because the estate agent failed to verify the flooding history before making an assumption, leading to a false statement that caused Beth to suffer a loss.

Which of the following statements about misrepresentation is correct?

• It can be a statement of opinion if the opinion is genuinely held

• Silence can never be a misrepresentation

• It cannot be a statement of opinion if the opinion is not genuinely held

• It can be made by a third party

Answer explanation

The correct statement is that misrepresentation cannot be a statement of opinion if the opinion is not genuinely held. This means that if someone expresses an opinion they do not truly believe, it can be considered misrepresentation.

Which case involved a misrepresentation by conduct?

• Fletcher v Krell

• Spice Girls Ltd v Aprilia World

• With v O’Flanagan

• Bissett v Wilkinson

Answer explanation

In Spice Girls Ltd v Aprilia World, the conduct of the Spice Girls in continuing to promote their brand while knowing they would not be touring constituted a misrepresentation by conduct, influencing the other party's decisions.

What does the case of Fletcher v Krell illustrate about misrepresentation?

• Silence can be a misrepresentation

• Silence cannot be a misrepresentation

• Statements of opinion can be misrepresentation

• Misrepresentation can be by conduct

Answer explanation

The case of Fletcher v Krell illustrates that silence cannot be a misrepresentation, as the court held that a party is not obligated to disclose information unless there is a duty to do so.

In With v O’Flanagan (1936), why was the original statement about profits considered a misrepresentation?

• The doctor lied about the profits

• The doctor failed to update the buyer about a change in circumstances

• The buyer misunderstood the statement

• The statement was an opinion

Answer explanation

The original statement about profits was considered a misrepresentation because the doctor failed to update the buyer about a change in circumstances, which affected the accuracy of the information provided.