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【Questions】

1 Which TWO of the following statements apply to contracts governed by the Unfair Contract Terms Act 1977?

A.The reasonableness test takes into consideration the relative bargaining strength of the parties to the contract.

B.The Act applies to exclusion clauses contained in contracts relating to the transfer of an interest in land.

C.In a non-consumer contract, any clause excluding liability for breach relating to the quality of the goods is subject to the reasonableness test.

D.Any clause excluding liability for personal injury due to one party’s negligence will only be upheld if it is reasonable.

2 On which of the following dates does a partnership begin?

A.The start date of the first accounting period.

B.The date on which the partnership starts trading with the public.

C.The date on which the partners agree to go into business together.

3 Sue owns a delicatessen and has contracted with Tim to supply her with fresh bread every day for the next ten weeks.

After six weeks, Tim tells Sue that he is unable to continue to supply the bread.

Which TWO of the following statements are true?

A.Sue can affirm the contract

B.Sue can accept this as a breach of contract and sue for damages now

C.Sue can wait a further four weeks and then sue for damages

D.Sue can obtain an injunction preventing Tim from breaching his contract

【Answers】

1 In a non-consumer contract, any clause excluding liability for breach relating to the quality of the goods is subject to the reasonableness test The reasonableness test takes into consideration the relative bargaining strength of the parties to the contract Under the Unfair Contract Terms Act 1977, the reasonableness test applies to a non-consumer contract whereas in a consumer contract such a clause would be void. The relative bargaining strength of the parties is one of the considerations in determining reasonableness.

2 The date on which the partners agree to go into business together A partnership begins on the date the partners agree to go into business together, even if this is before the partnership actually starts to trade. From the point of agreement onwards, the partnership and the partners become jointly and severally liable for partnership debts.

3 Sue can accept this as a breach of contract and sue for damages now This is a question of anticipatory breach of contract. Sue has the right to treat the contract as discharged here because Tim has repudiated it before he has completed performance of his obligations. She can Sue can wait a further four weeks and then sue for damages therefore sue for damages now, or wait a further four weeks and then sue for damages.

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