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LPAB Diploma in Law study materials
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LPAB Diploma in Law practice questions

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Question 1Criminal Law and Procedure

In New South Wales, which standard of proof must the prosecution satisfy in a criminal trial?

  1. On the preponderance of evidence
  2. On the balance of probabilities
  3. To a reasonable satisfaction
  4. Beyond reasonable doubt Correct answer.

Explanation

The prosecution bears the legal burden of proving every element of the offence to the criminal standard, which is proof beyond reasonable doubt. This standard reflects the presumption of innocence and the serious consequences of criminal conviction. The balance of probabilities is the civil standard and has no application to proof of guilt.

Question 2Criminal Law and Procedure

Which mental element is required for the common law offence of larceny at the time of taking?

  1. Negligence as to whether the property belonged to another
  2. An intention to permanently deprive the owner of the property Correct answer.
  3. Recklessness as to the owner's lack of consent
  4. An intention to temporarily use the property and return it

Explanation

Larceny requires that the accused take property belonging to another without consent, with an intention to permanently deprive the owner of it. An intention merely to borrow or temporarily use the property is generally insufficient. The mental element must exist at the moment of taking.

Question 3Criminal Law and Procedure

A person is charged with assault occasioning actual bodily harm. Which feature distinguishes this offence from common assault?

  1. The accused must have intended to cause grievous bodily harm
  2. The injury caused must be more than merely transient or trifling Correct answer.
  3. The assault must have been committed in company
  4. The victim must have suffered a psychiatric injury only

Explanation

Assault occasioning actual bodily harm requires proof of an assault plus bodily harm that is more than merely transient or trifling. Common assault requires no actual injury at all. The additional element is the level of harm, not the presence of company or a specific intent to cause really serious injury.

Question 4Criminal Law and Procedure

Which defence, if successfully raised on the evidence, results in an acquittal rather than a conviction for a lesser offence?

  1. Substantial impairment by intoxication
  2. Diminished responsibility
  3. Provocation
  4. Self-defence Correct answer.

Explanation

A successful plea of self-defence is a complete defence that results in acquittal. By contrast, diminished responsibility and provocation operate to reduce murder to manslaughter rather than to acquit. These partial defences therefore lead to conviction for a lesser offence.

Question 5Criminal Law and Procedure

Which court generally hears indictable offences tried before a judge and jury in New South Wales?

  1. The Coroner's Court
  2. The Children's Court
  3. The Local Court
  4. The District Court or Supreme Court Correct answer.

Explanation

Indictable offences are ordinarily tried on indictment in the District Court or the Supreme Court before a judge and jury. The Local Court mainly deals with summary offences and committal proceedings. The Children's Court and Coroner's Court have specialised and limited jurisdictions.

Question 6Criminal Law and Procedure

During a trial, the prosecution seeks to adduce evidence of the accused's previous convictions to show a tendency to commit similar offences. Under the uniform evidence law, what must the prosecution establish?

  1. That the accused consents to the evidence being admitted
  2. That the evidence is relevant and the probative value substantially outweighs any prejudicial effect Correct answer.
  3. That the previous convictions were recorded within the last five years
  4. That the evidence is corroborated by an independent witness

Explanation

Tendency evidence is admissible only if it is relevant and its probative value substantially outweighs the danger of unfair prejudice to the accused. This heightened threshold reflects the risk that juries will reason improperly from prior misconduct. Recency or corroboration is not the statutory test.

Question 7Criminal Law and Procedure

An accused made an admission to police during a recorded interview after being cautioned. The accused later claims the admission was induced by a threat. Which rule is most directly engaged?

  1. The discretion to exclude improperly obtained evidence
  2. The rule against admitting admissions influenced by violent or oppressive conduct Correct answer.
  3. The opinion rule
  4. The hearsay rule

Explanation

Admissions are excluded if they were influenced by violent, oppressive, inhuman or degrading conduct, or by a threat of such conduct. This rule protects the reliability and voluntariness of admissions. Hearsay and opinion rules are not the primary basis for excluding an involuntary admission.

Question 8Criminal Law and Procedure

A defendant is charged with murder and raises provocation. What is the effect of a successful plea in New South Wales?

  1. The defendant is convicted of assault occasioning bodily harm
  2. The charge is dismissed for want of jurisdiction
  3. The defendant is acquitted entirely
  4. The defendant is convicted of manslaughter Correct answer.

Explanation

Provocation operates as a partial defence that reduces a charge of murder to manslaughter. It does not result in complete acquittal. The rationale is that the offender's culpability is reduced because of the loss of self-control induced by the deceased's conduct.

Question 9Criminal Law and Procedure

Which statement best describes the actus reus of the offence of robbery?

  1. Theft committed by a person in a position of trust
  2. Theft accompanied by the use of force or a threat of force immediately before or at the time of taking Correct answer.
  3. Theft of property valued above a prescribed threshold
  4. The use of force against property only

Explanation

Robbery requires the elements of larceny together with the use of force, or a threat of force, to obtain the property. The force must be used immediately before or at the time of the taking. The value of the property and the offender's position are not elements of robbery.

Question 10Criminal Law and Procedure

A police officer arrests a suspect without a warrant. Which requirement is essential for the arrest to be lawful?

  1. The officer must first obtain a search warrant
  2. The officer must have a reasonable suspicion that the person has committed an offence Correct answer.
  3. The suspect must be informed of the maximum penalty before arrest
  4. The officer must obtain the suspect's written consent

Explanation

A warrantless arrest is lawful where the officer holds a reasonable suspicion, on reasonable grounds, that the person has committed or is committing an offence. The suspicion must be objectively justifiable, not merely a hunch. Consent, a search warrant, and prior notice of penalty are not prerequisites to arrest.

Question 11Criminal Law and Procedure

In the context of the defence of mental illness (insanity), which test is applied to determine criminal responsibility?

  1. Whether the accused was merely angry at the time of the act
  2. Whether the accused had consumed alcohol voluntarily
  3. Whether the accused knew the nature and quality of the act or knew it was wrong Correct answer.
  4. Whether the accused had a prior criminal record

Explanation

The M'Naghten test asks whether the accused was labouring under such a defect of reason from disease of the mind as not to know the nature and quality of the act, or not to know that it was wrong. This focuses on the accused's cognitive capacity at the time of the act. Anger, voluntary intoxication, and prior record do not establish the defence.

Question 12Criminal Law and Procedure

A witness gives evidence in court identifying the accused as the offender. The defence challenges the identification. Which factor is most relevant to the reliability of the identification?

  1. The witness's occupation
  2. The witness's confidence alone
  3. The conditions under which the witness observed the offender Correct answer.
  4. The number of previous court appearances by the accused

Explanation

The reliability of identification evidence depends heavily on the circumstances of observation, including lighting, duration, distance, and opportunity to see the offender. Confidence alone is a poor indicator of accuracy. Occupation and prior court appearances are not direct indicators of identification reliability.

Question 13Criminal Law and Procedure

A person is charged with attempting to commit an offence. Which requirement must the prosecution prove?

  1. The person had a motive to commit the offence
  2. The person had an intention to commit the offence and performed an act that was more than merely preparatory Correct answer.
  3. The person was merely thinking about committing the offence
  4. The person completed every element of the substantive offence

Explanation

An attempt requires proof of an intention to commit the substantive offence and conduct that goes beyond mere preparation. The substantive offence need not be completed. Mere thoughts or motives are insufficient to establish an attempt.

Question 14Criminal Law and Procedure

Which principle governs the admissibility of hearsay evidence under the uniform evidence law?

  1. Hearsay is admissible only in civil proceedings
  2. Hearsay is prima facie inadmissible unless a recognised exception applies Correct answer.
  3. Hearsay is admissible if the maker is unavailable, regardless of any exception
  4. Hearsay is always admissible if it is relevant

Explanation

The hearsay rule renders a previous representation made by a person inadmissible to prove the existence of a fact asserted in it, unless an exception applies. The exceptions are set out in the legislation and at common law. Relevance alone does not overcome the hearsay rule.

Question 15Criminal Law and Procedure

A judge is considering whether to exclude evidence whose probative value is outweighed by the danger of unfair prejudice to the accused. Which principle best describes the judicial approach?

  1. The judge has a discretion to exclude where the danger of unfair prejudice substantially outweighs the probative value Correct answer.
  2. The judge must admit the evidence if it is relevant
  3. The evidence must be excluded whenever it is prejudicial in any way
  4. The judge must exclude the evidence if the accused objects

Explanation

The court has a discretion to exclude evidence where the danger of unfair prejudice substantially outweighs its probative value. The test requires a substantial imbalance, not merely some prejudice. Relevance alone does not compel admission, and an objection does not automatically require exclusion.

Question 16Criminal Law and Procedure

In relation to the defence of duress, which requirement is generally necessary?

  1. The threat must be made by a police officer
  2. The threat must relate only to property damage
  3. The threat must be of death or serious harm and the accused's response must be proportionate Correct answer.
  4. The accused must have initiated the threatening situation

Explanation

Duress requires a threat of death or serious harm that induces the accused to commit the offence, with a response proportionate to the threat. The accused's will must be overborne so that there was no realistic alternative. Threats of minor harm or property damage are generally insufficient.

Question 17Torts

Which element must a plaintiff establish to succeed in an action for negligence?

  1. That the defendant owed the plaintiff a duty of care Correct answer.
  2. That the plaintiff suffered financial loss only
  3. That the defendant breached a contractual term
  4. That the defendant intended to cause harm

Explanation

Negligence requires proof of a duty of care owed by the defendant to the plaintiff, a breach of that duty, and damage that is not too remote. Intention to harm belongs to intentional torts, and contract is a separate source of obligation. Financial loss is only one possible form of damage.

Question 18Torts

In Australia, the standard of care in negligence is generally described as that of:

  1. A reasonable person in the defendant's position Correct answer.
  2. The ordinary person of the plaintiff's age
  3. The highest professional standard in the industry
  4. The most careful person imaginable

Explanation

The benchmark is the hypothetical reasonable person, taking into account the foreseeable risk and the circumstances confronting the defendant. It is an objective standard, not a search for perfection. Special standards apply to children and professionals, but the general test remains the reasonable person.

Question 19Torts

A customer slips on a spilled drink in a supermarket and sues. Which fact is most relevant to whether the supermarket breached its duty of care?

  1. The drink was a popular brand
  2. The customer was wearing new shoes
  3. The customer was shopping alone
  4. The supermarket had a reasonable cleaning and inspection system in operation Correct answer.

Explanation

Breach is assessed by comparing the defendant's conduct with what a reasonable person would do, including the practicability of precautions and the magnitude of risk. Evidence of a reasonable system of inspection and cleaning tends to show the duty was discharged. The other facts do not bear on the reasonableness of the occupier's precautions.

Question 20Torts

Which test is used in Australia to determine whether a duty of care exists in a novel category of case?

  1. The 'but for' causation test
  2. The 'egg-shell skull' rule
  3. The 'salient features' approach applied in Sullivan v Moody Correct answer.
  4. The 'res ipsa loquitur' inference

Explanation

In Sullivan v Moody the High Court emphasised that novel duties are determined by reference to salient features such as reasonable foreseeability, coherence with other legal doctrines, and the statutory context. The other tests address causation, remoteness of damage, or proof of negligence, not the existence of a duty.

Question 21Torts

A solicitor gives careless advice to a client who relies on it and suffers pure economic loss. Which principle is most relevant to whether the solicitor owes a duty?

  1. That a duty may arise where the defendant knew the plaintiff would rely on the advice Correct answer.
  2. That only a court can create a duty of care
  3. That the solicitor must have intended to cause the loss
  4. That pure economic loss is never recoverable in negligence

Explanation

Where a professional knows or ought to know that a specific person will rely on advice for a serious matter, the law recognises a duty of care even for pure economic loss. Reasonable reliance and known reliance are central. Intention is unnecessary, and pure economic loss is not categorically excluded.

Question 22Torts

What does the 'but for' test ask in the context of factual causation?

  1. Whether the plaintiff consented to the risk
  2. Whether the harm would have occurred regardless of the defendant's negligence Correct answer.
  3. Whether the defendant's negligence was the most substantial cause
  4. Whether the defendant was a reasonable person

Explanation

The 'but for' test asks whether, absent the defendant's negligence, the plaintiff's harm would still have occurred. If the harm would have happened anyway, factual causation is not established. It is a counterfactual inquiry, distinct from the common law's approach to multiple sufficient causes.

Question 23Torts

Which statement best describes the 'egg-shell skull' rule?

  1. A defendant must take the victim as found, including unusual susceptibility Correct answer.
  2. A plaintiff must disclose all pre-existing conditions before suing
  3. A defendant is liable only for foreseeable types of harm
  4. A defendant escapes liability if the injury is unusually severe

Explanation

The egg-shell skull rule provides that a defendant whose negligence causes harm is liable for the full extent of that harm, even if the victim's peculiar susceptibility makes the injury worse than expected. It operates once the type of harm is reasonably foreseeable. The defendant cannot reduce liability merely because the extent was unforeseeable.

Question 24Torts

In a claim for negligent misstatement causing economic loss, which factor is least likely to support the existence of a duty of care?

  1. The adviser invited reliance on the statement
  2. The adviser possessed special skill or expertise
  3. The adviser knew the statement would be relied on for a specific transaction
  4. The statement was made casually at a social gathering to a stranger Correct answer.

Explanation

Duties for negligent misstatement typically arise where the adviser has expertise, knows of the specific reliance, and invites the plaintiff to act on the advice. A casual remark at a social gathering, made without any assumption of responsibility to a stranger, is unlikely to generate a duty. The absence of reliance and expertise weighs against liability.

Question 25Torts

Which defence requires proof that the plaintiff freely and voluntarily accepted the risk of harm?

  1. Necessity
  2. Volenti non fit injuria Correct answer.
  3. Illegality
  4. Contributory negligence

Explanation

Volenti non fit injuria is a complete defence requiring the plaintiff to have voluntarily accepted both the physical risk and the legal risk of the defendant's negligence. Contributory negligence, by contrast, only reduces damages for the plaintiff's own carelessness. Illegality and necessity are distinct defences with different elements.

Question 26Torts

A plaintiff's damages are reduced by 30 per cent for contributory negligence. Which statement is correct?

  1. The plaintiff recovers nothing because of the reduction
  2. The plaintiff recovers the full amount and the defendant pays a fine
  3. The defendant is entirely excused from liability
  4. The plaintiff recovers 70 per cent of the assessed damages Correct answer.

Explanation

Contributory negligence is a partial defence: the court apportions responsibility and reduces the plaintiff's damages to the extent it considers just and equitable. A 30 per cent reduction therefore leaves 70 per cent recoverable. It does not eliminate liability altogether.

Question 27Torts

Which statement correctly distinguishes trespass to land from nuisance?

  1. Trespass protects exclusive possession against direct interference; nuisance addresses unreasonable interference with use and enjoyment Correct answer.
  2. Trespass requires proof of actual damage; nuisance does not
  3. Both require proof of intention to harm
  4. Nuisance protects only personal safety; trespass protects only reputation

Explanation

Trespass to land is actionable per se and concerns direct, unauthorised entry onto land in the plaintiff's possession. Private nuisance concerns indirect and unreasonable interference with the use and enjoyment of land, often continuing in nature. The two torts protect possession and amenity respectively and differ in the need to prove damage.

Question 28Torts

Which of the following is an element of the tort of battery?

  1. A written statement damaging reputation
  2. An unreasonable interference with the use of land
  3. A direct act causing harmful or offensive contact without consent Correct answer.
  4. A threat of future harm perceived by the plaintiff

Explanation

Battery requires a direct act by the defendant that causes physical contact with the plaintiff which is harmful or offensive, done without consent or lawful justification. The defendant need not intend harm, only the contact. Assault, defamation, and nuisance each have different elements.

Question 29Torts

A surgeon performs an operation without obtaining any consent from a competent adult patient. Which tort is most directly engaged?

  1. Nuisance, because the patient's peace was disturbed
  2. Negligence, because the standard of care was breached
  3. Defamation, because the patient's reputation was harmed
  4. Trespass to the person, because the procedure was performed without consent Correct answer.

Explanation

Performing a procedure on a competent adult without consent constitutes trespass to the person, since the contact is unauthorised. The wrong lies in the absence of consent rather than in a failure to exercise reasonable skill. Negligence would be the appropriate claim where consent exists but the treatment is performed carelessly.

Question 30Torts

In a defamation action, what does the 'serious harm' requirement generally require the plaintiff to establish?

  1. That the defendant acted with malice
  2. That the plaintiff suffered physical injury
  3. That the statement was published in a newspaper
  4. That the publication caused serious harm to the plaintiff's reputation Correct answer.

Explanation

Australian defamation statutes require a plaintiff to show that the publication has caused, or is likely to cause, serious harm to reputation. This threshold filters out trivial claims. Malice and the medium of publication are not elements of the cause of action, though they may affect defences or damages.

Question 31Torts

A factory emits fumes that drift onto a neighbouring property, causing discomfort and damage. Which cause of action is most appropriate?

  1. Private nuisance, because of unreasonable interference with use and enjoyment Correct answer.
  2. Strict liability for escape of a dangerous substance
  3. Negligence, because the factory owed a duty to the neighbour
  4. Trespass to land, because the fumes entered the land

Explanation

Indirect interferences such as fumes, noise, and smells are typically addressed through private nuisance, which asks whether the interference is unreasonable given locality, sensitivity, and duration. Trespass requires direct physical entry by a person or object. Negligence and strict liability may arise in some cases but nuisance is the most apt cause of action here.

Question 32Torts

A defendant's negligent act and an unrelated natural event each independently would have caused the plaintiff's harm. Which approach best reflects Australian law on causation in such cases?

  1. The claim always fails because the 'but for' test cannot be satisfied
  2. The defendant may be liable where their negligence materially contributed to the harm Correct answer.
  3. The defendant is liable only if the natural event was unforeseeable
  4. The plaintiff must prove the defendant's act was the sole cause

Explanation

Where the 'but for' test is inadequate because multiple factors each could have caused the harm, Australian courts have accepted that a defendant may be liable if their negligence materially contributed to the harm. This avoids the unfairness of denying recovery where causation is genuinely established. The 'but for' test remains the primary tool but is not applied rigidly.

Question 33Contracts

Which element is essential to the formation of a binding contract in Australian law?

  1. Witnessing by an independent adult
  2. Payment of consideration in money
  3. A written and signed document
  4. An intention to create legal relations Correct answer.

Explanation

A contract requires agreement (offer and acceptance), consideration, and an intention to create legal relations. Writing is only required for certain categories of contract, such as land dealings, and money is not the only form consideration may take. Witnessing is a formality for some documents but never a universal requirement.

Question 34Contracts

A supermarket displays goods on a shelf with a price tag. In law, the display is generally treated as which of the following?

  1. An acceptance of any customer's offer
  2. An invitation to treat Correct answer.
  3. An offer to sell at the marked price
  4. A binding unilateral contract

Explanation

A display of goods with a price is ordinarily an invitation to treat, inviting the customer to make an offer at the counter. The retailer retains the freedom to accept or reject that offer, which explains why mispriced goods need not be sold. Treating the display as an offer would wrongly bind the shop to every customer who tendered the price.

Question 35Contracts

Which of the following is sufficient consideration for a promise?

  1. A promise to perform an existing public duty
  2. A promise to refrain from suing on a genuinely disputed claim Correct answer.
  3. A promise to do something already contractually owed to the same promisor
  4. A past act performed before the promise was made

Explanation

Forbearance to sue on a claim that is honestly and reasonably disputed is good consideration because the promisor obtains the surrender of a claimed right. By contrast, past consideration is no consideration, and performing an existing duty owed to the promisor generally adds nothing. Performing a duty already owed to a third party may sometimes suffice, but a public duty does not.

Question 36Contracts

Which statement best describes the doctrine of promissory estoppel in Australian law?

  1. It prevents a promisor from resiling from a clear assumption the promisee relied on, where it would be unconscionable Correct answer.
  2. It requires the promisee to have provided fresh consideration for the promise
  3. It extinguishes the promisee's existing contractual rights
  4. It creates a cause of action for any broken promise

Explanation

Promissory estoppel operates where a party makes a clear representation creating an assumption, the other party relies on it, and departure would be unconscionable. The remedy is generally to prevent the promisor from acting inconsistently with the assumption rather than to create a new cause of action. It is often described as a shield rather than a sword.

Question 37Contracts

Which term is a condition in the contractual sense?

  1. A term merely reducing the price payable on breach
  2. A term the breach of which entitles the innocent party to terminate the contract Correct answer.
  3. A term that is always written into the contract by statute
  4. A term that has no legal effect until a court interprets it

Explanation

A condition is an essential term whose breach gives the innocent party a right to terminate as well as to claim damages. A warranty, by contrast, sounds only in damages and does not justify termination. Intermediate or innominate terms depend on the seriousness of the consequences of breach.

Question 38Contracts

A term is incorporated into a contract by signature. Which principle best explains the effect of signing?

  1. The signer is never bound by terms on a document they did not draft
  2. The signer is bound only if they actually read and understood the term
  3. The signer is bound only if the other party drew attention to every term
  4. The signer is bound even without reading the term, subject to limited exceptions such as misrepresentation Correct answer.

Explanation

A person who signs a contractual document is generally bound by its terms whether or not they read them, because signature indicates assent. Exceptions exist where the signature was procured by misrepresentation or the document was not one that could reasonably be thought contractual. Notice requirements are relevant to unsigned documents, not signed ones.

Question 39Contracts

Under the parol evidence rule, which material is generally inadmissible to contradict the terms of a wholly written contract?

  1. Evidence of the factual background known to both parties
  2. Evidence explaining the meaning of a technical term
  3. Evidence that a party lacked capacity at the time of signing
  4. Evidence of a prior oral agreement inconsistent with the writing Correct answer.

Explanation

The parol evidence rule generally excludes prior or contemporaneous oral statements that contradict or vary a complete written agreement. It does not exclude evidence used to interpret ambiguous terms, to establish the surrounding matrix of fact, or to prove vitiating factors such as incapacity. Such evidence supports rather than contradicts the document.

Question 40Contracts

Which of the following contracts is most likely to be unenforceable for lack of intention to create legal relations?

  1. An informal agreement between spouses about household chores Correct answer.
  2. A commercial supply agreement signed by two companies
  3. A lease of business premises between strangers
  4. A sale of goods between two traders at an auction

Explanation

Agreements between spouses or family members in a domestic setting are presumed to lack an intention to create legal relations. Commercial dealings, by contrast, carry a presumption that the parties do intend legal relations. Both presumptions are rebuttable, but the domestic example falls on the side of non-enforceability.

Question 41Contracts

A minor enters a contract to purchase a luxury car on credit. Which statement best reflects the common law position?

  1. The contract is void ab initio and confers no rights on either party
  2. The contract is automatically valid and binding until the minor turns eighteen
  3. The contract is fully enforceable against the minor as if they were an adult
  4. The contract is voidable at the minor's election and the minor may repudiate it Correct answer.

Explanation

Contracts for non-necessary goods are generally voidable at the option of the minor, who may repudiate them during minority or within a reasonable time afterwards. Contracts for necessaries, by contrast, bind the minor for their reasonable price. A luxury car is unlikely to qualify as a necessary.

Question 42Contracts

Which of the following will generally render a contract voidable rather than void?

  1. A contract for an illegal purpose
  2. A contract with a person declared of unsound mind by a court
  3. A contract in which the subject matter was destroyed before agreement
  4. A contract entered into under duress Correct answer.

Explanation

Duress renders a contract voidable at the election of the party pressured, who may affirm or rescind it. Contracts with persons lacking capacity may be void or voidable depending on the circumstances, but illegality and initial impossibility of subject matter are treated differently. A void contract has no legal effect from the outset.

Question 43Contracts

Which remedy is available to a party who has partly performed a contract and then encounters the other party's breach, where the contract has not been terminated?

  1. Restitution for a total failure of consideration
  2. Quantum meruit for the reasonable value of work done Correct answer.
  3. Specific performance of the whole contract
  4. An order for punitive damages

Explanation

Where a contract is discharged by breach or frustration, a party may sometimes recover a quantum meruit for work done, subject to the terms of the contract. Restitution for total failure of consideration requires that the consideration wholly failed, which partial performance negates. Specific performance and punitive damages are not the appropriate responses here.

Question 44Contracts

Which statement correctly distinguishes damages for breach of contract from damages in tort?

  1. Contract damages aim to put the plaintiff in the position as if the contract had been performed Correct answer.
  2. Contract damages are limited to the return of money paid
  3. Contract damages compensate for pain and suffering in the same way as tort damages
  4. Contract damages are always punitive where the breach is deliberate

Explanation

The expectation measure in contract seeks to place the innocent party in the position they would have occupied had the contract been performed. Tort damages, by contrast, generally aim to restore the plaintiff to their pre-tort position. Contract damages are compensatory, not punitive, and are not confined to restitution of money paid.

Question 45Contracts

Which statement best describes the effect of a frustrating event on a contract?

  1. It discharges both parties from future performance automatically Correct answer.
  2. It suspends performance indefinitely until the event ends
  3. It renders the contract void ab initio and requires full restitution
  4. It has no effect unless the parties expressly provided for it

Explanation

Frustration discharges the contract automatically as to future performance, releasing both parties from obligations arising after the event. It does not operate retrospectively to void the contract from the beginning. Statutory apportionment provisions may then adjust rights to money paid and work done.

Question 46Contracts

A party discovers that the other party made a false statement of fact during negotiations that induced the contract. Which remedy is most consistent with rescission for misrepresentation?

  1. An automatic award of the contract price to the representee
  2. Specific performance compelling the representor to perform the false promise
  3. An award of punitive damages against the representor
  4. Restoration of the parties to their pre-contract positions so far as possible Correct answer.

Explanation

Rescission for misrepresentation aims to restore the parties substantially to their original positions, so far as that is possible. It is not a punitive remedy and does not compel performance of the misrepresented promise. Bars to rescission include affirmation, lapse of time, and the impossibility of restitution.

Question 47Contracts

Which of the following best illustrates a breach of an intermediate term?

  1. A breach that the parties expressly agreed would give a right to terminate
  2. Failure to pay the price on time under a contract where time is of the essence
  3. A total failure to perform any of the contractual obligations
  4. Failure to deliver goods on the agreed date, causing only minor inconvenience Correct answer.

Explanation

An intermediate or innominate term gives a right to terminate only if the consequences of breach are sufficiently serious. Minor inconvenience from late delivery would ordinarily sound in damages alone. Where the parties expressly agree that breach gives a right to terminate, the term operates as a condition by agreement.

Question 48Contracts

Which statement about the doctrine of privity of contract is correct?

  1. A third party is bound by every obligation in a contract they did not sign
  2. A third party automatically becomes a party on performance of the contract
  3. A third party cannot generally enforce a contract to which they are not a party Correct answer.
  4. A third party may always sue to enforce a benefit conferred by a contract

Explanation

At common law, only parties to a contract may enforce rights under it, although statutory reforms in some jurisdictions allow certain third parties to enforce benefits. A third party is not bound by obligations they never agreed to assume. Becoming a party requires agreement, not mere performance.

Question 49Real Property

Which statutory provision in New South Wales requires Torrens title land to be dealt with only by registered instrument in the approved form?

  1. Section 23C of the Real Property Act 1900 (NSW) Correct answer.
  2. Section 41 of the Real Property Act 1900 (NSW)
  3. Section 42 of the Real Property Act 1900 (NSW)
  4. Section 74F of the Real Property Act 1900 (NSW)

Explanation

Section 23C of the Real Property Act 1900 (NSW) provides that no instrument is effectual to pass or create a legal estate or interest in Torrens land until it is registered, and dealings must be in the approved form. This embodies the registration-based conveyancing system that replaced the old deeds system.

Question 50Real Property

A registered proprietor holds an indefeasible title under the Real Property Act 1900 (NSW). Which statement best describes the nature of that indefeasibility?

  1. Title is defeasible until the proprietor has been in possession for twelve years
  2. Title is immune from all challenge, including in cases of fraud by the registered proprietor
  3. Title is conclusive only against unregistered interests and is always subject to prior unregistered claims
  4. Title is protected against claims except where the registered proprietor has been fraudulent or a statutory exception applies Correct answer.

Explanation

Section 42 confers indefeasibility subject to exceptions, including fraud by the registered proprietor and specified statutory interests such as rates and short-term tenancies. Indefeasibility is therefore strong but not absolute.