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Question 1Legal Systems, Methods and Professional Conduct

A lower court in the same jurisdiction is obliged to follow a legal principle laid down by a superior appellate court on materially similar facts. This obligation is described as:

  1. the doctrine of ultra vires
  2. the doctrine of res judicata
  3. the doctrine of promissory estoppel
  4. the doctrine of stare decisis Correct answer.

Explanation

Stare decisis expresses the rule that decisions of superior courts bind courts below them in the same hierarchy where the material facts are alike. It supplies certainty and consistency in the application of judge-made law.

Question 2Legal Systems, Methods and Professional Conduct

The part of a reasoned judgment that later courts in the same hierarchy are bound to follow is:

  1. the ratio decidendi Correct answer.
  2. the summary of the facts
  3. the obiter dicta
  4. the order made as to costs

Explanation

The ratio decidendi is the legal rule or reasoning that is necessary to the conclusion reached on the facts. Only that necessary reasoning carries binding authority for later cases.

Question 3Legal Systems, Methods and Professional Conduct

The body of principles developed historically to relieve the rigidity of the common law, and which prevails where the two conflict, is known as:

  1. equity Correct answer.
  2. the civil law
  3. the canon law
  4. the lex mercatoria

Explanation

Equity was developed through the courts of Chancery to provide remedies where the common law was inflexible. Where the rules of common law and equity conflict, equity is applied.

Question 4Legal Systems, Methods and Professional Conduct

Where an Act of the legislature and a line of earlier judicial decisions lay down conflicting rules on the same point, the position is that:

  1. the conflict is resolved in favour of whichever came later
  2. the judicial decisions prevail because courts interpret the law
  3. the two are treated as having equal authority
  4. the Act prevails over judge-made law Correct answer.

Explanation

Legislation ranks above case law as a source of law, so a statutory rule displaces a conflicting common law rule. The courts must apply the statute as enacted, subject only to any constitutional limits.

Question 5Legal Systems, Methods and Professional Conduct

A court applying the literal rule of statutory interpretation will:

  1. look primarily at the legislature's intention rather than the words used
  2. depart from plain words in order to avoid an absurd result
  3. apply the ordinary meaning even where the result is harsh Correct answer.
  4. read the statute so as to remedy the defect it was passed to address

Explanation

The literal rule requires the words of a provision to be given their ordinary and natural meaning. The court applies that meaning even if the outcome appears harsh, unless another rule of interpretation justifies a departure.

Question 6Legal Systems, Methods and Professional Conduct

Communications between a client and a legal practitioner made for the purpose of obtaining legal advice are, in general:

  1. protected only once proceedings have begun
  2. disclosable at the request of the opposing party
  3. protected only where the client is a company
  4. privileged from disclosure Correct answer.

Explanation

Legal professional privilege attaches to confidential communications made for the dominant purpose of obtaining or giving legal advice. The privilege belongs to the client and may be waived only by the client.

Question 7Legal Systems, Methods and Professional Conduct

Client money held by a legal practice must be:

  1. held in a separate client account Correct answer.
  2. held in the personal name of the practitioner handling the matter
  3. held in the firm's general operating account alongside its own money
  4. recorded in the accounts only when the matter is finally billed

Explanation

Client funds must be kept in a designated client account so that they can be identified and returned, and so that they are not exposed to the practice's own creditors. Commingling client and office money is a serious disciplinary matter.

Question 8Legal Systems, Methods and Professional Conduct

In most jurisdictions the body that admits practitioners and regulates their professional conduct is:

  1. the industry association of the client concerned
  2. the local chamber of commerce and industry
  3. an independent statutory or professional body Correct answer.
  4. the government ministry responsible for finance and trade

Explanation

Admission and discipline are normally entrusted to an independent regulator, such as a law society, bar council or statutory authority. Independence protects the public interest from commercial or governmental pressure.

Question 9Legal Systems, Methods and Professional Conduct

The golden rule of statutory interpretation permits a court to:

  1. read into the statute words the legislature omitted by oversight
  2. apply the statute only to events occurring after judgment
  3. depart from ordinary meaning to avoid an absurd result Correct answer.
  4. ignore the statutory text whenever it produces injustice

Explanation

The golden rule starts from the ordinary meaning of the words but allows a departure where that meaning would produce an absurdity or a repugnant outcome. The modification is the minimum needed to avoid the absurdity.

Question 10Legal Systems, Methods and Professional Conduct

The mischief rule directs a court to interpret a statute by:

  1. deferring to the view of the drafting ministry
  2. giving the words their most literal dictionary meaning
  3. considering the defect the statute was passed to remedy Correct answer.
  4. preferring the interpretation most favourable to the defendant

Explanation

Under the mischief rule the court identifies the problem in the previous law and construes the provision so as to suppress that mischief and advance the remedy. It is a purposive technique.

Question 11Legal Systems, Methods and Professional Conduct

A statute refers to 'horses, cattle, sheep and other animals'. Applying the ejusdem generis rule, 'other animals' is read as:

  1. all animals of any kind
  2. wild animals only
  3. animals of the same kind as those listed Correct answer.
  4. animals kept for commercial profit

Explanation

Ejusdem generis limits a general word following a list of specific items to things of the same class as those items. Here the class is farm livestock, so the general phrase is confined accordingly.

Question 12Legal Systems, Methods and Professional Conduct

A statute creating a new criminal offence is presumed to:

  1. apply to conduct that occurred before it came into force
  2. operate prospectively only Correct answer.
  3. apply retrospectively if the conduct is serious
  4. have no effect until a court first applies it

Explanation

Legislation is presumed not to operate retrospectively, and the presumption is especially strong for penal provisions. A person is not to be punished for conduct that was lawful when it took place.

Question 13Legal Systems, Methods and Professional Conduct

Delegated legislation may be held invalid by a court where:

  1. it was made by a minister rather than a local authority
  2. it is more detailed than the parent Act
  3. it was made without consulting the general public
  4. it exceeds the powers conferred by the enabling Act Correct answer.

Explanation

The validity of delegated legislation depends on the scope of the power granted by the enabling Act. A provision that goes beyond that power is ultra vires and void.

Question 14Legal Systems, Methods and Professional Conduct

A legal practitioner who learns that a client intends to commit a serious violent crime should normally:

  1. report the matter only after the crime is committed
  2. do nothing, as confidentiality is absolute
  3. disclose what is needed to prevent the harm Correct answer.
  4. seek the client's written permission before acting

Explanation

Confidentiality is not absolute; most professional codes permit or require disclosure of so much information as is necessary to prevent death or serious harm. Disclosure must be no wider than the purpose requires.

Question 15Legal Systems, Methods and Professional Conduct

A practitioner is asked to act for both parties to a transaction in which their interests directly conflict. The practitioner should:

  1. act for whichever party approached the practice first
  2. decline to act for both unless both consent Correct answer.
  3. act for both once each party has signed a retainer letter
  4. act for both provided the fee is shared equally between the parties

Explanation

A practitioner cannot properly serve two clients with conflicting interests, because the duty of single-minded loyalty cannot be given to both. Acting is permissible only in limited, non-contentious situations where the conflict is manageable and both clients give informed consent.

Question 16Legal Systems, Methods and Professional Conduct

Where a client's instructions conflict with a legal practitioner's duty to the court, the practitioner must:

  1. refer the matter to the client's insurer
  2. follow the client's instructions, as the retainer is paramount
  3. withdraw from the case without explanation
  4. give precedence to the duty owed to the court Correct answer.

Explanation

The duty to the court and the administration of justice overrides the duty to the client. A practitioner cannot advance a case by misleading the court merely because the client wishes it.

Question 17Legal Systems, Methods and Professional Conduct

A solicitor who gives a professional undertaking is:

  1. personally bound to honour it without consideration Correct answer.
  2. bound only if the undertaking is supported by consideration
  3. bound only once the client has indemnified the firm
  4. bound only if a court has ordered performance

Explanation

A professional undertaking is a personal promise, binding in honour and enforceable by the regulator, and it does not require consideration. The practitioner must ensure it can be performed before giving it.

Question 18Legal Systems, Methods and Professional Conduct

A fee arrangement under which the practitioner receives a share of the damages recovered is generally:

  1. permitted if the client is a company
  2. permitted in all civil matters
  3. permitted only in criminal matters
  4. prohibited, subject to limited exceptions Correct answer.

Explanation

Contingency fees are restricted because they may give the practitioner an interest in the outcome that conflicts with the duty of detached advice. Limited exceptions, such as regulated conditional fee arrangements, may be permitted.

Question 19Legal Systems, Methods and Professional Conduct

A practitioner who, without the client's informed consent, receives a commission from a third party in connection with the client's matter must:

  1. share it with the firm's partners
  2. pay it to the regulator
  3. keep it if the client never asks about it
  4. account to the client for it Correct answer.

Explanation

A practitioner is a fiduciary and may not make a secret profit from the retainer. Any benefit received in connection with the client's matter must be disclosed and accounted for to the client.

Question 20Legal Systems, Methods and Professional Conduct

A practitioner's duty of competence requires that he or she:

  1. keeps the skills and knowledge needed for the work Correct answer.
  2. accepts every matter offered, whatever its subject matter
  3. insures against claims for negligence
  4. refers every novel point of law to counsel

Explanation

Competence requires the practitioner to maintain the knowledge and skill necessary for the matters undertaken and to keep that knowledge current. Where a matter lies outside the practitioner's competence, it should be declined or the client advised to obtain specialist help.

Question 21Legal Systems, Methods and Professional Conduct

A practitioner previously acted for a client and is now asked to act for a new client whose matter is adverse to the former client and closely related to the earlier work. The practitioner should:

  1. act, if the new client pays a higher fee
  2. act, provided the former client's file is kept locked away
  3. act, because the earlier retainer has come to an end
  4. not act without the former client's informed consent Correct answer.

Explanation

A former client is entitled to expect that information given in the earlier retainer will not be used against him or her. Where the two matters are substantially related, the practitioner should decline unless the former client gives informed consent.

Question 22Legal Systems, Methods and Professional Conduct

A client tells counsel that he intends to give evidence that he knows to be untrue. Counsel should:

  1. put the client's account to the court but avoid asking about its truth
  2. refuse to call the client and, if necessary, withdraw Correct answer.
  3. call the client and examine him in the usual way
  4. disclose the client's intention to the court at once

Explanation

Counsel must not present evidence known to be false, because that misleads the court. The client should first be urged to correct the position; if he refuses, counsel must decline to call him and may have to withdraw, without disclosing the reason to the court.

Question 23Legal Systems, Methods and Professional Conduct

In a claim against a legal practitioner for professional negligence, the standard of care applied is that of:

  1. a reasonably competent practitioner in the relevant field Correct answer.
  2. the standard set out in the practice's internal manual
  3. the highest standard achieved by any practitioner in the jurisdiction
  4. the standard the client expected when giving instructions

Explanation

The practitioner must exercise the skill and care of an ordinarily competent member of the profession in the relevant field. The measure is objective and does not rise to the best possible practice in the jurisdiction.

Question 24Legal Systems, Methods and Professional Conduct

A large practice wishes to act against a party in a matter that is being handled for another client by a different department of the same firm. An information barrier within the firm will usually:

  1. bear on whether the conflict can be managed, but not settle it Correct answer.
  2. cure the conflict in every case without further steps
  3. be sufficient only where the affected client is a corporation
  4. be irrelevant, since conflicts are always imputed to the whole firm

Explanation

Whether a firm may act despite a conflict depends on the nature of the conflict, the safeguards adopted and, often, the informed consent of the clients. An information barrier is a relevant protective measure but is not by itself a complete answer.

Question 25Legal Systems, Methods and Professional Conduct

Shortly before a hearing, a practitioner discovers that a fact stated to the court at an earlier hearing was wrong. The practitioner should:

  1. wait for the opposing party to raise the point
  2. promptly inform the court and the other side Correct answer.
  3. leave it to the client to decide whether to correct it
  4. correct the error only if the court asks about it

Explanation

The duty of candour requires a practitioner who discovers that the court has been misled to correct the position without delay. The correction must be made to the court and, ordinarily, to the other parties as well.

Question 26Legal Systems, Methods and Professional Conduct

Under the Irish legal system, the text of the Constitution may be amended only by:

  1. a referendum approving a Bill passed by both Houses of the Oireachtas Correct answer.
  2. a statutory instrument made by the Government under a parent Act
  3. an Act of the Oireachtas passed by both Houses and signed by the President
  4. a resolution of the Supreme Court made on application by the Attorney General

Explanation

A proposed amendment must be introduced as a Bill, passed by both Houses of the Oireachtas, and then approved by the people in a referendum before it is signed into law. Ordinary legislation, court rulings and ministerial regulations cannot alter the constitutional text.

Question 27Legal Systems, Methods and Professional Conduct

In a reported judgment, the element that binds lower courts in later cases is:

  1. the obiter dicta of the judge
  2. the summary of the facts
  3. any dissenting opinion
  4. the ratio decidendi of the decision Correct answer.

Explanation

The binding element of a judgment is the legal principle or rule necessary to the decision reached, known as the ratio decidendi. Remarks not necessary to the outcome are obiter dicta and are persuasive only, while the facts and any dissent do not bind.

Question 28Legal Systems, Methods and Professional Conduct

A statute enacted in 2024 states that it 'shall be treated as having come into operation on 1 January 2020'. A person who did the act in question in 2021 argues that the statute cannot apply to that act. The presumption relied on is that:

  1. there is a presumption against retrospective effect Correct answer.
  2. there is a presumption that statutes do not alter the common law
  3. there is a presumption that statutes do not bind the State
  4. there is a presumption that statutes do not apply outside the State

Explanation

There is a strong presumption that legislation is not intended to operate retrospectively, particularly where it would affect vested rights or attach new consequences to past conduct. Clear and unambiguous words are required to rebut it. The other presumptions listed concern different matters entirely.

Question 29Legal Systems, Methods and Professional Conduct

A practitioner is asked to act for a client in the sale of the client's house, and the practitioner wishes personally to buy it. The practitioner should:

  1. act for the client but keep the purchase at arm's length
  2. decline to act, as a personal conflict of interest exists Correct answer.
  3. act for the client and buy the house without mentioning the purchase
  4. act for the client and buy the house, provided the price is fair

Explanation

A practitioner must not act where his or her own interest conflicts with the client's interest, since the practitioner would effectively be negotiating on both sides of the transaction. A purchase of client property requires full disclosure and independent advice, and the safe course is to decline the retainer. Secrecy or self-assessment of fairness does not cure the conflict.

Question 30Legal Systems, Methods and Professional Conduct

During litigation a practitioner receives from the opposing side a bundle that plainly includes a document protected by legal professional privilege, apparently sent by mistake. The practitioner should:

  1. stop reading, return the document and notify the other side Correct answer.
  2. read the document to assess whether it is helpful before returning it
  3. file the document with the court and leave the question of status to the judge
  4. retain the document and use it at the hearing if it assists the case

Explanation

Material that is obviously privileged and obviously disclosed in error should not be read or exploited; the receiving practitioner should return it and inform the sender. Reading or using such material risks breaching the other party's privilege and the practitioner's own professional obligations. The court expects candour rather than tactical advantage from an inadvertent disclosure.

Question 31Law of Contract

A shopkeeper places a handbag in a shop window with a ticket reading '£200'. A customer walks in and says she will buy it at that price. What is the legal status of the window display?

  1. An acceptance capable of forming a contract
  2. An invitation to treat Correct answer.
  3. A binding offer that the customer may accept
  4. A unilateral offer made to the world at large

Explanation

The display of goods with a price tag is generally treated as an invitation to treat, not an offer. The customer makes the offer, which the shopkeeper is free to accept or reject. This protects the retailer from being bound to sell to every person who tenders the price.

Question 32Law of Contract

An offeror posts a letter offering to sell goods and expressly states that acceptance must be sent by post. The offeree posts a letter of acceptance, but the letter is lost in the post and never reaches the offeror. When is the contract formed?

  1. No contract is formed, because acceptance was never received
  2. When the letter of acceptance is posted Correct answer.
  3. When the letter would ordinarily have arrived
  4. When the offeror actually reads the letter

Explanation

Where the post is contemplated by the parties, the postal rule treats acceptance as effective on posting, not on receipt. Loss or delay in the post is therefore at the offeror's risk. The rule applies only where posting was expressly or impliedly authorised.

Question 33Law of Contract

After a garage has completed repairs to her car, the owner promises to pay an extra £100 for the work already done. The garage had never requested the extra sum. Is the promise enforceable?

  1. No, because the consideration was inadequate
  2. No, because the work was past consideration Correct answer.
  3. Yes, because the promise was made in writing
  4. Yes, because the garage has suffered a detriment

Explanation

Consideration must be given in exchange for the promise; work already completed before the promise was made is past consideration and cannot support it. An exception exists only where the earlier act was done at the promisor's request and payment was impliedly expected. Neither condition is satisfied here.

Question 34Law of Contract

Two spouses agree that the husband, while working abroad, will pay the wife a monthly allowance. He later stops paying and she sues. What presumption applies to their agreement?

  1. That no legal relations were intended Correct answer.
  2. That a trust has been created over the husband's income
  3. That the arrangement is a binding commercial contract
  4. That legal relations were intended, because money is involved

Explanation

Agreements between spouses living together in amity are presumed not to be intended to create legal relations. The presumption can be rebutted by evidence of a contrary intention, but it is the starting point. The presence of a money payment does not by itself displace it.

Question 35Law of Contract

On Monday, A offers to sell a bicycle to B and promises to keep the offer open until Friday. On Wednesday, A sells the bicycle to C, and B learns of the sale from a reliable friend. On Thursday, B posts an acceptance. Is there a contract between A and B?

  1. Yes, because the acceptance was posted before Friday
  2. Yes, because A had promised to keep the offer open until Friday
  3. No, because the offer was revoked once B learned of the sale Correct answer.
  4. No, because the offer lapsed after a reasonable time

Explanation

An offer may be revoked at any time before acceptance, and revocation takes effect when it is communicated, including through a reliable third party. B's knowledge of the sale therefore ended the offer before the acceptance was posted. The promise to keep the offer open is unenforceable without consideration or a deed.

Question 36Law of Contract

A offers to sell land to B for £1,000. B replies that he will pay £950. A refuses that figure. B then states that he accepts the original offer of £1,000. What is the position?

  1. A's refusal revived the original offer
  2. A binding contract exists at £1,000
  3. The counter-offer destroyed the original offer Correct answer.
  4. B's reply was a mere inquiry, leaving the offer open

Explanation

A response that seeks to vary the terms of an offer is a counter-offer, which operates as a rejection and extinguishes the original offer. The original offer cannot afterwards be accepted unless the offeror renews it. B therefore has no contract to accept.

Question 37Law of Contract

A offers to sell 3,000 tons of iron to B. B replies asking whether A would accept a lower price for delivery over two months, or failing that, what the longest delivery period A would allow. A does not answer and sells the iron to another buyer; B knows nothing of this and then accepts A's original offer. Is there a contract between A and B?

  1. No, because A's sale to another buyer revoked the offer
  2. Yes, because B's message was a mere request for information Correct answer.
  3. No, because B's message was a counter-offer that destroyed the offer
  4. Yes, because A's failure to reply amounts to acceptance

Explanation

A message that merely seeks clarification of the offer's terms does not reject the offer or amount to a counter-offer. The original offer therefore remains open and can be accepted. A's sale to a third party does not revoke the offer unless it is communicated to the offeree.

Question 38Law of Contract

A contracts with B that A will pay £100 to C, a person named in the contract. C gave no consideration and is not a party to the agreement. Applying the traditional doctrine of privity, can C enforce the promise?

  1. No, because consideration did not move from C Correct answer.
  2. Yes, because consideration moved from B for C's benefit
  3. Yes, because C is the intended beneficiary
  4. Yes, because C is expressly named in the contract

Explanation

At common law only a party who has provided consideration may enforce a contract. A stranger to the consideration, even one intended to benefit, cannot sue on it under the traditional rule. Statutory reform now permits third-party enforcement in defined circumstances, but does not displace the basic requirement described in the question.

Question 39Law of Contract

A landlord agrees to accept a reduced rent from a tenant in financial difficulty, and the tenant pays the reduced sum for two years. The landlord then demands the arrears. What must the tenant establish to rely on promissory estoppel?

  1. Detriment amounting to fresh consideration
  2. A clear promise relied upon by the tenant Correct answer.
  3. A written agreement supported by consideration
  4. That the variation was executed as a deed

Explanation

Promissory estoppel requires a clear and unambiguous promise, intended to affect legal relations, on which the promisee has relied, and it must be inequitable for the promisor to resile. No consideration is needed. The doctrine generally operates as a defence and suspends rather than extinguishes the promisor's rights.

Question 40Law of Contract

A creditor agrees to accept £5,000 in full satisfaction of a £6,000 debt, payable on the original due date. The debtor pays £5,000 and the creditor then sues for the balance. Can the creditor recover the remaining £1,000?

  1. No, because the debt was extinguished by accord and satisfaction
  2. Yes, because part payment of a debt is not good consideration Correct answer.
  3. No, because estoppel binds the creditor permanently
  4. Yes, but only if the debtor had paid before the due date

Explanation

Part payment of an existing debt is not consideration for a promise to forgo the balance, because the debtor does nothing more than he was already bound to do. The creditor may therefore sue for the balance unless the promise is made by deed, supported by fresh consideration, or the payment is made early, at a different place, or with a different chattel.

Question 41Law of Contract

Two companies sign a written agreement containing a clause stating that it is not intended to create legal relations. What is the effect of that clause?

  1. It rebuts the commercial presumption, so no contract arises Correct answer.
  2. It is ignored, because companies always intend legal relations
  3. It is effective only if both parties are individuals
  4. It is void as contrary to public policy

Explanation

Commercial agreements are presumed to be intended to create legal relations, but the presumption is rebuttable. An express clause negating that intention rebuts it. This is a matter of the parties' objective intention, and the clause is given effect.

Question 42Law of Contract

A offers to supply goods on its standard terms. B replies by ordering the goods on B's own standard terms. A ships the goods without any further comment. Where the two sets of terms conflict, whose terms govern?

  1. A's terms, because A made the first offer
  2. B's terms, because B's order was the last document before performance Correct answer.
  3. Both sets, with A's terms prevailing on conflict
  4. Neither set, because the contract is void for uncertainty

Explanation

In a battle of the forms the traditional approach is the last-shot rule: the party who fires the last contractual shot before performance is treated as having its terms accepted by conduct. The other side's conflicting terms fall away. Some courts instead look for the terms common to both sides, but the last-shot analysis remains the standard exam answer.

Question 43Law of Contract

During negotiations for the sale of a house, the seller says nothing about a leaking roof. The buyer does not ask about the roof and later discovers the defect. Can the buyer rescind for misrepresentation?

  1. Yes, because the seller owed a duty to disclose all material facts
  2. No, because mere silence does not amount to a misrepresentation Correct answer.
  3. No, because the buyer should have commissioned a survey
  4. Yes, because the defect was latent and not discoverable

Explanation

As a general rule there is no duty of disclosure in ordinary negotiated contracts, so silence does not amount to misrepresentation. Caveat emptor applies, subject to exceptions such as contracts of utmost good faith, fiduciary relationships, and half-truths. The buyer therefore has no action in misrepresentation on these facts.

Question 44Law of Contract

A seller knowingly lies about a car's mileage in order to induce a purchase, and the buyer relies on the lie. What damages, in addition to rescission, is the buyer entitled to claim?

  1. Damages in the tort of deceit Correct answer.
  2. Specific performance of the sale
  3. Damages for breach of contract only
  4. An injunction restraining the sale

Explanation

A statement made knowingly, or without belief in its truth, is a fraudulent misrepresentation. The representee may rescind and claim damages in the tort of deceit, which place him in the position he would have occupied had the representation not been made. Damages are not limited by the contract.

Question 45Law of Contract

An elderly client transfers her house to her solicitor at a price well below market value, relying on his advice. Which statement best describes the legal position?

  1. Undue influence is presumed and the solicitor must rebut it Correct answer.
  2. The transaction is unenforceable for lack of consideration
  3. The transaction is void for mistake
  4. The client must prove actual undue influence before relief is granted

Explanation

Where a relationship of trust and confidence exists, and the transaction calls for explanation, a presumption of undue influence arises. The solicitor, as the dominant party, bears the burden of showing that the transaction was the result of free and informed consent. The client therefore does not have to prove actual coercion.

Question 46Law of Contract

A supplier threatens to stop deliveries in breach of contract unless the buyer agrees to pay a higher price. The buyer, unable to find an alternative supplier quickly, agrees. Which factor is most significant in establishing economic duress?

  1. That the supplier's pressure left the buyer with no practical alternative Correct answer.
  2. That the supplier gained a financial benefit
  3. That the buyer recorded the agreement in writing
  4. That the buyer paid more than the market price

Explanation

Economic duress requires illegitimate pressure that amounts to a significant cause inducing the contract, coupled with a lack of practical choice for the victim. The absence of a realistic alternative is central, since it negates genuine consent. A threat to breach an existing contract is generally illegitimate pressure.

Question 47Law of Contract

Both parties believe a cargo of goods exists when in fact it has already perished at sea, and they contract for its sale. What is the effect at common law?

  1. The contract is void for common mistake Correct answer.
  2. The contract is discharged automatically by frustration
  3. The contract is voidable at the buyer's option
  4. The contract remains valid and the seller bears the loss

Explanation

Where the subject matter of a contract has ceased to exist without the parties' knowledge, the contract is void for common mistake as to a fundamental fact. Sale of goods legislation puts the same result on a statutory footing. Voidness operates from the outset, unlike frustration.

Question 48Law of Contract

A shipowner charters his vessel to a charterer, then uses the vessel for a different voyage, making performance of the charterparty impossible. Can the owner rely on frustration?

  1. Yes, provided he compensates the charterer
  2. No, because the frustration was self-induced Correct answer.
  3. Yes, because performance became objectively impossible
  4. No, because frustration never applies to charterparties

Explanation

The doctrine of frustration cannot be invoked by a party whose own act or election brought about the alleged frustrating event. Self-induced frustration is no frustration. The owner is therefore liable for breach of the charterparty.

Question 49Law of Contract

A contract is discharged by frustration. What happens at common law to rights that had already accrued before the frustrating event?

  1. Rights already accrued before the event are preserved Correct answer.
  2. The contract continues but obligations are suspended
  3. The contract is void ab initio and all payments must be repaid
  4. The parties must restore all benefits received in full

Explanation

At common law frustration discharges the contract prospectively, leaving rights and liabilities that had already accrued intact. Money due before the event therefore remains payable. Statute now provides a wider adjustment of benefits conferred, but does not disturb this basic principle.

Question 50Law of Contract

A term in a contract is classified as a condition. What is the consequence of breaching that term?

  1. The injured party may terminate only if the breach is substantial
  2. The contract becomes automatically void
  3. The injured party may claim damages only
  4. The injured party may terminate and claim damages Correct answer.

Explanation

A condition is a term going to the root of the contract, and any breach of it entitles the injured party to treat the contract as at an end and to claim damages. The right to terminate arises from the nature of the term, not from the gravity of the particular breach. The contract is not void unless the innocent party elects to terminate.