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NEW QUESTION 33
Express terms in a contract are stated in which of the following? Select TWO that apply
- A. Trade customs
- B. Statutes
- C. Idea
- D. Orality
- E. Writing form
Answer: D,E
Explanation:
Express terms are the terms of the agreement which are expressly agreed between the parties. Ideally, they will be written down in a contract between the parties but where the contract is agreed verbally, they will be the terms discussed and agreed between the parties.
Implied terms are terms implied into the contract by the courts. They are not expressly set out in the contract but are taken to be as effective as if they were and as if they had been included from day one of the contract. The express terms and any implied terms together create the legally binding obligations on the parties.
Reference:
– Contracts: Express and Implied Terms
– CIPS study guide page 126-132
LO 3, AC 3.1
NEW QUESTION 34
A tire manufacturer entered into a contract with a distributor. In the contract, the distributor is prohibited from selling the tire under the price list. The distributor must pay $5 for each tire sold in breach. The amount of $5 is known as…?
- A. Quantum meruit
- B. Penalty
- C. Liquidated damages
- D. Caveat Emptor
Answer: C
Explanation:
This scenario is in fact based on a famous case law: Dunlop Pneumatic Tyre Company v New Garage & Motor co [1915] AC 79. In this case law, the House of Lords identified the clause as liquidated damages, and therefore enforceable.
However, if this case had happened in 2015 or afterwards, there would be some legal issues:
– The price agreement is prohibited by Competition Act 1998
– If the agreement is allowed by Competition Act, as in the case Cavendish Square Holding BV (Appellant) v Talal El Makdessi (Respondent), the clause can also be identified as a penalty and it is still enforceable.
Reference:
LO 3, AC 3.2
NEW QUESTION 35
Which of the following are most likely to be liabilities of suppliers under a guarantee clause? Select
- A. Installation
- B. Repair
- C. Replacement
- D. Upgrading
- E. Decommissioning
- F. TWO that apply
Answer: B,C
Explanation:
A guarantee is an agreement given by a trader to a consumer, without any extra charge, to repair, replace or refund goods that do not meet the specifications set out in the guarantee. A guarantee is usually issued by the manufacturer of goods or by a trader that provides goods as part of a service – replacement windows, for instance. Generally, a guarantee provider undertakes to carry out free repairs, for a set period of time, for problems that can be attributed to manufacturing defects.
Reference:
– Guarantees and warranties
– CIPS study guide page 157-159
LO 3, AC 3.2
NEW QUESTION 36
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