Contract Law

Second Mid-term Test, Paper B

1. Which of the following situations will make the contract void?

i. Before entering into the contract, the contracting parties held the belief that the battery of the computer they intended to transact lasts 5 hours where in fact the battery lasts 4 hours and 50 minutes.

ii. Before entering into the lease, the lessee held the wrong belief that no license is required to run a bar.

iii. Before entering into the contract, the contracting parties referred to the ship "Kris" for the delivery of Christmas ornaments. There are 2 ships called Kris. One will depart Hong Kong at 20th November and the other will depart at 20th December. One party believed that both parties referred to the former one while the other party believed that both parties referred to the latter one.

iv. Before entering into a contract of purchase of second hand car, the car concerned was destroyed by thunderstorm. Both parties did not notice it at the time the contract was concluded.

A. (i) and (iii)

B. (ii) and (iii)

C. (i) and (iv)

D. (ii) and (iv)

E. (iii) and (iv)

2. Which of the followings will necessarily make a claim of misrepresentation fails?

i. The statement relates to a past fact.

ii. The statement relates to a trivial matter.

iii. The one to whom the representation was made knew that the statement was false before the contract was concluded.

iv. The statement is a statement about the law.

A. (i) and (ii)

B. (i) and (iii)

C. (i) and (iv)

D. (ii) and (iii)

E. (ii) and (iv)

3. John and Mary are couples. John applied to a bank for a personal loan. The bank required him to request Mary to join as a guarantor. John exerted his undue influence to make Mary join as a guarantor. Mary now starts an action in the court to attack the validity of the contracts. Which of the followings CORRECTLY describes the current status of the contracts?

A. The loan contract and the guarantee contract are both void.

B. The loan contract and the guarantee contract are both voidable.

C. The loan contract and the guarantee contract are both valid.

D. The loan contract is valid while the guarantee contract is voidable.

E. The guarantee contract is valid while the loan contract is void.

4. Which of the followings are equitable remedies?

i. Damages

ii. Specific performance

iii. Injunction

iv. Rescission

A. (i) and (iii)

B. (i) and (iv)

C. (ii) and (iii)

D. (ii) and (iv)

E. (i) and (iii) and (iv)

5. With reference to the Multi-factor Test, which of the following circumstances will make it more likely for the court to classify the parties as having an employment relationship?

A. The workman has to bring his own tools and equipment.

B. The workman has to responsible for his own safety.

C. The workman is entitled to holiday pay.

D. The payment to the workman is on project basis.

E. The served party does not have right to select the individual whom he wishes to work for him.

6. Redundancy means that an employee is dismissed due to the reason that:

i. The employer intends to close the business line.

ii. The employer intends to close the branch.

iii. The employer intends to sell his shares in the business to another.

iv. The employer intends to close one of his business lines in the branch.

A. (i) and (ii) and (iii)

B. (i) and (ii) and (iv)

C. (i) and (iii) and (iv)

D. (ii) and (iii) and (iv)

E. (i) and (ii) and (iii) and (iv)

7. Under which of the following circumstances an exemption clause will be MORE likely to be considered as "reasonable" to the buyer under Schedule 2 of the Control of Exemption Clause Ordinance?

A. There are few alternative suppliers in the market.

B. The goods concerned is tailor made.

C. The exemption clause concerned is common in the industry.

D. The buyer did not read the exemption clause in the negotiation.

E. The buyer accepted the exemption clause after the provision of inducement by the supplier.

8. Which of the followings is CORRECT?

A. A legal act will attract both civil and criminal liability.

B. Decisions of the Privy Council still have relevance in Hong Kong.

C. Special magistrates have a wider jurisdiction than magistrates.

D. District Court has no jurisdiction in criminal cases.

E. Decisions of the District Court are binding on the lower courts.

9. Which of the followings are CORRECT?

i. The words that "Subject to Contract" negates any contractual intention and the parties are not bound until formal contracts are exchanged.

ii. Substantial performance is a breach of contract.

iii. Acceptance