Examiners’ reports 2018

Examiners’ reports 2018

LA1040 Contract law – Zone B

Introduction
The Contract law paper followed the same format as previous years with a
requirement to answer four questions out of eight, a mix of problem and essay
questions and a free choice as to which to answer.
I always raise the same concern about timing and students would do well to take
note of the need to spend equal time on each of the four questions. Answering only
three questions very often makes achieving even a bare pass extremely difficult.
Even three 2:1 marks (e.g. 62 each) but no fourth question achieves an overall
mark of only 47. Spending excessive time on the first two questions and very little
time on the next two has a similarly dramatic impact on the overall mark. Students
must be disciplined enough to move on to the next question every 45 minutes – the
first marks in a question are far easier to attain than the last.
Another common fault, as in previous years, is to write a pre-prepared answer to
the essay questions – the correct area of law is usually identified but the specific
question posed is not properly addressed. Students are usually being asked to take
a view on a statement and too often they simply provide a factual summary of the
law in that area as if the question had been: ‘Write all you know about
frustration/privity/illegality’ etc. Good marks can only be achieved by properly
applying the law to the question asked.
For problem questions we regularly see a reasonable discussion of the law but very
little attempt to apply it to the specific facts. Another common fault is the lack of
structure when analysing a problem, meaning muddled outcomes or elements of
the problem not addressed in the answer. In particular many students overlook any
‘add on’ question at the end (e.g. ‘would your answer be different if….’), therefore
missing the opportunity for a couple of extra marks.
The instruction at the end of each question should be read very carefully – it may
say who you must advise in a problem question and/or direct you to the particular
area of law to be addressed.
On this paper essay Questions 4 and 6 were particularly badly answered, largely
because students did not read them properly and therefore failed to address the
specific issue raised.

1
Comments on specific questions
Question 1
The Snob Squadron, an exclusive Yacht Club, decide to hold a race and so
place the following advertisement in the January issue of ‘Yachting Monthly’
(the leading sailing magazine):

Dell Buoy Race

Advise The Snob Squadron of their contractual liability, if any, in the following
alternative circumstances:
(a) The Snob Squadron later decides that the race might attract ‘the wrong
sort of sailors’ and places an advertisement in the February issue of
Practical Boat Owner (a small circulation magazine) cancelling the race.
Alastair does not see the February advertisement and spends £5,000
preparing his boat for the race before he learns of the cancellation from
a friend on 1st March.
(b) Brenda is leading the field and approaching the finish line when Lord
Dim, The Snob Squadron commodore, shouts from the committee boat
that the race has been abandoned.
(c) As (b) except a prize of £200,000 (not £1,000) had been advertised.
(d) Chas saw the boats lining up for the race and followed them. With a
lucky spurt of speed he overtook the leading boat just before the finish
line. Chas was not aware that a prize had been offered.
General remarks
This question was answered by most students. It requires good knowledge of the
law relating to unilateral contracts and was reasonably well done by most, although
not many achieved high 2:1s or above. It required a general discussion of the effect
of the advertisement and then separate discussion of the four scenarios set out at
a) to d), in each case advising Snob Squadron as to whether they were
contractually liable or not.
Law cases, reports and other references the examiners would expect you to use
Discuss the fact that advertisements are usually invitations to treat: Partridge v
Crittenden. Consider the Carlill case and conclude that this is a unilateral contract to
the world at large – with particular reference to the deposit at the bank. Explain
communication of acceptance not required – acceptance is by performance of the
act. Go on to consider:
(a) Withdrawal of offer? Same method to be used: Shuey v US – is it the same?
Communication by a third party can be effective: Dickinson v Dodds.
Expenses recoverable? No – preparatory steps, didn’t complete the race.
(b) Can withdrawal of unilateral offer take place once performance has begun?
Refer to principles in Errington and Dahlia – but don’t overstate the principle
that it can’t – depends on a term being implied to that effect.

2
 Examiners’ reports 2018

(c) Refer to Luxor v Cooper – is it necessary to imply a term to that effect when
the consideration is so high?
(d) Can Chas accept an offer of which he is unaware? Discuss R v Clarke,
Gibbons v Proctor.
Common errors
Spending a long time at the outset on general (and irrelevant) points about offer and
acceptance, discussing advertisements and unilateral contracts in general. Not
understanding that Alistair had not started performing the contract, missing the
message from his friend as a means of revocation. Most students missed the
specific point raised in c) re the increase in value of the prize money.
A good answer to this question would…
give a brief introduction of the way on which unilateral contracts operate then focus
on each sub clause. Support every point made with a relevant case (but without
setting out all the facts of each case – it’s the principle that’s important). Reach a
conclusion in each scenario as to whether SS is contractually required to pay out
the reward and why.
Poor answers to this question …
spent too long on a general introduction and failed to apply the legal principles to
the facts. Omitted section c) or completely missed the point and failed to give a
clear opinion in each case whether SS was liable or not.
Student extract
As per the case of Carlill, the company issues an advertisement stating that
they deposited £1,000 in the bank and £100 will be given to the customers
who cannot be cured by the smoke ball of the company. Mrs Carlill was this
customer, but was refused payment, with the excuse that it was merely an
advertisement and thus, not sufficient to bind the company to pay. The courts
held that it was a unilateral contract, a promise for an act. Thus, the company
must pay Mrs Carlill since she conducted the act stipulated.
Applying the same reasoning to the current question, the advertisement is a
unilateral contract. It contains a promise (£1,000) for an act (first yacht to
complete the course to Dell Buoy and back). The terms are very specific as
per Scammell v Ousten and Snob Squadron’s intentions seemed genuine,
since they deposited the £1,000 to Coots. These explanations for a unilateral
offer will apply for any subsequent answers below.
(a) When Snob Squadron decided to revoke, they did so in another
magazine; Practical Boat Owner, which is a small one compared to
Yachting Monthly, a leading sailing magazine. The question now is
whether or not revocation can take place. As per Shuey v US, revocation
must be done in the same way as the offer, or using a more efficient
method. Here, it would seem that Snob Squadron (SS) adopted a lesser
– known magazine, which affects the revocation, rendering it probably
invalid.
There is the issue therefore that based on the advertisement, Alastair
was not informed and did not know of the revocation. Revocation must
be communicated, as per Byrne v Van Tienhoven. There is a factor,
however, that may work in Snob Squadron’s favour. His friend had
informed him of the revocation on 1st March, well before the race.
Considering that he is a reliable third party as per Dickinson v Dodds,
the revocation might be rendered successful.

3
 Another issue arises with the fact that Alastair had spent money
preparing his boat for the race. As it is a unilateral contract, Errington v
Errington would highlight that once acceptance had started, revocation
should not be permissible. Nonetheless, an argument can be use in that
Squad Squadron never mentioned anything about fixing a boat. The act
required is to win the race for the money. Alastair fixing his boat up
seems like his own initiative.
Logically, it would be ridiculous to expect Snob Squadron to be
responsible for every boat owner deciding to fix up their boats for the
race. On this issue, acceptance cannot be said to have begun. A good
starting point would be when Alastair was actually at the yacht race.
Snob Squadron would not be liable to Alastair.
(b) Using Entores v Miles Far East Corporation and denoting the discussion
above, revocation must be communicated. Brenda would have heard (it
would seem) the revocation before she reached the finishing line.
Using the general revocation rule, SS would owe nothing to Brenda. Yet,
this is a unilateral contract. As per above, Errington v Errington would
dictate that revocation should not be possible if acceptance has begun
to take place. In Errington, the couple had started to pay mortgages, as
per the terms of the father in law giving them the house. Though it was
not completed, it has begun.
Above, the writer mentioned how a good starting point of beginning
performance would be at the race itself. Brenda has practically gone
through the entire course and approaching the finish line. As Dahlia v
Four Mill Bank Nominees said, it would no longer be fair to revoke. Not
considering the near completion of the contract. Hence, SS would
probably owe a contractual obligation to Brenda.
(c) One can view the case if Luxor v Cooper here, where the courts
mentioned about revocation of unilateral contracts when a large
consideration is given. Generally, as Professor Corbin would point out,
the act of not allowing revocation when acceptance has commenced is
not a blanket rule and does not need to be applied in every case.
The price of £200,000 seems to be of such a large sum that it would not
be equitable to SS if they were not given all opportunity to revoke. As the
estate agents in Luxor v Cooper did, Brenda took a small risk in return
for a comparatively large sum.
It must be remembered that contract law does not seek to be punitive. It
would be an imbalance in the rights of SS if they were not allowed to
revoke where they place such a big prize return. In this situation, the
revocation may actually be deemed successful. SS would not owe
Brenda the prize.
Comments on extract
This extract is from a longer answer which was awarded a high 2:1 mark It
demonstrates the logical analysis required, appropriate use of relevant case law
and a clear outcome in each scenario.
Question 2
(a) ‘Consideration need not be adequate but it must be sufficient.’
Discuss.

4
 Examiners’ reports 2018

(b) Dirk, who is disabled, returns to his car after work to find that someone
has syphoned off the petrol. He informs Eva, a passing police officer,
who says ‘Don't worry, I will get the person who did this’. Dirk replies
‘Thank you, if you do I will pay you £100’. Fiona overhears this
conversation and offers to go and get some petrol for Dirk. Dirk gives
Fiona a can and £10 to pay for the petrol. When Fiona returns Dirk says
‘Thank you for your trouble. I do not have any more money with me but
I want to give you £20 for getting the petrol’.
Eva caught the thief but Dirk now refuses to pay Eva or Fiona anything.
Advise Eva and Fiona.
General remarks
A popular question about consideration which was generally well answered. Split
into two parts, the first being a short essay and the second two problem scenarios.
Marks were lost by either very perfunctory answers to part a) or, conversely, very
long answers to part a) containing much irrelevant material. Less commonly, only
one of the two scenarios in part b) was answered. Too often decent knowledge was
shown but there was a lack of application to the facts.
Law cases, reports and other references the examiners would expect you to use
a. Give the classic definition of consideration and go on to explain the meaning
of the given statement – only certain things will be recognised as
consideration but if they fit that category then there is no further enquiry into
the equivalence of the exchange. Refer to cases such as Thomas v Thomas,
Chappell v Nestle, Ward v Byham, Edmonds v Lawson.
b. Eva – is a pre-existing duty good consideration? Identity public duty: Collins v
Godefroy; Glasbrook v Glamorgan; Leeds United v CC West Yorks.
Fiona – consideration is past: Lampleigh v Braithwaite; Re Casey’s Patents;
Re McArdle.
Common errors
In addition to the timing issues mentioned above, often only focused on one or two
cases in part a) and gave too little detail. Or wrote out all the standard rules about
consideration rather than sticking to the issue about adequacy.
Good answers to this question would…
stick to the issues of adequacy of consideration and illustrate it with three or four
cases explaining how the rule is applied by the courts. And in part b deal with each
issue separately supported by cases and considering whether the legal tests are
met on the facts (e.g. is it within the scope of Eva’s duty or not?). Does Flora fit any
of the exceptions to the past consideration rule?
Poor answers to this question…
contained all the student knew about consideration in part a) or set out the rules
with no case law in support. Got drawn in to long discussion about the modification
cases involving consideration in part b) and missed the point about past
consideration.
Question 3
Farouq meets Gerardo for the first time at a business meeting on 1st April and
agrees to buy Gerardo’s car from him for £10,000. Advise Gerardo as to his
contractual obligations in the following alternative circumstances in the light
of the different mistakes made by the party or parties:
(a) Gerardo was late for the meeting on 1st April and so parked his car in a
hurry and ran to the meeting. This was seen by the police who

5
 suspected it might contain a bomb. The car was destroyed in a
controlled explosion. Gerardo heard a loud bang as he entered the
meeting but thought nothing of it.
(b) Gerardo intended to sell his old jeep but Farouq intended to buy the
sports car he had watched Gerardo park. Gerardo was NOT aware of
Farouq’s mistake.
(c) Gerardo intended to sell his old jeep but Farouq intended to buy the
sports car he had watched Gerardo park. Gerardo was aware of
Farouq’s mistake.
(d) Both Farouq and Gerardo believe Gerardo’s car has a three litre engine.
It actually has a less powerful two litre engine.
General remarks
This question is about mistake – a topic often not understood very well. A few
completely missed the point and discussed frustration. No need for any general
introduction – deal with each scenario separately.
Law cases, reports and other references the examiners would expect you to use
(a) Common/shared mistake as to the existence of the subject matter of the
contract. Discuss Couturier, Bell v Lever, but as the goods once existed Sale
of Goods Act 1979, s.6 will apply.
(b) Cross purposes mistake – consider Smith, Centrovincial, Raffles.
(c) Also cross purposes mistake but one party aware so unilateral mistake
relevant. Consider ‘snapping up’ doctrine and Hartog v Collins, Scriven v
Hindley.
(d) Common mistake as to quality – void at common law, Bell v Lever Bros no
relief in equity following Great Peace.
Common errors
Failing to identify correct type of mistake to fit each example. Thinking the police
had made a ‘mistake’ by blowing up the car! Not advising Gerardo as to his
contractual obligation in each case as required by the question. Making assertions
without supporting case law.
A good answer to this question would…
not only identify the correct type of mistake but go on to say what the consequences
would be (i.e. render the contract void or not). Correctly apply the case law.
Poor answers to this question…
talked vaguely about making a ‘mistake’ without saying what type, gave muddled
answers with half-remembered cases and deployed to the wrong scenarios, gave
chatty answers about what was ‘fair’ without any legal rationale.
Student extract
(d) Mistake generally can only make a contract void if there was a
fundamental difference. In this situation, Farouq and Gerardo both made a
mistake on the engine. It was a common mistake in terms of the quality of
the engine. Mistake as to quality would only render the contract void if it
satisfies the essential difference test in Bell v Lever Brothers.
As per Bell, both the employers and the brokers had the consensus that
the brokers are to leave the company but be substantially remunerated for
it. Afterwards, the company discovered they could simply fire the brokers
without paying anything as they had breached a policy and had been
involved in external business ventures whilst in employment. They sought

6
 Examiners’ reports 2018

to reclaim the money, to which the courts declared against with the
reasoning that the mistake was not essentially different enough.
Applying the case to these facts, the one litre difference between the
engines may not be essentially different, as per Lord Atkin and
Thankerton when they applied the test in Bell. Ultimately, Farouq still got a
car, just slower.
Another consideration would be whether or not the courts would allow for
mistake as to quality to render the contract void under equity. Using Solle
v Butcher, the fact the Farouq contracted with Gerardo with the
understanding the engine was supposed to be more powerful, the
argument may work. It would be unfair for Farouq to pay the price but not
get the benefit, as per Grist v Bailey.
Nonetheless, the case of Great Peace Shipping has overruled the entire
notion of equitable mistake. The reasoning and test in Bell v Lever
Brothers therefore applies and the contract would be valid and binding
since the mistake was not sufficiently and essentially different.
Comments on extract
Extract from a much longer answer for which student scored a very high 2:1 and a
first on the paper overall. Shows a very clear logical approach to part (d) using
relevant case law in an intelligent way.
Question 4
Critically evaluate the approach taken by the courts to the implication of
terms into parties’ contracts.
General remarks
This was the worst-answered question on the paper. It was not answered by many
students, but those who attempted it invariably missed the point.
Law cases, reports and other references the examiners would expect you to use
Should distinguish between terms implied by the courts and those implied by statute
– only the former should be discussed. Explain implication in fact – Moorcock
‘business efficacy’ test and Shirlaw ‘officious bystander’ test, and implication in law:
Liverpool CC v Irwin, Johnston v Bloomsbury, Malik v BCCI and Attrill.
Common errors
Most students wrote at length about the difference between warranties and
conditions and innominate terms etc. Those who realised it was about implied terms
focussed on terms implied by statute (e.g. the Sale of Goods Act) not spotting that
the question referred to terms implied ‘by the courts’.
A good answer to this question would…
focus on the narrow remit, set out in detail the tests developed through case law
and comment on their effectiveness given the requirement to ‘critically evaluate’.
Poor answers to this question…
were generic pre-prepared essay about contractual terms that did not identify the
need to discuss solely terms implied by the courts.
Question 5
Ivan Earing is the University of Blue Skye’s dynamic, but naive, Vice
Chancellor who is developing an ‘electronic campus’ to reduce staff costs. He
hears about a new robotic professor being sold by Logik plc. Ivan visits Logik
to see a demonstration of the robot which is called ‘Professor Bright’. Ivan is

7
so impressed he immediately signs a contract to buy one for £200,000 for the
Law School. The contract contains the following provision:
1. Logik plc gives no warranty or assurance that any equipment provided
is of satisfactory quality.
The robot is delivered to the campus where Lurch takes delivery. Lurch signs
a document headed ‘Delivery Note’ which repeats term 1 above but also has
the extra clause below:
2. Logik plc shall not be responsible for any damage to property caused
by their equipment.
Ivan attends the robot’s first lecture in the Law School when ‘Professor
Bright’ appears to get very excited when discussing the doctrine of past
consideration and waves ‘his’ arms wildly. Unfortunately one of his hands
flies off and damages the University laptop which Ivan was using. The robot
then overheats and is ruined but causes no further damage.
Discuss the contractual liability of Logik arising from the above facts.
General remarks
A popular question and fairly well answered. The question is primarily about implied
terms and exclusion clauses but students are given credit for discussing the
liabilities under the relevant sale of goods legislation before considering the effect of
the two clauses. A logical and structured approach is required.
Law cases, reports and other references the examiners would expect you to use
Students should note at the outset that this is a B2B contract and so Sale of Goods
Act 1979 and UCTA 1977 and not the CRA 2015 will apply. Consider s.14(2) SGA
re satisfactory quality. Consider principles of incorporation (e.g. Interfoto case)
especially whether the second clause is incorporated. Refer to UCTA s.2(2) re
damage to laptop and test of reasonableness under s.11. Consider s.6(2) UCTA re
exclusion of SGA implied term and again s.11 and schedule 2.
Common errors
Jumping straight into exclusion clauses without considering liability first. Wrongly
using Consumer Rights Act throughout as if it were a B2C contract. Spending too
long on all the incorporation cases rather than focusing on the relevant ones. Not
discussing UCTA and just referring to general ‘reasonableness’. Some wrongly
discussed misrepresentation.
A good answer to this question would…
adopt a very structured approach – what is the potential liability under SGA referring
to the facts. Can Logik escape liability by relying on the exclusion clauses? Taking
each in turn are those clauses incorporated. If so does UCTA apply to prevent them
being used – refer to relevant section and then discuss reasonableness test. Take a
proper reasoned view as to likely outcome.
Poor answers to this question…
were written in a muddled way about whether the clauses were reasonable. Usually
discussed incorporation cases – many not relevant – but did not then go on to apply
UCTA. Failed to identify the actual liability that the clause were seeking to exclude.
Question 6
‘Where a claimant has a choice of suing either for damages for breach of
contract or for misrepresentation it cannot be said that one remedy is always
preferable to the other.’
Discuss.

8
 Examiners’ reports 2018

General remarks
Another badly answered question because students didn’t read the question. Most
wrote a prepared essay about misrepresentation. Firstly the question is about
damages for misrepresentation – not the general principles. Secondly the question
requires a comparison with damages for breach. Very few of those answering this
even mentioned breach, let alone discussed remedies for breach. Not a difficult
question – very descriptive – if read properly.
Law cases, reports and other references the examiners would expect you to use
Begin with a brief description of the key features of both actions. Compare burdens
of proof (e.g. s.2(1) Misrepresentation Act, Howard Marine). Outline the different
measures of damages for breach of contract – expectation: Robinson; reliance
Anglia; restitution: AG v Blake. Outline measures of damage for misrepresentation –
fraudulent, negligent and innocent, Misrepresentation Act s.2(1), Royscott, tortious
measure.
Common errors
Not reading the question and in 90 per cent of cases writing solely about
misrepresentation, no mention of breach and no discussion of measure of
damages.
A good answer to this question would…
explain the concepts of breach and misrepresentation and then go on to explain in
detail with relevant case law the different measures of damages for each. To get the
best marks there then needs to be a clear comparison between the two and the
circumstances where one type of claim may be more favourable than the other.
Poor answers to this question…
just described misrepresentation in great detail with a couple of paragraphs about
remedies at the end and no mention of breach at all.
Question 7
(a) Explain what is meant by the term ‘self-induced’ frustration.
(b) Lou Rolls sells and restores antique bathroom fittings. One evening
vandals break in and set fire to his workshop. The workshop and all its
contents are destroyed.
A week before the fire Mel had agreed to pay Lou £5,000 to restore an
antique bath. As agreed, Mel paid Lou £500 when she delivered the bath
with the balance payable on completion. Lou had purchased for £1,000
some specially formulated enamel to use in the restoration. Both the
bath and the enamel were destroyed in the fire.
At the time of the fire Ned, a builder, had almost completed retiling the
floor of Lou’s warehouse. It had been agreed that Lou would pay Ned
£8,000 as soon as the job was completed.
Advise Lou as to his rights and liabilities to Mel and Ned taking account
of the law relating to frustration.
General remarks
This is a question about frustration with part (a) an essay and part (b) a problem.
Answered by a good number of students with part (a) much better answered than
(b). Student who had properly revised this area and read the question carefully
scored well.
Law cases, reports and other references the examiners would expect you to use
(a) Explain briefly the classic definition of frustration, then go on to explain what
is meant by self-induced frustration (an event caused by one of the parties)

9
 with reference to Maritime National Fish v Ocean Trawlers and especially
Super Servant 2.
(b) Explain physical impossibility: Taylor v Caldwell and Davis Contractors v
Fareham UDC. In relation to Mel consider effect of frustration at common law:
Chandler v Webster. Compare with position under Law Reform (Frustrated
Contracts) Act 1943. Under s.1(2) Mel can get back £500 but Lou can offset
expenses of £1,000, meaning Lou loses £500: refer to Gamerco v ICM. In
relation to Ned – cannot bring an action at common law and no monies paid
in advance so s.1(2) doesn’t help. No benefit conferred on Lou so s.1(3)
doesn’t help either: BP v Hunt.
Common errors
Too many students in part (a) wrote a very wide essay about frustration in general –
the question has a very narrow focus and proper discussion of the two key cases is
essential. In part (b) there was insufficient discussion of remedies and the LR(FC)A.
A good answer to this question would…
give equal weight to parts (a) and (b) spending time on the two key cases in part
(a). For part (b) explain the common law and contrast with the statutory position
giving actual figures as to possible damages, following the instruction to advise Lou
as to his rights and liabilities in relation to Mel and Ned. Needs a clear logical
structure.
Poor answers to this question…
wrote very generically about frustration with lots of irrelevant cases, omitting to
discuss LR(FC)A and often not dealing with Ned at all.
Question 8
‘Specific performance has always been, and should remain, an exceptional
remedy under English law’.
Discuss.
General remarks
Very few students attempted this essay question. Those who did seemed very
unclear about the concept of specific performance and were unable to illustrate their
answer with key cases.
Law cases, reports and other references the examiners would expect you to use
Describe the remedy with reference to Coop v Argyle and explain its regular use in
land cases. Go on to describe the bars to SP which make it exceptional – personal
service, Giles v Morris, where contact supervision required Coop, where damages
are an adequate remedy Bronx Engineering and other bars such as hardship and
mutuality of remedy. Strong answers would note the willingness to award SP when
business otherwise under threat: Sky Petroleum and Thames Valley.
Common errors
Not understanding what SP is and failing to use any case law to support the
arguments
A good answer to this question would…
not only explain the principles with substantial use of case law but would go on to
critically evaluate the principles of SP in answer to the part of the question that says
‘and should remain an exceptional remedy’.
Poor answers to this question…
talked generally about remedies and failed to give any clear explanation of the
nature and purpose of SP.

10