Monday 25 August 2025
Your weekly SQE Prep Quiz has arrived
Dear Subscriber,
Hope you had a great weekend! Please see below for the question, the answer to the previous question and associated resources. This is the web version of this newsletter.
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This Week’s Question: A consumer buys a bottle of soft drink from a shop. After drinking half of it, the consumer becomes ill when a harmful object is later discovered inside the bottle. The manufacturer argues that it sold the product to the retailer, not the consumer, and therefore has no duty to the person who drank it. The consumer brings a claim in tort for compensation. Which of the following best reflects the likely legal position?
A. The manufacturer owes no duty because the contract was with the retailer, not the consumer.
B. The manufacturer may owe a duty because it is reasonably foreseeable that the consumer would drink the product.
C. The retailer alone is liable because the sale was made directly to the consumer.
D. The consumer cannot claim in tort because only contractual rights are available for defective products.
E. The consumer must prove the manufacturer intended to cause harm in order to succeed.
Dig Deeper: Learn more about the duty of care, by watching this video
Last Week’s Question: A group of people decide to start a trading business. They agree to operate as a private company and want to benefit from limited liability. They submit the required application to Companies House but do not yet receive a certificate of incorporation. While waiting, one member signs a supply contract on behalf of the “company.” Later, the supplier demands payment, but the group argues the company is not liable because it had not yet been formally registered. What is the correct legal position?
A. The company is bound by the contract because it was intended for the business and signed in its name.
B. The company is bound by the contract because incorporation was already underway.
C. The individual who signed the contract is personally liable because the company did not yet exist.
D. Neither the company nor the individual is liable because the contract is void until incorporation is completed.
E. The supplier can only enforce the contract once the company has received its certificate of incorporation.
✅ Correct Answer: C. The individual who signed the contract is personally liable because the company did not yet exist.
A company comes into legal existence only on the date of incorporation, when the registrar issues a certificate of incorporation under the Companies Act 2006, s.15.
- Before incorporation, there is no legal entity capable of entering contracts.
- Any agreement purportedly made “on behalf of” a company yet to be formed is treated as a pre-incorporation contract.
- Under s.51 Companies Act 2006, the person who signs is personally liable unless a clear novation occurs after incorporation.
Thus, the individual is bound, not the unformed company.
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All the best
Dr Ioannis Glinavos
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