Monday 2 March 2026
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 small company contracts with the company, a specialist software provider, for a bespoke accounting system. The company’s standard terms include the following clause:
“The company shall have no liability for any loss arising out of the supply of the software, including loss caused by its negligence or any pre-contractual statements.”
Before the contract was signed, the company’s sales representative stated that the software was “fully compatible” with the small company’s existing systems. This statement was untrue and induced the contract. The software is incompatible and causes substantial financial loss. The small company seeks to rescind the contract and claim damages. Which is the best answer?
A. The clause is fully effective because it expressly excludes negligence and pre-contractual statements.
B. The clause is ineffective in excluding liability for misrepresentation unless it satisfies the statutory reasonableness test.
C. The clause is automatically void because negligence can never be excluded in a commercial contract.
D. The small company cannot rescind because the contract contains an entire agreement clause.
E. The clause is effective because both parties are businesses and therefore statutory controls do not apply.
Dig Deeper: Learn more FLK Contract Law, on https://youtu.be/Ml00FrzY1NI
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Last Week’s Question: A claimant brings a £150,000 professional negligence claim in the High Court. Four months before trial, the claimant makes a valid Part 36 offer to settle for £100,000. The offer complies with all formal requirements and is not withdrawn. The defendant rejects the offer. At trial, the claimant is awarded £120,000. Which statement best reflects the likely costs consequences?
A. The claimant will recover standard costs up to judgment, but no additional consequences apply.
B. The claimant will recover indemnity costs from the expiry of the relevant period, enhanced interest on damages, enhanced interest on costs, and an additional amount capped at £75,000.
C. The claimant will recover indemnity costs from the date the offer was made and double damages.
D. The defendant must pay indemnity costs only if the court finds unreasonable conduct.
E. The claimant will recover indemnity costs only if the judgment exceeds £150,000.
✅ Correct Answer: B. The claimant will recover indemnity costs from the expiry of the relevant period, enhanced interest on damages, enhanced interest on costs, and an additional amount capped at £75,000. Explanation: Under CPR Part 36, if the claimant makes a valid Part 36 offer, and; the defendant fails to beat it at trial (i.e., the judgment is at least as advantageous as the offer), then, unless unjust, the court must order enhanced consequences. Here: Offer = £100,000; Judgment = £120,000; The claimant has beaten their own Part 36 offer. Therefore, from the expiry of the relevant period (usually 21 days after the offer), the court must order: Indemnity costs; Interest on damages at up to 10% above base rate; Interest on costs at up to 10% above base rate; An additional amount, calculated as: 10% of the first £500,000 of damages (subject to a maximum of £75,000). Since damages are £120,000, the additional amount would be 10% of £120,000 (£12,000). These consequences are automatic unless the court considers them unjust.
Why the other options are wrong (Exam Traps)
- A ignores the mandatory enhanced consequences under Part 36.
- C incorrectly states consequences run from the date of the offer (they run from expiry of the relevant period) and incorrectly mentions double damages.
- D confuses Part 36 consequences with general unreasonable conduct rules.
- E misstates the test — the claimant must beat their own offer, not exceed the pleaded value.
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All the best
Dr Ioannis (Yannis) Glinavos
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