Friday 22 December 2023
Your weekly SQE Prep Quiz has arrived
Dear Subscriber,
Hope you had a great week. Please see below for the question, the answer to the previous question and associated resources. This is the web version of the newsletter.
Question: A company wants to terminate its existing lease agreement for office space due to financial difficulties. The lease agreement contains a clause that allows termination upon payment of a specified penalty. The company notifies the landlord of its intention to terminate the lease and pays the penalty as stated in the agreement. Which of the following best describes the company’s position after the termination?
- The company is relieved of its obligations under the lease agreement upon payment of the penalty.
- The company is still responsible for fulfilling any outstanding obligations under the lease agreement.
- The company can terminate the lease without any penalty if financial difficulties are cited as the reason.
- The termination of the lease is not valid without the landlord’s explicit consent.
- The company must seek legal intervention to enforce the termination of the lease agreement.
Relevant Reading: For a relevant text see ReviseSQE Contract Law. You can obtain the text* by following this link.
Something Fun: Take a break from study and make a Greek Xmas favourite, see this link for the recipe.
Answer and feedback to last week’s question:Tracy is a director of Xena Ltd, a company engaged in the construction business. She is negotiating a contract with a client, who is a close relative, one of her uncles. Tracy wants to be sure the negotiations are conducted in a way that won’t raise any issues for any of the parties involved. Which of the following statements is correct regarding Tracy’s situation?
- Tracy can proceed with the contract negotiation without disclosing her relationship with the client.
- Tracy must disclose her relationship with the client to the board and obtain their consent to continue.
- Tracy can proceed with the contract negotiation but must obtain the client’s consent to continue.
- Tracy must ask another director to sign the contract once negotiations are complete.
- Tracy can proceed with the contract negotiation but must inform the client about her fiduciary duty as a director.
The correct answer is 2: “Tracy must disclose her relationship with the client to the board and obtain their consent to continue”. Directors have a duty to avoid conflicts of interest, and in this case, Tracy’s close relationship with the client creates a potential conflict. The conflict needs to be disclosed to the board and permission must be obtained to continue negotiations according to s.177 CA 2006.
Thank you for subscribing and let me know how you are getting on in your preparation through our Facebook Group. Feel free to forward this email to anyone you think will benefit.
The next newsletter will be on Monday 8 January. Hope you enjoy the festive break!
All the best
Dr Ioannis Glinavos
*As an Amazon Associate, I earn from qualifying purchases.
Leave a Reply