Monday 18 March 2024
Your weekly SQE Prep Quiz has arrived
Dear Subscriber,
I 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
Question:
Emma enters into a contract with David to sell her antique clock for £500. The contract specifies that Emma will deliver the clock to David’s address on a specified date, and David will pay the agreed price upon delivery. However, on the specified date, Emma fails to deliver the clock to David as agreed. David waits for several days but does not receive the clock. He then purchases a similar antique clock from another seller for £600. What legal principle applies to David’s rights in this situation?
A. David is entitled to specific performance of the contract, requiring Emma to deliver the clock to him.
B. The contract between Emma and David is voidable at David’s option due to Emma’s failure to perform her obligations.
C. David is entitled to claim damages for breach of contract equal to the difference in price between the clock Emma agreed to sell and the clock he purchased from another seller.
D. Emma is entitled to rescind the contract due to impossibility of performance.
E. David’s rights are extinguished since Emma’s failure to deliver the clock voids the contract.
Top Tip: Revising Contract Law? Have a look at the key topics discussed in this playlist.
Relevant Reading: For a relevant text to this week’s question see ReviseSQE Contract Law and Practice. You can obtain the text by following this link.
Answer and feedback to last week’s question: Emma enters into a contract with David to purchase a rare painting for £20,000. The contract specifies that Emma will pay David £10,000 upfront, with the remaining £10,000 to be paid upon delivery of the painting. After paying the initial £10,000, Emma learns that David does not actually own the painting and has no legal right to sell it. Emma immediately notifies David that she is rescinding the contract and demands a refund of the £10,000 she already paid. David refuses to refund the money, claiming that Emma breached the contract by failing to pay the full purchase price. What legal principles apply to this situation?
- The contract is void due to David’s lack of contractual capacity.
- Emma is entitled to rescind the contract due to David’s misrepresentation as to his ownership of the painting.
- Emma is not entitled to rescind the contract as she breached it by failing to pay the full purchase price.
- The contract is voidable at Emma’s option due to David’s fraudulent misrepresentation.
- Emma is entitled to specific performance of the contract, requiring David to deliver the painting as agreed.
Correct Answer: 2. Emma is entitled to rescind the contract due to David’s misrepresentation as to his ownership of the painting. In this scenario, Emma is entitled to rescind the contract and demand a refund of the £10,000 she already paid due to David’s misrepresentation as to his ownership of the painting. Misrepresentation occurs when one party makes a false statement of fact that induces the other party to enter into the contract. Here, David falsely represented that he owned the painting and had the legal right to sell it to Emma. However, since David did not actually own the painting, his misrepresentation vitiates the contract, allowing Emma to rescind it and seek a refund of the money she already paid. The reason why 4 is wrong (albeit similar) is because we don’t know whether David intentionally misrepresented his rights over the painting (fraudulent) and because caselaw supports the proposition that fraudulent misrepresentation renders a contract void ab initio, not merely voidable on the insistence of the victim.
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All the best
Dr Ioannis Glinavos
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