Monday 23 December 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.
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Question: Oliver, a first-time car buyer, decides to purchase a car from Flash Motors Ltd. During negotiations, the salesperson assures Oliver that the car has “never been in an accident and has only done 15,000 miles.” Relying on this statement, Oliver purchases the car for £10,000. However, a few weeks later, he discovers through a mechanic that the car had previously been involved in a major accident and that the odometer had been tampered with to show a lower mileage. Oliver confronts Flash Motors Ltd., who claim the salesperson had no way of knowing the car’s true history and argue that they are not liable for the incorrect statements.
What type of misrepresentation is most likely involved in this case, and what remedies might Oliver be entitled to?
1. Fraudulent misrepresentation; Oliver can claim rescission of the contract and damages for deceit.
2. Negligent misrepresentation; Oliver can claim rescission and damages if he proves that Flash Motors Ltd. failed to take reasonable care in verifying the car’s history.
3. Innocent misrepresentation; Oliver can claim rescission of the contract but not damages, as Flash Motors Ltd. acted in good faith.
4. Fraudulent misrepresentation; Oliver can only claim rescission if he can prove the salesperson intentionally misled him.
5. Negligent misrepresentation; Oliver can only claim damages if Flash Motors Ltd. admitted they failed to check the car’s history.
Resource: Learn more about misrepresentation by watching this video.
Free Study Planner: You can download our SQE1 Study Planner for the July 2025 exam by clicking here.
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Answer and feedback to last week’s question: Sophia contracts with Elite Builders Ltd. to renovate her home, agreeing on a total price of £50,000. The work is supposed to include a new kitchen, updated plumbing, and repairs to the roof. However, Elite Builders Ltd. completes only half the work, leaving the kitchen incomplete and failing to address the roof repairs. Sophia has already paid £30,000 upfront and must hire another contractor to finish the work at an additional cost of £25,000. She is considering her legal options and seeks to claim remedies against Elite Builders Ltd. for their failure to fulfill the contract.
Which of the following legal remedies is Sophia most likely entitled to in this situation, and what is the primary principle behind it?
1. Specific performance; Sophia can compel Elite Builders Ltd. to complete the renovation work as originally agreed.
2. Rescission; Sophia can cancel the contract and recover the £30,000 she has already paid.
3. Damages; Sophia can claim compensation for the additional cost of completing the work and any related losses caused by Elite Builders Ltd.’s breach.
4. Restitution; Sophia can recover the financial benefit Elite Builders Ltd. received by partially completing the work.
5. Injunction; Sophia can seek an order preventing Elite Builders Ltd. from working on other contracts until her renovation is completed.
Correct Answer: 3. Damages; Sophia can claim compensation for the additional cost of completing the work and any related losses caused by Elite Builders Ltd.’s breach. Feedback: In cases of breach of contract, the primary remedy is damages, which are designed to put the injured party in the position they would have been in if the contract had been properly performed. In this case, Sophia can claim damages to cover the additional cost of hiring another contractor (£25,000) to complete the work, as well as any other losses directly resulting from Elite Builders Ltd.’s breach of contract. Option 1 is incorrect because specific performance is an equitable remedy that is typically awarded only in cases where damages would not adequately compensate the injured party, such as contracts for unique goods or property. It is unlikely to be granted in this case as building contracts are rarely subject to specific performance. Option 2 is incorrect because rescission is a remedy that cancels the contract and seeks to restore both parties to their original positions before the contract. However, Sophia has already paid £30,000, and the contract has been partially performed, making rescission less appropriate. Option 4 is incorrect because restitution focuses on preventing unjust enrichment, not on compensating for breach of contract. It is not the appropriate remedy here, as Sophia is seeking to recover the additional cost of completing the work rather than the value of Elite Builders Ltd.’s partial performance. Option 5 is incorrect because an injunction is a remedy used to prevent certain actions, and it is not relevant to ensuring that the renovation work is completed or compensating Sophia for her losses. Therefore, the most appropriate remedy for Sophia is damages, which would compensate her for the financial loss caused by Elite Builders Ltd.’s breach of contract.
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Dr Ioannis Glinavos
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