SCHOOL OF ARTS, SOCIAL SCIENCES AND MANAGEMENT
DIVISION OF BUSINESS, ENTERPRISE AND MANAGEMENT
LEVEL 2 DIET 2
MODULE CODE: B2084
MODULE TITLE: Business Law
Section A
Multiple Choice Test Paper
July 2015
MATRICULATION NUMBER:………………………..............
YEAR ……………
Instructions – please read before commencing your answers
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Please make sure you have filled out your matriculation number above.
You should attempt all questions.
Select only one answer per question.
Indicate your answer by circling in ink only the number of the choice you believe to be correct.
Where you have indicated an answer but wish to change it, you must clearly cross out your first
choice and circle your preferred choice.
Where more than one answer is circled without crossing out, a zero mark will be given for that
question.
Question papers must not be removed from the examination hall. Removing your question
paper from the exam hall will result in an automatic zero mark.
Each question is worth 1 mark – total for Section A is 15 marks.
You must also complete 3 questions from Section B in the answer booklet provided. Each
question in Section B is worth 15 marks. Total for Section B is 45 marks.
Page 1 of 7
SECTION A
QUESTION 1
Misrepresentation can be
a)
b)
c)
d)
Innocent and fraudulent only
Innocent, fraudulent and negligent only
Fraudulent only
Fraudulent, reckless and negligent only
QUESTION 2
You are in a supermarket. The shelf edge ticket says that their own brand coffee is on a
“buy one get one free” offer. When you go to pay for the coffee you are charged for both
jars of coffee.
Which of the following statements is correct?
1. The shelf edge ticket is an invitation to treat
2. The customer makes the offer when the item is scanned and the price appears on
the till
3. The customer accepts the offer when the item is scanned and the price appears on
the till
4. The customer only needs to pay for one jar of coffee
Answer
a)
b)
c)
d)
All of them
1 and 2
1 , 2 and 4
1 and 3
QUESTION 3
Which of the following statements is INCORRECT?
a) The innocent part is under a duty to mitigate their losses when there is a breach of
contract
b) The effect of a counter offer is to extinguish the original offer
c) Children under 16 have no legal capacity whatsoever
d) Social and domestic arrangements are not legally binding
Page 2 of 7
QUESTION 4
Which of the following courts does not hear cases in Scotland?
a)
b)
c)
d)
Inner House
Court of Session
Magistrates court
Sheriff Court
QUESTION 5
Dodgy Dave calls at Maud’s house to try and buy her jewellery. She is 82 and frail. Dave
tells her that he will pay her £100 for the jewellery. When Maud hesitates as it is worth
£1000 Dave threatens to crash her bone china display. Maud fearing the worst reluctantly
agrees and Dave takes her jewellery away. The next day Maud asks for her jewellery back
on return of the money. Dave refuses.
Which of the following statements is correct?
a)
b)
c)
d)
Maud does not have legal capacity due to her age
Maud does not have legal capacity due to lack of mental capacity
The contract was entered into as a result of duress
There is no consensus in idem
QUESTION 6
Ivan the owner of a local business pledges in writing to pay for new football strips for a local
football team. His daughter plays for the team. The football team therefore placed an
order for £1000 of new kit. Unfortunately at last week’s match Ivan fell out with the
coaching team due to the fact that his daughter was substituted half way through the
match. As a result Ivan is now refusing to pay for the kit but the football team have no
funds to cover the cost. Is Ivan legally obliged to pay for the football strips?
a)
b)
c)
d)
Yes, because it is a gift so he can’t change his mind
Yes, because there is a contract to pay for the strips
Yes, because is a legally binding promise.
No, because the agreement is a social arrangement
Page 3 of 7
QUESTION 7
Aisha orders a book online for her sister’s birthday. She pays £3.99 for next day delivery.
The book is not delivered until five days later. Standard delivery is free.
Which of the following statements is INCORRECT?
a)
b)
c)
d)
There is a breach of contract for late delivery
The contract is void.
Aisha is entitled to a refund of the £3.99 delivery charge
Aisha is entitled to reasonable foreseeable losses
QUESTION 8
Which of the following best describes the outcome of the leading Scottish case of Wade v
Waldon (1909)?
a) All breaches of contract are material
b) Only material breach of contracts will entitle the innocent party to claim damages
c) The innocent party can claim damages for any special circumstances if the other
party has been made aware of them at the time the contract is made.
d) A material breach of contract is a breach that goes to the root of the contract
QUESTION 9
An events company is hosting a free event at a bookshop to launch a new book prize. They
serve canapés containing nuts. As a result Scott who is allergic to nuts suffers a severe
allergic reaction. They purchased the canapés from a catering company who had labelled
the canapés as not containing nuts
Which of the following statements is FALSE?
a) The events company have a contract with Scott
b) The events company have a contract with the catering company
c) The catering company have a duty of care to Scott
d) The catering company have a duty of care to the Events company
Page 4 of 7
QUESTION 10
To avoid liability, a person running a business event should make sure that they:
a) Take every precaution possible
b) Make sure every guest signs a disclaimer excusing the organiser
c) Take reasonable care in the circumstances
d) Get someone else to run it so they can be sued instead
QUESTION 11
Donoghue v Stevenson was an important case for several reasons:
1. It classified victims of negligence as either primary or secondary
2. It created a duty of care between manufacturers and consumers of products
3. It allowed recovery of damages for nervous shock for the first time
4. It formulated the ‘neighbourhood’ test
Answer:
a)
b)
c)
d)
1 and 3
1 and 2
2 and 4
2 and 3
QUESTION 12
If I am a primary victim of negligence suffering psychiatric injury, what do I need to prove?
1. A duty of care was owed, the duty was breached, and my loss resulted from the
breach
2. Close ties of love and affection, proximity in space and time, and direct exposure to
the incident
3. Vicarious liability of the defender
4. Clinical negligence
ANSWER:
a)
b)
c)
d)
2 and 4
3 and 1
1 only
2 only
Page 5 of 7
QUESTION 13
Josie is watching the TV news and sees a report of an accident on the Big Wheel fairground
round at the local theme park. She knows that her 13 year old brother, Carlos, is at the
theme park that day for a school trip and is most distressed to see pictures of her brother
lying badly injured on the Big Wheel. Which of the following statement is TRUE?
1. Carlos is a secondary victim
2. Josie is a primary victim
3. Josie is closely linked in time and space to the accident enough to have a claim in
negligence
4. A brother/sister relationship can be sufficiently close to demonstrate a close tie of
love and affection
ANSWER
a)
b)
c)
d)
All of them
None of them
2 only
4 only
QUESTION 14
Sid runs a PR and events management company. He was recently awarded a large contract
for £30,000 by a property developer. Since it will require Sid to make some significant
outlay in advance Sid contacts the property developer’s bank to ask for a credit reference
for them. They fail to take reasonable care when checking their records and incorrectly
confirm that the property developer has significant sums in the bank when in fact the
property developer has enormous debts.
Which of the following statements is INCORRECT?
a) The bank is vicariously liable for the employee who gave out the incorrect
information.
b) Sid can sue the bank under contract law for an innocent misrepresentation
c) Sid can sue the bank under the law of negligence for a negligent misrepresentation
d) The bank has a duty of care to Sid
Page 6 of 7
QUESTION 15
The modern three stage test for establishing whether a duty of care is owed in negligence is:
a)
b)
c)
d)
Foreseeability, proximity of relationship and whether it is just to do so
Fairness, justice and reasonableness
Foreseeability, proximity of relationship and reasonableness
Breach of duty, causation and legally recoverable loss
END OF SECTION A
PLEASE COMPLETE THREE QUESTIONS FROM SECTION B
Page 7 of 7