Free SQE Mock Test 40 — 20 Questions + Full Answers
Solicitors Qualifying Examination · Trainee solicitors · SQE1 sits: Jan & Jul
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Applaa SQE Mock Test 40
applaa-sqe-mock-40.pdf · 20 questions
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8 of 20 shownCorrect answers highlighted in green. Full explanations included.
A seller (Mia) negligently makes a false statement of fact regarding the turnover of a business to a buyer (Olivia), inducing them to buy it. The buyer subsequently discovers the fraud. Which of the following describes the remedies available under the Misrepresentation Act 1967?
- A.The contract is automatically void, and the seller must be prosecuted criminally.
- B.Rescission of the contract and/or damages under Section 2(1) of the Act.
- C.The buyer can only recover damages and has no right to rescind the contract under any circumstances.
- D.The contract is binding, and no remedy is available since the buyer should have checked the accounts (caveat emptor).
- E.The seller is required to perform specific performance of the turnover projection.
✓ Worked Explanation
Core Concept: Misrepresentation Act 1967 - Remedies The Misrepresentation Act 1967 classifies misrepresentation into three types (fraudulent, negligent, innocent) and provides different remedies for each. A negligent misrepresentation under Section 2(1) is the most commonly tested in SQE. Step-by-Step Resolution: 1. Identify the Type: A *negligent* false statement of fact made by Mia to induce Olivia to buy. 2. Remedy Under Section 2(1): The innocent party (Olivia) may: - Rescind the contrac
Lucas offered to sell a yacht to Thomas for £5,000. Thomas replied: 'I accept your offer, but I will pay £4,500.' Lucas did not respond. Two days later, Thomas wrote to Lucas saying: 'I accept your original offer of £5,000.' Is there a binding contract between Lucas and Thomas?
- A.Yes, because the second letter constituted a valid acceptance of the original offer.
- B.Yes, because the original offer remained open and had not been revoked by the offeror.
- C.No, because the counter-offer of the lower price killed the original offer, meaning it could no longer be accepted.
- D.No, because a contract for sale of goods must be made in writing signed by both parties.
- E.Yes, because the offeror's silence on the counter-offer constituted acceptance of the lower price.
✓ Worked Explanation
Core Concept: Counter-Offer and the Death of the Original Offer A counter-offer is a rejection of the original offer combined with a new offer on different terms. Once a counter-offer is made, the original offer is extinguished - it cannot be revived or accepted later. Step-by-Step Resolution: 1. Original Offer: Lucas offers the yacht for £5,000. 2. Counter-Offer: Thomas replies with £4,500 - this is a counter-offer, NOT an acceptance. Under Hyde v Wrench (1840), this kills the original offer e
A director of Zenith Retail Ltd (a private company limited by shares) wants to allot new shares to a new investor (Emma) to raise capital of £35,000. The company has only one class of ordinary shares. Under the Companies Act 2006, which of the following is correct regarding the director's authority to allot these shares?
- A.The director has automatic statutory authority to allot the shares without shareholder approval under Section 550, unless restricted by the articles.
- B.The director must always obtain authorization by ordinary resolution of the shareholders under Section 551.
- C.The director must obtain authorization by special resolution of the shareholders to allot any shares.
- D.The director requires the approval of the Board of Trade before alloting any class of shares.
- E.Authority is only required if the allotment would cause the company to exceed its authorised share capital as stated in the memorandum.
✓ Worked Explanation
Core Concept: Director's Authority to Allot Shares (Section 550 CA 2006) The Companies Act 2006 grants directors of private companies with a single class of shares a specific statutory power to allot shares of that class without requiring shareholder approval - unless the articles restrict this. Step-by-Step Resolution: 1. Identify Company Type: Zenith Retail Ltd is a *private* company limited by shares with *one* class of ordinary shares. 2. Apply Section 550: Directors of such a company have
Prior to the formal incorporation of Omega Holdings Ltd, a promoter (Jack) signed a contract 'on behalf of the company' to purchase machinery from a supplier. The company is now incorporated. Which of the following best describes the liability of Jack and the company on this pre-incorporation contract?
- A.The company is automatically bound by the contract upon incorporation, and the promoter is released.
- B.The contract is completely void and unenforceable by any party.
- C.The promoter is personally liable and entitled under the contract, subject to any agreement to the contrary, under Section 51 of the Companies Act 2006.
- D.The company and the promoter are jointly and severally liable automatically.
- E.The company can unilaterally ratify the contract without the supplier's agreement.
✓ Worked Explanation
Core Concept: Pre-Incorporation Contracts (Section 51 CA 2006) A company cannot be a party to a contract before it legally exists. When a promoter signs a contract 'on behalf of' an unformed company, Section 51 CA 2006 provides the default rule: the promoter is personally bound. Step-by-Step Resolution: 1. Legal Status Before Incorporation: Omega Holdings Ltd had no legal existence when Jack signed the contract. There was no legal entity to be bound. 2. Apply Section 51: The contract takes effe
A builder (Benjamin) contractually agreed to construct a wall for a customer (Bob) for £5,000. Halfway through the job, the builder states they cannot finish unless the customer pays an extra £1,000. The customer agrees. After completion, the customer refuses to pay the extra £1,000. Under Williams v Roffey Bros, is the promise to pay the extra £1,000 binding?
- A.No, because performing an existing contractual duty can never be good consideration.
- B.Yes, if the customer obtained a practical benefit (such as avoiding a penalty clause to a third party) and there was no economic duress.
- C.No, because a promise to pay more must be approved by the County Court under CPR regulations.
- D.Yes, because oral contracts are automatically binding regardless of consideration.
- E.No, because it violates Section 52 of the Law of Property Act 1925.
✓ Worked Explanation
Core Concept: Consideration and Practical Benefit (Williams v Roffey Bros) The traditional rule (Stilk v Myrick) held that performing an existing contractual duty cannot be good consideration. Williams v Roffey Bros [1990] modified this rule: performing an existing duty CAN be valid consideration if the promisee obtains a 'practical benefit'. Step-by-Step Resolution: 1. Traditional Rule: A builder promising to finish what they're already contractually bound to do provides nothing new - no consi
A shopkeeper (Katelyn) places a designer coat in the shop window with a price tag of £22,000. A customer (Grace) enters the shop, places the cash on the counter, and demands to buy the item. The shopkeeper refuses to sell it. Is there a binding contract?
- A.Yes, because placing the item in the window was a unilateral offer that was accepted by the customer's cash payment.
- B.No, because the display of goods in a shop window is an invitation to treat, not an offer. Refusing to sell does not breach any contract (Fisher v Bell).
- C.Yes, because consumer protection laws force retailers to sell all displayed items automatically.
- D.No, because contracts for sales in shops require a written signed document.
- E.Yes, because the shopkeeper was silent when the customer entered, constituting acceptance.
✓ Worked Explanation
Core Concept: Invitation to Treat vs. Offer A binding contract requires a valid *offer* and *acceptance*. The display of goods in a shop window or on a shelf is an invitation to treat - an invitation for customers to make offers. It is fundamentally different from a legal offer, which can be accepted to form a contract. Step-by-Step Resolution: 1. What is an Invitation to Treat?: A display of goods with a price tag is not an offer - it is merely an expression of willingness to deal on those ter
Benjamin offered to sell a residential apartment to Nora for £20,000. Nora replied: 'I accept your offer, but I will pay £18,000.' Benjamin did not respond. Two days later, Nora wrote to Benjamin saying: 'I accept your original offer of £20,000.' Is there a binding contract between Benjamin and Nora?
- A.Yes, because the second letter constituted a valid acceptance of the original offer.
- B.Yes, because the original offer remained open and had not been revoked by the offeror.
- C.No, because the counter-offer of the lower price killed the original offer, meaning it could no longer be accepted.
- D.No, because a contract for sale of goods must be made in writing signed by both parties.
- E.Yes, because the offeror's silence on the counter-offer constituted acceptance of the lower price.
✓ Worked Explanation
Core Concept: Counter-Offer and the Death of the Original Offer A counter-offer is a rejection of the original offer combined with a new offer on different terms. Once a counter-offer is made, the original offer is extinguished - it cannot be revived or accepted later. Step-by-Step Resolution: 1. Original Offer: Benjamin offers the residential apartment for £20,000. 2. Counter-Offer: Nora replies with £18,000 - this is a counter-offer, NOT an acceptance. Under Hyde v Wrench (1840), this kills t
A seller (Fredrick) negligently makes a false statement of fact regarding the turnover of a business to a buyer (Helen), inducing them to buy it. The buyer subsequently discovers the fraud. Which of the following describes the remedies available under the Misrepresentation Act 1967?
- A.The contract is automatically void, and the seller must be prosecuted criminally.
- B.Rescission of the contract and/or damages under Section 2(1) of the Act.
- C.The buyer can only recover damages and has no right to rescind the contract under any circumstances.
- D.The contract is binding, and no remedy is available since the buyer should have checked the accounts (caveat emptor).
- E.The seller is required to perform specific performance of the turnover projection.
✓ Worked Explanation
Core Concept: Misrepresentation Act 1967 - Remedies The Misrepresentation Act 1967 classifies misrepresentation into three types (fraudulent, negligent, innocent) and provides different remedies for each. A negligent misrepresentation under Section 2(1) is the most commonly tested in SQE. Step-by-Step Resolution: 1. Identify the Type: A *negligent* false statement of fact made by Fredrick to induce Helen to buy. 2. Remedy Under Section 2(1): The innocent party (Helen) may: - Rescind the cont
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Paper Info
- Exam
- SQE
- Mock number
- 40 of 250
- Questions
- 20
- Format
- Multiple Choice (MCQ)
- Sections
- 1
- Audience
- Trainee solicitors
- Timing
- SQE1 sits: Jan & Jul
- Copyright
- Applaa Proprietary
Sections Covered
- FLK1
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