LLB Contract Law - Practice Paper 4

Critically analyse the distinction between deposits and part-payments in contract law, and evaluate the circumstances in which a party may forfeit or recover such sums following breach. Consider the traditional rule that deposits are forfeit upon breach (Howe v Smith (1884)) and the development of relief against forfeiture in equity. Assess the impact of the Supreme Court's decision in Cavendish Square Holding BV v Makdessi (2015) on the law of deposits and penalties, and whether the reformulated penalty rule applies to deposits. Discuss the decision in Workers Trust & Merchant Bank Ltd v Dojap Investments Ltd (1993) regarding unreasonable deposits and evaluate whether the current law provides a coherent framework for the treatment of advance payments.

Stellar Logistics plc operates a large warehouse. It enters into a contract with FrostGuard Ltd for the installation of an industrial cooling system for £500,000. The system is critical for Stellar's pharmaceutical storage division, which generates £3 million in annual revenue. FrostGuard's project manager, Hannah, is aware that Stellar needs the system for pharmaceutical storage. The contract contains a 'no oral modification' clause (Clause 20): "No variation of this agreement shall be effective unless made in writing and signed by both parties." During installation, Stellar's operations director, Mark, verbally instructs FrostGuard to upgrade the insulation from standard to pharmaceutical-grade specification, agreeing to pay an additional £75,000. FrostGuard completes the upgrade. After installation, the cooling system fails due to a defective compressor, destroying £1.2 million of pharmaceutical stock. FrostGuard discovers the compressor was supplied by IceTech Components Ltd, which had provided a faulty batch. Stellar claims the full £1.2 million from FrostGuard. FrostGuard counterclaims the £75,000 for the insulation upgrade. Advise on: (a) the enforceability of the oral variation given Clause 20; (b) FrostGuard's liability for the pharmaceutical stock; and (c) FrostGuard's rights against IceTech.

Critically evaluate the law on contractual capacity as it applies to minors in English contract law. Assess the extent to which the current framework, distinguishing between contracts for necessaries, beneficial contracts of service, and voidable contracts, adequately balances the protection of minors with the need for commercial certainty. Consider whether the Minors' Contracts Act 1987 has remedied the deficiencies of the Infants Relief Act 1874, and discuss the role of restitution in recovering benefits conferred under unenforceable contracts. Evaluate whether the law should be reformed to reflect the greater commercial sophistication of modern minors, particularly in the context of online transactions and digital commerce.

Aurora Biotech Ltd contracts with ClinicalTrials International plc ("CTI") to conduct phase III clinical trials for a new cancer drug, Aurora-7, for £10 million over 30 months. The contract is essential to Aurora's regulatory approval application, which has a non-extendable deadline of 1 December. Clause 6 states: "Time is of the essence for all delivery milestones." CTI subcontracts data analysis to DataScience Partners Ltd ("DSP"). At month 24, CTI informs Aurora that DSP has suffered a major cyber-attack, destroying six months of trial data. CTI says it needs an additional 12 months to redo the analysis. Aurora argues this is a repudiatory breach. CTI argues the cyber-attack is a force majeure event (the contract contains no force majeure clause). Aurora terminates the contract and sues for: (a) the return of £7 million already paid; (b) £15 million representing the projected profits from Aurora-7 over its first five years on the market; (c) £3 million spent on manufacturing facilities built in anticipation of regulatory approval. Advise on breach, frustration, and the recoverability of each head of loss.

Critically assess the role of implied terms in English contract law. Evaluate the tests for implication of terms in fact (The Moorcock (1889), Liverpool City Council v Irwin (1977), and the clarification in Marks and Spencer plc v BNP Paribas Securities Services Trust Co (2015)), and terms implied by statute (Sale of Goods Act 1979, Consumer Rights Act 2015). Consider the relationship between implied terms and the process of contractual interpretation, and assess whether Lord Neuberger's restrictive approach in Marks and Spencer appropriately limits judicial intervention in the parties' bargain. Discuss whether the distinction between terms implied 'in fact' and 'in law' remains coherent.