SQE1 sample questions

Question 84

A sole trader, who operates as a builders’ merchant, enters into a contract with a company to hire a forklift truck. The terms of the contract are in writing and the sole trader is given the opportunity to read the contract in full before he signs it.

The sole trader does not read the contract but does sign it. The signature clause provides in bold and capital letters:

“I/WE HAVE READ THE CONTRACT IN FULL AND UNDERSTAND ITS TERMS.”

The contract states that the hire of the forklift truck is for a fixed three year term and that there is a fee payable to the company if the sole trader wishes to terminate it early (‘the Clause’).

The sole trader tries to return the forklift truck six months after signing the contract when he finds a cheaper alternative. The company requires the sole trader to pay the stipulated fee for early termination.

The sole trader then reads the contract. He claims that the Clause was not incorporated into the contract because he had not read it and had not dealt with the company before.

Was the Clause incorporated into the contract?

A. Yes, because the sole trader had signed the contract.

B. No, because the Clause was not specifically drawn to the sole trader’s attention before signature.

C. No, because there was no previous course of dealing between the sole trader and the company.

D. Yes, because the sole trader was acting in his capacity as a business not as a consumer.

E. No, because the sole trader did not read the Clause until some months after the contract was signed.