SQE1 sample questions

Question 95

A partnership agrees to pay £15,000 to a company to hire a large hall in London for an exhibition on 1 March. £5,000 is payable on 14 February and the balance is due on 28 February. The partnership does not make the payment of £5,000.

On 26 February, the company spends £2,000 on contractors who set up the hall with equipment, tables, chairs and display boards.

On 27 February, a major water leak takes place at the hall, through no fault of the company. The contract is frustrated.

The partnership is concerned that the company may seek to recover a payment from it and takes legal advice on its potential liability.

What sum, if any, is it most likely a court will order the partnership to pay to the company?

A. £5,000, being the amount payable prior to the date of the frustrating event.

B. £7,000, being the amount payable and the expenses incurred prior to the date of the frustrating event.

C. £13,000, being the total amount due under the contract less the expenses incurred prior to the date of the frustrating event.

D. £2,000, being the amount of expenses incurred prior to the date of the frustrating event.

E. Nothing, all monies due to be paid under the contract cease to be payable.


D -£2,000, being the amount of expenses incurred prior to the date of the frustrating event.

Candidates who answered correctly: 55%


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