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NEW QUESTION 23 Sally is shopping and sees an advert in a travel agent's window that says that flights to Malta are 50% off. She enters the shop and begins to speak to a travel agent who informs her that the poster she'd seen is out of date. Is the travel agent obliged to give Sally the discounted flight?

• A. yes- the offer is valid until another offer or counter offer is provided
• B. yes- the offer was displayed and therefore must be honoured
• C. no - the advert is an invitation to treat
• D. no- the offer has been rescinded

Answer: C Explanation: Adverts are invitations to treat - not offers. Therefore the travel agent isn't bound to provide the discounted flight. See p.3 for more information on offers and ITTs   NEW QUESTION 24 Restitution Measures are an award which seeks to return the value of a benefit which has been seen to be unfairly received. Which of the following statements about Restitution Measures is TRUE? Select TWO

• A. restitution damages are not limited to pre-agreed levels stated in the contract
• B. restitution damages intend to return the innocent party to the position they were in be-fore the contract
• C. restitution damages considers the position of the breaching party before the contract
• D. restitution damages are based on how much was gained by the breaching party as a re-sult of the breach

Answer: B,D Explanation: The correct answers are 1 and 3. These are taken from p. 124. Option 2 is incorrect - this is the definition of reliance damages. Option 4 is also incorrect- restitution damages are limited to pre-agreed levels stated in the contract.   NEW QUESTION 25 Terry's Toys is a Toy Manufacturer who has an agreement to provide Toys to an online re-tailer. The retailer has ordered 500 toys from Terry and Terry has incurred costs of £3000 manufacturing the toys. Halfway through production the retailer calls Terry to cancel the order. Terry reads through the contract and sees a liquidated damages clause of £1000. What should Terry do?

• A. Terry can apply to the court to increase the liquidated damages to £3000
• B. Terry can deliver the toys as agreed as there is a contract in place
• C. Terry can sue the retailer for the additional costs incurred above the liquidated damages
• D. Terry can do nothing and must pay the additional £2000 out of his own pocket

Answer: D Explanation: The correct answer is 4- Terry can do nothing and must pay the additional £2000 out of his own pocket. Liquidated damages are a pre-estimate of loss - they can't be changed by a court and you can't demand the buyer pays any higher than this if you actually lose more than is stated. This is one of the major disadvantages of having liquidated damages. Option 3 is a bad idea- the retailer has communicated that they do not want the toys so Terry is likely to only incur additional costs if he continues manufacturing them and delivers them. See p.106. There are lots of questions like this in the exam. Remember to think what the study guide would say- rather than what would happen in real life. Don't over complicate things.   NEW QUESTION 26 Which of the following will you put into box 6?

• A. arbitration
• B. litigation
• C. adjudication
• D. mediation

Answer: D Explanation: The correct answers are as follows: This is mediation because 1) it's private and 2) there's a third party present   NEW QUESTION 27 ......