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What is a problem question?
In a problem question, applicants are given a statement of law - for example, an excerpt from a statute or a passage from a judgment of a judge given in a court - and are asked to explain how it would apply in certain factual situations.
What are we looking for?
Problem questions are not designed to test applicants’ knowledge of the law. No prior knowledge of the law is expected or needed: all of the law-related information necessary to answer the question is provided in the given statement of law. Applicants who have studied or are studying law (for example at A-level) will therefore not be at an advantage over others. Problem questions are designed to test applicants’ ability to understand the given statement of law; to apply it accurately to the given factual situations, drawing relevant distinctions; and to explain their reasoning in a clear and logical way.
A piece of legislation (“the Act”) provides as follows:
(1) A person who is not a party to a contract (a “third party”) may in his own right enforce a term of the contract if—
(a) the contract expressly provides that he may, or
(b) subject to subsection (2), the term purports to confer a benefit on him.
(2) Subsection (1)(b) does not apply if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party.
(3) The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into.
(1) Where a third party has a right under section 1 to enforce a term of the contract, the parties to the contract may not, by agreement, cancel the contract, or vary it in such a way as to extinguish or alter his entitlement under that right, without his consent if—
(b) the promisor is aware that the third party has relied on the term, or
(c) the promisor can reasonably be expected to have foreseen that the third party would rely on the term and the third party has in fact relied on it.
Consider the application of the Act to each of the following alternative circumstances. In doing so, you can assume that a contract exists where two (or more) parties enter into an agreement in which they intend to be legally bound, and that a contract need not be in writing.
i. G and H are friends. In the pub one night they decide to play the National Lottery each week. Each is to contribute £1.50 and they would each choose three sets of numbers every other week, with H choosing three sets of numbers one week and G three sets of numbers the other week. They agree that any winnings are to be divided equally between the two of them and J, a friend. In the sixth week, when G has chosen the numbers, one of the combinations won a prize of £250,000. G, in whose name the ticket was registered, wishes to keep the prize. Can J sue G under the Act? Give reasons for your answer.
ii. On Mr and Mrs C’s marriage, their wealthy relative B buys an expensive 3 piece suite as a wedding gift from A Ltd, a well known department store. B makes it clear when purchasing the 3 piece suite that it is a gift for friends. The contract includes a term to the effect that the goods are of satisfactory quality. After 2 weeks of wear the fabric on the suite wears thin and frays, and after 3 weeks, two castors collapse. Can Mr and Mrs C sue A Ltd under the Act? Give reasons for your answer.
iii. X promises Y to pay Z £500 and Z, on hearing of this and because of it, immediately pays some outstanding bills. Before any money is handed over to Z, X and Y change their mind and agree to cancel their contract. Can Z sue X under the Act? Give reasons for your answer.