L6M5 practice question 12 of 15

Mustard Ltd contracted Red Ltd for IT services, requiring 98% internet connectivity. Red Ltd has only achieved 90% connectivity despite multiple meetings. Mustard Ltd now seeks to terminate the contract. Q: Can Mustard Ltd terminate the contract? Answer Options:

Full set: 83 questions

Answer options

A: Yes – connectivity was written into the contract, and Red Ltd is failing to deliver

B: Yes – since previous meetings have failed to resolve the issue, termination is justified

C: No – Red Ltd should be given more time to fix the issue

D: No – the contract would not allow for termination Correct answer

Correct Answer:

D. No – the contract would not allow for termination

Explanation

Connectivity is listed as a warranty, not a condition (p.125). Warranty breaches allow for damages but do not permit contract termination. If it were a "condition" instead of a warranty, termination would be allowed. [P.125]

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