Summary SQE 1 - Contract Law - Summarised Textbook - Includes 25+ Sample SQE Questions (FLK1)
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Course
Sqe 1
Institution
Sqe 1
SQE 1 Contract Law: Complete Study Guide; Prepare for your SQE 1 exam with our expertly crafted summary for Contract Law. This comprehensive guide features thorough summaries of all key topics, over 25 SQE-style practice questions, and a detailed module specification on the first page. Updated with...
Welcome to the SQE 1 Contract Law guide. This textbook is designed to help you master all the
essential aspects of contract law required to pass the SQE 1 exam. It provides comprehensive
coverage of key principles, case law, and statutory provisions that underpin contract law,
ensuring you are well-prepared for the FLK1 exam, where contract law is a critical component.
Each chapter includes sample questions to reinforce your learning and assess your
understanding, guiding you toward mastery of this vital topic.
Chapter 1 Agreement (2)
Chapter 2 Intention to Create Legal Relations (7)
Chapter 3 Consideration (9)
Chapter 4 Parties (12)
Chapter 5 Capacity (15)
Chapter 6 Contents (18)
Chapter 7 Exemption Clauses (22)
Chapter 8 Damages (27)
Chapter 9 Equitable and Other Remedies (30)
Chapter 10 Termination (33)
Chapter 11 Misrepresentation (38)
Chapter 12 Duress and Undue Influence (42)
Chapter 13 Mistake and Illegality (46)
Exam specification:
Candidates are required to apply relevant core legal principles and rules appropriately and
effectively, at the level of a competent newly qualified solicitor in practice. This includes:
• Existence/Formation of a Contract: Understanding how contracts are created and the
requirements for valid agreements.
• Contents of a Contract: Familiarity with the terms and obligations that form part of a
contract.
• Causation and Remoteness: Analyzing the relationship between breach of contract
and resulting damages.
• Vitiating Elements: Recognizing factors that can invalidate a contract, such as
misrepresentation, duress, or undue influence.
• Discharge of Contract and Remedies: Understanding how contracts can be
terminated and the available remedies for breach.
• Unjust Enrichment: Applying the principles of unjust enrichment in scenarios where
one party benefits at the expense of another.
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, 1 - Agreement
Introduction
• Contracts in Business and Consumer Transactions:
o Contracts are essential in business and consumer activities, from buying raw
materials to selling finished products.
o Consumers may not consider legal implications until something goes wrong
(e.g., a disastrous holiday).
o Businesses often employ a contracts manager to handle such matters.
• Importance of a Binding Contract:
o When issues arise (e.g., defective goods), the existence and terms of the
contract are examined.
o The focus of Part 1 is on what constitutes a binding contract.
Offers and Invitations to Treat
• Definition of an Offer:
o An offer is a clear expression of willingness to contract on specified terms,
intended to become binding upon acceptance (Treitel’s definition).
o Offers can be communicated in various forms (e.g., letters, advertisements,
emails, conduct).
• Objective Approach in Law:
o Courts use an objective approach to determine if an agreement exists, focusing
on what a reasonable person would conclude from the parties' actions and
words.
• Example:
o Faheem mistakenly offers to sell a motorcycle for £5,000 instead of £6,000.
Despite his intent, he is legally bound to the £5,000 price because that's what a
reasonable person would interpret as the offer.
• Distinction Between Offer and Invitation to Treat:
o An offer is a definite proposal, whereas an invitation to treat is merely an
invitation to negotiate or make an offer.
o Example: A statement about thinking of selling a car is an invitation to treat, not
an offer.
Situational Examples
• Goods on Display:
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, o Items on display in stores (e.g., supermarkets) are invitations to treat, not offers.
The contract is concluded at the checkout.
• Advertisements:
o Advertisements generally constitute invitations to treat, not offers.
o Exception: Reward advertisements are considered offers because they promise
a reward for performing a specific act (e.g., providing information).
• Unilateral Contracts:
o A unilateral contract involves one party making a promise in return for the
performance of a specific act.
o Example: The famous Carlill v Carbolic Smoke Ball Co case, where a company
promised £100 to anyone who used their product and contracted the flu.
Auctions and Tenders
• Auctions:
o A sale at an auction is concluded when the auctioneer accepts the highest bid
by bringing down the gavel, which is the acceptance of an offer.
o Reserve prices prevent the sale of items below a certain minimum price.
• Without Reserve Auctions:
o In auctions advertised as "without reserve," the auctioneer must accept the
highest bid, creating a binding unilateral contract (e.g., Barry v Davies case).
• Tenders:
o Inviting tenders is generally an invitation to treat, not an offer. However, a
promise to accept the lowest tender creates a unilateral contract.
Acceptance
• Definition of Acceptance:
o Acceptance is an unqualified expression of assent to the terms of an offer.
• Communication of Acceptance:
o Acceptance must be communicated by the offeree or their agent, either by
words or conduct.
o Silence generally does not constitute acceptance, but conduct implying
acceptance can suffice.
• Counter-Offers:
o A conditional response or counter-offer does not constitute acceptance and can
nullify the original offer.
• Battle of the Forms:
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, o When parties exchange documents with conflicting terms, the "last shot" often
prevails, meaning the final terms agreed upon become binding.
• Acceptance by Post:
o The postal rule states that acceptance is effective when a properly addressed
and posted letter is sent, not when received.
o Exceptions include specific instructions requiring the acceptance to be received
to be effective.
Termination of Offers
• Methods of Termination:
o Rejection: An offer is terminated if the offeree rejects it or makes a counter-
offer.
o Revocation: The offeror can withdraw an offer anytime before acceptance
unless the offeree has given consideration to keep it open (e.g., Mountford v
Scott case).
o Lapse of Time: Offers can expire after a reasonable period or a specified
timeframe.
• Revocation in Unilateral Contracts:
o Generally, the offeror can revoke an offer anytime before the completion of the
specified act. However, partial performance may prevent revocation.
• Communication of Revocation:
o Revocation must be communicated to be effective, and in electronic
communications, it is effective when it should have been read during normal
business hours (e.g., The Brimnes case).
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