CONTRACT LAW — EXAM Q&A PREP GUIDE | 2025/2026 Edition | A+ Grade
CONTRACT LAW
Exam Preparation Q&A
100% Verified Answers | A+ Grade | 2025/2026 Edition
✅ Key Cases | ✅ Exam Tips | ✅ Model Answers
30+ Questions 5 Sections Model Answers
HOW TO USE THIS GUIDE
1. Read each question carefully and attempt your own answer first.
2. Compare your answer with the model answer provided.
3. Study the key case cited and memorise the legal principle.
4. Use the Exam Tip to sharpen your exam technique.
SECTION A: FORMATION OF CONTRACT
Q1. What are the 6 essential elements required for a valid contract?
✅ ANSWER: The 6 essential elements are: (1) Offer, (2) Acceptance, (3) Consideration,
(4) Intention to create legal relations, (5) Capacity, and (6) Legality. All 6 must be present —
if any one is missing, the contract is invalid.
💡 Exam Tip: Remember the acronym OAICLE — Offer, Acceptance, Intention, Consideration,
Legality, Elements. Always list all 6 in exam answers.
Q2. What is the difference between an 'offer' and an 'invitation to treat'?
✅ ANSWER: An offer is a definite proposal by the offeror that, if accepted, creates a
legally binding contract. An invitation to treat is merely an invitation for others to make an
offer — it is NOT binding. Examples of invitations to treat include shop window displays,
advertisements, and menus.
📌 Key Case: Carlill v Carbolic Smoke Ball Co [1893] — An advertisement was held to be an
offer (not an ITT) because it was specific, clear, and showed intention to be bound.
💡 Exam Tip: Examiners love this distinction. Always identify whether something is an offer or
ITT BEFORE discussing acceptance.
Page 1 | Contract Law Q&A Exam Prep | 100% Verified Answers
, CONTRACT LAW — EXAM Q&A PREP GUIDE | 2025/2026 Edition | A+ Grade
Q3. What is the 'Mirror Image Rule' in contract law?
✅ ANSWER: The Mirror Image Rule states that acceptance must exactly match the terms
of the offer — no additions, modifications, or conditions. If the acceptance changes any
term, it is treated as a counteroffer, which destroys the original offer.
📌 Key Case: Hyde v Wrench [1840] — A counteroffer destroyed the original offer, meaning
the original offer could not be accepted later.
💡 Exam Tip: Any deviation from the original offer = counteroffer = original offer dies. Always
state this clearly.
Q4. Explain the Postal Rule and when it applies.
✅ ANSWER: The Postal Rule states that acceptance is effective from the moment the
letter is POSTED — not when it is received by the offeror. It applies only when: (1) it is
reasonable to use post, and (2) the offeror has not excluded it. It does NOT apply to
instantaneous communication such as email, fax, or phone.
📌 Key Case: Adams v Lindsell [1818] — The court held that acceptance was complete at the
moment of posting, establishing the postal rule.
💡 Exam Tip: Always contrast the postal rule with instantaneous communication — for
email/fax, acceptance is complete on receipt.
Q5. What is consideration and what rules govern it?
✅ ANSWER: Consideration is something of value exchanged between the parties. Key
rules: (1) Must be sufficient but need not be adequate, (2) Must not be past consideration,
(3) Must move from the promisee, (4) Cannot be something you are already legally obliged
to do, (5) Must have some economic value.
📌 Key Case: Chappell v Nestle [1960] — Chocolate wrappers counted as valid consideration
even though they had little monetary value — proving sufficiency, not adequacy.
💡 Exam Tip: In exam questions, always check ALL the rules of consideration. Past
consideration is a common trap.
Q6. What is 'past consideration' and why is it not valid?
✅ ANSWER: Past consideration is where one party performs an act BEFORE the
promise of payment is made. It is not valid because the consideration was not given in
exchange for the promise — it was already done. The law requires consideration to be
given in response to the offer.
📌 Key Case: Re McArdle [1951] — Improvements to a house made before a promise of
payment were held to be past consideration and therefore invalid.
💡 Exam Tip: If the act happened BEFORE the promise, it is past consideration = invalid = no
contract.
Page 2 | Contract Law Q&A Exam Prep | 100% Verified Answers
CONTRACT LAW
Exam Preparation Q&A
100% Verified Answers | A+ Grade | 2025/2026 Edition
✅ Key Cases | ✅ Exam Tips | ✅ Model Answers
30+ Questions 5 Sections Model Answers
HOW TO USE THIS GUIDE
1. Read each question carefully and attempt your own answer first.
2. Compare your answer with the model answer provided.
3. Study the key case cited and memorise the legal principle.
4. Use the Exam Tip to sharpen your exam technique.
SECTION A: FORMATION OF CONTRACT
Q1. What are the 6 essential elements required for a valid contract?
✅ ANSWER: The 6 essential elements are: (1) Offer, (2) Acceptance, (3) Consideration,
(4) Intention to create legal relations, (5) Capacity, and (6) Legality. All 6 must be present —
if any one is missing, the contract is invalid.
💡 Exam Tip: Remember the acronym OAICLE — Offer, Acceptance, Intention, Consideration,
Legality, Elements. Always list all 6 in exam answers.
Q2. What is the difference between an 'offer' and an 'invitation to treat'?
✅ ANSWER: An offer is a definite proposal by the offeror that, if accepted, creates a
legally binding contract. An invitation to treat is merely an invitation for others to make an
offer — it is NOT binding. Examples of invitations to treat include shop window displays,
advertisements, and menus.
📌 Key Case: Carlill v Carbolic Smoke Ball Co [1893] — An advertisement was held to be an
offer (not an ITT) because it was specific, clear, and showed intention to be bound.
💡 Exam Tip: Examiners love this distinction. Always identify whether something is an offer or
ITT BEFORE discussing acceptance.
Page 1 | Contract Law Q&A Exam Prep | 100% Verified Answers
, CONTRACT LAW — EXAM Q&A PREP GUIDE | 2025/2026 Edition | A+ Grade
Q3. What is the 'Mirror Image Rule' in contract law?
✅ ANSWER: The Mirror Image Rule states that acceptance must exactly match the terms
of the offer — no additions, modifications, or conditions. If the acceptance changes any
term, it is treated as a counteroffer, which destroys the original offer.
📌 Key Case: Hyde v Wrench [1840] — A counteroffer destroyed the original offer, meaning
the original offer could not be accepted later.
💡 Exam Tip: Any deviation from the original offer = counteroffer = original offer dies. Always
state this clearly.
Q4. Explain the Postal Rule and when it applies.
✅ ANSWER: The Postal Rule states that acceptance is effective from the moment the
letter is POSTED — not when it is received by the offeror. It applies only when: (1) it is
reasonable to use post, and (2) the offeror has not excluded it. It does NOT apply to
instantaneous communication such as email, fax, or phone.
📌 Key Case: Adams v Lindsell [1818] — The court held that acceptance was complete at the
moment of posting, establishing the postal rule.
💡 Exam Tip: Always contrast the postal rule with instantaneous communication — for
email/fax, acceptance is complete on receipt.
Q5. What is consideration and what rules govern it?
✅ ANSWER: Consideration is something of value exchanged between the parties. Key
rules: (1) Must be sufficient but need not be adequate, (2) Must not be past consideration,
(3) Must move from the promisee, (4) Cannot be something you are already legally obliged
to do, (5) Must have some economic value.
📌 Key Case: Chappell v Nestle [1960] — Chocolate wrappers counted as valid consideration
even though they had little monetary value — proving sufficiency, not adequacy.
💡 Exam Tip: In exam questions, always check ALL the rules of consideration. Past
consideration is a common trap.
Q6. What is 'past consideration' and why is it not valid?
✅ ANSWER: Past consideration is where one party performs an act BEFORE the
promise of payment is made. It is not valid because the consideration was not given in
exchange for the promise — it was already done. The law requires consideration to be
given in response to the offer.
📌 Key Case: Re McArdle [1951] — Improvements to a house made before a promise of
payment were held to be past consideration and therefore invalid.
💡 Exam Tip: If the act happened BEFORE the promise, it is past consideration = invalid = no
contract.
Page 2 | Contract Law Q&A Exam Prep | 100% Verified Answers
