SQE (CONTRACT LAW) EXPECTED
QUESTIONS AND REVIEWED ANSWERS
What is an invitation to treat?
Statement indicating a willingness to receive offers or
negotiation
-goods on display
-advertisements
-tender
What is acceptance?
unqualified expression of assent to the terms of an offer
-acceptance must be communicated by the offeree or their
authorised agent
-if coupled with conduct that clearly signifies acceptance,
then silence can be acceptance
what is the effect of a counter-offer?
a counter-offer effectively destroys the original offer and
represents a new offer that the other party is free to accept
or reject
when will the postal rule apply?
a) it was reasonable in all the circumstances to use the
post
b) the letter was properly addressed, stamped and posted;
and
c) the postal rule had not been excluded by the offeror
-letter of acceptance will be effective when posted
what are the requirements to reject offer?
,-offer rejected by offeree either expressly or impliedly - eg
if they make a counter-offer
what are the requirements for recovocation of an
offer?
-any time before acceptance -even if the offeror promised
to keep the offer open for a certain period of time
-EXCEPTION: offeree gave something in return for offer to
be kept open
-partial peformance of unilateral contract is sufficient to
prevent revocation- if act is started within reasonable time
-must be communicated to the offeree - email- revocation
will be effective when it should have been read
-postal rule does not apply
what is the requirement for consideration?
Consideration need not be adequate - it simply has to
have some value
Consideration must be sufficient -eg money, goods,
services
what is the rule of past consideration?
past consideration is not good consideration
-what was done/promised was not done/promised in return
for anything at all. It had been gratuitous
what is the exception to the rule 'past consideration is
not good consideration'?
-pact act/promise was done at the promisor's request
-there was a mutual understanding between the parties
, that the act/promise would be compensated for in some
way;
-had the promise been made in advance it would have
been legally enforceable
what is the general rule in relation to alteration
promises to pay more?
Simply performing an existing contractual duty owed to the
other party will not be consideration in exchange for a
promise by the other party to pay more.
Exception: exceeding a contractual duty is consideration
Exception: where the promisee confers a practical benefit
- however, if promise to pay more was made under duress
the promise may be set aside
what is the rule for alteration promises to accept less?
Pinnel's Case: agreement between a creditor and a debtor
that the creditor will simply accept part payment in full and
final settlement of the full amount is not binding on the
creditor.
EXCEPTION: provided a debtor gives the creditor
something (other than just part payment) in return for the
creditor's promise to forgo the balance of the debt then
that something different will be consideration. - eg paid in
advance of the due date
what is the doctrine of promissory estoppel?
creditor may be estopped from going back on a promise to
accept part payment if in all the circumstances it would be
unfair for the creditor to do so
- it can only be used as a defence when a party brings an
QUESTIONS AND REVIEWED ANSWERS
What is an invitation to treat?
Statement indicating a willingness to receive offers or
negotiation
-goods on display
-advertisements
-tender
What is acceptance?
unqualified expression of assent to the terms of an offer
-acceptance must be communicated by the offeree or their
authorised agent
-if coupled with conduct that clearly signifies acceptance,
then silence can be acceptance
what is the effect of a counter-offer?
a counter-offer effectively destroys the original offer and
represents a new offer that the other party is free to accept
or reject
when will the postal rule apply?
a) it was reasonable in all the circumstances to use the
post
b) the letter was properly addressed, stamped and posted;
and
c) the postal rule had not been excluded by the offeror
-letter of acceptance will be effective when posted
what are the requirements to reject offer?
,-offer rejected by offeree either expressly or impliedly - eg
if they make a counter-offer
what are the requirements for recovocation of an
offer?
-any time before acceptance -even if the offeror promised
to keep the offer open for a certain period of time
-EXCEPTION: offeree gave something in return for offer to
be kept open
-partial peformance of unilateral contract is sufficient to
prevent revocation- if act is started within reasonable time
-must be communicated to the offeree - email- revocation
will be effective when it should have been read
-postal rule does not apply
what is the requirement for consideration?
Consideration need not be adequate - it simply has to
have some value
Consideration must be sufficient -eg money, goods,
services
what is the rule of past consideration?
past consideration is not good consideration
-what was done/promised was not done/promised in return
for anything at all. It had been gratuitous
what is the exception to the rule 'past consideration is
not good consideration'?
-pact act/promise was done at the promisor's request
-there was a mutual understanding between the parties
, that the act/promise would be compensated for in some
way;
-had the promise been made in advance it would have
been legally enforceable
what is the general rule in relation to alteration
promises to pay more?
Simply performing an existing contractual duty owed to the
other party will not be consideration in exchange for a
promise by the other party to pay more.
Exception: exceeding a contractual duty is consideration
Exception: where the promisee confers a practical benefit
- however, if promise to pay more was made under duress
the promise may be set aside
what is the rule for alteration promises to accept less?
Pinnel's Case: agreement between a creditor and a debtor
that the creditor will simply accept part payment in full and
final settlement of the full amount is not binding on the
creditor.
EXCEPTION: provided a debtor gives the creditor
something (other than just part payment) in return for the
creditor's promise to forgo the balance of the debt then
that something different will be consideration. - eg paid in
advance of the due date
what is the doctrine of promissory estoppel?
creditor may be estopped from going back on a promise to
accept part payment if in all the circumstances it would be
unfair for the creditor to do so
- it can only be used as a defence when a party brings an
