(CONTRACT LAW) SQE1 EXAM
REVISION STUDYGUIDE
4 elements of formation of contract
Agreement (offer / acceptance)
Consideration
Intention to create legal relations
Certainty
Requirements of an offer
1. Clear
2. Certain
3. Shows intention to be bound
Specific rules on goods
1. Goods displayed in supermarket / website - ITT
2. Advertisements - ITT (unless unilateral)
3. Invitation to tender - ITT (unless unilateral)
4. Calling for bid at auction - ITT
5. Auction without reserve - unilateral contract
2 types of offers
1. Unilateral = acceptance occurs by complete
performance of act
2. Bilateral = offeror must be notified of acceptance
3 methods of terminating offer
Rejection
Lapse
Revocation
Requirements of acceptance
,1. Done in response to offer
2. Unqualified (mirror-image rule)
3. Follows prescribed mode of acceptance
4. Communicated (if bilateral)
Postal rule not applicable where...
1. Post not allowed to be used
2. Addressed incorrectly
3. Letter revoking offer
4. Postal rule disapplied by offeror
2 types of valid consideration
1. Executed - already performed at point of acceptance
2. Executory - promised but not yet provided
Requirements for valid consideration
1. Sufficient (something of value in the eyes of the law)
2. Not necessarily adequate
3. Not in the past
4. Moves from promisee
Examples of insufficient consideration
1. Past consideration
2. Fulfilment of existing contract
3. Pre-existing public duty
4. Pre-existing contractual duty
5. Part -payment of debt
Exceptions to past consideration being sufficient
1. Act done at promisor's request
2. Parties understood act was to be rewarded
3. Payment / conferment of benefit legally enforceable
Requirements for promissory estoppel
1. Acts as shield not sword
2. Clear and unequivocal promise of strict legal rights
, 3. Change of position in reliance on promise
4. Inequitable to allow promisor to go back on promise
Strict legal rights may be enforced (despite PE)
where...
1. Involves periodic payment and period over which PE
operates ends early
2. Promisor gives reasonable notice of intention to pursue
full legal rights
People who do not have capacity to enter into contract
1. U18
2. Mentally unsound
3. Temporarily lacking mental capacity e.g. drunk
2 contracts which are binding on minors
1. Contract of necessaries
2. Contract of employment, education, apprenticeship
(which is for their benefit)
When someone without capacity NOT contractually
bound to pay reasonable price for necessaries
1. Did not understand what they were doing
2. Other party knew they did not understand what they
were doing
Methods of circumventing strict privity of contract
rules
1. Common law
2. Contract (Rights of Third Parties) Act 1999
Common law exceptions to privity of contract
1. Assignment / succession
2. Agency
3. Collateral contract
4. Actions in tort
REVISION STUDYGUIDE
4 elements of formation of contract
Agreement (offer / acceptance)
Consideration
Intention to create legal relations
Certainty
Requirements of an offer
1. Clear
2. Certain
3. Shows intention to be bound
Specific rules on goods
1. Goods displayed in supermarket / website - ITT
2. Advertisements - ITT (unless unilateral)
3. Invitation to tender - ITT (unless unilateral)
4. Calling for bid at auction - ITT
5. Auction without reserve - unilateral contract
2 types of offers
1. Unilateral = acceptance occurs by complete
performance of act
2. Bilateral = offeror must be notified of acceptance
3 methods of terminating offer
Rejection
Lapse
Revocation
Requirements of acceptance
,1. Done in response to offer
2. Unqualified (mirror-image rule)
3. Follows prescribed mode of acceptance
4. Communicated (if bilateral)
Postal rule not applicable where...
1. Post not allowed to be used
2. Addressed incorrectly
3. Letter revoking offer
4. Postal rule disapplied by offeror
2 types of valid consideration
1. Executed - already performed at point of acceptance
2. Executory - promised but not yet provided
Requirements for valid consideration
1. Sufficient (something of value in the eyes of the law)
2. Not necessarily adequate
3. Not in the past
4. Moves from promisee
Examples of insufficient consideration
1. Past consideration
2. Fulfilment of existing contract
3. Pre-existing public duty
4. Pre-existing contractual duty
5. Part -payment of debt
Exceptions to past consideration being sufficient
1. Act done at promisor's request
2. Parties understood act was to be rewarded
3. Payment / conferment of benefit legally enforceable
Requirements for promissory estoppel
1. Acts as shield not sword
2. Clear and unequivocal promise of strict legal rights
, 3. Change of position in reliance on promise
4. Inequitable to allow promisor to go back on promise
Strict legal rights may be enforced (despite PE)
where...
1. Involves periodic payment and period over which PE
operates ends early
2. Promisor gives reasonable notice of intention to pursue
full legal rights
People who do not have capacity to enter into contract
1. U18
2. Mentally unsound
3. Temporarily lacking mental capacity e.g. drunk
2 contracts which are binding on minors
1. Contract of necessaries
2. Contract of employment, education, apprenticeship
(which is for their benefit)
When someone without capacity NOT contractually
bound to pay reasonable price for necessaries
1. Did not understand what they were doing
2. Other party knew they did not understand what they
were doing
Methods of circumventing strict privity of contract
rules
1. Common law
2. Contract (Rights of Third Parties) Act 1999
Common law exceptions to privity of contract
1. Assignment / succession
2. Agency
3. Collateral contract
4. Actions in tort
