Law of Contract
Formation
Work through offer, acceptance, consideration, intention to create legal relations, certainty and capacity, in that order. Distinguish an offer from an invitation to treat - displays of goods, advertisements, auction calls and requests for tenders are generally invitations to treat. Acceptance must be communicated, must mirror the offer and must be made while the offer subsists; a counter-offer destroys the original offer. Revocation is effective only when communicated, save where the postal rule applies to acceptance. Consideration must be sufficient but need not be adequate; past consideration is not good consideration; performance of an existing duty owed to a third party can be good consideration.
Terms and defences
Know express terms, terms implied by statute, fact, custom or trade usage, and incorporation by signature, reasonable notice or a course of dealing. Exemption clauses are construed contra proferentem. For misrepresentation, distinguish fraudulent, negligent and wholly innocent statements and match the remedy (rescission and/or damages; bars to rescission such as lapse of time, affirmation or third-party rights). Cover duress, undue influence, illegality and restraint of trade.
Discharge and remedies
Performance, agreement, breach and frustration. Damages are compensatory, not punitive, and are limited by remoteness and mitigation; specific performance is discretionary and unavailable for personal service.
Trap: candidates lose marks by treating an invitation to treat as an offer, and by forgetting that a counter-offer kills the original offer rather than merely amending it.
Rule of thumb: recoverability of damages = loss arising naturally in the usual course, or loss within the parties' reasonable contemplation at formation.