Law of Contract - FE-1
This section covers Law of Contract for FE-1. The exam tests whether you can identify the legal issue, apply common-law doctrine and relevant Singapore statutory modifications, and reach a reasoned conclusion. Expect problem questions on formation, terms, vitiating factors, discharge, and remedies rather than pure essay recall.
Formation and enforceability
An offer must be definite and intended to bind on acceptance; invitations to treat (advertisements, displays, auctions) generally are not offers. Acceptance must be unqualified and communicated, subject to exceptions such as postal acceptance and prescribed modes. Consideration must be sufficient but need not be adequate; past consideration is generally no consideration. Intention to create legal relations is presumed in commercial agreements and rebutted in social/domestic ones. Certainty and completeness matter; an agreement to agree may fail.
Terms, vitiating factors and remedies
Distinguish representations from terms and incorporate terms by signature, notice, or course of dealing. Analyse exemption clauses for incorporation, construction, and statutory control under the Unfair Contract Terms Act. Misrepresentation requires an untrue statement of fact inducing the contract; remedies depend on type and statutory provisions. Mistake, duress, undue influence, and unconscionability may vitiate consent. Discharge by performance, agreement, breach, or frustration; remedies include damages (expectation, reliance, remoteness, mitigation) and equitable remedies.
Worked example
A advertises a laptop for $1,000. B replies, “I will buy it if you include a case.” A refuses. B cannot accept by saying “I accept” because B's reply was a counter-offer, which destroyed the original offer. If A later offers to sell at $900 and B accepts immediately, a contract forms at $900, provided consideration and intention are present.
Traps
Do not merge offer and acceptance; watch counter-offers, revocation, and communication. Do not treat every pre-contract statement as a term. Check statutory controls before relying on an exemption clause. Cite principle and apply facts; conclusory answers lose marks.