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SQE1: Contract

SQE1 · Work through your exam, one topic at a time.

All guide sections

Contract

Formation

Offer, acceptance, consideration, intention to create legal relations and certainty. Advertisements and displays of goods are generally invitations to treat (Fisher v Bell, Partridge v Crittenden). Acceptance must be communicated; the postal rule is a narrow exception. Consideration must be sufficient but need not be adequate, and must not be past. Part payment of a debt is not good consideration for a release (Foakes v Beer; Pinnel's Case exceptions: different thing, earlier payment, different place, creditor's request).

Terms and representations

Distinguish pre-contractual statements from terms (importance, timing, expertise, reduction to writing). Incorporation of terms requires reasonable notice before or at the time of contracting; signed documents bind regardless of reading. Implied terms arise by statute (SGA 1979 ss 12–15, CRA 2015 for consumers), custom or business efficacy.

Exclusion clauses

Must be incorporated, cover the loss, and survive construction (Canada Steamship / Photo Production). UCTA 1977 (business-to-business) bars exclusion of liability for death or personal injury from negligence and requires reasonableness for other losses; the CRA 2015 regulates consumer terms.

Vitiating factors and discharge

Misrepresentation (false statement of fact inducing the contract) gives rescission and/or damages under s 2(1) Misrepresentation Act 1967. Mistakes, frustration, duress and undue influence complete the picture. Discharge by breach, performance or agreement; remedies include damages (Hadley v Baxendale remoteness, mitigation), specific performance and injunction.

Worked example: a clause excluding "all liability howsoever arising" fails for negligently caused personal injury - UCTA s 2(1) prohibits it outright.