LAW200 — Contract Law: Complete Exam Revision Guide
Contract law is primarily concerned with when legally enforceable agreements arise, what
obligations they create, and what happens when those obligations are not performed. For exam
success, focus on identifying the legal issue, stating the relevant rule, applying leading
authorities to the facts, and reaching a justified conclusion.
«KEY TAKEAWAY: In a problem question, do not simply list cases. Use the cases as legal
authority for a rule, then apply that rule directly to the facts.»
1. Module overview
- Formation of contract: A valid contract generally requires agreement, consideration, and
intention to create legal relations, with sufficient certainty and any required formalities.
- Terms and enforceability: Courts determine what the parties agreed, which terms form part of
the contract, and whether exclusion clauses, representations or other provisions are legally
effective.
- Breach and remedies: When contractual obligations are broken, the law determines whether
there has been a breach and what remedy—especially damages, specific performance or an
injunction—is appropriate.
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2. Key theories/concepts
1. Offer
An offer is a definite promise to be bound on specified terms if accepted by the other party. It
must be distinguished from an invitation to treat, which merely invites others to make offers.
Example: A shop displaying a £500 laptop normally invites customers to make an offer at the
checkout rather than making an offer to sell to whoever sees it.
Case: Fisher v Bell [1961] 1 QB 394 established that a shop-window display is ordinarily an
invitation to treat.
2. Acceptance
Acceptance is the final and unqualified assent to the terms of an offer. Acceptance must
generally correspond with the offer; attempting to introduce new terms may instead amount to a
counter-offer.
Example: A offers to sell a car for £5,000 and B says, "I accept, provided you include new
tyres." B has probably made a counter-offer rather than accepted A's original offer.
, Key authorities: Hyde v Wrench (1840) and Entores Ltd v Miles Far East Corporation [1955] 2
QB 327. With instantaneous communications, acceptance generally takes effect when received.
3. Unilateral contracts
A unilateral contract involves a promise in return for performance rather than a promise in return
for another promise. Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 is the classic authority:
the advertisement was capable of being a binding offer accepted through performance of its
conditions.
Example: A company offers £1,000 to anyone who finds and returns a lost item; performing the
specified act can constitute acceptance.
4. Invitation to treat
An invitation to treat is an invitation for others to make offers, rather than an offer itself. This
protects sellers from being automatically bound to every person who attempts to purchase
displayed goods.
Example: A supermarket shelf displaying a product at £10 normally constitutes an invitation to
treat; the customer's presentation of the goods at the checkout constitutes the offer.
Cases: Fisher v Bell and Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953]
1 QB 401.
5. Consideration
Consideration is something of legal value exchanged for a promise and is traditionally described
as the price of the promise. It must be sufficient, although it need not be economically adequate,
and generally cannot consist merely of something already done.
Example: Paying £100 in return for a service is consideration; a purely voluntary promise with
no consideration may be unenforceable unless another doctrine applies.
Cases: Currie v Misa (1875), Thomas v Thomas (1842), and Chappell & Co Ltd v Nestlé Co Ltd
[1960] AC 87.
6. Intention to create legal relations
The parties must intend their agreement to have legal consequences. Courts apply
presumptions: social/domestic arrangements are generally presumed not to be legally binding,
while commercial agreements are generally presumed to be intended to create legal relations.
Contract law is primarily concerned with when legally enforceable agreements arise, what
obligations they create, and what happens when those obligations are not performed. For exam
success, focus on identifying the legal issue, stating the relevant rule, applying leading
authorities to the facts, and reaching a justified conclusion.
«KEY TAKEAWAY: In a problem question, do not simply list cases. Use the cases as legal
authority for a rule, then apply that rule directly to the facts.»
1. Module overview
- Formation of contract: A valid contract generally requires agreement, consideration, and
intention to create legal relations, with sufficient certainty and any required formalities.
- Terms and enforceability: Courts determine what the parties agreed, which terms form part of
the contract, and whether exclusion clauses, representations or other provisions are legally
effective.
- Breach and remedies: When contractual obligations are broken, the law determines whether
there has been a breach and what remedy—especially damages, specific performance or an
injunction—is appropriate.
---
2. Key theories/concepts
1. Offer
An offer is a definite promise to be bound on specified terms if accepted by the other party. It
must be distinguished from an invitation to treat, which merely invites others to make offers.
Example: A shop displaying a £500 laptop normally invites customers to make an offer at the
checkout rather than making an offer to sell to whoever sees it.
Case: Fisher v Bell [1961] 1 QB 394 established that a shop-window display is ordinarily an
invitation to treat.
2. Acceptance
Acceptance is the final and unqualified assent to the terms of an offer. Acceptance must
generally correspond with the offer; attempting to introduce new terms may instead amount to a
counter-offer.
Example: A offers to sell a car for £5,000 and B says, "I accept, provided you include new
tyres." B has probably made a counter-offer rather than accepted A's original offer.
, Key authorities: Hyde v Wrench (1840) and Entores Ltd v Miles Far East Corporation [1955] 2
QB 327. With instantaneous communications, acceptance generally takes effect when received.
3. Unilateral contracts
A unilateral contract involves a promise in return for performance rather than a promise in return
for another promise. Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 is the classic authority:
the advertisement was capable of being a binding offer accepted through performance of its
conditions.
Example: A company offers £1,000 to anyone who finds and returns a lost item; performing the
specified act can constitute acceptance.
4. Invitation to treat
An invitation to treat is an invitation for others to make offers, rather than an offer itself. This
protects sellers from being automatically bound to every person who attempts to purchase
displayed goods.
Example: A supermarket shelf displaying a product at £10 normally constitutes an invitation to
treat; the customer's presentation of the goods at the checkout constitutes the offer.
Cases: Fisher v Bell and Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953]
1 QB 401.
5. Consideration
Consideration is something of legal value exchanged for a promise and is traditionally described
as the price of the promise. It must be sufficient, although it need not be economically adequate,
and generally cannot consist merely of something already done.
Example: Paying £100 in return for a service is consideration; a purely voluntary promise with
no consideration may be unenforceable unless another doctrine applies.
Cases: Currie v Misa (1875), Thomas v Thomas (1842), and Chappell & Co Ltd v Nestlé Co Ltd
[1960] AC 87.
6. Intention to create legal relations
The parties must intend their agreement to have legal consequences. Courts apply
presumptions: social/domestic arrangements are generally presumed not to be legally binding,
while commercial agreements are generally presumed to be intended to create legal relations.
