SQE FLK1: Contract Law for SQE2 about:srcdoc
SQE FLK1: Contract Law for SQE2
1. Offer and acceptance (agreement)
2. Intention to be legally bound
What are the requirements for a contract? 3. Consideration
4. Certainty
5. Capacity
Offeror = person who makes the offer
Who are the offeror and offeree?
Offeree = person who the offer is made to
Objective test: how does the interaction
between the parties look to a reasonable
What are the tests used to determine the person?
existence of a binding agreement between
parties? Subjective test: applied where offeree knew, or
ought to know the offeror made a mistake
(means offeror is not bound)
When offeree knew or ought to have known the
When does the subjective test for a binding
offeror made a mistake relating to a term not a
agreement apply?
collateral matter.
A promise to be bound if the offeree agrees to
What is an offer?
the terms
What is an offer? Promise to be bound if offeree agrees to terms
• Clear and certain
What are the requirements for a valid offer? • Displays an intention to be bound
(unequivocal acceptance)
Statement indicating a willingness to receive
What is an invitation to treat?
offers or negotiation, but NOT to be bound
Can an invitation to treat be accepted as binding
No
a contract?
What are five examples of an invitation to treat? 1. Ads (not where there is a unilateral
offer)
2. Display of goods
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,SQE FLK1: Contract Law for SQE2 about:srcdoc
3. Invitation to tender
4. Auctions
5. Websites
Invitations to treat - whoever reads the ad
should make an offer that the advertiser can
What is the general rule for advertisements? accept or reject
UNLESS it is a unilateral offer
Invitations to treat - whoever reads the ad
What is the general rule for menus, wine lists or
should make an offer that the advertiser can
list of goods?
accept or reject
Invitation to treat
What is the rule for displays of goods? Offer is made by customer who wishes to buy
them, and shopkeeper can accept or reject offer.
If goods can be bought = invitation to treat
What is the rule for websites? When order is made through website to buy =
offer
Auctioneer’s request for bids = invitation to
treat
What is the rule with auctions?
Bidder’s offer = accepted when hammer taps
down
Could be sued for breach of unilateral contract:
What happens with a 'without reserve' auction promise auction is without reserve
where the auctioneer refuses to sell to the Highest bona fide bidder entitled to damages
highest bidder? but NOT the goods (as this was dictated by
bilateral contract)
Invitation to treat - person receiving the tenders
can decide to accept
What is the rule for tenders (requests for quotes,
bids)? HOWEVER, if there’s a promise to accept the
most competitive bid or consider bids that
conform to tender conditions = unilateral offer
Unilateral advertisements are offers: offeror
What is the exception for the general rule for
makes promise in exchange for offeree
advertisements?
performing an act (missing pet reward)
What is the effect of an auction ‘without Unilateral offers = promise to sell goods to
reserve’? highest bidder
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,SQE FLK1: Contract Law for SQE2 about:srcdoc
If it expressly contains an undertaking to accept
When will an invitation to tender NOT be the highest/lowest bid or that conforms to
treated as an invitation to treat? tender conditions
Form of unilateral offer
Goods displayed or offered by vending
What is the effect of an automatic vending machines = offers
machine?
When they put money in = acceptance
When one party makes a promise in return for a
What is a bilateral contract?
promise/offer from the other party
Promise in return for an act, it’s one-sided (offer
What is a unilateral contract?
or reward, without reserve auctions)
Upon completion of the requested act
When is a unilateral contract accepted? Offeree must give notice within reasonable time
after completion
Offeror = customer
When is agreement/acceptance made for self-
Offeree = storekeeper
service shops?
Agreement made when scanned through
Final and unqualified, unconditional agreement
What is acceptance?
to all terms in the offer
Offer will lapse
What happens if the offeree dies before
acceptance has been made? Offer cannot be accepted after offeree's death
by offeree's representatives
If offeree knows offeror is dead: offer lapses
What happens if the offeror dies before
acceptance has been made? If offeree doesn't know/unaware: offer probably
won't lapse
1. Must be offeree who accepts
2. Must be unqualified
What are the requirements for valid acceptance? 3. Must be made in valid method
4. Must be communicated to offeror
(effective from time communicated)
What is the meaning of the rule that acceptance
Acceptance must correspond with offer
must be unqualified?
What are the requirements to accept with Mandatory if: clear words are used and other
prescribed mode of acceptance? modes are excluded
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,SQE FLK1: Contract Law for SQE2 about:srcdoc
Otherwise can use other method that is no less
advantageous to offeror
Stating that their terms will apply
What is a prevail clause? Rarely effective as cancelled out by counter-
offer
If acceptance wasn’t received, what is the
consequence if: 1. Offeree = no contract
1. Offeree was at fault 2. Offeror = contract prevails
2. Offeror was at fault 3. Nobody = no contract
3. If nobody was at fault?
1. Requests for information
What is not considered an offer? 2. Statement of intention
3. Invitations to treat
Parties communicate that they intend to do
What is a statement of intention? something.
Not binding
Acceptance must be exactly the same as the
What is the mirror-image rule?
offer to which it relates
How can acceptance be communicated? Words or by conduct
What happens if an offeree doesn’t accept in
writing or verbally, but begins to perform Acceptance by conduct
obligations?
Response to an offer introducing new terms.
What is a counter-offer? Not acceptance and destroys the original offer,
which can no longer be accepted by the person
who makes the counter-offer
• Bilateral, unless 'without reserve'
• Sale complete when the hammer falls =
acceptance
What type of contract is an auction?
• Bids = offers which can be withdrawn
before acceptance
• Call for bids = invitations to treat
What is a request for flexibility in payment Response to an offer that enquiries whether the
terms? amount required for offered goods can be paid
in instalments or later than set out in the offer,
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01/09/2025, 10:07
SQE FLK1: Contract Law for SQE2
1. Offer and acceptance (agreement)
2. Intention to be legally bound
What are the requirements for a contract? 3. Consideration
4. Certainty
5. Capacity
Offeror = person who makes the offer
Who are the offeror and offeree?
Offeree = person who the offer is made to
Objective test: how does the interaction
between the parties look to a reasonable
What are the tests used to determine the person?
existence of a binding agreement between
parties? Subjective test: applied where offeree knew, or
ought to know the offeror made a mistake
(means offeror is not bound)
When offeree knew or ought to have known the
When does the subjective test for a binding
offeror made a mistake relating to a term not a
agreement apply?
collateral matter.
A promise to be bound if the offeree agrees to
What is an offer?
the terms
What is an offer? Promise to be bound if offeree agrees to terms
• Clear and certain
What are the requirements for a valid offer? • Displays an intention to be bound
(unequivocal acceptance)
Statement indicating a willingness to receive
What is an invitation to treat?
offers or negotiation, but NOT to be bound
Can an invitation to treat be accepted as binding
No
a contract?
What are five examples of an invitation to treat? 1. Ads (not where there is a unilateral
offer)
2. Display of goods
1 of 62 01/09/2025, 10:07
,SQE FLK1: Contract Law for SQE2 about:srcdoc
3. Invitation to tender
4. Auctions
5. Websites
Invitations to treat - whoever reads the ad
should make an offer that the advertiser can
What is the general rule for advertisements? accept or reject
UNLESS it is a unilateral offer
Invitations to treat - whoever reads the ad
What is the general rule for menus, wine lists or
should make an offer that the advertiser can
list of goods?
accept or reject
Invitation to treat
What is the rule for displays of goods? Offer is made by customer who wishes to buy
them, and shopkeeper can accept or reject offer.
If goods can be bought = invitation to treat
What is the rule for websites? When order is made through website to buy =
offer
Auctioneer’s request for bids = invitation to
treat
What is the rule with auctions?
Bidder’s offer = accepted when hammer taps
down
Could be sued for breach of unilateral contract:
What happens with a 'without reserve' auction promise auction is without reserve
where the auctioneer refuses to sell to the Highest bona fide bidder entitled to damages
highest bidder? but NOT the goods (as this was dictated by
bilateral contract)
Invitation to treat - person receiving the tenders
can decide to accept
What is the rule for tenders (requests for quotes,
bids)? HOWEVER, if there’s a promise to accept the
most competitive bid or consider bids that
conform to tender conditions = unilateral offer
Unilateral advertisements are offers: offeror
What is the exception for the general rule for
makes promise in exchange for offeree
advertisements?
performing an act (missing pet reward)
What is the effect of an auction ‘without Unilateral offers = promise to sell goods to
reserve’? highest bidder
2 of 62 01/09/2025, 10:07
,SQE FLK1: Contract Law for SQE2 about:srcdoc
If it expressly contains an undertaking to accept
When will an invitation to tender NOT be the highest/lowest bid or that conforms to
treated as an invitation to treat? tender conditions
Form of unilateral offer
Goods displayed or offered by vending
What is the effect of an automatic vending machines = offers
machine?
When they put money in = acceptance
When one party makes a promise in return for a
What is a bilateral contract?
promise/offer from the other party
Promise in return for an act, it’s one-sided (offer
What is a unilateral contract?
or reward, without reserve auctions)
Upon completion of the requested act
When is a unilateral contract accepted? Offeree must give notice within reasonable time
after completion
Offeror = customer
When is agreement/acceptance made for self-
Offeree = storekeeper
service shops?
Agreement made when scanned through
Final and unqualified, unconditional agreement
What is acceptance?
to all terms in the offer
Offer will lapse
What happens if the offeree dies before
acceptance has been made? Offer cannot be accepted after offeree's death
by offeree's representatives
If offeree knows offeror is dead: offer lapses
What happens if the offeror dies before
acceptance has been made? If offeree doesn't know/unaware: offer probably
won't lapse
1. Must be offeree who accepts
2. Must be unqualified
What are the requirements for valid acceptance? 3. Must be made in valid method
4. Must be communicated to offeror
(effective from time communicated)
What is the meaning of the rule that acceptance
Acceptance must correspond with offer
must be unqualified?
What are the requirements to accept with Mandatory if: clear words are used and other
prescribed mode of acceptance? modes are excluded
3 of 62 01/09/2025, 10:07
,SQE FLK1: Contract Law for SQE2 about:srcdoc
Otherwise can use other method that is no less
advantageous to offeror
Stating that their terms will apply
What is a prevail clause? Rarely effective as cancelled out by counter-
offer
If acceptance wasn’t received, what is the
consequence if: 1. Offeree = no contract
1. Offeree was at fault 2. Offeror = contract prevails
2. Offeror was at fault 3. Nobody = no contract
3. If nobody was at fault?
1. Requests for information
What is not considered an offer? 2. Statement of intention
3. Invitations to treat
Parties communicate that they intend to do
What is a statement of intention? something.
Not binding
Acceptance must be exactly the same as the
What is the mirror-image rule?
offer to which it relates
How can acceptance be communicated? Words or by conduct
What happens if an offeree doesn’t accept in
writing or verbally, but begins to perform Acceptance by conduct
obligations?
Response to an offer introducing new terms.
What is a counter-offer? Not acceptance and destroys the original offer,
which can no longer be accepted by the person
who makes the counter-offer
• Bilateral, unless 'without reserve'
• Sale complete when the hammer falls =
acceptance
What type of contract is an auction?
• Bids = offers which can be withdrawn
before acceptance
• Call for bids = invitations to treat
What is a request for flexibility in payment Response to an offer that enquiries whether the
terms? amount required for offered goods can be paid
in instalments or later than set out in the offer,
4 of 62
01/09/2025, 10:07
