Summary Contract Cheat Sheet FLK1 SQE Exam

Contract: Backbones Notes
Binding Contract
 Offer and Acceptance
o Valid offer – clear and certain with intention to be bound
 Invitation to treat – will not form a binding contract
 Advertisement – invitation to treat unless amounting to a
unilateral offer.
 Display of goods for sale – invitation to treat
 Invitation to tender (auction)
o Auctioneer’s request for bids is an invitation to treat and
a contract is made when the hammer falls
o Without reserve auctions – unilateral offer given the
promise that the auction is without reserve.
o Valid acceptance
 In response to the offer
 Mirror rule – unqualified
 Prescribed mode of acceptance may be required
 Acceptance must be communicated
 Instantaneous communication – takes place when received if
during ordinary office hours.
 Postal rule – where post is a deemed method of
communication, acceptance takes place once properly posted,
even if lost in the post.
o Has the offer been terminated?
 Rejection
 Counter-offer will amount to a new offer and rejects the initial offer
 Request for information will not terminate
 Lapse – prescribed period/death
 Revocation – withdrawal effective where properly communicated
(postal rule will not apply)
 Intention to create legal relations
o Objective test – determined by the actions of the parties in the circumstances
 Commercial agreements: presumed that there is ICLR but this can be
rebutted
 Domestic agreements: presumed that there is no ICLR but this can be
rebutted.
 Consideration – to enforce a promise, something must be provided in return for that
promise. Must be sufficient but need not be adequate.
o Promises to pay more – general rule: not binding
 Exceptions
 Went beyond their existing obligations
 A practical benefit and no duress/fraud

, o Promises to accept less – general rule: not binding
 Exceptions
 Payment at a different time or place
 Payment of a lesser sum by a third party
 Practical benefit
 Promissory Estoppel (clear, unequivocal promise)
 Full legal rights may be resumed but only with reasonable
notice
 Would otherwise be inequitable to go back on.
 Shield not a sword
 Capacity
o Minors – generally not bound, though another adult party would be
o Exception
 Necessaries – for their benefit
 Employment – for their benefit
o Mental Capacity
 Contract for necessaries binding unless they did not understand AND
the other party knew this to be the case.
Duress
 A lack of practical choice
 Illegitimate pressure
 ‘But for’ the duress, the contract would not have been entered into.
Undue Influence
 Overt acts of pressure or coercion or
 Taking advantage of influence of ascendancy
o Presumed for: parent/child, solicitor/client, trustee/beneficiary, doctor/patient
o Bank/lender will need to make sure another party to a loan/mortgage
understands what they are signing.
Contract Terms
 Term of the contract?
o Did the parties intend the statement to be binding?
 Timing
 Importance attached
 Reduction of contract o writing
 Special knowledge or skill
 Assumption of responsibility
 Express
o Signed, written contract
o Incorporation by notice
 Reasonable steps taken to bring it to their attention