Law of Contract – Q&A Workbook (Expanded
Edition)
1. What are the essential elements required to form a valid contract?
Offer and Acceptance, Consideration, Intention to Create Legal Relations, Capacity, and
Legality.
2. Define 'offer' in contract law.
An offer is a definite proposal to be bound by specific terms, which becomes binding upon
acceptance.
3. What is the legal effect of a counteroffer?
A counteroffer terminates the original offer and proposes new terms.
4. Explain the 'postal rule' in contract acceptance.
Acceptance is effective once posted, even if it is delayed or lost, unless specified otherwise.
5. What is consideration?
The value exchanged between parties; it must be sufficient but need not be adequate.
6. Why is past consideration invalid?
Because it occurred before a promise was made, and therefore cannot be linked to the
current agreement.
7. Give an example of sufficient consideration.
Even a peppercorn can be sufficient if it has legal value, as in Thomas v Thomas.
8. What is an invitation to treat?
An invitation for others to make offers (e.g., price tags, advertisements).
9. What does 'intention to create legal relations' mean?
Both parties must intend for their agreement to be legally enforceable.
10. When is there presumed intention in a contract?
In commercial agreements, unless explicitly stated otherwise.
11. What case shows lack of intention in domestic contracts?
Balfour v Balfour.
12. Who lacks capacity to contract?
Minors, intoxicated persons, and those of unsound mind.
Edition)
1. What are the essential elements required to form a valid contract?
Offer and Acceptance, Consideration, Intention to Create Legal Relations, Capacity, and
Legality.
2. Define 'offer' in contract law.
An offer is a definite proposal to be bound by specific terms, which becomes binding upon
acceptance.
3. What is the legal effect of a counteroffer?
A counteroffer terminates the original offer and proposes new terms.
4. Explain the 'postal rule' in contract acceptance.
Acceptance is effective once posted, even if it is delayed or lost, unless specified otherwise.
5. What is consideration?
The value exchanged between parties; it must be sufficient but need not be adequate.
6. Why is past consideration invalid?
Because it occurred before a promise was made, and therefore cannot be linked to the
current agreement.
7. Give an example of sufficient consideration.
Even a peppercorn can be sufficient if it has legal value, as in Thomas v Thomas.
8. What is an invitation to treat?
An invitation for others to make offers (e.g., price tags, advertisements).
9. What does 'intention to create legal relations' mean?
Both parties must intend for their agreement to be legally enforceable.
10. When is there presumed intention in a contract?
In commercial agreements, unless explicitly stated otherwise.
11. What case shows lack of intention in domestic contracts?
Balfour v Balfour.
12. Who lacks capacity to contract?
Minors, intoxicated persons, and those of unsound mind.
