SQE1 · FLK1
Contract
Formation, terms, vitiating factors, remedies.
Offer, acceptance, consideration, terms, misrepresentation, frustration and remedies — the classical contract syllabus.
Contract in SQE1 FLK1
Contract is a doctrine-heavy FLK1 area with a settled case canon, so it rewards precise rule statement. Questions move through the life of a contract: was one formed, what does it contain, can a party escape it, and what happens on breach.
What’s tested
- Formation: offer and acceptance, the postal rule, certainty, intention to create legal relations and consideration
- Promissory estoppel as a shield where consideration is absent
- Contents: express and implied terms, conditions, warranties and innominate terms
- Exemption clauses, incorporation and the Unfair Contract Terms Act 1977 / Consumer Rights Act 2015
- Vitiating factors: misrepresentation, mistake, duress, undue influence and illegality
- Discharge: performance, agreement, breach and frustration
- Remedies: expectation damages, remoteness, mitigation, and the equitable remedies
Leading cases to know
- Carlill v Carbolic Smoke Ball Co — unilateral offers and acceptance by conduct
- Hadley v Baxendale — the two limbs of remoteness of damage
- Hong Kong Fir Shipping v Kawasaki — innominate terms and the seriousness of breach
- Williams v Roffey Bros — practical benefit as good consideration
- Hedley Byrne v Heller — negligent misstatement and assumption of responsibility
Key statutes and rules
- Consumer Rights Act 2015 — terms in consumer contracts and the fairness test
- Unfair Contract Terms Act 1977 — control of exemption clauses in non-consumer contracts
- Misrepresentation Act 1967 — remedies for misrepresentation, including s.2(1)
- Law Reform (Frustrated Contracts) Act 1943 — the financial consequences of frustration
Common SBAQ traps
- Treating a counter-offer as an acceptance — it destroys the original offer (Hyde v Wrench)
- Confusing the remoteness rule (Hadley v Baxendale) with the duty to mitigate
- Applying the Consumer Rights Act 2015 to a business-to-business contract, where UCTA 1977 governs
How to revise Contract for FLK1
Drill the canon: for each leading case, be able to state the rule in one line and apply it to a new fact pattern. Then sequence MCQs by stage (formation → terms → vitiating → remedies) so you instinctively spot which doctrine a scenario is testing.
Go deeper
Free revision notes — Contract
Contract law in FLK1 follows the classical English law syllabus: formation, terms, vitiating factors, discharge, and remedies. Questions are scenario-based — a short fact pattern with a twist that maps to a specific doctrine. Know your leading cases cold.
Formation
The five requirements: offer, acceptance, consideration, intention to create legal relations, certainty of terms. Offer vs invitation to treat (Carlill v Carbolic Smoke Ball [1893]; Partridge v Crittenden [1968]). Postal rule: acceptance complete on posting (Adams v Lindsell [1818]); does not apply to instantaneous communications (Entores v Miles Far East [1955]). Consideration must move from the promisee (Tweddle v Atkinson [1861]), be sufficient but need not be adequate (Chappell v Nestlé [1960]), must not be past (Re McArdle [1951]) unless at the promisor's request (Lampleigh v Braithwait [1615]). Pre-existing duty: Williams v Roffey [1991] (practical benefit for service obligations); Re Selectmove [1995] (Foakes v Beer applies to money debts).
Terms and exclusion clauses
Express terms incorporated by signature (L'Estrange v Graucob [1934]), by notice (Thornton v Shoe Lane Parking [1971] — onerous terms need special notice), or by course of dealing. Implied terms: by statute (SGA 1979 / CRA 2015), by fact (BP Refinery v Shire of Hastings [1977] — 5 conditions), by law. UCTA 1977 and the Consumer Rights Act 2015 regulate exclusion clauses: a term purporting to exclude liability for death/personal injury caused by negligence is void; for other loss, subject to reasonableness (UCTA s.11; Schedule 2 guidelines). Conditions, warranties, and innominate terms (Hong Kong Fir [1962]).
Vitiating factors
Misrepresentation (Misrepresentation Act 1967): fraudulent (Derry v Peek [1889] — subjective dishonesty), negligent (s.2(1) — statutory claim, strict liability once representation established), innocent. Remedy: rescission (subject to bars — affirmation, lapse of time, third-party rights, restitution impossible) and damages in lieu under s.2(2). Mistake: common mistake (Bell v Lever Bros [1932] — very narrow; Solle v Butcher overruled on equitable mistake), mutual mistake (neither party knows of the other's mistake), unilateral mistake (Shogun Finance [2004]). Duress: economic duress — illegitimate pressure that vitiated consent (DSND Subsea [2000]). Undue influence: actual; presumed class 1 (parent/child, solicitor/client), class 2 (rebuttable presumption from relationship of trust).
Remedies
Expectation damages: put claimant in position as if contract performed (Robinson v Harman [1848]). Reliance damages: pre-contractual expenditure (Anglia Television v Reed [1972]). Duty to mitigate (Payzu v Saunders [1919]). Remoteness: first limb — arising naturally; second limb — in contemplation of parties at time of contract (Hadley v Baxendale [1854] as refined by Victoria Laundry [1949]). Specific performance (equity, discretionary, not for personal service contracts, not where damages adequate). Liquidated damages vs penalty clauses (Cavendish Square v Makdessi [2015] — is it a genuine pre-estimate of loss or a legitimate commercial interest in performance?).
Common pitfalls
- Confusing the two limbs of Hadley v Baxendale — the second limb requires actual knowledge of special circumstances at the time of contracting.
- Forgetting that Re Selectmove means Williams v Roffey does not extend to promises to pay a lesser sum — Foakes v Beer still controls money debt scenarios.
- Misapplying the misrepresentation bars: mere delay without affirmation is not a bar; the representee must have unambiguously elected to affirm.
- Treating all misrepresentation remedies as identical — s.2(1) gives a tortious damages measure, not contractual expectation.
Exam tip
In any contract problem, work through the elements in order: formation → terms → vitiating factors → discharge → remedies. Do not jump straight to remedies without checking whether a contract exists and whether any vitiating factor applies.
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Contract — frequently asked questions
What's tested in SQE1 Contract?
Contract (FLK1) covers formation (offer, acceptance, consideration, intention to create legal relations and certainty), the contents of a contract (express and implied terms, conditions, warranties and innominate terms, exemption clauses and the Consumer Rights Act 2015), vitiating factors (misrepresentation, mistake, duress, undue influence and illegality), discharge (performance, breach and frustration), and remedies (damages, the rules on remoteness and mitigation, and equitable remedies).
Which contract cases come up most in SQE1?
Leading authorities you should be comfortable applying include Carlill v Carbolic Smoke Ball Co (offer and unilateral contracts), Hadley v Baxendale (remoteness of damages), Hong Kong Fir (innominate terms), Hedley Byrne v Heller (negligent misrepresentation) and Williams v Roffey Bros (consideration and practical benefit).
Is SQE1 Contract multiple choice?
Yes. Like the rest of SQE1, Contract is assessed through single-best-answer questions: a client-based scenario followed by five options (A–E) from which you pick the single best answer. There is no negative marking, so it is always worth attempting every question.