Common Professional Examination (CPE) Contract Law Syllabus

Contract Law syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Contract Law in Common Professional Examination (CPE), not a summary of it.

1. 1

   Formation of Contract

   5 topics

   • Offer and Invitation to Treat
     • Distinguishing offers from invitations to treat (shop displays, advertisements)
     • Unilateral offers and the Carlill v Carbolic Smoke Ball principle
     • Auctions, tenders and the request for tenders
   • Acceptance
     • Mirror image rule and battle of the forms
     • Communication of acceptance and the receipt rule
     • The postal rule and its exceptions
     • Acceptance by conduct and silence
   • Termination and Revocation of Offers
     • Revocation before acceptance and communication to third parties
     • Lapse, rejection and counter-offers
   • Certainty and Completeness of Terms
   • Intention to Create Legal Relations
     • Domestic and social agreements
     • Commercial agreements and the rebuttable presumption
2. 2

   Consideration and Promissory Estoppel

   4 topics

   • The Doctrine of Consideration
     • Benefit and detriment; sufficiency not adequacy
     • Past consideration and its exceptions
   • Performance of Existing Duties
     • Existing public, contractual and third-party duties
     • Practical benefit (Williams v Roffey Bros)
   • Part Payment of Debts
     • The rule in Pinnel's Case and Foakes v Beer
   • Promissory Estoppel
     • Requirements and the High Trees principle
     • Suspensory effect and 'shield not sword'
3. 3

   Contents and Terms of the Contract

   4 topics

   • Express Terms and Incorporation
     • Signature, notice and course of dealing
     • The parol evidence rule
   • Implied Terms
     • Terms implied by fact, custom and statute
     • Consumer Rights Act 2015 implied terms
   • Classification of Terms
     • Conditions, warranties and innominate terms
   • Exclusion and Limitation Clauses
     • Incorporation and construction (contra proferentem)
     • Unfair Contract Terms Act 1977
     • Consumer Rights Act 2015 fairness controls
4. 4

   Vitiating Factors

   4 topics

   • Misrepresentation
     • Types: fraudulent, negligent and innocent
     • Remedies and the Misrepresentation Act 1967
   • Mistake
     • Common, mutual and unilateral mistake
     • Mistake as to identity and non est factum
   • Duress and Undue Influence
     • Duress to person, goods and economic duress
     • Actual and presumed undue influence
   • Illegality and Public Policy
5. 5

   Discharge and Remedies

   5 topics

   • Discharge by Performance and Breach
     • Entire and substantial performance
     • Anticipatory breach and the right to terminate
   • Frustration
     • Grounds and limits of frustration
     • Law Reform (Frustrated Contracts) Act 1943
   • Damages
     • Expectation and reliance interest
     • Remoteness (Hadley v Baxendale) and causation
     • Mitigation and contributory fault
   • Equitable Remedies
     • Specific performance and injunctions
   • Privity of Contract
     • Contracts (Rights of Third Parties) Act 1999

Contract Law flashcards for Common Professional Examination (CPE)

24 of 75 cards from the Contract Law deck — real questions with worked answers.

1. What is the legal distinction between an offer and an invitation to treat?

   An offer is a clear expression of willingness to be bound on stated terms upon acceptance, with intention to be bound. An invitation to treat is merely an invitation to others to make offers or to begin negotiations; it cannot be accepted to form a contract.

2. In Pharmaceutical Society of Great Britain v Boots (1953), what was held about goods displayed on a shop shelf?

   A display of priced goods on a shelf is an invitation to treat, not an offer. The customer makes the offer at the till, which the shopkeeper may accept or reject. So no sale occurred until acceptance at the cash desk.

3. How are advertisements generally classified, and what is the leading exception?

   Advertisements are generally invitations to treat (Partridge v Crittenden). The exception is a unilateral offer to the world: Carlill v Carbolic Smoke Ball Co (1893), where a sufficiently clear promise with a deposited reward showed intention to be bound.

4. State the four key requirements for a valid offer to be capable of acceptance.

   It must be (1) communicated to the offeree, (2) made with intention to be bound, (3) sufficiently certain in its terms, and (4) still open (not lapsed, revoked, or rejected).

5. What is the general rule on acceptance, and what does 'mirror image' mean?

   Acceptance is a final and unqualified assent to all the terms of the offer. The mirror image rule requires acceptance to correspond exactly to the offer; any variation is a counter-offer, not an acceptance.

6. What did Hyde v Wrench (1840) establish about counter-offers?

   A counter-offer rejects and destroys the original offer, which can no longer be accepted. There the offeree's reply proposing a lower price killed the original offer, so the later purported acceptance of the original price was ineffective.

7. Distinguish a counter-offer from a mere request for information.

   A counter-offer varies terms and destroys the original offer (Hyde v Wrench). A request for information merely seeks clarification and leaves the original offer alive (Stevenson, Jaques & Co v McLean), so it can still be accepted afterwards.

8. State the postal rule of acceptance and the leading authority.

   Acceptance by post is complete and binding the moment the letter is properly posted, not when received (Adams v Lindsell, 1818). It applies where post is a reasonable means of acceptance and the letter is correctly addressed and stamped.

9. When does the postal rule NOT apply?

   It does not apply where (1) instantaneous communication is used (e.g. telex/email), (2) the offer requires actual receipt/'notice in writing', (3) it would produce manifest absurdity or inconvenience, or (4) the letter was misaddressed through the offeree's fault.

10. How is the timing of acceptance determined for instantaneous communications?

    For instantaneous methods (telephone, telex), acceptance is effective when and where it is received by the offeror (Entores v Miles Far East; Brinkibon). The postal rule does not apply.

11. Can acceptance be made by silence? State the authority.

    No. An offeror cannot stipulate that silence constitutes acceptance; the offeree's silence is generally not effective acceptance (Felthouse v Bindley, 1862). Acceptance normally requires some positive act of communication.

12. How is a unilateral contract accepted, and is communication of acceptance required?

    A unilateral offer is accepted by full performance of the requested act (Carlill). Communication of acceptance is dispensed with; performing the condition is itself the acceptance, and the offeror is bound once performance is complete.

13. List the four ways an offer may be terminated before acceptance.

    (1) Revocation by the offeror before acceptance; (2) Rejection or counter-offer by the offeree; (3) Lapse of time (or non-occurrence of a condition); and (4) Death of a party. Acceptance after any of these is ineffective.

14. State the rule on revocation of an offer (Payne v Cave / Routledge v Grant).

    An offer may be revoked at any time before acceptance, even if the offeror promised to keep it open, unless that promise is supported by separate consideration (an option). Revocation is effective only when actually communicated to the offeree.

15. What did Dickinson v Dodds (1876) establish about communication of revocation?

    Revocation is effective if the offeree learns of it from any reliable source, not just the offeror. There, the offeree heard from a third party that the property had been sold, which was sufficient notice of revocation.

16. Can a unilateral offer be revoked once the offeree has begun performance?

    No. Once the offeree has started to perform the requested act, the offeror cannot revoke (Errington v Errington and Woods, 1952); the offer remains open while the offeree completes performance, provided performance continues.

17. What is required for a contract to be enforceable in terms of certainty and completeness of terms?

    The terms must be sufficiently certain and complete; an agreement that is too vague (Scammell v Ouston) or that leaves essential terms 'to be agreed' (an agreement to agree, Walford v Miles) is unenforceable.

18. How may a court resolve apparent uncertainty rather than strike a contract down?

    By reference to a previous course of dealing, trade custom, a reasonableness standard, or a contractual machinery for resolution (e.g. Sudbrook Trading v Eggleton). A meaningless or self-cancelling clause may also be severed (Nicolene v Simmonds).

19. State the presumptions on intention to create legal relations in social/domestic versus commercial agreements.

    In social and domestic agreements there is a rebuttable presumption AGAINST intention to be legally bound (Balfour v Balfour). In commercial agreements there is a rebuttable presumption IN FAVOUR of intention (Esso v Commissioners of Customs).

20. How was the domestic presumption rebutted in Merritt v Merritt (1970)?

    The presumption against legal intent was rebutted because the spouses were already separated when they made the agreement, so it was made in a business-like, not amicable, context. This showed intention to create legal relations.

21. What is the effect of an 'honour clause' or expressly stating an agreement is 'binding in honour only'?

    Such a clause rebuts the commercial presumption and shows no intention to create legal relations, making the agreement legally unenforceable (Rose & Frank Co v JR Crompton & Bros, 1925).

22. Define consideration and give the classic definition.

    Consideration is the price for which the promise is bought. Classically: 'a valuable consideration may consist either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other' (Currie v Misa, 1875).

23. State the rule that 'consideration must move from the promisee.'

    A person can only enforce a promise if they themselves provided consideration for it (Tweddle v Atkinson, 1861). It need not move TO the promisor, but it must move FROM the party seeking to enforce.

24. Explain the rule 'consideration need not be adequate but must be sufficient.'

    Courts do not assess whether the bargain is economically fair (adequacy), so even a nominal or trivial price counts (Chappell v Nestlé, chocolate wrappers). But consideration must be sufficient, meaning real, tangible and of recognised legal value.

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