Solicitors Qualifying Examination (SQE) Contract and Tort (FLK1) Syllabus

Contract and Tort (FLK1) syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Contract and Tort (FLK1) in Solicitors Qualifying Examination (SQE), not a summary of it.

1. 1

   Formation and Content of Contracts

   3 topics

   • Essential elements of a contract
     • Offer and acceptance
     • Consideration and promissory estoppel
     • Intention to create legal relations
     • Certainty of terms
   • Terms of the contract
     • Express terms and incorporation
     • Implied terms (common law and statute)
     • Conditions, warranties and innominate terms
   • Exemption clauses and consumer protection
     • Incorporation and construction of exclusion clauses
     • Unfair Contract Terms Act 1977
     • Consumer Rights Act 2015
2. 2

   Vitiating Factors and Discharge

   3 topics

   • Factors affecting validity
     • Misrepresentation and remedies
     • Mistake
     • Duress and undue influence
     • Illegality and public policy
   • Discharge of contract
     • Performance and breach
     • Frustration
     • Agreement and variation
   • Third party rights
     • Privity of contract
     • Contracts (Rights of Third Parties) Act 1999
3. 3

   Contractual Remedies

   3 topics

   • Damages
     • Expectation and reliance loss
     • Remoteness and causation
     • Mitigation and the duty to mitigate
   • Equitable remedies
     • Specific performance and injunctions
     • Rescission
   • Restitution and unjust enrichment
     • Quantum meruit
     • Recovery of money paid
4. 4

   Tort: Negligence and Liability

   4 topics

   • The tort of negligence
     • Duty of care and the Caparo test
     • Breach and the standard of care
     • Causation (factual and legal) and remoteness
   • Pure economic loss and psychiatric harm
     • Negligent misstatement (Hedley Byrne)
     • Primary and secondary victims
   • Employer's and occupier's liability
     • Vicarious liability
     • Occupiers' Liability Acts 1957 and 1984
   • Defences and remedies in tort
     • Contributory negligence and consent
     • Nuisance and the rule in Rylands v Fletcher
     • Damages and limitation in tort

Contract and Tort (FLK1) flashcards for Solicitors Qualifying Examination (SQE)

24 of 49 cards from the Contract and Tort (FLK1) deck — real questions with worked answers.

1. What are the essential elements required to form a legally binding contract?

   Offer, acceptance, consideration, and intention to create legal relations. (Capacity and certainty of terms are also required for validity.)

2. What is the difference between an offer and an invitation to treat?

   An offer is a definite expression of willingness to be bound on stated terms upon acceptance. An invitation to treat (e.g. goods on a shelf, adverts, auctions) merely invites others to make offers and cannot itself be accepted to form a contract (Pharmaceutical Society v Boots; Partridge v Crittenden).

3. State the rule on acceptance by post (the postal rule) and when it applies.

   Acceptance takes effect when the letter is posted, not when received (Adams v Lindsell), provided post is a reasonable means of acceptance and the letter is properly addressed and stamped. It does not apply to instantaneous communications or where excluded by the offeror.

4. What is consideration, and what are the two key rules about its sufficiency?

   Consideration is something of value given in exchange for a promise (a benefit to the promisor or detriment to the promisee). Rules: (1) consideration must be sufficient (real/of some value) but need not be adequate (equal in value); (2) past consideration is not good consideration (Re McArdle).

5. Explain the rule in Pinnel's Case and the doctrine of promissory estoppel.

   Part payment of a debt is not good consideration to discharge the whole debt (Pinnel's Case; Foakes v Beer). Promissory estoppel may prevent a creditor going back on a promise to accept less where the debtor relied on it and it would be inequitable to resile (Central London Property v High Trees). It is 'a shield, not a sword.'

6. When is intention to create legal relations presumed and how is the presumption rebutted?

   In commercial/business agreements intention is presumed present (rebuttable by clear words e.g. 'binding in honour only'). In social/domestic agreements intention is presumed absent (rebuttable by evidence the parties intended legal consequences) (Balfour v Balrour; Merritt v Merritt).

7. What is the distinction between a contractual term and a representation?

   A term is a statement that forms part of the contract; breach gives a contractual remedy. A representation is a statement inducing the contract but not part of it; its falsity gives a remedy in misrepresentation, not breach. Factors: importance of statement, timing, special knowledge/skill, and whether reduced to writing.

8. Compare conditions, warranties and innominate terms and the remedies for breach of each.

   Condition: a major term going to the root of the contract; breach allows termination plus damages. Warranty: a minor term; breach allows damages only. Innominate term: classified by the seriousness of the actual consequences of breach (Hong Kong Fir) — termination only if the breach deprives the innocent party of substantially the whole benefit.

9. What are the requirements for a term to be implied into a contract by fact (the business efficacy / officious bystander tests)?

   Business efficacy test: the term is necessary to make the contract work (The Moorcock). Officious bystander test: the term is so obvious it goes without saying (Shirlaw v Southern Foundries). The term must be reasonable, capable of clear expression, not contradict an express term, and reflect the parties' presumed intention.

10. What are the three requirements for an exemption (exclusion/limitation) clause to be valid at common law?

    (1) Incorporation — by signature, reasonable notice given before/at contract, or consistent course of dealing; (2) Construction — the clause, on its wording, covers the breach that occurred (contra proferentem against the party relying on it); (3) It must not be defeated by statute (UCTA 1977 / CRA 2015).

11. Under UCTA 1977, how is liability for negligence treated by exemption clauses (business-to-business)?

    Liability for death or personal injury caused by negligence cannot be excluded or restricted at all (s.2(1)). Liability for other loss or damage caused by negligence can only be excluded/restricted insofar as the clause satisfies the requirement of reasonableness (s.2(2)).

12. Under the Consumer Rights Act 2015, what is the test for an unfair term in a consumer contract, and which terms cannot be excluded?

    A term is unfair if, contrary to good faith, it causes a significant imbalance in the parties' rights and obligations to the detriment of the consumer (s.62). Unfair terms are not binding. Terms excluding the statutory rights as to goods (satisfactory quality, fit for purpose, as described) and services cannot be excluded; the core 'transparency and prominence' requirement also applies.

13. List the four vitiating factors that may affect the validity of a contract.

    Misrepresentation, mistake, duress, and undue influence (illegality is also a factor that may render a contract void/unenforceable).

14. Define misrepresentation and state its three required elements.

    A misrepresentation is a false statement of fact (or law) made by one party that induces the other to enter the contract. Elements: (1) an unambiguous false statement of existing fact/law (not mere opinion or future intention); (2) addressed to the misled party; (3) which induced the contract (the claimant relied on it).

15. Compare fraudulent, negligent and innocent misrepresentation and the remedies for each.

    Fraudulent (Derry v Peek — knowingly/recklessly false): rescission + damages in the tort of deceit. Negligent (Misrepresentation Act 1967 s.2(1) — maker cannot prove reasonable belief): rescission + damages (fiction of fraud measure). Innocent (reasonable grounds to believe true): rescission, or damages in lieu under s.2(2) at the court's discretion.

16. What are the bars to rescission for misrepresentation?

    Affirmation of the contract; lapse of time; impossibility of restitutio in integrum (substantial restoration not possible); and where a bona fide third party has acquired rights in the subject matter for value.

17. Distinguish common mistake, mutual mistake and unilateral mistake.

    Common mistake: both parties share the same mistaken belief (e.g. res extincta — subject matter doesn't exist). Mutual mistake: parties are at cross-purposes, each mistaken about the other's intention. Unilateral mistake: only one party is mistaken and the other knows (often as to identity or terms). A fundamental operative mistake renders the contract void.

18. Define duress and the modern test for economic duress.

    Duress is illegitimate pressure that vitiates consent. Economic duress requires: (1) illegitimate pressure (e.g. a threatened breach of contract); (2) which was a significant cause inducing the claimant to enter the contract; and (3) the claimant had no practical/reasonable alternative but to submit. The contract is voidable.

19. Distinguish actual undue influence from presumed undue influence (Class 2).

    Actual undue influence: the claimant proves overt acts of improper pressure or coercion. Presumed undue influence: arises from a relationship of trust and confidence plus a transaction calling for explanation; the burden then shifts to the dominant party to rebut (e.g. by showing independent legal advice) (Royal Bank of Scotland v Etridge).

20. What are the four ways a contract can be discharged?

    By performance, by agreement, by frustration, and by breach.

21. State the general rule on discharge by performance and its main exceptions.

    General rule: performance must be complete and exact to discharge obligations (Cutter v Powell). Exceptions allowing partial recovery: substantial performance, divisible (severable) obligations, wrongful prevention of performance by the other party, acceptance of partial performance, and tender of performance that is rejected.

22. What is the doctrine of frustration and what is its effect?

    Frustration discharges a contract automatically where, after formation, an unforeseen event (not the fault of either party) makes performance impossible, illegal, or radically different from what was agreed (Taylor v Caldwell; Davis Contractors). It is narrow — not triggered by mere hardship, increased expense, or events foreseen/provided for.

23. How does the Law Reform (Frustrated Contracts) Act 1943 allocate loss after frustration?

    Money paid before frustration is recoverable and sums payable cease to be payable (s.1(2)), subject to the court allowing a payee to retain/recover expenses incurred. A party who obtained a valuable non-money benefit before frustration may be ordered to pay a just sum for it (s.1(3)).

24. What is an anticipatory breach and what options does the innocent party have?

    An anticipatory breach occurs where one party indicates, before performance is due, that it will not perform (renunciation) or disables itself. The innocent party may either (1) accept the breach, terminate immediately and sue for damages, or (2) affirm and wait for the time of performance (keeping the contract alive for both) (Hochster v De La Tour; White & Carter v McGregor).

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