Law Paper 3 Topical Past Papers Article

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Article No. 489
9084
Paper-3
(Topical Past Paper with Mark Scheme & Examiner Report)
(2009-2019)
Features:
 Questions wise Mark schemes
 Questions wise Examiner Report
 All Variants
 Exam Guidelines
Editor:
Sufyan Ali Chaudhry
Advocate High Court
L.L.B(PU), L.L.M(USA), M.A English
Review Board:
o Hassaan Ghuman
Green Hall
o Hafsa Rizwan Noor
Green Hall, Pak Turk
o Unsa Hayat
Green Hall, KIMS
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Title LAW A-Level Paper-3 Topical (Article# 489)
Editor Sufyan Ali Chaudhry

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PREFACE
Law A-level Paper 3 Topical Past Paper is an attempt to provide a vivid, comprehensive and
easy to handle version of exam preparation material to both learners as well as legal mentors.
I believe this book will act as a catalyst, enhancing efficiency of law teachers, in producing
excellent results, in Cambridge International Law Exams, on one hand, but at the same time
it will also serve as an incentive for boosting learners' ability to achieve higher grades.
The addition of question-wise examiner reports alongside with questions and mark schemes
will ease gauging the quality of answers produced and mistakes in these responses
highlighted by the examiner. This practice will help learners to lessen the chances of
committing similar errors which were on the face of records in previous years committed by
the candidates, as well as, these reports will help them in boosting their confidence towards
their final assessments.
Constructive criticism and suggestions would be appreciated.

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Acknowledgement
First of all, I would like to owe infinite thanks to Almighty Allah, who has bestowed me with his
countless blessings and one of such blessings is a ray of knowledge and enlightenment, so
that I may contribute sharing this with my learners through shaping this book.
Secondly, I want to dedicate this book to my elder brother Muhammad Fareed who has always
lent a helping hand in shaping my life, career, and all what I’m today.
Thirdly, I can never forget the support of my better-half Sadaf Sufyan. Had she not motivated
me in compiling this cumbersome task, it couldn’t have been possible.
Lastly, I would like to recognize my limitations in compiling this book. I confess that I have
consulted works of some authors before starting compilation. I also admit that my work might
be vulnerable to some lacunas, but I left this to coming up authors.
Law A-Level Paper-3 Topical 5 Syllabus Paper-3
Syllabus Paper-3
Unit 1: Formation of valid contracts

This unit introduces candidates to a key area of substantive law. It explores the nature of
contracts and the rules that a court of law applies to determine whether contracts are valid or
not.
1. Nature of contract
•Agreement; unilateral; bilateral; collateral.
2. Offer and acceptance

• Principles and evidence: offers; invitation to treat; counter offers; requests for information;
Termination; acceptance.
3. Intention
• Reason for requirement; presumption and rebuttal in commercial and social/domestic
agreements.
4. Consideration
• Nature and function; sufficiency/adequacy, past, performance of existing duties; promissory
estoppel.
5. Capacity
• Reason for limitation.
• Minors’ contracts: necessaries; employment and training; continuing obligations; main
provisions of “Minors contracts Act 1987”.
• Corporations, Persons of unsound mind, drunkards: a basic outline.
Unit 2: Contents of contracts

This unit examines the relative importance of different types of term that contracts may
incorporate.
1. Types of term
• Express; implied (by statute only: Sale of Goods Act 1979 as amended).
2. Status of terms
• Conditions, warranties, innominate terms.
• Nature; examples; effects of breach.
3. Control of exemption clauses

• Common law: rules of incorporation; contra proferentem Rule.
• Statutory: Unfair Contract Terms Act 1977; Unfair Terms in Consumer Contracts Regulations
1999; Consumer Rights Act 2015
6
Unit 3: Vitiating factors

This unit explores two key factors that can lead to seemingly valid contracts being declared
invalid and their inter-relationship.
1. Vitiating factors
• Reasons; invalidating effect.
2. Misrepresentation
• Definition; when actionable.
• Types: innocent; negligent; fraudulent.
• Effects on validity of contract; remedies at Common Law, in Equity and by statute
(Misrepresentation Act 1967).
3. Mistake
• General rule and exceptions.
• Operative mistakes: common, mutual (cross purpose), unilateral.
• Mistakenly signed documents; non est factum.
• Effect at Common Law and in Equity.
4. Passing of title under void and voidable contracts.

• General rule.
• Nemo Dat Rule; sale under voidable title (Sale of Goods Act 1979 as amended)
Unit 4: Remedies for breach

This unit introduces candidates to the various types of remedy for breach of contract, their
purpose and the limitations on their award.
1. Common Law
• Damages: nature; purpose.
• Mitigation; remoteness.
2. Equitable
• Specific performance; specific restitution; injunction.
• Nature; purpose.
• Limitations on awards in contract law
Law A-Level Paper-3 Topical 7 Assessment Objectives
Assessment Objectives
There are three assessment objectives (AOs) for Cambridge International AS & A Level Law.
Candidates are expected to demonstrate:
(Solving 25 marks question)
AO1: Knowledge and understanding 50% (12.5 marks)

 An ability to recall, select, use and develop knowledge and understanding of legal
principles and rules by means of example and citation.
AO2: Analysis, evaluation and application 40% (10 marks)

 An ability to analyse and evaluate legal materials, situations and issues and accurately
apply appropriate principles and rules.
AO3: Communication and presentation 10% (2.5 marks)

Use appropriate legal terminology to present logical and coherent argument and to
communicate relevant material in a clear and concise manner
8
Contents
SYLLABUS PAPER-3 ............................................................................................................ 5
ASSESSMENT OBJECTIVES................................................................................................... 7
UNIT 1: FORMATION OF VALID CONTRACTS ................................................................ 10
1.1: NATURE OF CONTRACT, OFFER AND ACCEPTANCE ....................................................... 10
Section – A ............................................................................................................................................ 10
Section – B............................................................................................................................................. 21
1.2: INTENTION ................................................................................................................. 49
Section – A ............................................................................................................................................ 49
Section – B............................................................................................................................................. 54
1.3: CONSIDERATION ......................................................................................................... 62
Section – A ............................................................................................................................................ 62
Section – B............................................................................................................................................. 74
1.4: CAPACITY .................................................................................................................. 87
Section – A ............................................................................................................................................ 87
Section – B............................................................................................................................................. 96
UNIT 2: CONTENTS OF CONTRACTS ............................................................................ 106

2.1: TYPES OF TERM & STATUS OF TERMS ........................................................................ 106
Section – A .......................................................................................................................................... 106
Section – B........................................................................................................................................... 115
2.2: CONTROL OF EXEMPTION CLAUSES ........................................................................... 120
Section – A .......................................................................................................................................... 120
Section – B........................................................................................................................................... 129
UNIT 3: VITIATING FACTORS ......................................................................................... 144

3.1: MISREPRESENTATION ............................................................................................... 144
Section – A .......................................................................................................................................... 144
Section – B........................................................................................................................................... 152
3.2: MISTAKE .................................................................................................................. 168
Section – A .......................................................................................................................................... 168
Section – B........................................................................................................................................... 175
UNIT 4: REMEDIES FOR BREACH ................................................................................. 186

4.1: COMMON LAW & EQUITABLE REMEDIES ...................................................................... 186
Section – A .......................................................................................................................................... 186
Section – B........................................................................................................................................... 209
ART TO INTERPRET THE KEY WORDS USED BY AN EXAMINER IN A QUESTION ... 222
QUESTION WORDS THAT REQUIRE A CRITICAL APPROACH................................................... 222
QUESTION WORDS THAT REQUIRE A DESCRIPTIVE RESPONSE ............................................. 225
OCTOBER/NOVEMBER 2018 PAPER 32........................................................................ 229
Section – B........................................................................................................................................... 231
MAY/JUNE 2019 PAPER 32 ............................................................................................ 235

Law A-Level Paper-3 Topical 9 U1.1: Nature of Con., offer & Acceptance
Read & Write Publications
Topics
1.1 Nature of Contract
1.2 Intention
FORMATION 1.3 Consideration
OF VALID
1.4 Capacity
CONTRACTS
A Level
Law
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Unit 1: Formation of valid contracts

1.1: Nature of Contract, Offer and Acceptance
Section – A
1. M/J 17/P32/Q2
An offer to form a contract will last forever unless expressly revoked. Critically evaluate the
truth of this statement.
Mark Scheme:
Candidates should contextualize their response by stating the general rule that a contract
cannot come into existence until there has been an offer and corresponding acceptance.
Candidates should then identify and explain the rule that if an offer is withdrawn or revoked
prior to acceptance then no contract can result. Discussion should then take place as to
whether or not offers have a definitive life once communicated to the intended offeress(s).
Candidates are expected to consider lapse of specified time, lapse of reasonable time
[Ramsgate Victoria Hotel v Montefiore], and failure of preconditions [Financings Ltd v
Stimpson, Total Gas Marketing Ltd v ArcoBritish Ltd.] rejection, counter offer [Hyde v
Wrench], death of offeror/offeree [Bradbury v Morgan], and revocation as means of bringing
offers to an end.
Candidates are expected to critically evaluate the way in which the law deals with these
situations to reach band 4.
Examiner’s Report:
This was a popular question which was generally tackled successfully. Most candidates
could identify how a contract could be terminated and the best responses supported this
with excellent case citation. A limiting factor for many candidates was a failure to evaluate
as per the question.
The best candidates achieved this bay making perceptive comments to accompany their
factual points. For example, an offer will lapse after a reasonable time but what amounts to
a reasonable time will depend on the nature of the goods contracted for and the methods
of communicating offer and acceptance.
Evaluating the law is just as important as describing the law and if candidates answered this
and other easy question with this balance in mind they would achieve much higher marks.
2. M/J 16/P31/Q1
Distinctions are frequently drawn between advertisements for unilateral and bilateral
contracts. Critically analyse this statement with reference to the formation of contracts.
Mark Scheme:
cannot come into existence until there has been an offer and corresponding acceptance
and by briefly discussing the need to distinguish between offers and invitations to treat as
only the former can be accepted to form a valid, binding contract.
Candidates should offer definition of the terms ‘offer’ and invitation to treat’. Candidates
should go on the explain that confusion can arise, however, because some advertisements
would appear to amount to an offer but are held by the law to be merely an invitation to
treat. Unilateral contracts result from advertisement which call for action only of those
reading them, such as that in the case of Carlill v Carbolic Smoke Ball Company or those
offering rewards in return for information or for returning a lost item are usually considered
to be firm offers capable of acceptance without the need for further negotiation and ones
which the advertiser intends to be bound by.
By comparison, advertisements that intimate action or further negotiation between
advertiser and customer before bilateral contracts results are generally seen as invitation to
treat or something that invites the viewer to make a consequential offer to the advertiser.
Shop window displays and classified advertising are classic examples as exemplified by
cases such as Partridge v Crittenden, Fisher v Bell and Pharmaceutical Society of GB v
Boots Cash Chemists (Southern) Ltd. In these instances, it is considered that potential
buyers may still wish to negotiate price and that seller might wish to refuse to sell their goods
or services to certain buyers in some circumstances. Generalised response lacking focus
on the question or those based purely on factual recall will received marks limited to the
maximum in band 3. Evidence of critical analysis is required for marks to be awarded within
bands 4 and 5.
This was a popular question and although some responses were confused over the
difference between unilateral and bilateral contracts, most were able to at least outline the
difference.
The outcomes in Carlill and Partridge were generally known and the most successful
responses were characterized by an impressive level of investigation and comparison. Less
successful responses were unlikely to criticize the rules in any meaningful way.
3. M/J 16/P32/Q1
A ‘battle of the forms’ often takes place when commercial contracts are made. Evaluate the
rules hat determine when and on what terms commercial contracts come into existence.
Mark Scheme:
Responses should be contextualized: this statement addresses the issue of the formation
of a contract. Candidates are expected to explain the conditions of offer and acceptance on
which a binding contract is formed, but this should not form the main focus of the response.
General commentary on formation issues is not expected but may be granted some credit.
The expression ‘battle of the forms’ must be explained in relation to negotiating contract
terms and reliance on standard written terms to save time and money and the fact that
standard terms commonly conflict.
The general rule of ‘last shot wins’ should be explored in terms of offer and counter offer
with delivery of goods or performance of service equating to acceptance of the offer
represented by the last form.
Case law such as British Road Services v Crutchley, Butler Machine Tool Ltd v Ex-Cell-O
Corp and others must be examined in detail and candidates should identify rules and
approaches which have developed to help determine if and when contracts come into
existence when standard terms and determine their effectiveness.
Generalized responses, lacking forcus on the question or responses based purely on factual
recall will receive marks limited to the maximum in band 3. Evidence of evaluation is
required for marks to be awarded within bands 4 and 5.
The most successful responses identified the question correctly and produced good
discussion of the relevant cases wrapping it in the context of offer and acceptance.
The best responses were able to thing outside the box and to relate principles related to
contract formation to what commonly happens in real-life business situations.
Less successful responses tended to focus on the key words as ‘commercial contracts’ and
produced responses on legal intent or certainty or even around Carlill and Trade Puffs.
4. M/J 15/P33/Q2
A contract comes into existence as soon as acceptance is communicated. Analyze the
relevant legal rules and identify the exact moment in proceedings when a binding contract is
actually formed, using appropriate case law examples.
Mark Scheme:
Candidates must explain that contracts come into existence when a firm offer has been
unconditionally accepted. Unconditional assent to the terms of the offer must be defined
(Tinn v Hoffman) and its potential to be in oral or written form or implied by conduct should
be explored and explained.
Candidates should be credited for a brief examination of whether silence can also amount
to an acceptance in law (Felthouse v Bindley; re Selectmove).
Candidates should explore the battle of the forms in some detail and examine whether it
really is the last shot that succeeds in such cases (Butler Machine Tool Ltd v Ex-Cell-O
Corp; British Road Services v Crutchley (Arthur V Ltd).
Candidates should also consider communication of acceptance (Entores v Miles Far East
corporation and exceptions thereto, such as conduct and the posting rule (Adams v Lindsell;
Henthorn v Fraser; Byrne v Van Tienhoven; Holwell Securities v Hughes; Brinkibon v Stahag
Stahl GmbH) Factual recall without suitable discussion and conclusion will result in
maximum marks within band 3.
This was a popular question but broadly speaking responses were less successful. A
significant number of candidates wrote indiscriminately about formation of contracts rather
than selecting material relating to acceptance and the continued relevance of the posting
rule as indicated in the question.
The more successful candidates produced a succinct and brief introduction to the
ingredients for the formation of a contract before producing a focused exploration of the
means of communicating acceptance (including e-communication) and the pinpointing of
precisely when agreement is reached.
In general, responses were suitable structured to formulate the assessment required by the
question. The lease successful responses generally failed to focus sufficiently on the
specific question posed and were largely descriptive.
5. M/J 15/P32/Q3
Offers last forever in law. Examine the relevant rules that relate to the formation of contracts.
Consider the extent to which this statement reflects the law today.
Mark Scheme:
prior to acceptance then no contract can result. Discussion should then take place as to
whether or not offers have a definitive life once communicated to the intended offree(s).
(Ramsgate Victoria Hotel v Montefiore), failure of preconditions (Financings Ltd v Stimpson,
Total Gas Marketing Ltd v Arco British Ltd), rejection, counter offer (Hyde v Wrench), death
of offeror / offeree (Bradbury v Morgan), and revocation as means of bringing offers to an
end.
This was one of the most popular questions and attracted perhaps the best general quality
responses to any on the question paper. Despite this some candidates failed to balance
their responses, spending far too much time on general formation principles and then
dealing with appropriate aspects of the offer far too superficially to demonstrate in-depth
understanding.
It was pleasing to see the strongest candidates contextualize selectively and appropriately,
clearly distinguishing differences between unilateral and bilateral contract formation.
Acceptance, rejection, revocation, lapse and death as potential reasons for an offer to
terminate were examined and explained in detail and conclusions supported by reference
to appropriate case law.
6. M/J 15/P31/Q2
The postal rule of acceptance is no longer for any real significance to the formation of valid
contracts. Critically assess the truth of this statement.
Mark Scheme:
Candidates should set the question in the context of the general rule of offer and
acceptance, i.e. that a contract is formed once a firm offer has been communicated by offror
to offeree and that an unconditional acceptance has been communicated by offeree to
offeror, and explain that the posting rule has arisen as an exception to the general rule.
Postal acceptances take effect from posting rather than communication, due to the
inevitable delay between posting and receipt (Adams v Lindsell).
Candidates may outline the circumstances under which the rule applies specified or
reasonable means of acceptance (Henthorn v Fraser), posting in proper manner (Re
Landon & Northern Bank), and properly addressed and stamped (Holwell Securities v
Hughes) and briefly explain the effects of letters of acceptance that never arrive (Household
Fire Insurance v Grant) or cross with letters of revocation (Byrne v Van Tienhoven).Does
the rule still have any real significance in today’s world of instantaneous, electronic
communications?
The rule was extended to cover acceptance by telegram, now telemassages (Cowan v
O’Connor), but what about fax, email or mobile phone massaging?
It would appear, however, that where acceptances are made by an instant mode of
communication, the posting rule in inapplicable, as the acceptor will know at once that they
have not managed to communicate with the offeror and will need to try again(Brinkibon v
Stahag Stahl GmbH).
So does the rule have any real significance today? Even in today’s society, many offerors
will still want written, signed evidence that an offer has been accepted and my make it a
specific requirement of the offer itself, in which case the rule clearly applies even today.
The present day significance of the rule must be assessed even if band 3 marks are to be
achieved and a critical view must be expressed to achieve band 4.
This was a popular question but broadly speaking candidates did not on the whole do
themselves justice.
The question largely seemed to lead candidates to write indiscriminately about formation of
contracts rather than to be selective of material relating to acceptance and the continued
relevance of brief introduction to the ingredients for the formation of contracts today and
whether or not the rule is still relevant to them.
In general, responses were suitable structured to formulate the assessment required by the
question. The weakest responses generally failed to focus sufficiently on the specific
question posed and were frequently muddled and confused.
7. M/J 14/P32/Q2
Acceptance of an offer must be communicated before a contract comes into existence.
Critically assess any exceptions to this principle that might exist.
Mark Scheme:
Candidates should set the question in context by briefly outlining the requirements of the
formation of agreement as a basis for a binding contract. No credit should be given for a
wider discussion of other essentials of a valid contract.
Candidates should explain that in general, it is impossible for binding contract to exist
without a firm offer to contract having been communicated by an offeror to an offeree and a
corresponding, unconditional assent to the terms of that offer communicated by that offeree
back to offeror.
In other words, for a contract to exist, the person who made the offer must know that his
offer has been accepted (e.g. Entores v Miles Far East Corporation). Candidates ought to
emphasis that this only really becomes an issue when parties do not deal with one another
face to face. The crux of the question is clearly the critical assessment of exceptions to the
rule, but significant credit will be awarded for a detailed explanation of the ruler. The
generally accepte4d exceptions to be covered are:
 The terms or type of offer negate the need (e.g. Felthouse v Bindley and Carlill
v Carbolic Smoke Ball Co)
 The conduct of the offeror prevents communication (e.g Entores and the
Brimnes)
 The postal rule applies.
Candidates are expected to consider the application and effect of the postal rule of
acceptance (e.g. Henthorn v Fraser, Household Fire Insurance v Grant, Byrne v Van
Tienhoven) and its exceptions in detail (e.g. Holwell Securities v Hughes and Brinkibon v
Stahag Stahl), and to assess the rule with a truly critical eye. Ill-focused, all embracing
general responses or those based purely on factual recall will receive marks limited to the
maximum allocated in Band 3. Evidence of critical assessment is required for marks to be

awarded within Band 4 and 5.
This was by far the most popular question and the best answered with many candidates
citing a range of appropriate and references.
The crux of the question was the critical assessment of generally accepted exceptions to
the principle of communication of acceptance.
The best responses considered all the generally accepted exceptions to the rule with a
critical eye and the application and effect of the postal rule of acceptance and its exceptions
in detail.
Less well-prepared candidates demonstrated a superficial knowledge and understanding of
relevant principles were unselective and tended to deal with all the rules of offer and
acceptance or solely with the posting rule.
8. O/N 12/P32/Q3
Once an offer has been accepted, the contract is binding. Assess the extent to which you
believe this statement continues to be true, now that there is a high volume of distance selling
that takes place on the internet.
Mark Scheme:
Candidates should contextualize their response by stating the rule that binding contracts
come into existence when there has been a firm offer which has been unconditionally
accepted, given that other essentials are in place. They are then expected to point out that
technological developments and globalization of markets has resulted in many consumers
entering contracts by the internet, digital television, mail order, phone or fax at ever
increasing distance from sellers.
Candidates should identify that, but for certain exceptions, these transactions are now
governed by the Consumer Protection (Distance Selling) Regulations 2000.
Candidates should be given credit for giving brief details of the principal ingredients of the
legislation, i.e. that consumers must be given clear information in writing before they buy
(including details of the goods or services offered, delivery arrangements and payment, the
supplier’s details and the consumer’s cancellation right) and that the consumer has a
cooling-off period of seven working days in which to cancel the contract.
Candidates should explain that the rationale for giving consumers special protection in such
deals is that the consumer does not have the benefit of meeting face-to-face with the
supplier and inspecting the goods or services offered for sale.
Candidates should at least list some of the distance contracts which are exempt from some
or all of the provisions of the Regulations, such as most contracts for the sale or transfer of
land, contracts for the supply of financial services, contracts concluded by means of an
automated vending machine, contracts by telephone through the use of public pay-phones
and contracts concluded at genuine auctions.
Given the ambit of the Act, candidates must then assess the proposition and draw clear
conclusions in order to achieve marks in band 4.
This was a very popular question, but unfortunately candidates did not appear to have
explored the ever-growing and thus increasingly relevant issues of contract formation using
the internet and distance selling rights and duties were unknown.
Even the better prepared candidates limited their responses to an analysis of general offer
and acceptance principles and consequently failed to score but basic marks within band 3.
9. M/J 12/P33/Q2
The postal acceptance rule is now out of step with the electronic age and no longer serves a
useful purpose in the law relating to the formation of contracts. Discuss.
Mark Scheme:
An outline of the essentials of a valid contract may serve as an introduction; emphasis is
expected on the formation of contract and the rules relating to the communication of
acceptance. Binding contracts require definite offer and corresponding, unconditional
acceptance.
The general rule is that, in bilateral contracts, the fact of acceptance must be communicated
such that the offeror is aware that his offer has been accepted. Needless to say, the rule
has always applied to oral communication, but an exception in the form of the posting rules
was needed to over situations where an inevitable time delay would be experienced
between an offeree communicating acceptance and the offer or becoming aware that the
offer has been accepted, such as when letter post is used.
Candidate should detail the posting rule and case law discussed (e.g. Henthorn v Fraser,
Household Fire Insurance v Grant, Byrn v Van Tienhovenetc.)
Candidates should emphasize and discuss the fact post needs to be the proper means of
acceptance for the rule to apply – properly stamped and addressed and posted in the proper
manner – and that if not the proper means then letter effective upon receipt.
Candidates MUST address the key issue of the question: does this rule really serve a useful
purpose in today’s age when electronic business communication has almost exclusively
superseded the use of postal communication. Does the rule apply to fax, email and
variations on a theme?
The issue must be discussed fully and clear, compelling conclusion s must be drawn.
Responses limited to factual recall of principle will be restricted to marks below band 4.
One of the most popular questions; most candidates understood the postal rule and
connected it with acceptance.
There was less security when it came to relating modern communication methods to the
fundamental rules and there was less security when it came to relating modern
communication methods to the majority was aware of Entores v Miles.
The best responses came from those candidates who focused on the question set and who
made a gallant attempt to related the rules of communication of acceptance to
instantaneous electronic methods and draw a compelling conclusion.
The weaker responses simply regurgitated the law on acceptance as a whole and only
covered the postal rules and electronic communication briefly.
10. O/N 11/P32/Q2

The postal rule of acceptance no longer serves a useful purpose in the world of modern
business communications. Discuss the reason for the introduction of the rule and critically
assess the extent to which you think that the above proposition might be true.
Mark Scheme:
Candidates might introduce responses by explaining the general requirement that the
acceptance of an offer is not effective until it has been communicated to the offeror, i.e. until
the person who made the offer knows that it has been accepted, and that the postal rule is
an exception to it.
Candidates should explain that the reason for the rule is historical, dating from a time when
communication through the post was one of a very small number of means of
communication for the masses and even slower and less reliable than today. The rule as
set down in Adams v Lindsell should be explained and credit will be given for outlining and
for explaining and illustrating its application and effect, with reference to suitable case law
such as Brinkibon, Henthorn v fraser, Holwell Securities, Household Fire Insurance, Byrne
v Van Tienhoven etc.
The question also requires focus on whether or not the rule is now out of date, given the
myriad instantaneous means of electronic communication, such as email, text messaging,
faxes etc. One conclusion that might emerge is that even though the post may be a less
attractive means of business communication than it used to be, from the point of view of the
formation of a contract, it is still easier to prove that a letter has been posted than it is to
prove that an acceptance has been brought to the attention of the offer or by other means.
Candidates are therefore expected to discuss the issue and draw firm conclusion if they are
to reach band 4.
Examiner’s report:
It is important for candidates to be totally focused when responding to questions relating to
the formation of contract. No question will require candidates to write about everything they
have been taught on the topic.
So candidates need to select material and focus on the precise question posed. Better-
prepared candidate set the question in context, briefly explained the rules relating to
communicating offer and acceptance, and then went on to focus on the posting rules and
its place today.
There were some very thoughtful and well-informed responses. Many less well-prepared
candidates explained the requirements of a contract at length and consequently spent too
little time actually explaining the postal rule in the requisite detail. Few were able to discuss
whether it was still applicable to modern society, beyond saying that post is not used in
business today.
11. M/J 09/P33/Q2

Offers may be withdrawn at any time up until acceptance. Discuss the extent to which you
agree with this statement and analyse the rules which determine the validity of the withdrawal
of an offer.
Mark Scheme:
Candidates should contextualize their responses by defining the terms 'offer' and
'acceptance' in law and by briefly explaining that, other things being equal, a valid, binding
contract comes into existence only when firm offers have been unconditionally accepted
[Brogden v Metroplitan Railway; Felthouse v Bindley etc].
A discussion should then take place as to when acceptance takes place in law, i.e. when
there has been a clear and unequivocal assent to all of the terms of an offer communicated
to the offeror by the offeree.
The issue of communication of acceptance should be explored further, but credit should not
be given for anything but a very brief outline of the posting rule [Entores Ltd v Miles
Corporation; Holwell Securities v Hughes; Household Fire Insurance v Grant].
Candidates should explain that offers can however be retracted, revoked or withdrawn at
any time up to acceptance [Payne v Cave] provided that the withdrawal is communicated to
the offeree in time [Byrne v Van Tienhoven].
Candidates are expected to analyse and debate the fact that case law suggests that
communication of the withdrawal does not have to come directly from the offeror as long as
any third party involved in the communication process is deemed reliable [Dickinson v
Dodds] as this would appear at variance with the rules of communication of offers and
acceptances.
Candidates can be given additional credit for analyzing the rules concerning the
circumstances under which withdrawal of an offer cannot legally be made at all i.e. when an
option to keep the offer open for a set period of time has been purchased.
Responses limited to factual recall of principle without analysis and comment regarding the
issues will be restricted to marks below band 4.
12. O/N 09/P32/Q3

With reference to decided case law and relevant rules for the formation of contracts, discuss
the exact moment in proceedings when acceptance occurs and a binding contract results.
Mark Scheme:
Candidates must explain that contracts come into existence when a firm offer has been
unconditionally accepted. Unconditional assent to the terms of the offer must be defined
(Tinn vHoffman) and its potential to be in oral or written form or implied by conduct should
be explored and explained.
Candidates should be credited for a brief examination of whether silence can also amount
to an acceptance in law (Felthouse v Bindley; re Selectmove).
Candidates should explore the battle of the forms in some detail and examine whether it
really is the 'last shot' that succeeds in such cases (Butler Machine Tool Ltd v Ex-Cell-O
Corp; BritishRoad Services v Crutchley (Arthur V) Ltd).
Candidates should also consider communication of acceptance (Entores v Miles Far

EastCorporation) and exceptions Henthorn v Fraser; Byrne v Van thereto, such as conduct
and the posting rule (Adams v Lindsell; Henthorn v Fraser; Byrne v Van Tienhoven, Holwell
Securities v Hughes;, Brinkibon v Stahag Stahl GmbH)
Examiner's Report:
Unfortunately, many saw this as an excuse to write out a brief history on the formation of
contracts with only a small part of the question dealing with acceptance. Although cases
were used by many they were not always the correct ones or used in the correct context.
Candidates simply must learn to provide balanced responses. A short introductory
paragraph regarding formation of contract is all that will attract marks when the question
clearly points to one aspect which the examiner wishes the candidate to explore in detail.
13. O/N 09/P31/Q1

The formation of commercial contracts commonly results in a "battle of the forms'. With
reference to case law, analyse the rules which determine when a contract comes into
existence in these circumstances and on what terms.
Mark Scheme:
Responses should be contextualised: this statement addresses the issue of the formation
of a contract.
Candidates are expected to explain briefly the conditions of offer and acceptance on which
a binding contract is formed, but this should not form the main focus of the response. The
expression 'battle of the forms' must be explained in relation to negotiating contract terms
and reliance on standard written terms to save time and money and the fact that standard
terms commonly conflict.
The general rule of last shot wins' should be explored in terms of offer and counter offer with
delivery of goods or performance of service equating to acceptance of the offer represented
by the last form.
Case law such as British Road Services v Crutchley, Butler Machine Tool Ltd v Ex-Cell-O
Corp and others must be examined in detail and candidates should identify rules and
approaches which have developed to help determine if and when contracts come into
existence when standard terms and determine their effectiveness.
Examiner's Report:
Some reasonable answers but very few did any critical examination. Many were able to
explain how oral statements can become terms of the contract, but too many saw it as a
question that asked them to write all they knew on offer, acceptance, consideration, and
intention.
14. M/J 09/P32/Q1

‘Offers last forever unless expressly revoked.'
Critically evaluate this statement as it relates to the formation of contracts.
Mark Scheme:
Candidates should contextualise their response by stating the general rule that a contract
prior to acceptance then no contract can result.
Discussion should then take place as to whether or not offers have a definitive life once
communicated to the intended offeree(s).
[Ramsgate Victoria Hotel vMontefiorel, failure of preconditions [Financings Ltd v Stimpson,
Total Gas Marketing Ltd v ArcoBritish Ltd], rejection, counter offer [Hyde v Wrench], death
of offeror/offeree [Bradbury v Morgan], and revocation as means of bringing offers to an
end.
Examiner's Report:
A popular question but most of the candidates merely recited the rules of offer and
acceptance and included other means of terminating offers as an afterthought. The
Examiner will always look for a brief introduction to contextualise the response, but
candidates must realise that focus on those aspects pinpointed by the actual question is the
key to success. Better prepared candidates managed the necessary focus, addressing the
withdrawal of offers for both unilateral and bilateral contracts and analysing in some detail
the case law pertinent to other situations in which an offer will terminate.
Section – B
1. M/J 18/P33/Q6
XYZ is a bakery business. The company sends its standard order form to ABC, a supplier of
flour, requesting the supply of 100 sacks of bread flour at £20 each, for delivery by 1
November. On the back of the form are printed a number of terms, including one which says
that payment will only be made 28 days after delivery of any goods ordered. ABC sends a
form acknowledging the order to XYZ which contains ABC’s terms of business. These terms
provide for payment on delivery and that ABC cannot be held liable for the quality of the goods
that it supplies. Nobody in XYZ’s office reads the order acknowledgement. The sacks of bread
flour are delivered to XYZ on 30 October and an immediate demand for payment is made.
XYZ refuses on the basis that its terms of business permit 28 days for payment. The first 10
sacks opened are found to be infested by insects and XYZ decide to reject the entire 100 sack
order. Discuss the respective rights and liabilities of the parties under the contract.
Mark Scheme:
Candidates should identify the crux of the matter in this question as contract negotiation and
the ‘battle of the forms’. Candidates should recognize that when negotiation of a contract
becomes protracted, it can become more problematic to identify exactly when an offer has
been made and unequivocally accepted.
In such cases, the courts look at the entire course of negotiation to decide whether
agreement has ever been reached and, if so, when. Candidates should recognize that in
the ‘battle of the forms’ it is a general rule that the ‘last shot’ wins the battle.
The first form is counted as the offer and each subsequent form is a counter offer, such that
when one party performs its obligations – delivering the 100 sacks of bread flour in this case
– it is seen as acceptance of terms specified on the final form (e.g. British Road Services v
Arthur V Crutchley & Co Ltd, Butler Machine Tool Ltd v Ex- Cell-O Corp (England) Ltd).
Additional credit should be given to any reference and application candidates may make to
the approach suggested by Lord Denning in a Butler Machine Tool Ltd v Ex-Cell-O
Corporation 1968 which departed from strict offer/counter offer analysis.
If the court was to follow the last shot approach, clearly the goods were supplied on the
basis of ABC’s terms contained in the order acknowledgement.
The question then arises as to the validity of the exclusion clause printed on the back. As
this is a contract between two businesses candidates need to refer to the provisions within
UCTA 1977 and draw relevant conclusions.
Credit any discussion based on incorporation issues and any discussion based on breach
of a term regarding the quality of the flour provided.
General, all-embracing and ill-focused responses are to be awarded a maximum mark

within mark band 3. Any advice given to the parties should be clear, concise and conclusive.
Issues must be fully discussed and clear compelling conclusions drawn.
2. M/J 18/P33/Q5
Tamara wants to buy Suneeta’s specialist sewing machine. Suneeta posts a letter to Tamara,
offering to sell the machine for £500 and saying that she needs a reply by 31 May. Tamara
does not reply immediately and a few days later she hears from a mutual friend that Umma
has agreed to buy the machine from Suneeta. Knowing how difficult specialist sewing
machines are to find, Tamara posts a letter to Suneeta on 30 May in which she agrees to buy
the sewing machine. Suneeta receives the letter from Tamara on 1 June, but she has already
agreed to sell the machine to Umma. Discuss Suneeta’s potential contractual liability to
Tamara and to Umma.
Mark scheme:
Candidates may begin their answer by offering an outline of the essentials of a valid
contract with emphasis on offers, invitations to treat, revocation and acceptance. Overlong
narratives of marginal relevance should not be credited. Binding contracts require definite
offer and corresponding, unconditional acceptance.
There was an apparent firm offer to sell made to Tamara which she attempted to accept by
post. Credit should be given for a discussion of the postal rule (Adams v Lindsell) and the
conditions where it can apply.
For example, specified or reasonable means of acceptance (Henthorn v Fraser), posting in

proper manner (Re London & Northern Bank), and properly addressed and stamped
(Holwell Securities v Hughes) and briefly explain the effects of letters of acceptance that
never arrive (Household Fire. Insurance v Grant) or cross with letters of revocation (Byrne
v Van Tienhoven).
If there has been an offer and corresponding unconditional acceptance, a contract has been
made, However, Tamara knew that the offer had been withdrawn prior to sending her letter
of acceptance and the validity of the communication of revocation via third parties needs to
be analysed and discussed (Dickinson v Dodds).
Candidates may consider possible remedies available to either Tamara or to Umma

depending on line of argument and conclusions.

within mark band 3. Any advice given to the parties should be clear, concise and conclusive
Issues must be fully discussed and clear compelling conclusions drawn.
3. M/J 18/P32/Q5
Benji is trying to sell his caravan and hears that Clarice might be interested in buying one. He
writes and posts a letter to Clarice offering to sell the caravan to her for £1000. Benji’s letter
tells Clarice that he needs a reply by 30 May. On 28 May, Clarice hears from a mutual
acquaintance that Benji has agreed to sell his caravan to a caravan dealer. Nevertheless,
Clarice posts a letter of acceptance the same day, agreeing to buy the caravan for £1000.
Benji receives the letter from Clarice on 29 May. Discuss Benji’s potential contractual liability
to Clarice and to the caravan dealer.
Mark Scheme:
Candidates may begin their answer by offering an outline of the essentials of a valid contract
with emphasis on offers, invitations to treat, revocation and acceptance. Overlong narratives
of marginal relevance should not be credited. Binding contracts require definite offer and
corresponding, unconditional acceptance.
There was an apparent firm offer to sell made to Clarice which he purported to accept by
post. Credit should be given for a discussion of the posting rule (Adams v Lindsell) and the
conditions where it can apply. For example, specified or reasonable means of acceptance
(Henthorn v Fraser), posting in proper manner (Re London & Northern Bank), and properly
addressed and stamped (Holwell Securities v Hughes) and briefly explain the effects of
letters of acceptance that never arrive (Household Fire Insurance v Grant) or cross with
letters of revocation (Byrne v VanTienhoven).
If there has been an offer and corresponding unconditional acceptance, a contract has been
made, however, Clarice knew that the offer had been withdrawn prior to sending his letter
of acceptance and the validity of the communication of revocation via third parties needs to
be analysed and discussed (Dickinson v Dodds).
Candidates may consider possible remedies available to either Clarice or to the dealer
depending on line of argument and conclusions. General, all-embracing and ill-focused
responses are to be awarded a maximum mark within mark band 3. To rise into the higher
bands compelling conclusions should be drawn.
4. O/N 17/P31/Q6
Eric, Fabrice and Gilles collect rare coins. They all attend a specialist coin auction held by
ABC Auctions. Eric is the highest bidder for a very rare bronze coin but the auctioneer refuses
to sell it to him as his bid fails to meet the reserve price set by its owner. Fabrice has seen a
Roman coin listed in the auction catalogue. On the day of the auction, he arrives at the auction
room only to discover that the coin has been withdrawn from sale. Gilles bids more than he
can afford for a scarce silver coin. He calls out to the auctioneer that he wishes to withdraw
his bid, but the auctioneer does not hear Gilles and the coin is sold to him as the highest
bidder. Consider whether binding contracts were formed between ABC Auctions and the three
collectors and identify any remedies that might be available to them.
Mark Scheme:
Candidates should introduce their response by explaining that contracts can only result from
agreement represented by firm offer to contract on certain terms and a corresponding
unconditional acceptance of such terms.
Candidates are not expected to display precise knowledge of how rules of offer and of the
intention to hold an auction of goods [as in the catalogue seen by Fabrice] is probably a
mere invitation to treat and not a firm offer to sell anything [Harris v Nickerson) and thus no
contract results until someone either offers to sell or offers to buy and there is a
corresponding unconditional acceptance of the price stated. As the goods were apparently
withdrawn from the potential sale, there was no offer made to sell so no contract could
result.
In Eric's case, candidates should debate whether or not he knew that the coin was for sale
only on the condition that offerees were only willing to pay a minimum price (Barry v Davies].
Gilles appears to have offered (he bid) to buy the coin and the auctioneer seems to have
accepted the offer made so there would appear to be a binding contract unless an effective
revocation or withdrawal of offer was communicated prior to acceptance taking place
[Warlow v Harrison].
Did the auctioneer hear or see Gilles' attempts to withdraw his offer to buy? General, all-
embracing and ill-focused responses are to be awarded a maximum mark within mark band
3.
Any advice given to the parties should be clear, concise and conclusive Issues must be fully
discussed and clear compelling conclusions drawn.
Offer and acceptance is a firm favorite of the contract law candidate and in general, this
question was well received. The majority of candidates were able to explain the difference
between offer and invitation to treat and most candidates organized their response well,
separating the elements and answering each part in turn.
The best responses correctly identified the significance of auction sales, cited the relevant
cases, applied the law well to the scenario and were rewarded accordingly.
Other responses were based wholly on application of offer and acceptance. Case citation
here was limited to the shopping cases, with no mention of any auction case apart from an
occasional reference to Payne v Cave.
Amongst these responses, the issue of the catalogue appears to be the most successfully
applied. Revocation was identified in the third element but at times not particularly well
applied.
The very weakest responses lacked any focus on the question, writing generally about
irrelevant aspects such as the postal rule, or giving a 'common sense' response about who
deserved to 'win'.
5. M/J 17/P32/Q6
Ursula owns a mobile phone shop. She receives a letter from XYZ Electronics offering to sell
5000 of their latest phones at a special price. The letter makes it very clear that stocks at that
price are limited. Ursula immediately faxes XYZ and places an order for all 5000 phones at
the special price. The fax arrives at XYZ’s office while it is closed for the weekend. When the
office reopens the fax is not read immediately, but is put aside to be dealt with later. By the
time the fax is read, there are no phones left at the special price.
Advise the parties as to their respective rights and liabilities in these circumstances.
Mark Scheme:
Candidates will undoubtedly recognize that a binding contract only comes into existence if
there has been a firm offer made which has been unconditionally accepted.
There is room for debate in this case as to whether the letter advertising the mobile phones
for sale is a firm offer to sell it at that price or a mere invitation to treat that invites offers to
buy.
Candidates should debate and conclude based on either interpretation of the facts. The
facts suggest an unequivocal offer made on very definite terms: the sale of 5000 mobile
phones at a specific price, communicated by an offeror to an offeree.
The issue of contract, therefore, is whether or not the offer gets unconditionally accepted.
In this case, the terms of the offer do not seem to stipulate how any acceptance should be
communicated, only that the offer will only last as long as stocks do, thus implying that
however it is done, it should be done quickly.
Ursula decides to accept by fax, sending a fax message immediately that she is aware of
the offer. The issue here is whether an acceptance is deemed effective from the time that it
is sent or from the time that it is received and the offeror is aware that the offer has been
accepted.
Candidates should discuss, and illustrate with case law, the general rule of acceptance: that
acceptance is effective once it has been communicated to the offeror. (Entores Ltd v Miles
Far East Corporation). Candidates should then look at the only exception granted by the
posting rule (Adams v Lindsell, Henthorn v Fraser; Household Fire insurance v Grant, etc.)
and consider whether acceptances made by fax are subject to the general rule or the posting
rule of acceptance. As fax is, like telephone and telex, an effectively instantaneous means
of communication, with no inevitable delay between transmission and receipt, the postal
rule is unlikely to apply, so any acceptance made by this means would not be effective until
the offeree is aware of it (Entores Ltd v Miles FarEast Corporation). There is no case law
on when an acceptance by fax is binding, but even if deemed effective from the time that
the offices opened (Brinkibon v Stahag Stahl), it would appear that a contact was made
between offeror and offeree.
The fact that the fax was not read immediately would appear to be of no importance (The
Brimnes). However, as the mobile phones have all gone by the time the fax is read, there
would be little that Ursula can do except to claim damages.
An interpretation that the original advert was merely an invitation to treat and that the fax
constituted the offer to buy which was never responded to by way of acceptance should
also be fully credited if fully explained and supported by appropriate case law. Clear
compelling, supported conclusions are to be expected to reach band 4.
Examiner's Report:
The majority of candidates correctly identified the relevance of formation. There was some
very good discussion of the status of the advertisement. The possibility of it being an offer
or invitation to treat was fully explored and supported with excellent citation.
Other responses adopted an almost text-book response writing on offer and acceptance in
general and without regard to the scenario presented. Somewhat problematic was the way
candidates dealt with the acceptance issues presented by the scenario.
The postal rule of acceptance was generally well understood but there appeared to be
confusion as to when and in what circumstances acceptance by fax applied.
The best responses clearly revealed a grasp on this significant area of law which made
analogy to the scenario relatively straightforward. While the postal rule will continue to be
relevant candidates should be advised that, in an era of e commerce, they should broaden
their knowledge and understanding of those cases discussing when acceptance by
instantaneous means of communication takes place.
6. M/J 17/P31/Q4
Pablo is a professional racing driver. Q Racing employs him for the season to drive for its
team. Pablo signs a contract with Q Racing; its terms state that while working for the company,
he must not drive professionally for any other motor racing team. He does not read the terms
of the contract. Several months later, Q Racing discovers that Pablo has been racing for T-
Sport. Q Racing wants to enforce its contract with Pablo and prevent him from driving for T
Sport until the current season is over. Discuss whether or not Pablo is bound by his contract
with Q Racing and consider the likelihood of an award of any of the remedies that might be
sought.
Examiner's Report:
This was the least popular of the scenario based questions and was on the whole poorly
answered. The better responses successfully identified the issue of non est factum and
correctly applied a logical and reasoned outcome to the scenario presented. Identifying an
appropriate remedy, the second requirement of the question, proved a little more
problematic even with the better candidates. All too often the gambit of available remedies
was discussed even though not all were clearly suitable given the facts presented. Less
successful responses fell into the same trap here or more often than not did not discuss the
possible remedies of specific performance or injunction at al. This was party a consequence
of not identifying the mistake issue. Many candidates saw Pablo's actions as breaching a
term of his contract and went down the route of discussing whether it was a breach of a
condition or warranty and exploring the remedy for those.
7. O/N 16/P31/Q6
Rochelle wants to sell her car. Rochelle writes a letter to her friend Shania and offers to sell it
to her for £4000. She explains that she needs a reply by 30 September. Shania posts a letter
of acceptance on 25 September agreeing to pay the asking price. Rochelle does not receive
the letter until 3 October. Having received no reply from Shania, on October 1 Rochelle agrees
orally to sell the car to Tamisa for £4100 Rochelle still has the car, but refuses to sell it to
Shania, saying that her letter arrived too late. Shania has no proof of posting of her letter.
Assess Rochelle's contractual liability towards Shania and Tamisa in this situation.
Mark Scheme:
expected on the formation of contract and the rules relating to the communication of firm
offers, to what amounts to unconditional acceptance and to the communication of
acceptance.
Binding contracts require definite offer and corresponding, unconditional acceptance. There
was an apparent firm offer to sell made to Shania which she purported to accept by post.
But
 Was post the proper means of acceptance? If not – effective upon receipt.
 If yes, then the posting rule applies -properly stamped and addressed and posted in
the proper manner: was it and is there any evidence?
Candidates to consider the effect of compliance and on-compliance with the rule.
Discussion should be case law referenced (e.g. Henthorn V Fraser, Household Fire
Insurance v Grant, Byrne v Van Tienhoven etc).
The issues must be discussed fully and clearly and compelling conclusions must be drawn.
Examiner's Report:
A popular question and generally well answered. The better responses recognised the need
to discuss offer and acceptance and the postal rule, even if responses were not always as
selective of truly pertinent material as they might have been.
The vast majority of these responses discussed the implications of the decision in Adams v
Lindsell, potential revocation and silence issues, application was good and conclusions
soundly based.
However, the least successful responses did not focus on what was needed, discussing a
broad range of issues such as the battle of the forms, material on auctions etc. Instead of
concentrating on rules relating to offer and acceptance.
8. O/N 16/P31/Q5
Daniel places the following advertisement in a fishing magazine.
FOR SALE
Commercial Fishing Nets - £5000 each. Orders accepted by post or telephone.
Any quantities supplied. Contact Daniel, 23 Rod Lane, SeafordTel No.
01212343434
Alastair is a commercial fisherman and a regular reader of the magazine. He sees the
advertisement and responds to it by sending his standard order form to Daniel. The order form
requests five nets for his fleet of boats, to be delivered by 1 November. O the back of Alastair's
order form a number of terms appear in small type, including one which states that payments
will only be made 30 days after receipt of goods purchased. Daniel sends his standard order
acknowledgement form back to Alastair, the front of which confirms the order quantity, price
and delivery date as per Alastair's order. On the back of the form his terms provide for payment
on delivery and state that his company is not liable for manufacturing faults in products
supplied. Alastair files the order acknowledgement form without reading it. The order is
delivered to Alastair on 31 October and an immediate demand for payment is made. Alastair
argues that his terms of business permit 30 days for payment. Alastair inspects the fishing
nets and sends them back to Daniel on the grounds of defective manufacture. Advise Daniel
and Alastair of their respective rights in this situation and assess the likely success of any legal
action brought to recover damages.
Mark Scheme:
Candidates should identify the key issue in this question as contract negotiation and the
‘battle of the forms’, Candidates should recognize that when negotiation of à contract
becomes protracted, it can become more problematic to identify.
In such cases, the courts look at the entire course of negotiation to decide whether has ever
been reached and, if so, when. Candidates should recognize that in battles of the forms it
is a general rule counter offer, such that when one party performs its obligations-delivering
the commercial fishing nets that the 'last shot' wins the battle.
The first form is counted as the offer and each subsequent form is a in this case – it is seen
as acceptance of terms specified on the final form to change hands (e.g. British Road
Services v Arthur V. Crutchley & Co Ltd, Butler Machine Tool Ltd v Ex-Cell-O Corp
(England) Ltd).
If the court was to follow the last shot approach, clearly the goods were supplied on the
basis of Daniel's terms contained in the order acknowledgement. The question then arises
as to the validity of the exclusion clause printed on the back.
Candidates need to refer to UCTA 1977 and draw conclusions. Knowledge and application
of the Consumer Rights Act 2015 will be credited, but is not yet expected. Generalised
responses, lacking focus on the question, are to be awarded a maximum mark within mark
band 3. Any advice given to the parties should be clear, concise and conclusive.
Examiner's Report:
This was not a popular question, with only the best responses producing a meaningful
discussion of the formation of contract via 'the battle of the forms' and also discussing the
implications of the exclusion clause.
Less successful responses demonstrated confusion between invitations to treat, offer and
whose fault it was for not reading the terms and conditions. Only the very best responses
noticed that there were exclusion clauses.
Some thought the question related solely to terms of contract and went into great detail
about which part was a condition, warranty or innominate terms. Most of those attempting
this question missed the battle of the forms' issue altogether.
9. M/J 16/P32/Q4
Euan is due to start a new job and has to move to an apartment in Paris which is much smaller
than the one he has in London. He sends a letter to his sister, Faith, and asks whether she
would be interested in buying his large television for £500. His letter asks for a prompt reply,
as a friend wants to buy it from him. Faith writes a reply immediately to Euan saying that she
would like to buy it for £500, but also asks if he is prepared to accept payment in four monthly
installments. She receives no reply from Euan as her letter gets lost in the post. Having made
several attempts to contact Euan by telephone, Faith borrows £500 from her bank and
immediately sends Euan a £500 cheque for the television. By the time Euan receives Faith’s
cheque, he has already sold the television to his friend. Consider Euan's potential contractual
liability towards Faith and the remedies that she might pursue against him.
Mark Scheme:
An outline of the essentials of a valid contract; emphasis expected on offers, invitations to
treat, counter offers and acceptance. Credit is to be given for possible reference to intention
to create legal relations, but nothing for other essentials. Domestic agreements are
generally considered to have not been intended to be legally binding, but the assumption
may be rebutted (Simpkins v Pays).
 Is there sufficient evidence of intention here? Binding contract requires definite offer
and corresponding, unconditional acceptance. Counter offer operates as a rejection
and terminates offer (Hyde v Wrench).
 Was there an offer made by Euan or was his letter an invitation to treat?
 If it was an offer, does Faith make a counter offer when she asks about payment by
installments? Probably not, as a mere enquiry for information (Stevenson v
McLean). If there has been an offer and corresponding unconditional acceptance, a
contract has been made; sale of the television to Tim's neighbor is tantamount to a
breach of that contract.
Acceptance and posting rules (Henthorn v Fraser, Fire and Household Insurance v Grant)
must also be considered.
The potential for remedies of damages, rescission and specific performance should be
discussed as appropriate. Informed debate followed by clear, compelling conclusions is
expected.
Generalised responses, lacking focus on the question or responses limited to factual recall
are to be awarded a maximum mark within mark band 3.
Examiner's Report
A popular well answered question with many responses giving good evidence of case law
and valid application. The most successful responses demonstrated excellent knowledge
of offer and acceptance and successfully explored different interpretations whilst applying
principle to the scenario.
They were able to produce clear conclusions. In less successful responses, it was the usual
case of less than detailed knowledge of principle, lack of its application to the scenario and
lack of reasoned conclusion.
10. O/N 15/P31/Q4

Basmati Hospitality (BH) owns and operates many hotels and restaurants throughout England
and Wales. The company receives an email from Celebrity Cuisine (CC) which reads: 'Try the
latest Tornado Rice Cooker: Can offer at just £100 each'. On 1 October BH email a reply which
states will take 40, delivery by 15 November please. Upon receipt of the email, CC replies,
saying: ‘Thank you for your email which is receiving our attention'. Two weeks later CC is
ready to deliver the 40 cookers to BH. Before they leave the factory, another email is received
from BH saying: 'Please cancel the order, cookers no longer required'. Advise the parties as
to their potential contractual liability in these circumstances, using appropriate case law to
support your response.
Mark Scheme:
Whilst candidates can be given marginal credit for discussion of the essentials of a valid
simple contract, the main issue in this problem is whether there is an 'agreement’ — firm
offer and corresponding and unqualified acceptance.
The first issue to be dealt with is the 'offer'.
 Has Celebrity Cuisine made a genuine offer to Basmati & Co in their fax?
Candidates might conclude that this is not a genuine offer; it is more in the nature of an
invitation to treat. The words 'can offer' might be considered not to bet a definite proposal
to sell the cookers at the stated price but is simply suggesting that they are available for
sale.
The test in deciding between an offer and an invitation to treat was set out in Carlill v Carbolic
Smoke Ball Co which held that an 'invitation to treat is a request for offers’ and determined
by the 'ordinary person test'.
Clearly here, we have an inducement sent out by Celebrity Cuisine to Basmati & Co to enter
into negotiations for the purchase of the rice cookers.
It is probably not a definite proposal, made with the intention that it becomes binding once
accepted (see Partridge v Crittenden). As the fax sent on September 1 by Celebrity Cuisine
is not an offer, candidates need to consider the position with the Basmati & Co fax sent on
October 1.
 Is this reply an acceptance in law?
An acceptance is an agreement to be bound to the terms of an offer. The better

interpretation regarding the fax sent by Basmati & Co. would appear to be that that it is
actually an offer to buy the cookers for £100 each (Harvey v Facey). Celebrity Cousine’s
response to the Basmati & Co’s fax stating that the earlier fax is 'receiving attention’ is not
acceptance to the offer.
An acceptance must be clear and unqualified to be binding. It can be argued that Celebrity
Cuisine is actually ‘silent’ on the issue of acceptance and silence is not acceptance
(Felthose v Bindley).
Candidates should then consider the issue of the revocation and decide whether basmati &
Co is required to take delivery and pay for the cookers. Since Basmati & Co made the offer
to Celebrity Cuisine which was not actually accepted, they are entitled to revoke that offer.
An offer can be revoked by an offeror before communication of acceptance by the offeree

(Goldborough Mort & Co v Quinn). Thus, it would thus appear that Basmati & Co do not
have to take delivery or pay for the rice cookers as they are not bound by contract.
The issues must be discussed fully and clearly, applied fully to the scenario and compelling
conclusions must be drawn to be awarded marks in bands 4 and 5. Responses effectively
limited to factual recall of principle will be restricted to marks below and band 4.
Examiner Report:
A majority of candidates spotted the formation of contract issues and managed to use
relevant case citation, if a little thin at times. Less successful responses commonly made
hasty concrete conclusions about the scenario which boxed them into a corner, limiting the
legal principles and cases they could use and develop.
It was encouraging, however, to see responses that recognised the possibility that Celebrity
Cuisine may have made an offer or an invitation to treat and explore the alternative
consequences.
This was a feature of the very best responses. This was by far the most popular scenario-
based question and the most successfully answered with many candidates citing a range
of appropriate case references.
Moreover, a large proportion of learners had grasped a fundamental comprehension of

principles involved although depth and breadth of that comprehension varied considerably.
The best responses came from candidates who explained the need for intention to create
legal relations as an element of contract and then examined the presumption of
intention/lack of attention appropriately.
Pertinent case law was examined and applied to the scenario and clear conclusions drawn.
Having concluded the likely existence of intention on the basis of Merritt, the issues raised
by Errington were sometimes explored.
Less successful respondents too frequently digressed inappropriately into promissory

estoppel as a basis for the enforcement of the contract.
11. O/N 14/P31/Q4

Lexus has often spoken with his business associate, Mercedes, about the possibility of selling
his antique writing desk to her. Although there has been discussion about the price and Lexus
has said that he wants about £1500 for the desk, Mercedes has not yet decided to buy it.
Several weeks later, Lexus is working away from home when Mercedes sends him an email
which includes the words: "Let's stop debating the price for the writing desk. Unless I hear
from you by Friday this week, I’ll assume the desk is mine for £1500." Lexus reads her email
quickly but is too busy to respond. Lexus doesn't return home at the weekend, but goes to visit
a friend, Ka. During his stay with Kia, Lexus agrees to sell the writing desk to her for £1400.
When Mercedes hears about this, she informs Lexus that she believes the desk belongs to
her. With reference to decided case law, advise the respective parties of their contractual
rights and liabilities in this situation and consider the remedies that might be granted.
Mark Scheme:
Candidates should set the question in context by briefly outlining the requirements of the
formation of agreement as a basis for a binding contract. No credit should be given for wider
discussion of other essentials of a valid contract.
Candidates should explain that in general it is impossible for a binding contract to exist
without a firm offer to contract having been communicated by an offeror to an offeree and a
corresponding, unconditional assent to the terms of that offer communicated by that offeree
back to offeror.
In other words, for a contract to exist, the person who made the offer must know that his
offer has been accepted (e.g. Entores v Miles Far East Corporation).
Candidates ought to emphasis that this only really becomes an issue when parties do not
deal with one another face to face as in this scenario. The crux of the matter in this scenario
is twofold: whether and by whom a firm offer was made (c.f. invitation to treat) and whether
or not that has been a corresponding and unequivocal acceptance communicated by offeree
to offeror.
Candidates need to critically assess exceptions to the communication rule but no significant
credit will be awarded for a detailed explanation of from the generally accepted exception
that the terms or type of offer can negate the need for the communication of acceptance, It
is a well-established principle that if an offeror merely remains silent, it cannot amount to an
acceptance in law unless it is absolutely clear that acceptance was intended (e.g. Felthouse
v Bindley); it must involve some action indicative of acceptance.
Nevertheless the courts will only interpret conduct as indicative of acceptance if reasonable
to infer that the offeree acted with the intention of accepting the offer (e.g. Brogden v
Metropolitan Rail Co.). The principles need to be clearly applied to the scenario and
conclusions drawn:
 Who makes the firm offer re the sale/purchase of the desk? Mercedes or Lexus?
 Can acceptance be inferred from Lexus' silence?
Not so according to Felthouse but decision in selectmove suggests that it could be.The
potential application of the postal rule for acceptance of offers ought to be assessed in
connection with email communications and conclusions drawn. Remedies must also be
addressed.
Candidates should recognize that specific performance might be applicable as an equitable

remedy if depending on whether or not it is concluded that third party rights in the wring
desk had accrued.
The issues must be discussed fully and clearly, applied fully to the scenario and compelling
conclusions must be drawn to be awarded marks in bands 4 & 5. Responses effectively
limited to factual recall of principle will be restricted to marks below band 4.
Examiner's Report:
This was a question which should have been very popular and ought to have produced few
problems. What appeared, at first glance to be a simple offer and acceptance scenario
proved somewhat difficult for many.
However that was not the case with too many candidates becoming confused over the task
of explaining offer and acceptance and seemingly lacked the ability to deal with the issue in
a logical sequence.
Less well prepared candidates were too quick to jump to the conclusion that an offer had
been made by Lexus without considering the words used i.e. about £1500 and thus did not
debate invitation to treat at all.
Far too many tried to write all they knew about agreement formation and could not extricate
themselves from the resultant confusion.
Better prepared candidates did consider the relationship between invitations to treat, firm
offers, and their acceptance in a logical and selective manner.
Most were able to discuss the issue of acceptance acknowledging the issue of silence. Only
a handful of candidates were able to discuss the legal implications of modern
communication by way of email and, possible remedies were not always addressed.
12. M/J 14/P31/Q5

Denzil drives his prized Cadillac convertible car on a shopping trip to the Astra grocery shop.
Whilst he is shopping, his car is stolen from the car park. He places the following advertisement
in the local newspaper:
£1500 Reward
For information leading to the recovery of Cadillac convertible stolen from Astra car park
on 1st April.
Reward to be claimed by post by 1st May
Claims to: 5 New Street, Newtown
Eddie, an off-duty policeman, sees the Cadillac convertible in a ditch by the side of the road
along which he runs every morning. He is unaware that a reward has been advertised until
told which he runs every morning. He is unaware that a reward has been advertised until told
about it by his girlfriend, who read about the reward in the newspaper earlier in the day. Eddie
writes a letter to claim the reward. He posts it on 30 April and it arrives at Denzil’s address on
2 May. Denzil refuses to honour the reward as promised. Advise Eddie whether he has a
contractual right to the reward from denzil.
Mark Scheme:
Candidates should recognize this question as one concerning the offer, acceptance and
consideration in the formation of a unilateral contract. The basic rules of offer and
acceptance need to be explained somebody needs to have made a firm statement of
willingness to do something, as another person has to unconditionally accept the terms of
the other’s statement.
Candidates should distinguish offer from invitations to treat which do not have the same
legal status as offer and which cannot be accepted to form a contract. In addition, offer must
be communicated, they cannot be legally accepted to form a binding contract by anyone
unaware that the offer has been made. Acceptance takes place once the offeror knows that
his offer has been accepted, with the exception of acceptance by post.
An explanation of the postal rule should be include in the answer. Consideration should be
addressed and explained. A focus on the need for real consideration is required. What
actually amounts to something of value performed in return for another’s promise?

Candidates must apply principles to the scenario and draw suitable conclusions:
 Was Denzil’s advertisement an offer or an invitation to treat (Carlill v Carbolic

Smoke Ball Co; Bowerman v Assoc of British travel Agents Ltd)?
 Does it matter that Denzil did not see the advertisement himself?
 Is the postal rule of acceptance operative here, and does he apply for the reward
in time (Entores Ltd v Miles Far East Corp; Household Fire Insurance v Grant)?
 Does it matter that Denzil is a policeman?
 Was he merely performing his public duty and therefore providing no real
consideration for the promise of the reward (Glasbrook Bros v Glamorgan CC;
Harris v Sheffield United)?
Candidates are expected to debates the issues and should draw clear, compelling
conclusions, which are fully supported by case law references.
Examiner Report:
This question was a popular and generally attracted the most pleasing responses overall.
The basic rules of offer and acceptance needed to be explained. Somebody needs to have
made a firm statement of willingness to do something (as opposed to an invitation to treat)
and another person has to unconditionally accept the terms of the other’s statement.
The better—prepared Candidates then proceeded to explore the rules regarding

acceptance and in particular the postal rule and associated case law. Some also introduced
the issue of consideration and whether or not the policeman was merely performing a public
duty and thus not providing valuable consideration to support the offer of a reward.
Responses were typified by appropriately selected factual detail and focused, supported
conclusions.
Poorer responses either tended to lack appropriate focus on truly relevant principles or were
unclear and/or confused.
13. O/N 13/P32/Q6

Lesley used to be a land surveyor until she retired recently. She writes a letter to a friend,
Patrick, who has just qualified as a surveyor to ask if he would be interested in buying her
surveying equipment for £1000. She tells Patrick to reply promptly, as an ex-colleague is
already interested' in buying the equipment. Patrick would need to get a loan to buy the
equipment, but he posts an immediate reply to Lesley in which he expresses a definite interest,
but also asks if she would be prepared to accept payment by two equal installments. Lesley
does not receive this letter from Patrick. Without waiting for a reply, Patrick arranges to borrow
the money from his bank and, several days later, posts a cheque to Lesley for the £1000
asking price. By the time Lesley receives it, she has already sold the equipment to her ex-
colleague. With reference to relevant case law, discuss Lesley’s potential contractual liability
towards Patrick and the possible remedies that he might pursue against her.
Mark Scheme:
An outline of the essentials of a valid contract; emphasis expected on offers, invitations to
treat, counter offers and acceptance. Credit for possible reference to consideration, but
nothing for other essentials.
Binding contract requires definite offer and corresponding, unconditional acceptance,

Counter offer operates as a rejection and terminates offer (Hyde v Wrench). Was there an
offer made by Lesley or was his letter an invitation to treat?
If it was an offer, does Patrick make a counter offer when she asks about payment by
installments? Probably not as a mere enquiry for information (Stevenson v McLean) if there
has been an offer and corresponding unconditional acceptance, a contract has been made;
sale of the equipment to Lesley's ex—colleague is tantamount to a breach of that contract;
Acceptance and posting rules must also be considered.
General, all-embracing and ill-focused responses or ones limited to factual recall are to be
awarded a maximum mark within mark band 3.
Examiner’s Report
This was a question that contained scope for demonstrating knowledge about contract
formation. However, it was evident that many candidates struggle to actually apply legal
principles to facts in any sort of systematic way; rules and cases are recited without any real
consideration of their relevance to the facts set in the question.
Better prepared candidates tended to follow a tree diagram like logical progression
determining whether or not a contract was formed between Lesley and Patrick. These
candidates also explored whether or not posting a reply was a suitable means of
communication.
A common error among less well prepared candidates was to conclude that Lesley’s initial
letter was an IT and then permit the contract to be formed by an acceptance by Patrick.
A second common error was to launch into the postal rule without exploring the general rule
that acceptance must be communicated.
14. O/N 13/P31/Q5

Ollie decides to sell his hi-fi system and sends a letter to Henry, offering to sell it to him for
£300 and saying that he needs a reply by the 20 October. Henry wants to buy the hi-fi but
doesn't have the money to buy it until a loan is repaid to him towards the end of October. On
10 October, Henry telephones Ollie and asks if he would be prepared to keep open the offer
to sell the hi-fi until 5 November. Ollie is not keen to do so, as he has also offered it on the
same terms to Charlie, but agrees when Henry promises to treat him to a restaurant meal if
he does. Meanwhile, on 17 October, Charlie posts a letter accepting Ollie's offer; but, due to
postal delays, it does not arrive at Ollie's house until 7 November. On 3 November, Ollie takes
the hi-fi to a dealer, Geoff, who gives him £275 for it. With reference to case law, discuss the
potential contractual rights and liabilities of the respective parties that arise out of this scenario
Mark Scheme
expected on the formation of contract and the rules relating to the communication of firm
offers, to what amounts to unconditional acceptance and to the communication of
acceptance.
Binding contracts require definite offer and corresponding, unconditional acceptance. There
was an apparent firm offer to sell made by Ollie to both Henry and Charlie. Henry responded
to the offer by seeking to extend the period during which he could accept the offer.
It would appear that the proposal was accepted by Ollie in return for valuable consideration:
the promise of a meal. Charlie purported to accept by post. But was post the proper means
of acceptance? If not — effective upon receipt. if yes, then the posting rule applies —
properly stamped and addressed and posted in the proper manner: was it?
Candidates to consider effect of compliance and noncompliance with the rule. Discussion
should be case law referenced (e.g. Henthorn v Fraser, Household Fire insurance v Grant,
Byrne v Van Tienhoven etc.) Ollie then chose to sell to Geoff instead of either of the previous
offerees. In Henry's case, as Ollie does not appear to have expressly revoked the offer
made to him, it would seem that Ollie may be in breach of the option purchased by Henry,
but no more. In Charlie and Geoff 5 case, however, it is less certain.
If Charlie has satisfied the postal rule, there was a contract with Ollie from the moment his
acceptance was posted. However, as no payment had been made, Ollie would still have
been the owner, when he sold the hi-fi to the innocent third-party, Geoff. Thus it would
appear that Geoff has become the legal owner and all that Charlie could do is to sue Ollie
for breach of contract.
The issues must be discussed fully and clear, compelling conclusions must be drawn.
This was a popular question with many candidates recognising that it was a straightforward
question about contract formation.
Stronger responses identified the relevant rules relating to invitation to treat, offer, counter
offer and acceptance (including the postal rule), illustrated them by reference to appropriate
case law and then accurately and effectively applied them to each part of the transaction in
each mini-scenario before reaching clear and concise conclusions.
Some answers consisted of often lengthy poorly supported material of variable accuracy.
Application was commonly superficial and brief and any conclusion attempted was
extremely thin.
Q15. M/J 13/P33/Q5

Norman restores and sells antique furniture. He sees several interesting items listed in the
catalogue for an auction to be held at the Belgravia Auction Rooms, so he attends the sale.
The first item that Norman bids for is a set of 6 Regency chairs but, despite being the highest
bidder for them, the auctioneer refuses to sell them to him because his bid failed to meet the
reserve price set by the owner of the chairs. He then bids for an eighteenth century table. He
realises that he has bid far more than the table is worth and calls out to withdraw his bid. The
auctioneer doesn't hear him, continues the sale and eventually knocks it down to Norman as
the highest bidder. Finally, Norman is disappointed to find that the one item in the catalogue
that he most wanted to acquire, a French writing desk, has been withdrawn from the sale.
Using case law to support your views, consider Norman’s legal rights and liabilities as a
consequence of his attendance and actions at the auction.
Mark Scheme:
Candidates should introduce their response by explaining that contracts can only result from
agreement represented by firm offer to contract on certain terms and a corresponding
unconditional acceptance of such terms.
Candidates are not expected to display precise knowledge of how rules of offer and
acceptance relate directly to auction sales, but will be credited if knowledge is disclosed.
In the case of the chairs, candidates should debate whether or not Norman knew that they
were for sale only on the condition that offerees were only willing to pay a minimum price
(Barry v Davies).
Had the terms been communicated in the catalogue perhaps? Norman appears to have
offered (he bid) to buy the table and the auctioneer seems to have accepted the offer made
(he banged the hammer down to Norman so there would appear to be a binding contract
unless an effective revocation or withdrawal of offer was Communicated prior to acceptance
taking place (Warlow v Harrison). Why didn’t the auctioneer hear or see Norman's attempts
to withdraw his offer to buy?
The advertising of the intention to hold an auction of goods (as in the catalogue seen by
Norman) is probably a mere invitation to treat and not a firm offer to sell anything (Harris v
Nickerson) and thus no contract results until someone either offers to sell or offers to buy
and there is a corresponding unconditional acceptance of the price stated.
As the writing desk was apparently withdrawn from the potential sale, there was no offer
made to sell so no contract could result.
Whatever conclusions are drawn by candidates, they should be clear, compelling and result
from a detailed application of principle to facts.
General, all- embracing and ill-focused responses are to be awarded a maximum mark
within mark band 3. A clear, compelling conclusion should be drawn.
Examiner's Report:
Although this was a popular question, performance generally was often far from strong.
Although the majority who attempted this question were aware it related to formation of
contract, at times they found it difficult to apply invitation to treat, offer and acceptance with
confidence and did not appear to have the range of cases to substantiate their views.
The majority of candidates recognised that this question involved distinguishing between
offer and invitation to treat. Having said that, when applying the law to the facts, many
candidates still became muddled as to whether Norman or the auctioneer was the offeror.
Few discussed whether the issue of a reserve price needed to be mentioned by the auction
house in advance of bidding. Only the very best prepared candidates seemed to deal with
the revocation issue well; comparatively few mentioned the issue of whether the auctioneer
had deliberately failed to hear Norman's revocation or whether Norman had a responsibility
to ensure that it was heard, especially as the question states that the auctioneer ’continues
the sale and eventually knocks it down to Norman as the highest bidder’, thus suggesting
that Norman had sufficient time to get the auctioneer’s attention before the hammer went
down.
The majority recognised that the withdrawal of the desk by the auction house did not
constitute a breach.
Weak responses were all too frequently based on a version of common sense rather than
law or failed to provide adequate/accurate law to support their answer and many became
muddled about who the offeror and offeree were in each situation.
16. M/J 13/P32/Q6

Direct Foods UK (DFU) receives a letter from Huiles Naturelles d’0c (HNO) The letter
advertises for sale 100 000 bottles of olive oil at a reduced price and states that stocks at that
price are limited. DFU sends an immediate fax in which it orders all the reduced price olive
Oil. The fax arrives at HNO’s office while it is closed for lunch. When the office re-Open the
fax is not read, but is put aside to be dealt with later. By the time the fax is read, all the olive
oil has been sold to other customers. Using case law, advice the parties concerned whether
a valid contract was formed between DFU and HNO.
Mark Scheme:
Candidates will undoubtedly recognise that a binding contract only comes into existence if
there has been a firm offer made which has been unconditionally accepted. There is room
for debate in this case as to whether the letter advertising the olive oil for sale is a firm offer
to sell it at that price or a mere invitation to treat that invites offers to buy.
Candidates should debate and conclude based on either interpretation of the facts. The
facts suggest an unequivocal offer made on very definite terms: the sale of 100,000 bottles
of olive oil at a specific price, communicated by an offer or to an offeree. The issue of
contract, therefore, is whether or not the offer gets unconditionally accepted.
In this case, the terms of the offer do not seem to stipulate how any acceptance should be
communicated, only that the offer will only last as long as stocks do, thus implying that
however it is done, it should be done quickly.
Direct Foods UK decide to accept by fax, sending a fax message immediately that they are
aware of the offer. The issue here is whether an acceptance is deemed effective from the
time that it is sent or from the time that it is received and the offeror is aware that the offer
has been accepted.
Candidates should discuss, and illustrate with case law, the general rule of acceptance: that
acceptance is effective once it has been communicated to the offeror. (Entores Ltd v Miles
FarEast Corporation.)
Candidates should then look at the only exception granted by the posting rule (Adams v
Lindsell, Henthorn v Fraser, Household Fire Insurance v Grant, etc.) and consider whether
acceptances made by fax are subject to the general rule or the posting rule of acceptance.
As fax is, like telephone and telex, an effectively instantaneous means of communication,
with no inevitable delay between transmission and receipt, the postal rule is unlikely to
apply, so any acceptance made by this means would not be effective until the offeree is
aware of it (Entores Ltd v Miles Far East Corporation).
There is no case law on when an acceptance by fax is binding, but even if deemed effective
from the time that the offices opened (Brinkibon v Stahag Stahl), it would appear that a
contact was made between offeror and offeree.
The fact that the fax was not read immediately would appear to be of no importance (The
Brimnes) However as the olive oil has all gone by the time the fax is read, there would be
little that Direct Foods UK can do except to claim damages.
An interpretation that the original advert was merely an invitation to treat and that the fax
constituted the offer to buy which was never responded to by way of acceptance should
also be fully credited if fully credited if fully explained and supported conclusions are to be
expected.
This was a popular question. The majority correctly tried to identify the law on invitation to
treat, offer and acceptance, but some chose to present a verbatim copy of all their notes
without significant application to the scenario whilst others were more selective and made
a truly gallant attempt to deal with the issues, draw conclusions and give advice.
The crux of this problem required candidates to succinctly discuss the difference between
offers and invitations to treat and, with use of exemplar case law, decide whether the initial
letter might be deemed an offer to sell capable of acceptance or merely an invitation for
offers to buy to be made.
A definite conclusion is difficult, so better prepared candidates tended to follow this up with
a discussion of possibilities should the court conclude either way.
Discussion then commonly followed as to whether contract was concluded in either event
given case law on electronic communications.
Less well prepared candidates had a tendency to have concluded the outcome before
putting pen to paper and thus either missed key questions or were drawn into verbose tangle
from which they were unable to extract themselves. Meaningful conclusions were commonly
weak or non-existent.
17. O/N 12/P31/Q4

Jose is reading a newspaper when he sees the following advertisement.
“Treat yourself to a new digital SLR camera from Photo Direct prices from £299
Contact us today on 0845-666777for a quotation. We have 10005 in stock for
immediate dispatch”.
José telephones PhotoDirect and says that he is interested in buying a camera with an 18—
105 mm telephoto lens and asks what it would cost. The sales assistant has to check prices
and promises to call him back. The sales assistant calls back when José is engaged on
another call, so has to leave a voicemail message. The message says: ‘The camera you have
ordered will cost £500, please call us with your credit card details. Delivery will be within 5
working days.’ José does not listen to the message and buys a camera from CameraMart for
£450. Several weeks later, the camera ceases to work. He returns it to CameraMart and is
told that it can neither be repaired nor replaced because the manufacturer has gone out of
business; he had bought the last of CameraMart’s stock of this camera. José buys a
replacement camera with the same features from Flash Harry but has to pay £520 for it.
Critically assess the rights and liabilities of José, PhotoDirect and CameraMart as a
consequence of the above events.
Mark Scheme:
An outline of the essentials of a valid contract: emphasis expected on offers, invitations to
treat, and acceptance. Credit will be for possible reference to consideration, but nothing for
other essentials of valid.
Binding contract requires definite offer and corresponding, unconditional acceptance. Was
there a firm offer made? Advertisement is an invitation to treat, not a firm offer to sell
(Partridge v Crittenden).
So it would seem that PhotoDirect invited José to offer to buy a camera when he saw the
advert. Did Jose make a firm offer to buy a camera or did he merely ask for further
information as in the price for the required specification (e.g. Stevenson v McLean)? So was
there an offer capable of acceptance between Jose and PhotoDirect? At any rate even if
the message left on voicemail amounted to the acceptance of an offer (poor conclusion) it
was never listened to by José, so was never actually communicated.
Jose actually buys a camera from CameraMart but it proves to be faulty and the supplier is
unable to repair or replace it.
What liability exists here and what is its measure? By buying a replacement, Jose might be
seen to be attempting to mitigate his loss. Informed debate followed by clear, compelling
conclusion sis expected.
General, all- embracing and ill-focused responses are to be awarded a maximum mark
within mark band 3. A clear, compelling conclusion should be drawn.
question about contract formation. The better responses identified the relevant rules relating
to invitation to treat, (implied) offer, counter offer and acceptance, illustrated them by
reference to appropriate case law and then accurately and effectively applied them to each
part of the transaction in the in the scenario before reaching a clear and concise conclusion.
The weakest answers consisted of lengthy, often contradictory diatribe, which was poorly
applied to the scenario; any conclusion attempted was too often thin at best.
18. M/J 12/P33/Q4

Aaron wants to buy a soft drink. He approaches a vending machine which has large buttons,
each with the name of a soft drink and its price. Next to the slot on the machine, into which
payment is made, there are instructions saying that coins should be put in the slot and change
will be given. Aaron chooses to buy a can of lemonade priced at 75 pence. He puts a £1 coin
(=100 pence) in the slot and presses the button marked ‘lemonade’. A message appears to
say that the selected drink is sold out and asks him to make an alternative choice. Initially
Aaron presses the lever marked ‘coin return’ several times but the machine fails to return his
£1 coin. In frustration, he presses a button marked 'cola' and price 80 pence. The machine
dispenses a can of cola but gives him no change. Analyse the circumstances of this case and
advise Aaron of his legal position and of the likely remedy to which he might be entitled.
Mark Scheme:
Candidates should recognise this scenario to concern rules relating to formation of contract
(invitations to treat, offers, acceptance) and its possible breach. Candidates are expected
to state the general rule that there needs to be a firm offer which is accepted unconditionally.
Candidates may consider invitation to treat in this instance, but should not be given more
than cursory credit. The existence of vending machine which is switched on and in a public
place suggests an implied offer to sell its contents to anyone willing to meet the conditions
of sale.
Meeting those conditions of sale by putting appropriate money in the machine and pressing
appropriate buttons represents unconditional acceptance by conduct; whilst rules expect
acceptance to be communicated to the offeror, this requirement is waived in such
impersonal circumstances.
Notwithstanding the small sums of money involved, candidates are expected to debate the
issues of the drink requested being sold out and the non-return of the coin which had been
inserted and the issue of an unwanted type of drink being dispensed and no change given.
Potential legal rights and liabilities still need to be discussed and clear, compelling
conclusions must be drawn. Responses limited to factual recall of principle will be restricted
to marks below band 4.
question about contract formation. The better responses identified the relevant rules relating
to invitation to treat, (implied) offer, counter offer and acceptance, illustrated them by
reference to appropriate case law and then accurately and effectively applied them to each
part of the transaction in the scenario before reaching a clear and concise conclusion.
The weakest answers consisted of lengthy, often contradictory responses which were poorly
applied to the scenario; any conclusion attempted was too often thin at best.
It is somewhat alarming that some candidates concluded that it was a case of fraud and/or
misrepresentation by the vending machine.
19. M/J 12/P31/Q6

The following advertisement appears in the trade magazine called Bits for Boats.
Personal Buoyancy Aids for sale- -£50 each. Orders accepted by post or
telephone. No minimum order quantity. Safety First Afloat, Brownsea View,
Poole Telephone 01234-567890
Bournemouth Pleasure Cruisers (BPC) responds to the advertisement by sending its own
standard order form to Safety First Afloat (SFA) on the front of which is typed an order for 500
personal buoyancy aids at £50 each for delivery by 1 May. On the back of the form a number
of terms of business appear in small type, including one which says that payments are due
within 28 days of delivery. SFA sends a standard order acknowledgement form back to BPC,
the front of which confirms the order quantity, price and delivery date (as stated above). On
the back of the form, its terms of business provide for payment on delivery and that the supplier
is liable to the buyer for faults in materials or construction of products supplied. An
administrator working for BPC simply files the order acknowledgement form without reading
it. The order is delivered to BPC on 1 May and an immediate demand for payment is made.
BPC refuses on the basis that its terms of business permit 28 days for payment and
subsequently rejects the entire consignment on the grounds that a quality check of a sample
of fifty reveals manufacturing defects. Analyse the respective rights of the parties under the
contract and advise SFA of the likely success of any legal action to recover damages.
Mark Scheme:
Candidates should indentify the crux of the matter in this question as contract negotiation
and the ’battle of the forms'. Candidates should recognise that when negotiation of a
contract becomes protracted, it can become more problematic to identify exactly when an
offer has been made and unequivocally accepted. In such cases, the courts look at the
entire course of negotiation to decide whether it has ever been reached and, if so, when.
Candidates should recognise that in ’battles of the forms’ it is a general rule that the ’last
shot' wins the battle. The first form is counted as the offer and each subsequent form is a
counter offer, such that when one party performs its obligations – delivering the personal
buoyancy aids in this case - it is seen as acceptance of terms specified on the final form to
change hands (e.g. British Road Services v Arthur V Crutchley & Co Ltd, Butler Machine
Tool Ltd v Ex-, Cell-O Corp (England) Ltd). If the court was to follow the last shot approach,
clearly the goods were supplied on the basis of SFA’s terms contained in the order
acknowledgement.
The question then arises as to the validity of the exclusion clause printed on the back.
Candidates need to refer to UCTA 1977 and draw conclusions.
General, all- embracing and ill focused responses are to be awarded a maximum mark
This question was the most popular in Section B. It was a relatively straight forward question
on invitation to treat, offer, counter offer and acceptance even if candidates had never been
introduced to the notion of the battle of the forms, but it resulted in outcomes of very differing
quality.
Well-prepared candidates were able to demonstrate what they can achieve: material was
carefully selected, presented within a compelling and logical structure which applied the law
to the scenario throughout and clear, compelling conclusions were presented, thus
demonstrating a first rate understanding of the law and its likely application.
The concept of the battle of the forms was known and understood and appropriate case law
selected to support argument.
Weaker responses demonstrated lack of knowledge and/or confused understanding and/or

lack of appropriate skill.
20. M/J 12/P31/Q4

For twenty years Jackson Textiles has been a major supplier of clothing to shops owned by
Hebdon Retail. Six months ago, Hebdon Retail advised Jackson Textiles that it would cease
all supply arrangements from the end of April 2012. There had never been any signed and
written agreement between Jackson Textiles and Hebdon Retail. Jackson Textiles claim that
it had a contract with Hebdon Retail and a term of this contract had been breached when the
company terminated its supply arrangements. Hebdon Retail argues that there was never any
intention on its part to be bound by any long term supply contract. Using case law to support
your answer, analyse the rules relating to formation and breach of contract and advise Jackson
Textiles of the possible outcome of any legal action that might be pursued.
Mark Scheme:
Candidates might be expected to introduce their response with an outline of the essentials
of a valid contract; emphasis expected on implied offers, and acceptance and intention to
create legal relations.
No credit will be given for expansive coverage of other essentials of valid contracts. Binging
contracts require a definite offer and corresponding, unconditional acceptance.
Was there an offer made, whether in express terms or implied from circumstances? There
appear to be two separate contractual issues: was there a long term supply contract and
were there separate contracts to supply particular orders?
Clearly order were placed and honoured, thus giving rise to separate contracts on each
occasion. The main issue, however would appear to be whether there was an overarching
long term supply contract an d if so what the terms of it actually said the situation is made
all the more difficult because even if such a contract’s existence can be established, it would
be difficult to establish the nature and extent of terms without written evidence.
Oral contracts are just as binding as written ones (evidence permitting), so could it be
argued that the repeated placing of orders and the fulfillment of those orders was evidence
of a long term implied overarching contract (e.g. Baird Textile Holdings Ltd v Marks &
Spencer plc)?
Binding contracts also require an intention to create legal relations. Whilst this intention
would ordinarily be presumed in commercial agreements such as this (if indeed agreement
can be deduced), the presumption can be rebutted by evidence to the contrary (e.g. Rose
& Frank v Crompton Bros).
Candidates need to conclude whether agreement can be implied to give business reality to
the transaction and whether an argument that no binging agreement was intended might
succeed.

A popular question which was well answered by those who chose to focus their knowledge
on the question actually posed; but many simply stated all they knew about the formation
and essentials of a valid contract.
The examiner will always look for a brief introduction to contextualise the response, but
candidates must realize that focus is the key to success.
The concepts of unilateral and bilateral contracts were generally well known but the ability
to clearly and succinctly state, explain and illustrate with case law example the basic rules
relating to offers, invitations to treat and acceptance of offers was very variable.
The best responses to this question were excellent examples of what well-prepared
candidates can achieve: material was carefully selected, presented within a compelling and
logical structure which applied the law to the scenario throughout and clear, compelling
conclusions were presented.
Nevertheless, few candidates saw the need to distinguish between the overarching long
term contract and the individual contracts made as a consequence of it.
The intention to create legal relations in commercial settings was well known even if the
decision in Rose and Frank v Crompton Bros either was not or was overlooked.
The weakest answers consisted of lengthy, unordered text which was poorly applied to the
scenario; any conclusion attempted was often thin or even contradictory
21. O/N 11/P31/Q4

Hilary places the following advertisement in the Horse and Rider magazine:
FOR SALE
Horse-Riding Saddle.
Almost new; still in excellent condition. £500 or near offer.
You will not be disappointed
Please Call 01987-654321
Emily sees the advertisement, telephones Hilary and arranges to go and see the saddle at 10
o’clock, in the morning. Hilary also receives a telephone call from Felicity and arranges for her
to come to see the saddle at 11 o’clock on the same morning. Emily arrives as agreed at 10
o’clock inspects the saddle and tells Hilary that she is interested in buying it for £500 but that
she needs to speak to her husband first when they meet for lunch. She offers to pay Hilary
&25 if she will keep the offer open to her until 3 o’clock that afternoon. Hilary agrees. Felicity
arrives at 11 o’clock and having seen the saddle, says that she will give Hilary £500 in cash.
Hilary takes her money and Felicity takes the saddle home. When Emily returns later in the
day as arranged, Hilary informs her that she is too late and that the saddle has been sold.
Consider Hilary’s potential contractual liability towards Emily and the possible remedies that
she might pursue.
Mark Scheme:
An outline of the essentials of a valid contract required: emphasis expected on offers,
invitations to treat, and acceptance. Credit will be given for possible reference to
consideration but nothing for other essentials of valid contracts. Binding contract requires
definite offer and corresponding, unconditional acceptance.
Counter offer operates as a rejection and terminates offer (Hyde v Wrench). Was there an
offer made? Advertisement is an invitation to treat, not a firm offer to sell (Partridge v
Crittenden). Dies Hilary offer to sell for £500?
Does Emily makes a counter offer when she asks about buying after she has spoken with
her husband? Does she buy an option to purchase? What is the implication if this is so? Is
the sale to felicity a breach of the contract to keep the offer to sell the saddle open until
Emily’s return? Could either specific performance or rescission be sought unlikely to be
granted (the saddle is hardly unique and third party rights have accrued); damages are the
only likely remedy available.
It is important for candidates to be totally focused when responding to question relating to
the formation of contract. No question will require candidates to write about everything they
have been taught on the topic, so candidates have to select material and not lose sight of
the precise aspects actually addressed by the scenario that has been presented.
Better-prepared candidates set the question in context, briefly explained the rules relating
to invitations to treat, offers and acceptance and then went on to focus on the issues raised.
There were some very succinct, well-informed and accurate assessments of the situation
which drew extremely compelling conclusions.
Less well-prepared candidates often saw this as an opportunity to explain the requirements
of a contract at length and consequently spent too little time discussing the purchase of an
option to buy and what effect that might have on the situation. Conclusions were often vague
or non-existent.
22. M/J 11/P33/Q5

Club Mencer post letters to their credit card account-holder inviting them to join a new wine
club. The letter says that member of the club will benefit from special price wine delivered to
their homes at regular intervals, that membership lasts for one year and that members must
order at least 12 bottles of wine every 3 months. The letter also says that new member is
entitled to an introductory bonus. Her application is posted on 24 March but it fails to arrive
until 3 April, by which time the stock of introductory bonus wine has all been sold. Carol also
receives the letter from Club Mencer. She applies for the introductory bonus wine and it is
delivered to her. She then orders no further wine during her year’s membership because she
claims that she didn’t know she had to. Taking into account the rules on formation of contract,
consider whether Lorraine and Carol are each bound by a contract of membership to the wine
club and analyse their respective rights and liabilities in the light of the above circumstances.
Mark Scheme:
The question addresses the rules relating to the formation of the contract, and in particular,
offer and acceptance, so these do need to be discussed in some detail in relation to the
three parties concerned. In the case of Lorraine and Carol, discussion should centre on
whether the letters sent out by Club Mancer amounted to offers or invitations to treat, both
of which should be defined, explained, illustrated by case law (e.g. Carlill v Carbolic Smoke
Ball Co etc) and conclusions drawn.
The better view would seem to be that the letters amounted to firm offers to contract on
certain terms set out in the letter and consequently candidate ought then to discuss whether
or not either Lorraine and/or Carol went on to accept the offer unconditionally.
There seems little doubt as regards Carol as she ultimately received the introductory offer
wine promised by Club Mancer. As regards Lorraine, candidates need to discuss and apply
the posting rule as it relates to acceptance. Was post the proper means of acceptance (e.g.
Henthorn v Fraser)? If so, was the letter posted in time, even though it arrived after the
deadline? If candidates conclude that contracts were formed between Club Mancer and the
two ladies, the issue then arises as to whether Club Mencer breached the contract when
they failed to supply the introductory wine at a special price to Lorraine and whether Carol
breached the contract by failing to buy sufficient wine during the first year’s membership of
the club.
Consideration of potential remedies should be credited accordingly. Clear, compelling

conclusions must be drawn. Responses limited to factual recall of principle will be restricted
to marks below band 4.
This was probably the most popular question in section B. The concepts of unilateral and
bilateral contracts were generally well known but the ability clearly and succinctly to state,
explain and illustrate with case law examples the basic rule relating to offers, invitations to
treat and acceptance of offers was variable.
The best responses to this question were excellent examples of what well prepared
candidates can achieve: material was carefully selected, presented within a compelling and
logical structure which applied the law to the scenario throughout and clear, compelling
conclusions were presented.
Weaker candidates recognized that offer and acceptance were important issues. A
surprising number found that Mencer’s letter constituted an invitation to treat then went on
to ignore that finding and discuss Lorraine’s reply as an acceptance that fell under the postal
rule.
It was a bit disappointing that so many candidates appeared not to understand the postal
rule, given that invariably they recognized that it was an issue and many candidates
appeared not to understand the postal rule, given that invariably they recognized that it was
an issue and many even said that it could only be used for acceptance but still misapplied
the principle
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Article No. 489

Title LAW A-Level Paper-3 Topical (Article# 489)

Editor Sufyan Ali Chaudhry

Constructive criticism and suggestions would be appreciated.

Unit 1: Formation of valid contracts

2. Offer and acceptance

Unit 2: Contents of contracts

3. Control of exemption clauses

Unit 3: Vitiating factors

4. Passing of title under void and voidable contracts.

Unit 4: Remedies for breach

(Solving 25 marks question)

AO1: Knowledge and understanding 50% (12.5 marks)

AO2: Analysis, evaluation and application 40% (10 marks)

AO3: Communication and presentation 10% (2.5 marks)

UNIT 2: CONTENTS OF CONTRACTS ............................................................................ 106

UNIT 3: VITIATING FACTORS ......................................................................................... 144

UNIT 4: REMEDIES FOR BREACH ................................................................................. 186

MAY/JUNE 2019 PAPER 32 ............................................................................................ 235

FORMATION 1.3 Consideration

Sale Point: Shop # 25-28 Lower Ground Floor,

Unit 1: Formation of valid contracts

maximum allocated in Band 3. Evidence of critical assessment is required for marks to be

10. O/N 11/P32/Q2

11. M/J 09/P33/Q2

12. O/N 09/P32/Q3

Candidates should also consider communication of acceptance (Entores v Miles Far

13. O/N 09/P31/Q1

14. M/J 09/P32/Q1

General, all-embracing and ill-focused responses are to be awarded a maximum mark

For example, specified or reasonable means of acceptance (Henthorn v Fraser), posting in

Candidates may consider possible remedies available to either Tamara or to Umma

General, all-embracing and ill-focused responses are to be awarded a maximum mark

10. O/N 15/P31/Q4

The first issue to be dealt with is the 'offer'.

 Is this reply an acceptance in law?

An acceptance is an agreement to be bound to the terms of an offer. The better

An offer can be revoked by an offeror before communication of acceptance by the offeree

Moreover, a large proportion of learners had grasped a fundamental comprehension of

Less successful respondents too frequently digressed inappropriately into promissory

11. O/N 14/P31/Q4

Candidates should recognize that specific performance might be applicable as an equitable

12. M/J 14/P31/Q5

actually amounts to something of value performed in return for another’s promise?

 Was Denzil’s advertisement an offer or an invitation to treat (Carlill v Carbolic

The better—prepared Candidates then proceeded to explore the rules regarding

13. O/N 13/P32/Q6

Binding contract requires definite offer and corresponding, unconditional acceptance,

14. O/N 13/P31/Q5

Q15. M/J 13/P33/Q5

16. M/J 13/P32/Q6

17. O/N 12/P31/Q4

18. M/J 12/P33/Q4

19. M/J 12/P31/Q6

Weaker responses demonstrated lack of knowledge and/or confused understanding and/or

20. M/J 12/P31/Q4

General, all-embracing and ill-focused responses are to be awarded a maximum mark

21. O/N 11/P31/Q4

22. M/J 11/P33/Q5

Consideration of potential remedies should be credited accordingly. Clear, compelling

Note: Please mark with aor X