CILEx L3 Contract Law

Question 1

Which of the following is NOT an essential element required to form a valid contract?

Accepted Answer

A written document

Answer

A valid contract requires offer and acceptance, consideration, intention to create legal relations, and capacity to contract. Writing is not generally required — most contracts can be made orally or by conduct. Exceptions include contracts for the sale of land (which must be in writing under s.2 Law of Property (Miscellaneous Provisions) Act 1989) and guarantees (Statute of Frauds 1677).

Question 2

In Carlill v Carbolic Smoke Ball Company [1893], the court held that the advertisement was:

Accepted Answer

A unilateral offer to the whole world

Answer

The Court of Appeal held that the advertisement constituted a unilateral offer to the whole world, which could be accepted by anyone who performed the conditions stated (using the smoke ball as directed). The deposit of £1,000 in the bank showed the company's sincerity and intention to be bound.

Question 3

What is the postal rule as established in Adams v Lindsell (1818)?

Accepted Answer

Acceptance takes effect when the letter is posted, not when it is received

Answer

The postal rule provides that acceptance of an offer is effective from the moment the letter of acceptance is properly posted, even if it is delayed or lost in the post. This is an exception to the general rule that communication must be received. The postal rule does not apply to revocation of offers, instantaneous communications, or where its application would produce manifest inconvenience.

Question 4

Which case established that past consideration is not valid consideration?

Accepted Answer

Re McArdle (1951)

Answer

In Re McArdle (1951), decorating work had already been completed before a promise of payment was made. The Court of Appeal held that the promise was unenforceable because the consideration (the work) was past — it had been performed before the promise was made and was not given in exchange for the promise.

Question 5

What is the effect of a misrepresentation that induces a party to enter into a contract?

Accepted Answer

The contract is voidable at the option of the innocent party

Answer

A misrepresentation renders a contract voidable, not void. The innocent party can choose to rescind (set aside) the contract and/or claim damages, depending on the type of misrepresentation (fraudulent, negligent, or innocent). The contract remains valid until the innocent party elects to avoid it.

CILEx Level 3 Practice Test

CILEx Level 3 Practice Test

CILEx L3 Contract Law