AQA A-Level Law: Law of Contract — Revision Notes

Law of contract is section 3.4 of AQA A-level Law (7162). It is one of two options for Paper 3 (2 hours, 100 marks), where it carries 75 marks alongside 25 marks on the nature of law and the English legal system. You must apply the rules on formation, terms, vitiating factors, discharge and remedies to problem scenarios and evaluate the theory behind them, especially freedom of contract against consumer protection.

Use these notes with the Law of contract study guide and the Law of contract practice questions.

Syllabus coverage (AQA 7162, section 3.4)

Specification content	Key points
Rules of contract law	Formation, terms, vitiating factors, discharge, remedies
Theory of contract law	Freedom of contract vs consumer protection; offers, unilateral offers and invitations to treat; postal rule and electronic communication; consideration, privity and economic duress; effectiveness of exemption clauses and remedies
Essential requirements	Offer and acceptance; consideration including privity; intention
Terms: general	Express and implied; conditions, warranties, innominate terms
Terms implied by CRA 2015	s9, s10, s11 with remedies s20, s23, s24; s49, s52 with remedies s55, s56
Exclusion clauses	Nature; incorporation and construction; UCTA 1977 s2, s3; CRA 2015 s31, s57, s65
Vitiating factors	Misrepresentation (nature, types, remedies); economic duress
Discharge	Performance; actual and anticipatory breach; frustration
Remedies	Compensatory damages; specific performance; rescission; termination for breach

What are the essential requirements of a contract?

Offer and acceptance

• Offer vs invitation to treat: Fisher v Bell (1961), Pharmaceutical Society v Boots (1953), Partridge v Crittenden (1968). Unilateral offer: Carlill v Carbolic Smoke Ball Co (1893).
• Counter-offer (Hyde v Wrench, 1840); request for information (Stevenson, Jaques v McLean, 1880); revocation must be communicated (Byrne v Van Tienhoven, 1880).
• Acceptance: mirror image, communicated; silence insufficient (Felthouse v Bindley, 1862).
• Postal rule (Adams v Lindsell, 1818); excluded where the offer requires actual notice (Holwell Securities v Hughes, 1974). Instantaneous communication takes effect on receipt (Entores v Miles Far East, 1955; Brinkibon v Stahag Stahl, 1983).

Consideration - “some right, interest, profit or benefit… or some forbearance, detriment, loss or responsibility” (Currie v Misa, 1875). Sufficient not adequate (Chappell v Nestle, 1960); not past (Re McArdle, 1951); existing duty (Stilk v Myrick, 1809; Williams v Roffey, 1991); part payment (Foakes v Beer, 1884), with promissory estoppel (High Trees, 1947).

Privity - only parties can sue (Tweddle v Atkinson, 1861; Dunlop v Selfridge, 1915). Contracts (Rights of Third Parties) Act 1999: a third party may enforce a term that expressly gives them the right or purports to benefit them.

Intention - domestic: presumed absent (Balfour v Balfour, 1919), rebuttable (Merritt v Merritt, 1970); commercial: presumed present (Esso v Commissioners of Customs and Excise, 1976, discusses the presumption).

Which terms does a contract contain?

• Express terms; terms vs representations (Routledge v McKay, 1954; Oscar Chess v Williams, 1957; Dick Bentley v Harold Smith, 1965).
• Implied by fact (The Moorcock, 1889, business efficacy; Shirlaw v Southern Foundries, 1939, officious bystander) or by statute.
• Conditions (Poussard v Spiers, 1876), warranties (Bettini v Gye, 1876), innominate terms (Hong Kong Fir, 1962; The Hansa Nord, 1976).

Consumer Rights Act 2015

Contract to supply	Implied terms	Remedies
Goods	s9 satisfactory quality; s10 fit for particular purpose; s11 match description	s20 short-term right to reject (30 days under s22); s23 repair or replacement; s24 price reduction or final right to reject
Services	s49 reasonable care and skill; s52 reasonable time (if no time agreed)	s55 repeat performance; s56 price reduction

How are exclusion clauses controlled?

• Exclusion clauses remove liability; limitation clauses cap it.
• Incorporation: signature (L’Estrange v Graucob, 1934); reasonable notice before contracting (Olley v Marlborough Court, 1949; Thornton v Shoe Lane Parking, 1971); course of dealing (McCutcheon v David MacBrayne, 1964 - inconsistent dealings not enough).
• Construction: contra proferentem; clear words needed to exclude negligence (Canada Steamship Lines v The King, 1952).
• UCTA 1977 (business contracts): s2(1) cannot exclude negligent death or personal injury; s2(2) other loss only if reasonable; s3 standard terms subject to reasonableness.
• CRA 2015 (consumer contracts): s31 cannot exclude s9-s11; s57 cannot exclude s49, nor limit the trader’s liability under it to less than the price paid; s65 cannot exclude negligent death or personal injury.

What vitiating factors make a contract voidable?

Misrepresentation = false statement of fact (not opinion, Bisset v Wilkinson, 1927, unless the maker has superior knowledge, Smith v Land and House Property, 1884) that induces the contract (Attwood v Small, 1838; Redgrave v Hurd, 1881). Silence is not usually a misrepresentation, but half-truths (Dimmock v Hallett, 1866) and failing to correct a statement that becomes false (With v O’Flanagan, 1936) are.

Type	Test	Damages
Fraudulent	Knowingly, without belief in truth, or reckless (Derry v Peek, 1889)	Tort of deceit, all direct losses
Negligent (statutory)	Misrepresentation Act 1967 s2(1): defendant cannot prove reasonable grounds for belief (Howard Marine v Ogden, 1978)	Fraud measure (Royscot Trust v Rogerson, 1991)
Innocent	Reasonable belief in truth	Rescission, or damages in lieu at the court’s discretion, s2(2)

Rescission is lost by affirmation (Long v Lloyd, 1958), delay (Leaf v International Galleries, 1950) or third-party rights.

Economic duress: illegitimate pressure that is a significant cause of entering the contract, leaving no practical alternative (Atlas Express v Kafco, 1989; DSND Subsea v Petroleum Geo-Services, 2000). The contract is voidable but the right to avoid can be lost by affirmation (The Atlantic Baron, 1979). Lawful act duress is possible only in narrow cases (Times Travel v Pakistan International Airlines, 2021).

How is a contract discharged?

• Performance: complete and exact (Cutter v Powell, 1795; Re Moore and Landauer, 1921); substantial performance (Hoenig v Isaacs, 1952; contrast Bolton v Mahadeva, 1972).
• Breach: actual or anticipatory (Hochster v De la Tour, 1853). Breach of condition or a serious innominate breach gives a right to terminate.
• Frustration: impossibility (Taylor v Caldwell, 1863), illness (Condor v Baron Knights, 1966), illegality, purpose defeated (Krell v Henry, 1903). Not where only more expensive (Davis Contractors v Fareham UDC, 1956), self-induced (Maritime National Fish, 1935) or foreseen. Effects: Law Reform (Frustrated Contracts) Act 1943.

What remedies are available?

• Compensatory damages: expectation (Robinson v Harman, 1848); reliance (Anglia TV v Reed, 1972); mental distress for pleasure contracts (Jarvis v Swans Tours, 1973). Limits: causation, remoteness (Hadley v Baxendale, 1854; Victoria Laundry, 1949), mitigation (British Westinghouse, 1912).
• Specific performance: discretionary, where damages are inadequate, such as unique goods or land; not for personal service.
• Rescission: returns parties to their pre-contract position.
• Termination for breach: for breach of condition, serious innominate breach or repudiation.

How do I evaluate contract theory?

• Freedom of contract vs consumer protection: the classical model assumes equal bargaining power; the CRA 2015 and UCTA 1977 limit freedom where the bargain is unequal.
• Postal rule: justified as the offeror chose the post and as a way to give certainty; less suited to email, where receipt is near-instant.
• Consideration, privity and duress: Williams v Roffey’s practical benefit made it easier to enforce renegotiated promises, so economic duress became the main control on unfair pressure.
• Effectiveness of exclusion clauses and remedies: statutory rights help consumers, but enforcement depends on knowledge and the cost of claiming.

Common mistakes and exam traps

• Discussing misrepresentation without first identifying a false statement of fact.
• Applying UCTA to a consumer, or CRA 2015 to two businesses.
• Missing the s22 30-day limit for the short-term right to reject.
• Treating economic duress as making a contract void rather than voidable.
• Concluding on damages without remoteness and mitigation.

Frequently asked questions

Is contract compulsory in AQA 7162? No. On Paper 3 you study either law of contract or human rights, each worth 75 marks, alongside 25 marks of English legal system content.

Which CRA 2015 sections must I know? For goods: s9, s10 and s11 with remedies under s20, s23 and s24. For services: s49 and s52 with remedies under s55 and s56. For exclusions: s31, s57 and s65.

What is the difference between negligent misrepresentation at common law and under s2(1)? Under s2(1) the burden of proof is reversed, so the defendant must prove reasonable grounds for belief. The claimant also gets the fraud measure of damages.

Official specification

AQA A-level Law (7162) specification, section 3.4 Law of contract - aqa.org.uk.