Contract Law SQE1 practice questions

What Contract Law covers in SQE1

The SRA's assessment specification for assessments from 1 September 2026 lists six groups of topics:

• Formation: offer and acceptance, consideration, intention to create legal relations, certainty and capacity.
• Parties: privity of contract and the rights of third parties.
• Terms: express terms, incorporation, terms implied by common law and statute, exemption clauses, interpretation, classification as conditions, warranties and innominate terms, and variation.
• Vitiating factors: misrepresentation, mistake, unfair contract terms, duress and undue influence, and illegality.
• Termination: expiry or another specified event, breach, frustration, and the basic principles of restitution and unjust enrichment on termination.
• Remedies: damages, liquidated sums and penalties, specific performance, injunctions, the duty to mitigate, indemnities and guarantees, with causation and remoteness.

Classification of terms is listed as its own item for the first time in the 2026 specification.

Where it sits in FLK1

Contract is examined in FLK1, in session 2 from January 2027, with Tort and the Legal System of England and Wales with Constitutional and Administrative Law and EU Law. Each session has 85 questions, grouped by subject and randomised within the session. In the SRA's 2019 blueprint Contract makes up 14 to 20 percent of FLK1.

Contract rules also reach beyond session 2. A claim in Dispute Resolution, a pre-incorporation contract in Business Law and Practice, or a sale in Property Practice may turn on them. Ethics can arise in any Contract question. The law examined in January 2027 is the law in force on 11 September 2026.

Where candidates go wrong

In the SRA's annual report for 2023/24, Contract had a mean scaled score of 335, the highest in FLK1 apart from ethics. The marks lost tend to go on rules candidates think they know, and these traps recur in our question bank.

• Timing of incorporation. A term on a ticket, a receipt or a notice seen only after the contract was made is not part of it, however clearly it is worded. A signed document binds whether or not it was read.
• The postal rule stretched too far. Acceptance by post takes effect on posting only where post is a reasonable means and the offer does not require the acceptance to reach the offeror. A revocation of the offer takes effect only when it is received.
• Exclusion clauses read as drafting problems. Some liabilities cannot be excluded at all, such as liability for death or personal injury caused by negligence. For the rest, the clause must cover the loss on its true construction and then pass the statutory test that applies.
• Remoteness and mitigation confused. Remoteness asks what was within the reasonable contemplation of both parties when the contract was made, under the two limbs of Hadley v Baxendale. Knowledge gained after that date does not count. Mitigation is a separate question about what the claimant reasonably did after the breach.
• Penalties judged by the old test. A clause triggered by breach is tested by whether it protects a legitimate interest and is not out of all proportion to it. Asking only whether it was a genuine pre-estimate of loss leads to the wrong option.

Frustration adds a numerical trap. Under the Law Reform (Frustrated Contracts) Act 1943, money paid before the frustrating event is recoverable and money payable ceases to be payable, but the court may let the payee keep up to its expenses. An answer that returns everything, or nothing, has usually missed the expenses allowance.

How to revise Contract Law

Revise in the order a problem is solved: formation, terms, exclusion or invalidity, breach or discharge, then remedy. Working through the stages in order shows which one a question is testing.

Learn the statutory routes side by side: the Consumer Rights Act 2015 for traders dealing with consumers, and the Sale of Goods Act 1979, the Supply of Goods and Services Act 1982 and the Unfair Contract Terms Act 1977 between businesses. Learn the remedies with numbers and practise the calculation of expectation loss, reliance loss and the 1943 Act adjustment.

Contract and Tort share session 2 and share several concepts, remoteness among them, with different tests. Revising them in the same weeks makes the differences easier to hold. The SQE1 study plan places both in the weeks before your sitting.