Formation: offer & acceptance
Contract formation asks whether the parties reached an agreement supported by a matching offer and acceptance. SQE1 tests this constantly through short problem facts, so you must distinguish an offer from an invitation to treat and know exactly when acceptance takes effect.
What "Formation: offer & acceptance" covers
- An offer is a statement of terms on which the offeror is prepared to be bound; an invitation to treat (shop displays, adverts, auction calls, tender requests) merely invites offers.
- Acceptance must be an unqualified assent to all terms (the 'mirror image' rule); a purported acceptance that adds or changes terms is a counter-offer that destroys the original offer.
- Acceptance must generally be communicated to and received by the offeror; silence cannot be imposed as acceptance.
- The postal rule makes acceptance effective when posted (if post is a reasonable method), but it does not apply to instantaneous communications, which take effect on receipt.
- An offer can be terminated by revocation (communicated before acceptance), rejection, counter-offer, lapse of time, or death.
- Revocation is effective only when it actually reaches the offeree, and may be communicated by a reliable third party.
- A unilateral offer (e.g. a reward) is accepted by full performance and generally cannot be revoked once performance has begun.
Key cases & statutes
The authorities and provisions most likely to matter for this subtopic:
How it's tested in SQE1
SQE1 uses single best answer questions: a short factual scenario, one precise question, and five options of which only one is the best answer on the law applied to the facts. For formation: offer & acceptance, expect to be asked what the correct legal position is, what a party may or must do, or which outcome follows — with more than one option looking arguable. Reading the facts carefully and eliminating the near-misses is the skill that earns the mark.
Where candidates lose marks
- Treating an advertisement or shop display as an offer rather than an invitation to treat.
- Applying the postal rule to email, phone or fax, where receipt (not sending) governs.
- Assuming a counter-offer keeps the original offer open — it terminates it.
Learn this subtopic in the course
A video lesson, notes and exam-style practice on formation: offer & acceptance.
FAQ
Is formation: offer & acceptance tested on SQE1?
Yes — formation: offer & acceptance is part of the SQE1 Contract syllabus (FLK1) and can appear in single best answer questions.
How is formation: offer & acceptance examined in SQE1?
SQE1 tests it by application: you're given a realistic scenario and choose the single best answer from five options. The focus is on using the law correctly, not reciting it — knowing the leading authorities (Carlill v Carbolic Smoke Ball Co [1893], Pharmaceutical Society v Boots [1953]) helps.