Picture the exam. You are 140 questions into FLK1, the clock is eating your buffer, and up pops a fact pattern where a car dealer says "this engine has never given a moment's trouble", the buyer signs, and three weeks later the gearbox dies. Is that a term? A representation? An actionable misrepresentation? Or nothing at all? Four of the five answer options look defensible. This is where Contract Law stops being about formation and starts testing whether you can read a statement and slot it into the right legal box under time pressure.
Most candidates revise offer, acceptance and consideration to death and then run out of steam on the messier middle of the syllabus. That is a mistake. On the SQE1 FLK1 paper the examiners lean heavily on terms, misrepresentation and the vitiating factors, because these areas force you to distinguish concepts that sound almost identical. Let me walk you through the parts that actually move marks.
Terms of a Contract: Express, Implied and the Term–Representation Line
Start with the question the exam keeps asking: was the statement a term (part of the contract) or a mere representation (a statement that induced it)? The distinction decides your remedy. Break a term and you sue for breach of contract. Rely on a false representation and you are in misrepresentation territory instead.
The courts weigh several factors. How much importance did the parties attach to the statement (Bannerman v White)? Did the maker have special knowledge or skill (Oscar Chess v Williams versus Dick Bentley v Harold Smith)? How long between the statement and the contract? Was the deal reduced to writing, and was the statement left out? None of these is decisive on its own, so in an MCQ look for the strongest indicator in the facts rather than a single rule.
Terms are also implied by statute, most importantly the Consumer Rights Act 2015 for business-to-consumer contracts (satisfactory quality, fit for purpose, matching description) and the Sale of Goods Act 1979 for business-to-business sales. Know which statute governs which relationship — the SQE loves to hand you a consumer and then quote a section from the wrong Act.
Quick check before you answer any "terms" question: Is this B2B or B2C? That single fact routes you to the correct statute and the correct remedy.
Conditions, Warranties and Innominate Terms in FLK1
Once a statement is a term, its type controls what happens on breach. A condition is a major term; breach lets the innocent party terminate and claim damages. A warranty is a minor term; breach gives damages only, never the right to walk away. Simple enough — until the innominate term appears.
The innominate term approach from Hong Kong Fir Shipping v Kawasaki Kisen Kaisha asks you to look at the consequences of the breach rather than the label. If the breach deprives the innocent party of substantially the whole benefit of the contract, they may terminate; if not, damages only. Watch the facts: where the parties have clearly labelled a term, or a statute classifies it, use that. Where the term is silent and the breach could be trivial or catastrophic, the innominate route is your answer. A well-set MCQ often signals this by describing a term that "could be breached in many ways".
Exclusion and Limitation Clauses: The Three-Stage Test
Exclusion clauses are pure exam gold because they demand a structured, three-stage analysis, and each stage can be the "best" answer depending on the facts.
Stage one — incorporation. Was the clause part of the contract? It can be incorporated by signature (L'Estrange v Graucob), by reasonable notice given before or at the time of contracting (Olley v Marlborough Court; Thornton v Shoe Lane Parking), or by a consistent course of dealing. A clause slipped in after the deal is done fails at this gate.
Stage two — construction. Does the wording actually cover the loss that happened? Ambiguity is read against the party relying on the clause (the contra proferentem principle).
Stage three — statutory control. For business contracts the Unfair Contract Terms Act 1977 applies: liability for negligently caused death or personal injury can never be excluded, other negligence loss can be excluded only if reasonable, and clauses limiting liability for breach of the implied terms about goods must pass the reasonableness test. For consumer contracts, the Consumer Rights Act 2015 takes over with its fairness test and its list of terms that are automatically non-binding. In an SBA, if the clause survives incorporation and construction, always ask whether the relevant Act strikes it down. That final step is where careless candidates lose the mark.
Misrepresentation: The Type Decides the Remedy
A misrepresentation is an unambiguous false statement of fact or law, made by one party to the other, which induces the contract. Silence generally does not count, though there are exceptions — half-truths, statements that become false before signing, and contracts of utmost good faith. Statements of pure opinion or future intention are usually not actionable, unless the maker did not honestly hold the opinion or never intended to keep the promise.
The SQE tests the categories because they carry different remedies:
- Fraudulent misrepresentation (Derry v Peek) — made knowingly, without belief in its truth, or recklessly. Remedy: rescission plus damages in the tort of deceit, with no remoteness cap.
- Negligent misrepresentation under section 2(1) Misrepresentation Act 1967 — the burden reverses, so the maker must prove reasonable grounds and honest belief. Damages are assessed on the generous fraud measure (the Royscot point).
- Innocent misrepresentation — the maker had reasonable grounds to believe the statement. Rescission is available, or the court may award damages in lieu under s.2(2).
Do not forget the bars to rescission: affirmation, lapse of time, impossibility of returning to the pre-contract position, and third-party rights. If the facts tell you the buyer used the goods for months after discovering the truth, rescission is likely lost and you are looking at damages only. That kind of detail is the difference between the right option and a plausible trap.
Duress, Undue Influence and Mistake: The Vitiating Factors
These doctrines make a contract voidable or void, and they cluster together in the syllabus for a reason — the examiner wants you to pick the correct one from facts that could fit several.
Duress is illegitimate pressure that leaves the victim with no practical alternative. Economic duress is real but demanding: a threat to break a contract, causing the victim to enter a new agreement with no realistic choice, and a protest at the time all help. Ordinary hard bargaining is not duress.
Undue influence splits into actual and presumed. Presumed undue influence arises where there is a relationship of trust and confidence and a transaction that calls for explanation; the burden then shifts to the stronger party to show the weaker one had independent advice. The banking scenarios flowing from Royal Bank of Scotland v Etridge (No 2) are a favourite — watch for a spouse guaranteeing the other's business debts.
Mistake is narrow. Common mistake (both parties share the same false assumption about a fundamental fact), mutual mistake (they are at cross purposes), and unilateral mistake (one party knows the other is mistaken, often as to identity). Most alleged mistakes fail because the doctrine is deliberately restrictive, so be sceptical when an option offers "the contract is void for mistake" unless the facts are genuinely fundamental.
Exam habit worth building: for every vitiating-factor question, state whether the contract is void (never existed) or voidable (valid until set aside). That one word often eliminates two answer options instantly.
Turning Knowledge Into FLK1 Marks
Reading these rules is the easy part. Scoring is about method. Try this: for any Contract Law SBA, run a fixed sequence in your head — Is there a valid contract? Is the statement a term or a representation? If a term, what type and what breach consequence? Any exclusion clause to survive three stages? Any vitiating factor? Then match remedy to category. A repeatable checklist stops you second-guessing under time pressure and catches the buried facts, such as a signed document or a lapse of time, that decide the question.
Practise with single-best-answer questions rather than open essays, because SQE1 rewards choosing the most correct option when several are partly right. Time yourself at roughly 100 seconds per question so exam pace becomes automatic long before you sit either the FLK1 or FLK2 paper.
If you would like structured support, CELE SQE (celebar.com) covers all thirteen FLK subjects across our SQE1 courses — Short-term at £1,750, Mid-term at £2,750 and Long-term at £3,720, with a single-FLK option at half price if you only need FLK1 or FLK2. Many candidates pair a course with the SQE1 question bank at £575 a month to drill exactly the term-versus-representation and vitiating-factor scenarios above. Reach us any time on WeChat SQE100 or at [email protected] — no pressure, just ask when you are ready.