Monday 12 January 2026
Dear Subscriber,
Hope you had a great weekend, and if you are sitting SQE1 this week, good luck! Please see below for the question, the answer to the previous question and associated resources. This is the web version of this newsletter.
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This Week’s Question: A company advertises specialist computer servers for sale on its website. A fraudster emails the company, falsely claiming to be a well-known university procurement officer and using a similar email address to the genuine one. Relying on this representation, the company agrees by email to sell the servers on credit and delivers them. The fraudster immediately sells the servers on to an innocent third party. When the fraud is discovered, the company seeks to recover the servers from the third party. Which statement best reflects the legal position?
A. The contract is void for mistake, so title never passed and the company can recover the servers.
B. The contract is voidable for misrepresentation, but title passed before avoidance.
C. The contract is void because the identity of the buyer was fundamental to the agreement.
D. The contract is valid because mistakes as to identity are never recognised in online contracts.
E. The contract is void unless the company can show that the third party acted dishonestly.
Dig Deeper: Learn more about FLK Contract Law, on https://youtu.be/Ml00FrzY1NI
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Last Week’s Question: A solicitor in a regulated firm receives £15,000 from a client on account of costs for an ongoing matter. Before any bill is delivered, the solicitor transfers £5,000 of that money from the client account to the firm’s office account to cover work already carried out. The solicitor intends to send a bill later once the matter is completed. The client later complains to the firm and the SRA investigates. Which statement best reflects the solicitor’s position under the SRA Accounts Rules?
A. The transfer was permitted because the solicitor had already carried out work of equivalent value.
B. The transfer was permitted because the money belonged beneficially to the firm once work was done.
C. The transfer breached the SRA Accounts Rules because client money cannot be withdrawn without a bill or written notification of costs.
D. The transfer was permitted provided the client was informed within a reasonable time.
E. The transfer was permitted because the money was held on account of costs rather than for a specific disbursement.
✅ Correct Answer: C The transfer breached the SRA Accounts Rules because client money cannot be withdrawn without a bill or written notification of costs. Feedback: Under the SRA Accounts Rules 2019, client money includes money held on account of costs and must remain in the client account until it is properly due to the firm. A firm may only transfer client money to its office account after delivering a bill or other written notification of costs to the client (Rule 4.3). It is irrelevant that work has already been done or that the solicitor intends to bill later — the procedural requirement must be met first. Why the other options are wrong:
- A and B are wrong: work done does not automatically convert client money into office money.
- D is wrong: informing the client after the transfer does not cure the breach.
- E is wrong: money on account of costs is still client money until billed.
This question tests FLK1: Legal Services, specifically financial integrity, handling of client money, and regulatory compliance, an area that appears regularly in SQE1 but is often under-revised.
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All the best
Dr Ioannis (Yannis) Glinavos
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