Answering SQE1 questions requires one of two things.

Either –

1) a highly specific piece of knowledge, or

2) the understanding of a broad principle which can guide you to the right answer.

Specific Knowledge

Take the following question from an SRA SQE practice paper:

The directors of a private limited company plan to sell some land which is owned by the company. The proposed purchaser of the land is known to all the directors, and is the father of one of the directors. The company’s directors are all also shareholders in the company. The land has recently been independently valued at £70,000 and it is agreed that this will be the sale price. The company’s most recent set of annual accounts states net profits of £770,000 and net assets of £600,000. The company has adopted the Companies (Model Articles) Regulations 2008 (unamended) as its articles of association. Does the proposed sale of land require shareholder approval?

 A. No, because the transaction falls under the directors’ general authority to manage the company’s business.

 B. No, because the transaction involves the sale and purchase of land which is a non-cash asset.

C. No, because the transaction involves the sale and purchase of an asset at its fair market value.

D. Yes, because the transaction involves the sale and purchase of land whose value exceeds 10% of the company’s asset value.

E. Yes, because the company’s directors are all also shareholders in the company.

To answer this question you need to know one specific piece of knowledge. You need to know when a Director needs shareholder authority to enter into a transaction.

For that you need to know that the Companies Act requires shareholder approval where a transaction involves

-A non-cash asst

-Worth over £5000;

-Being bought or sold to a connected person

– Which is worth in excess of 10 percent of net asset price of the company.

In these circumstances, the Companies Act deems the transaction substantial and requires shareholder approval.

So, with this specific piece of knowledge you can quickly identify D as the correct answer.

Understanding of a principle

Now consider this question:

In March 2023, a claimant brought a claim against his plumber for a breach of contract alleged to have taken place in June 2017. The plumber operated as a sole trader.

In August 2023, the plumber died. The plumber’s assets are being dealt with by her personal representatives.

In October 2023, the claimant applied to substitute the plumber’s personal representatives for the deceased plumber in the claim, so that the claim could continue.

What powers does the court have to make a substitution for the plumber as a deceased party in the claim?

A. The court can order a new party to be substituted because the relevant limitation period was current when the claimant applied for the substitution.

B. The court cannot order a new party to be substituted because the relevant limitation period has expired.

C. The court can order a new party to be substituted because the relevant limitation period was current when the proceedings were started.

D. The court can order a new party to be substituted because the relevant limitation period was current when the plumber died.

E. The court cannot order a new party to be substituted because liability remains with the plumber’s business.

Here, it is enough to know that limitation is supposed to limit the time between something happening and proceedings being issued.

It is not concerned with how long proceedings last or with the deaths of the parties. The only answer which reflects the overall purpose of limitation is C, because it is focused on when the proceedings were started.

It is common for SQE1 questions to require either a highly specific piece of knowledge or, alternatively, a good understanding of how a particular area of law operates and why.

Most lawyers could answer the second question without revising. Most would struggle with the first question without revising it.

This is why we think experience is essential to passing SQE1. It gives you the framework to understand the law in its context. It is the best possible revision.

If you want to learn more about combing SQE1 preparation with practical experience then why not reach out!