Business Law Flashcards
Explain why knowledge of employment law is important and identify a relevant law.
Businesses employ people across many roles and has a duty of care to them.
Relevant laws include
o Health and Safety at Work Act (1974)
o Equality Act 2010
o Equal Pay 1970
Explain what a private limited company means?
Candidates’ answers may include:
* Owners are only liable to the extent of their shareholding
* The Articles of Association of a private limited company may provide for a right of pre-emption so that when a member wishes to sell or to transfer ownership of his shares he must first offer them to existing members
* No minimum capital requirement for a LTD company
* Only need one director
* No upper age limit for directors in a LTD
* Audited accounts must be produced by a LTD within 10 months of the end of the financial year
Explain what is meant by a voidable contract and two circumstances when a contract may be voidable.
A voidable contract was legally binding at one point but suffers from an underlying defect which means that either party can apply to courts to have contract annulled or reduced
Examples of when a contract may be voidable
- non-disclosure of one or more material facts,
- misrepresentation,
- mutual mistake,
- lack of free will of a contracting party, or presence of one contracting party’s undue influence over the other, and
- a material breach of the terms of the contract.
Identify 3 things needed for the formation of a contract?
- Agreement (Consensus in idem)
- Offer and acceptance
- Capacity to contract
- Not unlawful
- Two parties or more
Explain what is meant by the term ‘Breach of Contract’ and state one remedy available in this situation.
Breach of Contract is the situation that occurs when one party has broken the agreement in some way or another and has, as a result, failed to satisfy their part of the contract. (1 Mark)
Four possible remedies: (Identify One = 1 Mark)
- Damages
- Specific Implement
- Retention of lien
- Recission
State two examples of instances when a contract is not legally binding.
One party cannot enter into a contract (i.e. they’re underage or mentally incapacitated).
One party is coerced into entering into the contract.
One party exerts undue influence over the other, affecting their decision-making.
One party provides false information or fails to disclose material facts relevant to the contract.
The terms of the contract are excessively unfair or one-sided.
The contract would violate public policy or break the law.
A significant mistake is made regarding the contract’s subject matter or terms.
If fulfilling the contract becomes impossible because of unforeseen circumstances.
Is Health and Safety criminal or civil law? Explain the difference.
Criminal law. Civil law is concerned with resolving conflicts between individuals and criminal law is concerned with offenses committed against society.
List four laws that will affect Highland Spring
Candidates must identify 4 examples of legislation. Candidates are not required to include the correct year.
Candidates who successfully identify 2 pieces of legislation will receive 1 mark.
Health and Safety at Work Act (1974)
* Companies Act (1985) & (2006)
* Food Standards Act (1999)
* Food Safety Act (1990)
* Employment Legislation
o Equality Act 2010
o Equal Pay 1970
Sex Discrimination Act 1975.
Any other reasonable answer
Explain two differences between a private and a public limited company.
- The Articles of Association of a private limited company may provide for a right of pre-emption so that when a member wishes to sell or to transfer ownership of his shares he must first offer them to existing members WHEREAS a public limited company can trade shares freely on the stock exchange
- No minimum capital requirement for a LTD company, WHEREAS a plc must have a minimum of £50000 share capital
- Only need one director for a LTD WHEREAS a PLC must have 2 directors
- No upper age limit for directors in a LTD WHEREAS the directors of a PLC must retire at the age of 70
- Audited accounts must be produced by a LTD within 10 months of the end of the financial year WHEREAS a PLC must produce them in 7 months.
- PLC’s must wait until the 117 Trading Certificate is received WHEREAS a LTD company can trade as soon as th Certificate of Incorporation is received.
Outline the difference between a void and a voidable contract.
- A void contract never existed and has no legal effect what so ever
WHEREAS - A voidable contract was legally binding at one point but suffers from an underlying defect which means that either party can apply to courts to have contract annulled or reduced
Examples of when a contract may be void
- it is illegal from the moment it is made
- it is legal but declared null by the courts because it violates a fundamental principle such as fairness, or is contrary to public policy
- it becomes void due to changes in the law
- Lack of capacity to contract (such as arises from being an infant or minor, intoxicated, or insane)
Examples of when a contract may be voidable
- non-disclosure of one or more material facts,
- misrepresentation,
- mutual mistake,
- lack of free will of a contracting party, or presence of one contracting party’s undue influence over the other, and
- a material breach of the terms of the contract.
Identify two things needed for formation of contract.
- Agreement (Concensus in idem)
- Offer and acceptance
- Capacity to contract
- Not unlawful
- Two parties
The US legislation that has affected the export of the Aberdeen Angus crisps to the USA does not affect the way that Mackies at Taypack produce and sell their product in the UK, Europe, Japan and Hong Kong.
Explain the reason for this.
Answers should recognise that as Mackies at Taypack operate in the Scotland, they are bound as such to operate under the legal system of Scotland and the rest of the United Kingdom.
Although the law of Scotland is directly affected by the legal system of the European Union and Westminster, the legislation imposed by the USA will only affect the products that are to be sold in the USA.
State the difference between common law and statute law.
Statute: The main laws, regulations and orders passed by The Westminster Parliament and Scottish Parliament (1 Mark)
Common law: Law developed through custom and practice (1 Mark)
What is meant by the term ‘precedent’?
Precedent (Case Law) relates to decisions made by courts (1 Mark), which can change interpretations of legal obligations imposed by statute (1 Mark). It is a judicial decision that may be used as a standard in subsequent cases.
Briefly describe the structure of the Criminal Justice System in Scotland.
The criminal courts are, in ascending order of authority (1 Mark): the Justice of the Peace Court; the Sheriff Court and the High Court of Justiciary (1 Mark).
