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SQE 1 > Contract/Business: EXTRA > Flashcards

Contract/Business: EXTRA Flashcards

1
Q

Are requests for tender offers or invitation to treat?

A

Request for tender: Invitation to treat
Tenders=offer to do the work
If promised to accept lowest tender/impliedly promised to consider all conforming tenders=offer of unilateral contract

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2
Q

Are auctions offers or invitations to treat?

A
  • Request for bids-invitation to treat
  • Bids-offer
  • Hammer falls-acceptance (If auctioneer acting as agent for the owner, a bilateral contract is formed between owner and bidder once hammer falls)
  • BUT ‘Without reserve’-auctioneer must sell to highest bidder, is offer of unilateral contract by auctioneer (not owner)
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3
Q

What is the measure of damages when suing an auctioneer for breach of unilateral contract (without reserve auctions)?

A

difference between the value of item and the amount of the client’s bid

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4
Q

Is an ad of reward an offer or invitation to treat?

A

offer of unilateral contract

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5
Q

Are advertisements, menus, promotional materials offers or invitations to treat?

A

Invitation to treat
BUT is special circumstances showing an intention to be bound, may be offer of unilateral contract

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6
Q

What is the postal rule?

A

Acceptance takes place on posting BUT:
1. post reasonable form of communication
2. Properly stamped, addressed and posted
3. Offeror must not have expressly or implicitly excluded rule

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7
Q

When may the postal rule be impliedly excluded?

A

If offeror says/implies they need ‘notice in writing’ or be ‘told’ of acceptance, letter will only be effected when received

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8
Q

How can an offer be terminated?

A
  1. Revocation
  2. Rejection (by offeree)
  3. Lapse of time (reasonable time depends on circumstance)
  4. On occurrence of a condition (eg. goods damaged)
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9
Q

When can an offer be revoked

A

Any time before acceptance, even if the offeror has said they will leave it open for a specified period of time
UNLESS offeree has given (or promised) something to the offeror in return for keeping the offer open

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10
Q

What must be done for an offer to be successfully revoked?

A

Must be communicated to offeree (can be by reliable 3rd party)

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11
Q

How can an offer be impliedly rejected?

A

Counter offer
NOT request for further info

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12
Q

Rule for when acceptance via electronic communication is communicated?

A

No universal rule, look at all circumstances

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13
Q

Is silence acceptance

A

NO, even if the offer states it is, unless coupled with conduct that clearly signifies acceptance when viewed objectively

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14
Q

What is an offer?

A

‘An expression of willingness to contract on certain terms made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed’

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15
Q

What is acceptance?

A

‘An unqualified expression of assent to the terms of an offer’
‘Expression of assent’=must be communicated
‘Unqualified’=unconditional

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16
Q

Consideration definition

A

A right, interest, profit or benefit accruing to one party, OR some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other

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17
Q

What must consideration be?

A

must be sufficient but need not be adequate

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18
Q

Certainty: what will be to vague for sufficient certainty to create a contract?

A

Things like “on industry standard terms”/”on hire-purchase” as there are lots of different types to see what terms have been ra

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19
Q

ITCLR: what do commercial agreements cover?

A

all agreements that are not made between family and friends

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20
Q

ITCLR: what is needed to rebut each presumption/how strong are they?

A
  • Commercial: V strong presumption, need clear words to rebut
  • Domestic: can be rebutted by variety of factors (eg. relationship/£ at stake)
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21
Q

Can there be ITCLR where a business gives away stuff for free

A

Yes

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22
Q

ITCLR, what is this: For two years a client and their neighbour have acted on an agreement whereby every other week they each buy a ‘Lucky Dip’ lottery ticket on the understanding that if the ticket wins they will share the prize money. Last week the neighbour bought the ticket and it won £1,000,000. The neighbour refuses to share the prize money and the client believes they are entitled to half of it

A

A joint enterprise, there would be an expectation any prize would be shared.

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23
Q

Consideration: rules for alteration to pay MORE?

A

General rule: Performing existing contractual duty to the party is NOT consideration for promise by other party to pay more.

UNLESS exceed original duty
OR other party has received a practical or commercial benefit AND NO economic duress/fraud

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24
Q

Consideration: rules for alteration to pay LESS?

A

Part payment of undisputed debt not consideration for a promise to forgo balance
UNLESS give something extra (eg. early payment/goods not cash)
OR Doctrine of Promissory Estoppel

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25
Q

What is the Doctrine of Promissory Estoppel defence?

A

Creditor may be stopped from going back on promise to accept part payment if it would be unfair for them to do so in all the circumstances (even if not supported by consideration)
Conditions:
i) promise to waive a strict legal right
ii) Promisee must act on promise
iii) Inequitable for promisor to go back on promise
iv) Can only be used as defence
v) Must have clean hands to use (as equitable defence)
vi) Ongoing/recurring payments-was p promise was clearly intended to last a certain amount of time? If yes, creditor must give reasonable notice to can resume right to full payment but cannot claim arrears. (unknown for one off)

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26
Q

Effect of duress, undue influence, misrepresentation, mistake, and illegality

A

VOIDABLE: duress, undue influence, misrepresentation
VOID: mistake, illegality

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27
Q

Is past consideration good consideration?

A

NO unless:
◊Act done at promisers request
◊Parties understood from start that act was to be rewarded
◊ Had the promise been made in advance it would have been legally enforceable (requirements for binding contract satisfied)

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28
Q

What are the types of consideration?

A

Executory consideration=promise (normally bilateral contracts)
Executed consideration=an act (normally unilateral contracts)

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29
Q

Privity of contract: Where a contract with the object of leisure and enjoyment is made by one party on behalf of a group, who can claim under it?

A
  • only parties to a contract may sue or be sued upon it
  • the party to the contract can claim on the group’s behalf
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30
Q

What contracts bind a minor?

A
  1. For ‘necessities’
  2. Of service that (on the whole/balance more favourable than not to the minor) are for their benefit eg. Employment where gain training and experience
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31
Q

Capacity: Which contracts can/cant be challenged for being ultra vires?

A
  • Cos: cant be challenged for being beyond the powers granted in cos constitution
  • Statutory corporations (eg. LAs): contract made outside statute creating will be void
  • LLPs: unlimited capacity
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32
Q

Which partners have personal liability for partnership debts (incoming/outgoing/current partner/death/bankrupcy)?

A
  • Incoming partners: NOT liable for debts existing before they joined UNLESS novation agreement
  • Current partners: Jointly and severally liable for debts incurred when they were partner
  • Outgoing partners: Remain liable for depts incurred when they were partner
  • Death/Bankruptcy: estate/PRs NOT liable
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33
Q

What is required for a limited partnership in terms of liability?

A

Must be at least 1 general partner who has unlimited liability for partnership debts.
Permitted to have a limited partner whos liability is limited to the amount they initially invested in business, IF they:
1. Don’t control/manage the LP
2. Can’t make binding decisions on behalf of the LP
3. Dont remove their contribution to the LP for as long as it is in business

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34
Q

Personnel requirements of an LLP

A

At least 2 members
At least 2 must be designated members (who have certain additional administrative responsibilities)

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35
Q

What are SHs rights under the statutory contract created by a company’s constitution?

A

Can sue any of the other members of the company if his membership rights are infringed.
Can bring an action against the company to enforce his rights under the constitution

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36
Q

Difference between nominal and market value of shares?

A
  • Nominal (aka ‘at par’) value=original fixed value
  • Market value=price share is currently traded on a stock exchange at, reflecting the value investors are willing to pay based on supply, demand, and market conditions.
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37
Q

How is capital and income shared in a partnership?

A
  • INCOME: Equal regardless of hours worked unless agreed otherwise
  • CAPITAL: equal regardless of initial contrib BUT can be inferred/established from a course of conduct that the partners entitled to capital profits in unequal shares (eg. according to initial contributions)
38
Q

In the absence of contrary agreement, what are the rules about amount of time spent working in a partnership/time off?

A
  • No obligation to work full-time BUT can be implied through conduct/course of dealings.
  • No automatic right to time off due to ill-health or injury
  • Common PA clause= state that partner must devote the whole of their time and attention to the business.
39
Q

Partnership definiton

A

2 or more people carrying on a business in common with a view to profit

40
Q

What parts of the Partnership Act 1890 CANT be overridden by agreement?

A
  1. When a partnership comes into existence
  2. relationships between partners and 3rd parties
41
Q

Does a partnership dissolve on death/ retirement of a partner for GPs/LLPs?

A

GP-Yes
LLP-NO

42
Q

Who can call a GM?

A
  1. Dirs at BM
  2. SH with 5% voting rights (dirs call within 21d, occur within 28d)
43
Q

Notice period for calling GM?

A

14 clear days (+48h for email/post)

44
Q

Who can call a GM on short notice?

A

Majority of SH who hold 90% voting rights

45
Q

4

When CANT a GM be held on short notice?

A

-loan to dir
-buyback of shares
-dir long term service contract
-removal of dir

46
Q

When must special notice of a GM be given/what is it?

A

Removing dir
28 clear days before GM
Inform co +Dir (written representations)

47
Q

Is there a limit on the number of times a company can change its accounting reference date and who can do it?

A

No limit, can at BM
BUT extension must not result in a new period exceeding 18 months

48
Q

How can a company auditor be removed

A

OR of SH

49
Q

What is the lapse date (deadline for responding) of a written resolution?

A

midnight of 28th day from circulation unless articles state otherwise

50
Q

When is a GM/WR not needed for a decision that usually requires one?

A

All SH in unanimous agreement

51
Q

4

Who can call a poll vote?

A

*Chair
*Dirs
*2 or more SH with right to vote on the res
*SH holding at least 10% of the voting rights of SH having right to vote on that res

52
Q

4

EXCEPTIONS to requirement for OR for loans to a director?

A

○Loans up to 50k: for business purposes/enabling the director to properly perform their duties
○Defending civil/criminal proceedings in relation to Co/ associated Co
○ Defending regulatory proceedings/investigation by a regulatory authority
○ Minor and business transactions not exceeding 10k

53
Q

What are the classifications of contract terms?

A

CONDITION: major term going to the root of the contract
INNOMINATE (aka. Intermediate): Cant be classified at the outset as there’s such a wide spectrum of breaches. ‘Wait and see’ and if the effect of a breach of the term is to deprive the innocent party of substantially the whole benefit it was anticipated he should receive under the contact
WARRANTIES: A minor, less important term

54
Q

Consequences of breach of contract terms

A

Condition/innominate (if deprives innocent party of substantially the whole benefit it was anticipated he should receive)=terminate and damages

Warranty: damages NOT termination, even if loss is serious

55
Q

How may contract terms be incorporated?

A
  1. Signature (inc tick box)
  2. Reasonable notice before/at time of contract
  3. Previous consistent course of dealing
56
Q

When will incorporation of terms via signature not be effective?

A

a) illegible
b) Contents of doc misrepresented
c) Unusual and onerous and not fairly or reasonably drawn to attention of other party

57
Q

Requirements for contract terms to be incorporated via previous consistent course of dealing?

A

□ Must be a sufficient number of regular dealings in consistent format
Eg. Not for’3/4 times over 5 years but yes for 3/4times a month for 3 years

58
Q

How can terms be implied into contract?

A
  1. Custom (unless express term contradicts
  2. In fact: would be unworkable without (so obvious, didnt think to inc)
  3. In law: bc law regards it as necessary for a particular type of contract
  4. Statute
59
Q

Effect of breach of ss9-11 CRA 2015 (comply with description/satisfactory quality/fit for purpose)
Inc burden of proof

A
  1. Reject & refund & damages(if costs more to get elsewhere) (non perishables within 30d bought/delivery, perishable-as long as goods reasonably expected to last)
  2. Repair/replacement
  3. Price reduction/reject and partial refund to reflect use

Burden of proof: if buyer can prove was defective within 6mo, presumed goods defective when purchased

60
Q

Which terms implied by the Sale of Goods Act 1979 are conditions?

A

All:
1. Seller has right to sell goods
2. Comply with description
3. Satisfactory quality
4. Fit for purpose where purpose made known

61
Q

Which terms implied by the Supply of Goods and Services Act 1982 are conditions?

A

(all except reasonable care skill/time/price)
1. Seller has right to sell
2. Comply with description
3. Satisfactory quality
4. Fit for purpose where purpose made known

62
Q

Which terms implied by the Supply of Goods and Services Act 1982 are innominate terms?

A
  1. Exercise reasonable care/skill
  2. If not agreed, reasonable time and reasonable price
63
Q

Exemption clauses: what are the rules under the CRA for B2C contracts for sales and service contracts?

A

SALES not binding if would:
1. exclude breach for s9-11(quality, purpose, description)
2.make right subject to restrictive/onerous condition
3. put person at disadvantage as a result of purchasing right/remedy
4. exclude/restrict rules of evidence/procedure

SERVICE not binding if would:
1. exclude liability for reasonable care/skill/time/price
2.make right subject to restrictive/onerous condition
3. put person at disadvantage as a result of purchasing right/remedy

64
Q

Exemption clauses: what is the reasonable test for clauses under UCTA? (B2B)

A

Must be fair and reasonable, having regard to the circumstances which were/ought reasonably to have been, known to/in the contemplation of the parties when the contract was made,
To determine:
1. relative bargaining powers?
2. Inducement/opp to accept another contract without clause?
3. Ought to have known of existence/extent of clause, considering trade custom/prev dealings?
4. For noncompliance-reasonable that compliance would be practicable?
ALSO
1. resources
2Insurance

65
Q

4

Which terms implied under the CRA only apply ‘in the course of business’ so not consumer to consumer?

A
  • Satisfactory quality
  • Fit for purpose
  • Reasonable care/skill
  • Reasonable time
66
Q

Which terms implied under the CRA apply for consumer-consumer contracts?

A

Seller has right to transfer
Goods correspond with description
Reasonable price

67
Q

What is remoteness in contract damages?

A

Loss must have been in the reasonable contemplation of the parties at time as a probable result of breach:
1. is loss inevitable/natural consequence of breach?
2. Know of special circumstances making loss likely consequence?

68
Q

What can be awarded for a breach of covenant restricting trade in a contract when theres no actual loss?

A

Restitutionary damages to compensate it for loss of opportunity to negotiate a fee for releasing D from the covenant.

69
Q

Remedies: what is restitution and when is it awarded?

A

Prevents one party being unjustly enriched, ordered when:
1. total failure of consideration
2. party has done work/supplied goods and wants to be compensated
3. for notional loss of opportunity to bargain where that was the ONLY loss (negotiating damages)

70
Q

What is a force majeure clause?

A

Clause specifying what should happen if an event outside the parties control occurs
Valid if reasonable
=No need for the doctrine of frustration

71
Q

primary test and 5 others

What are the guidelines for determining if something is a term of the contract or a representation?

A

Primary test: What’s the common intention of the parties?
If unclear:
1. Relative skill and knowledge
2. Verbal statement repeated before it was agreed?
3. Recipient made clear it was of vital importance?
4. Maker invited other party to verify?
5. Lapse of time between statement and contract formation?

72
Q

Can silence amount to misrepresentation?

A

No UNLESS
1. Fiduciary relationship
2. Contract is of upmost good faith
3. Half truth
4. Statement true when made and change of circumstances not disclosed

73
Q

What are the 4 bars to recession?

A
  1. Affirmation
  2. Undue delay
  3. Innocent purchaser acquired rights in prop
  4. Restitution impossible
74
Q

Damages: what must the C do in terms of their loss

A

Take REASONABLE steps to mitigate (minimise) loss

75
Q

What is the effect of the 3 different types of misrepresentation?

A

Fraudulent/Negligent: Recession (+indemnity) OR damages in tort of deceit (for all consequential losses)
Innocent: Recession (+indemnity) NOT damages

76
Q

What counts as ‘illegitimate pressure’ for duress?

A
  • Unlawful threats
  • Actual/threatened breach of contract
77
Q

Do limited liability partnerships have to publish their accounts?

A

Yes

78
Q

Can promissory estoppel be used to sue?

A

No it is only a defence, ‘Shield not a sword’

79
Q

Damages: how are losses as a result of breach established?

A
  1. Expectation loss=compare Cs position as is with the position they’d have been in if the contract had been fully performed
  2. Reliance loss=Where loss of expectation to speculative, C just claims for expenses incurred because of reliance on the contact being performed
80
Q

When can directors remove another director?

A

ONLY of theres powers in the articles (NOT) model articles, otherwise SH via OR

81
Q

For which tax can you carry forward the annual exemption?

A

IHT
NOT CGT

82
Q

What can be recovered if a contract is frustrated

A
  1. Money that has been paid can be recovered
  2. Money that should have been paid need not be paid
  3. At the courts (very wide) discretion, expenses incurred in performance of the contract can be recovered
83
Q

When does mistaken identity (unilateral mistake) rarely work

A

When dealing face to face

84
Q

For innocent misrepresentation, where does the burden of proof lie?

A

Misrepresentor has to show they honestly and reasonably believed what they said to be true

85
Q

When will undue influence be presumed?

A
  1. Relationship of trust and confidence
  2. AND transaction calls for explanation (not easily explained by relationship between parties)
86
Q

When is it irrebuttably presumed theres a relationship of trust and confidence for undue influence?

A

Solicitor/client
Dr/patient
Parent/child
Religious advisers and followers
NOT husband and wife (rebuttable not irrebuttable)

87
Q

Who is a person connected to a director for the purposes of a SPT?

A

Spouse/CivP
Partner with whom they have an ‘enduring relationship’
Parents
Children (and step-children)

88
Q

How/how often can a company change its accounting reference period?

A

No limit on number of times
But, a further change wont be effective if notice is given less than 5 years after the end of an earlier accounting reference period extension.
Extension must not result in a new period exceeding 18 months
Dirs can do at BM

89
Q

Deadline for paying CGT

A

no later than 31 January following the end of the tax year to which the assessment relates.

90
Q

Deadline for paying Corp tax

A

within nine months from the end of the tax year to which the assessment relates.

SQE 1 (46 decks)

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