Definitions Flashcards
Trust
A legal relationship created (in lifetime or on death) by a settlor through which assets are placed under the control of a trustee either for the benefit of a beneficiary or a specified purpose
Specific performance
A court compelling a person to carry out a promise which they have given to another
Injunction
A court order compelling a person to do something or prohibiting them from doing something
Promissory estoppel
an insured who has broken a warranty cannot enforce the contract unless they can prove that the insurers clearly indicated, by their words or conduct, that they do not intend to rely on the breach of warranty as a defence to further liability under the policy, e.g. renewing the policy
Private Members’ Bills
Bills which are introduced by individual Members of Parliament rather than by Government and unless they have Government support are unlikely to become law
Consolidating Act
One which repeals all previous legislation on a subject and re-enacts it in one logically arranged statute; no new law is created but existing statutory enactments are brought under one umbrella
Codifying Act
Sometimes Government may decide not only to consolidate current legislation on a particular topic, but to include also principles embodied in case law. Therefore in most cases all the law on a particular topic, including existing statute and case law is reduced to a single code.
Retroactive (retrospective) legislation
Legislation which affects acts done or rights acquired before it came into effect
Delegated legislation
Acts of Parliament often law down only a general framework of rules, leaving the detail to be filled in by civil servants in the appropriate ministry, so rules are conferred
Enabling Acts (Parent Acts)
Acts which confer power on persons or bodies (particularly Government Ministers)
Delegated (subordinate) legislation
Rules made under the authority of Enabling Acts, which have the same legal force as primary legislation
Statutory instruments
Most Enabling Acts which give Ministers and their civil servants power to enact delegated legislation, stipulate that the powers in question are to be exercised in the form of departmental regulations or orders, known collectively as statutory instruments
Orders in council
When power of special importance is delegated by statute, such as power concerning constitutional matters, it is usually conferred on the Privy Council. An Order in Council is drafted by a minister and comes into force when approved by a meeting of the Privy Council where at least 3 Privy Councillors are present. The powers in question are effectively exercised by the Cabinet.
Bye-laws
Statutory authority may be given to certain bodies, particularly local authorities, to make bye-laws which are of local application - require the approval of the appropriate Minister
Common law rule
Rules which the courts themselves have developed to assist with interpretation
Literal rule
According to the rule, words and phrases should be construed by the courts in their ordinary sense, and the ordinary rules of grammar and punctuation should be applied. If, applying this rule, a clear meaning emerges, then this must be applied. The courts will not try to establish whether this represents what Parliament intended when the legislation was passed.
‘Noscitur a sociis’ rule
Subsidiary literal rule - a general principle that a word must be determined by its context
‘Ejusdem generis’ rule
Subsidiary literal rule - under this rule the meaning of any general term depends upon any specific words which precede it
Golden rule
Where the meaning of words in a statute, if strictly applied, would lead to an absurd result, and there is an alternative interpretation which avoids the absurdity, the courts are entitled to choose that latter meaning and to assume that Parliament did not intend the absurdity
Mischief rule
Sometimes called the rule in Heydon’s case, from the decision in 1584 in which it was first set out. Under this rule, the judge will consider the meaning of the words in the Act in the light of the abuse or ‘mischief’ which the Act was intended to correct, and choose the interpretation which makes the Act effective in suppressing this mischief.
Tort
Tortious liability arises from the breach of a duty primarily fixed by the law; such duty is towards persons generally and its breach is redressable by an action for unliquidated damages
Unliquidated
The amount of damages is not fixed in advance but will be decided by the court, according to the seriousness of the injury that has been caused
Liquidated
The parties to a contract will have agreed, in advance, a fixed amount of compensation to be paid if there is a breach of contract
Assault
Any act which directly causes the claimant to fear an attack on their person
Battery
The hostile application by the defendant of physical force, even though it might be slight, to the claimant
Malice
Not just personal spite or ill-will but any improper motive
False imprisonment
Occurs when the defendant imposes total bodily restraint on the claimant, preventing them from going where they want to go. No physical contact is necessary.
Conversion
(Trespass to goods) If the defendant deliberately deals with the goods which is inconsistent with the rights of the person who owns or possesses them, they can be sued for conversion; in this case the defendant does more than merely meddle or interfere with the goods
Trespasser ‘ab initio’
If a person enters land lawfully but abuses their right to be there they are treated as a trespasser from the moment they entered the land
Land
Generally includes anything beneath its surface and all space above the land so tunnelling beneath or crossing the airspace of another may be a trespass. Non-consumer organisations often have statutory power to work beneath private land to extract coal or other minerals, and similarly, aircraft operators are generally permitted to overfly private land.
Reasonable foreseeability
A duty of care is owed to another person if it is reasonably foreseeable that they will be affected by one’s acts or omissions
‘Thin skull’ or ‘eggshell skull’ cases
Cases where the damage is not reasonably foreseeable because it results from some pre-existing physical weakness or defect in the claimant of which the defendant is not aware
Novus actus interveniens
New intervening case
Primary victims
Persons who suffer shock through fear for their own safety - the first category of claimant to be recognised by English law
Secondary victims
Persons who suffer shock through fear for the safety of others. As the 20th century progressed, the law came to recognise claims by persons who suffered shock through fear for the safety of persons other than themselves.
Public nuisance
The carrying on of an activity which is likely to cause inconvenience or annoyance to the public, or a section of the public, or interference with a right common to all
Private nuisance
An unlawful interference with a person’s use or enjoyment of their land (which includes houses and buildings attached to it)
Strict liability
Liability that can arise even where there is no fault or negligence, developed in Rylands vs. Fletcher and is generally regarded as a separate form of nuisance
Vicarious liability
When one person is held liable for wrongs committed by another - therefore not a tort or wrong in itself but a way in which liability may be imposed: a person may be directly liable for their own torts or vicariously liable for the torts committed by others
Defamation
A false statement about a person which causes injury to that person’s reputation. Takes two forms:
- Libel
- Slander
Libel
The defamatory statement is in a permanent form, e.g. an email, text, posting on social media or in a written publication
Slander
The statement is in a transient (non-permanent) form - will usually take the form of defamatory speech or possible defamatory gestures
Defamatory statement
A statement is defamatory if it is false and exposes the claimant to ‘hatred, ridicule or contempt or lowers them in the eyes of right-thinking members of society generally’
Volenti non fit injuria
No legal wrong is done to a person who consents, however the defence is based on the proposition that the claimant consented not to a deliberate act but to the risk of negligence by the defendant, therefore the defence is sometimes known as ‘assumption of risk’
Contributory negligence
The claimant is partly to blame for the injuries which they have suffered at the hands of another
Limitation period
The time allowed for an action to be brought - begins on the date on which the cause of action accrues
Cause of action
The situation which gives rise to the claimant’s right to sue the defendant, and in the law of torts the date in question is usually the date when the damage or injury was sustained by the claimant
Special damages
The claimant is required to give notice when they make their claim against the defendant and which they must prove strictly at trial; precise financial assessment
General damages
Do not require strict pleading and proof from the claimant because they relate to losses which the law automatically presumes to result from the tort; cannot be precisely quantified but only assessed on the basis of what a ‘reasonable man’ would deem appropriate to compensate for the loss. The purpose of general damages is to compensate the claimant for the injury/loss sustained.
Aggravated damages
In certain torts (e.g. assault, trespass) the court may award additional damages to reflect the fact that the motives and conduct of the defendant have aggravated the injury suffered, by injuring the claimant’s sense of dignity or pride
Exemplary (punitive) damages
Awards which exceed the loss which has actually been suffered and intended to punish the defendant for their conduct
Nominal damages
Where a person has committed a tort which is actionable per se (libel or trespass) but no real loss has been caused to the claimant, the court may award a nominal (e.g. token) sum to mark the fact the defendant was in the wrong
Contemptuous damages
The award of a tiny sum (traditionally the smallest coin of the realm) to mark the court’s low opinion of the claim of the claimant or record their disapproval of the claimant’s conduct
Injunction
A court order commanding the defendant either to do a particular thing or refrain from doing it
Mandatory injunction
A court order commanding the defendant to do a particular thing (such as knock down a wall which is blocking a right of way)
Prohibitory injunction
A court order commanding the defendant to refrain from doing a particular thing (such as publish a libellous book)
Actionable per se
Actionable in itself - the claimant does not have to provide that they have suffered loss or damage, only that the tort has been committed
Contract under seal
A formal contract which is in writing and is witnessed, and which originally had to be sealed and delivered; some contracts must be in this form to be valid
Simple (informal) contract
A contract which does not need to be in writing and witnessed, or which originally had to be sealed and delivered
Unilateral contract
Only one party to the contract is legally bound. The offeror makes the offer and cannot argue that they are not bound by the contract when their offer is accepted. Once their offer is accepted (no one has to accept the offer but they may choose to accept it), the offeror is bound by their promise.
Bilateral contract
Each party makes a promise to the other and both are legally bound.
Offeror
The party who makes the offer
Offeree
The party who receives the offer
Invitations to treat
In effect these are invitations to make an offer. Circulars, advertisements and the like often fall in this category and it is generally accepted that the display of price-marked goods in a shop is merely an invitation to treat.
‘Buying the option’
Giving something of value in return for the promise to keep the offer open
Unqualified acceptance
It must exactly match the terms of the offer
De minimis non curat lex’ (‘the law does not concern itself with trifles’), often referred to as the ‘de minimis’ principle
Trivial variations from the terms of the offer will not affect the validity of an acceptance
Posting rule
A letter of acceptance is effective the moment it is posted and not only when it is received, as in the case of an offer. A contract can be made by posting even if the letter of acceptance never arrives. The offeror can prevent the rule from applying. It applies only to acceptance: a letter containing an offer, revocation or rejection will only take effect when it is received.
Applies to telegrams or telemessages but not to instantaneous methods of communication. Could possibly apply to an acceptance sent by fax.
Consideration
‘The price which supports the promise’, ‘benefit to the promisor or detriment to the promisee’
Restitution
The law of restitution is concerned with those situations where a person is liable to restore property to another
Ultra vires doctrine
A contract may be invalid if it is ‘ultra vires’ (‘beyond the powers of’) the corporation. In order to protect people and organisations which deal with companies in good faith, the law now provides that contracts made by companies will be valid even if they are outside the powers expressed in the memorandum.
Express terms
Arise from the words used by the parties in reaching or recording their agreement (either spoken or written)
Implied terms
Those which form part of the agreement even though the parties never put them into words
Course of dealing
Exceptionally, the courts may allow an exclusion clause to be incorporated in a contract as a result of past dealings between the parties in which the exclusion clause was regularly used. In such cases the party who alleges that he is prejudiced by the clause may be held to be ‘fixed with knowledge’ of it even though it was not included in the transaction in question. To bring this rule into operation there must be a regular and consistent course of dealing.
Intermediate or innominate terms
These cannot be classified as either conditions or warranties in advance and it is only when the effects of a breach are considered that the true nature of the term is revealed. A trivial breach will then give rise to an action for damages only whereas a serious breach will entitle the injured party to treat the contract as repudiated.
Pari delicto potior est defendentis
‘Where there is equal wrongdoing the position of the defendant is stronger’
Pari delicto
Equal in wrongdoing
Severance
If a contract is illegal in part only, the court may in some cases be willing to enforce the valid portion of the contract and refuse assistance only with regard to the illegal part
Duress
Any threat to commit a legal wrong can amount to duress if the other party is forced to agree against their will. In some cases the threat may amount to duress even when what is threatened is not in itself illegal, as where a blackmailer threatens to expose the truth about his victim.
Undue influence
The concept of undue influence is a product of equity which recognised more subtle forms of ‘persuasion’ than those of duress. In particular, it is presumed that certain relationships, such as solicitor and client or doctor and patient, will give rise to improper pressure unless the contrary is proved. This will occur when one party holds a dominant position over the other or is able to take advantage of a relationship of trust and confidence between them. If such a relationship exists, the person seeking to have the agreement set aside need only show that the arrangement was manifestly to their disadvantage by showing that the transaction is ‘not readily explicable on ordinary motives’.
‘Consensus ad idem’
Meeting of minds
Representations
Statements intended to persuade the other to enter into the contract or to accept particular term
Affirmation
Treat a contract as binding
Discharge of contracts
How the rights and obligations of the parties come to an end
Frustration
A contract may become impossible to perform or illegal or futile because of some unexpected turn of events after the contract was made
Waiver
The parties to a contract can make a further agreement to release each other from their obligations. By releasing each other, the parties both give up a benefit and, thus, provide consideration.
Accord and satisfaction
The party to be released in an agreement to discharge contract must give some fresh consideration for it. They can provide consideration by doing something different from that which was originally required of them, even if it is only a small favour. The agreement to discharge is the accord and the fresh consideration is the satisfaction.
Novation
A discharge by agreement may take the form of the substitution of a new contract
Common law remedies
Available as of right (e.g. damages)
Equitable remedies
Granted only at the discretion of the court and may be refused in some circumstances, such as where another remedy is more appropriate (e.g. specific performance and injunction)
Repudiation
Where a party refuses to accept further performance from the other party (e.g. rejecting goods)
Liquidated damages clauses
If the parties agree in advance that a certain fixed sum should be payable in the event of a breach of contract and it is found to be reasonable, the clause is valid and called a liquidated damages clause
Penalty clauses
If the parties agree in advance that a certain fixed sum should be payable in the event of a breach of contract but and it is found to be unreasonable, the clause is invalid and called a penalty clause
Quantum meruit
‘As much as they have earned or deserved’
Privity of contract
A doctrine which restricts the rights and duties created by a contract to the persons who originally made it; ‘only a person who is a party to a contract can sue upon it’
Assignment
An original party to the contract may be able to assign (transfer) their rights under the contract to another who then stands in their place
‘Chose (thing) in action’
A contractual right, a valuable but intangible piece of property. It is called a chose in action because it cannot be physically seized but only enforced through an action in court.
‘Chose in possession’
A piece of tangible property which can be seized or physically controlled.
Agent
A person who has the authority or power to act on behalf of another person, known as the principal. Their main task is to bring about a contract between their principal and a third person, referred to as a third party.
Fiduciary relationship
One based on duties of good faith
Lien
The right to retain the goods of another as security for payment of a debt
Particular lien
A right to retain the particular goods in respect of which payment is due
General lien
A right to retain any property as security. Arises only by agreement between the parties or by trade usage. At various times, bankers, solicitors and stockbrokers have been held by the courts to have a general lien based on trade usage..
Actual authority
The authority of the agent is real, in the sense that they have been given the right to act on behalf of the principal, either expressly or by implication
Apparent authority
The agent has no real authority to do the act in question. However, it appears, in the eyes of the third party, that they have such authority and are, therefore, able to bind their principal.
Express actual authority
Arises from the instructions which have been given to the agent, stating
what is required and what is allowed. May be oral or in writing.
Implied actual authority
Agents have implied authority to do anything which is incidental to, or necessary for
the carrying out of their express instructions, e.g. they may incur travel expenses or post and telephone charges. An agent may also have implied authority to perform those acts which are usually performed by persons in the agent’s position or usual in a particular trade or profession.
Usual (customary) authority
An agent may have implied authority to perform those acts which are usually performed by persons in the agent’s position or usual in a particular trade or profession
Agency ‘by estoppel’
Sometimes a person may ‘hold out’ another person as being their agent when the latter has no authority at all, with the result that the third party is deceived
Disclosed principal
One whose existence is known to the third party at the time the
contract is made
Right of election
Undisclosed principal: The third party can enforce the contract and has the option of doing so either against the agent or against the principal
‘Deal now, detail later’
Until 2007, insurance contracts used to be formed by a slip which was presented by a broker to a managing agent at Lloyd’s and the contract of insurance used to be formed at the moment that the slip was scratched (signed and stamped) by the underwriter. The policy was issued after the contract was formed by virtue of a slip.
‘Consensus ad idem ’
Meeting of minds
Insurable interest
The legal right to insure arising out of a financial relationship recognised at law, between the insured and the subject matter of insurance. The owner has an interest because destruction of, or damage to, the property will obviously cause the owner loss.
Bailee
A person who has legal possession of goods belonging to another
Misrepresentation
A false statement of fact that induces the other party to enter into the contract
Fraudulent misrepresentation
When a person makes a false statement with the deliberate intention of misleading another and putting them at a disadvantage
Innocent misrepresentation
If a statement is false but there is no intention to mislead the other party
Negligent misrepresentation
The statement is false because the person making it did not take sufficient care to check that it was correct
Person ‘responsible for the insured’s insurance’ (IA 2015)
Expected to cover, for example, the insured’s risk manager if they have one, and any employee who assists in the collection of data or negotiates the terms of the insurance. It may also include an individual acting as the insured’s broker.
Senior management (IA 2015)
This is intended to include (and be more or less limited to) board members or their equivalent in a non- corporate organisation
‘Knowledge’ of an individual as defined by the Insurance Act 2015
Not only actual knowledge, but also matters which the individual suspected, and of which the individual would have had knowledge but for deliberately refraining from confirming them or enquiring about them
Constructive knowledge
Courts take the view that they are facts which insurers ought to know
Qualifying breach
Where the insurer shows that, but for the breach, it would not have entered into the contract of insurance at all would have done so only on different terms
Qualifying misrepresentation
The misrepresentation was caused by the consumer’s failure to exercise reasonable care and the insurer shows that without the misrepresentation, it would not have entered into the contract (or agreed to the variation) at all, or would have done so only on different terms
Deliberate/reckless
The consumer knew that it was untrue or misleading, or did not care whether or not it was untrue or misleading, or knew that the matter to which the misrepresentation related was relevant to the insurer, or did not care whether or not it was relevant to the insurer
Rules of construction/ rules of interpretation
The rules which have been developed to resolve disputes over the meaning and scope of words used in insurance policies
Unfair term or notice (according to the Consumer Rights Act 2015)
That which, contrary to the requirement of good faith, causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer
Precedent in insurance contracts
Once one court has considered the meaning of a word then its decision is likely to influence future cases where the word is used in a similar context within the same sort of contract
‘Noscitur a sociis’
‘A word may be known by the company which it keeps’
‘Ejusdem generis’
Rather more specific principle of construction based on context; provides that general words which follow specific words are taken as referring to ‘things of the same kind’
‘Expressio unius est exclusio alterius’
‘Specifying one thing implies the exclusion of other things’ – those which are not specified. So, where specific words are used which are not followed by any general words, the provision in question applies only to the things specified.
Contra preferentum rule
The clause is construed against the party who proposed it (i.e. the drafter of the clause), so that the other party is given the benefit of the doubt
Warranty
A promise made by the insured relating to facts or to something which they agree to do
Conditions precedent to the contract
One which states, in one form of words or another, that the policy will not come into effect if the insured fails to comply with the term in question
Conditions precedent to liability
Used to describe a term that allows the insurers to discharge themselves from liability for a particular loss if the term is broken
Collateral conditions
Conditions that are not classified as ‘condition precedent’
Joint policy
The interest of the assureds’ is the same, e.g. husband and wife insure their joint property
Composite policy
The interest of the insured persons are different, e.g. a mortgagor and mortgagee insured together, construction risks policies covering contractors and sub-contractors and policies covering a number of companies within one group
Doctrine of proximate cause
The loss in question must result directly from the operation of an insured peril if the insurance is to respond.
‘Fraudulent device’ defence
An insurer’s rejection of a claim on the basis of lying about the circumstances of a genuine loss to improve the chances of a claim being paid
Insurance fraud
When someone invents or exaggerates a claim, or does not tell the truth in order to obtain cheaper cover
Indemnity insurances
Those where the insurers agree to pay only when the insured suffers a loss of a particular type, and only for the amount of the loss. Most types of general (non-life) insurances are indemnity contracts, i.e. virtually all property, pecuniary and liability insurances, including motor, marine and aviation. May be described as a claim for unliquidated damages (the exact amount of the compensation is not known in advance but is to be fixed afterwards on the basis of the loss actually suffered).
Non-indemnity (contingency) insurances
Policies in which insurers agree to pay a specified sum when a particular defined event occurs. The insured does not have to prove that they have suffered a loss, only that the event in question has happened. E.G. life insurance, accident and sickness.
Trends clause
Purpose is to allow, in assessing the amount to be awarded for business interruption, to take account of exceptional events that may have depressed or increased revenue in the earlier comparator, and also to take account of anticipated exceptional events in the indemnity period.
Abandonment
The action of giving up the subject matter to the insurer
Salvage
The right of the insurer to take over the subject matter is known as salvage
Constructive Total Loss
Applies when the subject matter is damaged or the insured is deprived of the possession of their ship or goods but the subject matter is not destroyed
Contribution clause
A clause that sets out how the loss is to be met if the insured has another policy which covers it. The effect of the condition will be to change or override the common law rules.
Escape clause
A condition that effectively forbids the insured from taking out another policy without the consent of the insurer
‘Duty of assured’ clause
The insurer requires the insured to take steps to preserve the insurer’s subrogation rights
‘Excess’ clause
If there is any other insurance in place, the other insurance would respond first and the insurer would only be liable for loss in excess of the cover of the other policy
