F4 Business Law ENG Flashcards
- Law and the Legal System
Name the 4 types of law
- Common law and Equity
- Statute Law
- Private Law and Public Law
- Criminal law and civil law
- Law and the Legal System
Define “Crime”
Conduct prohibited by the law.
- Law and the Legal System
Describe the term ‘Delegated legislation’
When power to create legislation is passed to some subordinated body. Often legislation involving great detail.
- Law and the Legal System
What is the golden rule?
Golden rule relates to how judges should interpret legislation. Words in a law should be interpreted literally and in meaning unless literal interpretation results in absurdity and inconsistency with the rest of the statute.
- Law and the Legal System
Define Expressio Unius est exclusio alterius
To express on thing is by implication to exclude anything else.
- Law and the Legal System
What does ‘Noscitur a sociis’ mean?
It is presumed that words draw meaning from the other words around them.
- Law and the Legal System
In pari materia
Similar subject matter
- Content of Contracts
What is the ‘contra proferentem’ rule?
In deciding what an exclusion clause means, the courts interpret any ambiguity against the person at fault who relies on the exclusion.
- Breach of contract and remedies
What is repudiation?
Breach of contract that entitles injured party to end contract if they so choose.
- Breach of contract and remedies
What are the 4 lawful excuses to non performance?
Agreement - agree to discharge
Frustration - performance becomes impossible
Performance - performance met/substantially met
Breach - failure to me contractual obligation
- Content of Contracts
What is meant with ‘innominate terms?’
When courts are unable to determine whether a term is a condition or a warranty
- Content of Contracts
What are condition and a warranty terms to a contract?
Condition is a vital term going to the root of the contract. i.e. primary subject matter.
Warranty is subsidiary to the main purpose of the contract.
- Breach of contract and remedies
What are common law remedies to breach of contract?
Action to pay price
Quantum meruit
- Breach of contract and remedies
What does the term ‘quantum meruit’ mean?
- How much it is worth
A.k.a. a ‘restitutory award,’ designed to restore the claimant to the position they would have been had they not entered the contract.
(Restitution = restore)
- Breach of contract and remedies
name three equitable remedies
Specific Performance
Injunction
Rescission
- Breach of contract and remedies
What is rescission and what (4) conditions must be met?
Rescinding a contract means rejecting/cancelling contract thus restoring parties to original condition.
Right that exists under certain circumstances, where for example contract is voidable.
- Must be possible to restore both parties to orignal condition (restitio integrum)
- An innocent 3rd party who has acquired rights in the subject matter of the contract will prevent the original contract being rescinded
- Right to rescission must be exercised within a reasonable amount of time of it arising
- Where a person affirms a contract expressly or by conduct may not then be rescinded.
- Breach of contract and remedies
What are the two tests applied to claim for damages?
Remoteness of damage
Measure of damage
- Breach of contract and remedies
What is an injunction?
A discretionary court order and an equitable remedy, requiring a defendant to observe a negative condition of a contract.
- Law of Tort and Professional Negligence
Name 2 most important types of tort
Passing off - misleading use of some other name/brand
Negligence - carelessness causing damage to others
- Law of Tort and Professional Negligence
What are three elements claimant must show to succeed in proving tort?
- Defendant had a duty of care
- Defendant breached that duty
- Claimant suffered detriment due to that breach
- Law of Tort and Professional Negligence
What does ‘res ipsa liquitor’ mean with respect to tort negligence?
Means, ‘the thing speaks for itself’. The burden of proof is reversed. The defendant must then prove that they were not negligent.
- Law of Tort and Professional Negligence
What does ‘Volenti non fit injuria’ mean with respect to tort defenses?
A defense against negligence claimants where the claimant accepted risk and was injured anyway.
Courts will uphold defense only if defendant can prove that risk was expressly communicated and that claimant consented anyway.
- Law of Tort and Professional Negligence
Outline the significance of the Caparo case.
Relevant to understanding professional negligence. Courts held that auditors do not owe a general duty of care to the public at large OR to shareholders increasing their stakes in the company in question.
- Law of Tort and Professional Negligence
With respect to negligence cases, what case triggered the ‘neighbor principle and why was this significant?
Neighbor principle established through Donaghue v. Stevenson 1932 where courts held that a person might owe a duty of care to someone with whom they had no contractual relationship.
- Breach of contract and remedies
What are liquidated damages?
Up front formula (included in contract) to determine damages payable in case of breach.
Courts will enforce if they are a genuine attempt to estimate likely loss.
- Formation of Contract I
Describe the difference between:
- Invitation to treat
- Invitation to tender
Invitation to treat is where one party indicates that they are open to offers to enter into contract. Often initiation to negotiations.
- auction sales
- advertisments
- exhibition of goods
- invitation to tender
Invitation to tender is a form of indicating that a party is accepting offers to enter into contract: i.e. an invitation to treat.
when a supplier tenders for a contract, they are responding to an invitation to treat by offering goods, services at some price.
- Formation of Contract II
What is the difference between:
- Executed &
- Executory
consideration?
Both are terms describing what TYPE of consideration is given.
Executed: An act in return for a promise
Executory: A promise in return for a promise
- Dismissal and Redundancy
Give thresholds for when employer dismisses (when employer gives notice).
Employment >1 month <2 years –> min 1 week
Employment >2 years <12 years –> min 1 week per year of continuous employment
Employment >12 years –> min 12 weeks
- Dismissal and Redundancy
Give thresholds for when employee gives notice.
Employment >1 month –> min 1 week
That’s it.
- Dismissal and Redundancy
What is the difference between ‘summary’ and ‘constructive’ dismissal?
Summary dismissal: employer gives notices
Constructive dismissal: Employer breaches contract and employee quits as a result.
- Dismissal and Redundancy
What are remedies available for wrongful dismissal?
earnings that would otherwise have been earned if proper notice of dismissal had been given.
- Dismissal and Redundancy
What employee types are not protected from unfair dismissal statute?
Employees working outside UK
Participants of unofficial strikes
Members of police
Employees that have been continuously employed for less than 2 years
- Dismissal and Redundancy
What are remedies for unfair dismissal?
Reinstatement
Re-engagement
Compensation
- Dismissal and Redundancy
What are the 5 reasons an employer must show to prove dismissal was ‘fair?’
Reason for dismissal was related to one of the following:
1. capability or qualification for the job employee was hired to do
- employee conduct
- Redundancy
- legal prohibition or restriction preventing employee to work in position held
- some other substantial reason justifying dismissal
- Dismissal and Redundancy
Are client lists considered trade secrets?
Faccenda Chicken v. Fowler (1986) held that client lists were not considered trade secrets.
- Insolvency and Administration
what is the order of repayment of debts on liquidation?
- cost of liquidation
- Preferential debts
- Debts secured by floating charges
- Debts owed to unsecured ordinary creditors
- Deferred debts
- Any surplus to members
- Company meetings and Resolutions
How many days notice is required for meetings where special notice is to be voted on?
14 days
- Company meetings and Resolutions
on a vote by show of hands, how many votes is each member granted?
one vote
- Company meetings and Resolutions
When must notice be given of AGM?
min 21 days
- Company meetings and Resolutions
Under what circumstances can shorter notice be given for AGM?
when 100% of members agree.
- Company meetings and Resolutions
what are normal items of AGM business
- Considering the accounts
- Receiving the directors’ report, the directors’ remuneration report and the auditors’ report.
- Dividends
- Electing Directors
- Appointing auditors
- Company meetings and Resolutions
What requirements are necessary for members to requisition a GENERAL meeting?
- Must hold 5% of paid up share capital holding voting rights
- notice must be sent out 21 days in advance
- Directors are required to schedule the meeting to be HELD 28 day after notice sent out. If directors do not call the meeting, members may convene within 3 months of requesting meeting.
- Company meetings and Resolutions
Under what circumstances can an auditor request a GENERAL meeting?
to receive and consider their explanation surrounding a given statement of circumstances
- Company meetings and Resolutions
When can directors schedule a general meeting?
Whenever they see fit
- Company meetings and Resolutions
List Resolution types, required notice and number of votes to pass
- Ordinary, 14 days, 51% majority - for most business
- Special resolution, 14 days, 75% - for major changes
- Written (Private companies only), 51% or 75% depending on type of business being passed. Cannot be used to remove director or remove auditor.
- Company meetings and Resolutions
What are 5 items of business that require Special Resolution?
- change of name
- restriction of objects, change of articles
- reduction of share capital
- winding up
- Presenting a petition by the company for an order for a compulsory winding up
- Company meetings and Resolutions
List requirements for waiving required notice for both:
- General Meeting
- AGM
General meeting -
members holding 90% of issued shares of private company, and 95% for public company must consent.
AGM -
100% must consent for public companies
(private companies not required to hold AGM)
- Company meetings and Resolutions
When is Special Notice required and what time in advance must it be given?
Members must give Special Notice of 28 days must be given to company to:
- remove/appoint auditor other than one already appointed
- remove director from office
Company gives notice 21 days. Must send to affected director/auditor to give time to prepare
- Company meetings and Resolutions
What are the rules for demanding a poll vote?
- Must be demanded by min. of 5 members
- Members representing must hold min. 10% of voting rights
- Members holding shares must represent 10% of paid-up capital
members of quoted company may demand and independent report of the poll results if:
- they represent min. 5% of voting rights
- at least 100 in number holding min of £100 of paid up capital
- Capital and the financing of companies
What are the ways a company can reduce its share capital?
- Extinguish/reducing liability on partly paid shares
- cancelling paid-up share capital
- paying off part of paid.share capital
- Capital and the financing of companies
What are requirements for Private and Public companies to reduce their share capital?
Private
- Special resolution
- Must be permitted by articles
- solvency statement (12mths)
Public
- Special resolution
- must be permitted by the articles
- Court confirmation
- Company formation
What are documents that must submitted to Registrar to form a company?
- memorandum of association
- statement of proposed officers
- statement of compliance
- registration fee
- articles of association –> (if custom articles drafted)
- statement of capital –> (only for companies limited by shares)
- Formation of a Contract
What are the rules on effective consideration with respect to adequacy and sufficiency?
MuSt Sufficient
Not adequate - Nadequacy
