Legal Concepts

Question 1

Q: What are the essential elements of a valid contract?

Answer 1

A: Offer, acceptance, consideration, intention to create legal relations, and capacity.

Question 2

Term: Capacity

Answer 2

Definition: The legal ability of a person to enter into a contract.

Question 3

Q: What is ‘consideration’ in contract law?

Answer 3

A: Something of value exchanged between the parties.

Question 4

Term: Void Contract

Answer 4

Definition: A contract that is not legally enforceable from the start.

Question 5

Q: What makes a contract voidable?

Answer 5

A: It may be set aside due to factors like misrepresentation, duress, or undue influence.

Question 6

Term: Express Terms

Answer 6

Definition: Terms specifically agreed upon by the parties to a contract.

Question 7

Q: What are implied terms in a contract?

Answer 7

A: Terms not expressly stated but assumed to exist by law or custom.

Question 8

Term: Duty of Care

Answer 8

Definition: A legal obligation to avoid acts or omissions likely to harm others.

Question 9

Q: What is negligence?

Answer 9

A: Failing to take reasonable care to avoid causing injury or loss to another.

Question 10

Term: Tort

Answer 10

Definition: A civil wrong that causes a claimant to suffer loss or harm.

Question 11

Q: What is the difference between a civil and criminal case?

Answer 11

A: Civil deals with disputes between individuals; criminal involves offences against the state.

Question 12

Term: Fiduciary Duty

Answer 12

Definition: A legal obligation to act in the best interest of another party.

Question 13

Q: What is the role of the law of agency in financial advice?

Answer 13

A: It governs relationships where one party acts on behalf of another.

Question 14

Term: Principal

Answer 14

Definition: The person who authorises another (the agent) to act on their behalf.

Question 15

Q: What is the agent’s duty under the law of agency?

Answer 15

A: To act with care, skill, loyalty, and in accordance with instructions.

Question 16

Term: Power of Attorney

Answer 16

Definition: A legal document authorising someone to act on another’s behalf.

Question 17

Q: What is the difference between lasting and ordinary power of attorney?

Answer 17

A: Lasting continues after mental incapacity; ordinary does not.

Question 18

Term: Mental Capacity

Answer 18

Definition: The ability to make decisions for oneself at the time a decision is required.

Question 19

Q: What legislation governs mental capacity in the UK?

Answer 19

A: The Mental Capacity Act 2005.

Question 20

Term: Trust

Answer 20

Definition: A legal arrangement where one party holds property for the benefit of another.

Question 21

Q: Who are the main parties involved in a trust?

Answer 21

A: Settlor, trustee, and beneficiary.

Question 22

Term: Bare Trust

Answer 22

Definition: A trust where beneficiaries have an absolute right to capital and income.

Question 23

Q: What is a discretionary trust?

Answer 23

A: A trust where trustees decide how income or capital is distributed among beneficiaries.

Question 24

Term: Trustee

Answer 24

Definition: A person who manages the trust property on behalf of the beneficiaries.

Question 25

Q: What are the key duties of a trustee?

Answer 25

A: Duty of care, loyalty, impartiality, and to act in beneficiaries' best interests.

Question 26

Term: Settlor

Answer 26

Definition: The person who creates a trust by transferring assets into it.

Question 27

Q: What is a will trust?

Answer 27

A: A trust created by a will, taking effect on the testator’s death.

Question 28

Term: Intestacy

Answer 28

Definition: The state of dying without a valid will.

Question 29

Q: What happens when someone dies intestate in England or Wales?

Answer 29

A: The estate is distributed according to statutory rules of intestacy.

Question 30

Term: Probate

Answer 30

Definition: The legal process of administering the estate of a deceased person.

Question 31

Q: What is an executor?

Answer 31

A: A person named in a will to carry out the instructions and administer the estate.

Question 32

Term: Administrator (of estate)

Answer 32

Definition: A person appointed to administer an estate when there is no will.

Question 33

Q: What is the difference between an executor and an administrator?

Answer 33

A: An executor is named in a will; an administrator is appointed by a court.

Question 34

Term: Deed of Variation

Answer 34

Definition: A legal document used to alter a deceased person’s will after death.

Question 35

Q: What is a legal personal representative (LPR)?

Answer 35

A: A general term for executors or administrators of an estate.

Question 36

Term: Legal Ownership vs. Beneficial Ownership

Answer 36

Definition: Legal is formal title; beneficial is the right to benefit from the asset.

Question 37

Q: What is a constructive trust?

Answer 37

A: An implied trust created by the courts to address unfair enrichment.

Question 38

Term: Joint Tenancy

Answer 38

Definition: Ownership where two or more people share equal rights and survivorship.

Question 39

Q: What is tenants in common?

Answer 39

A: Co-ownership where each party owns a specific share that can be left in a will.

Question 40

Term: Contract Law

Answer 40

Definition: Law that governs agreements enforceable by law.

Question 41

Q: What is legal precedent?

Answer 41

A: Past judicial decisions that guide future case rulings.

Question 42

Term: Statutory Law

Answer 42

Definition: Laws passed by Parliament or other legislatures.

Question 43

Q: What is common law?

Answer 43

A: Law developed by judges through decisions in court.

Question 44

Term: Breach of Contract

Answer 44

Definition: Failure to perform a contractual obligation.

Question 45

Q: What is misrepresentation in contract law?

Answer 45

A: A false statement that induces someone to enter a contract.

Question 46

Term: Duress

Answer 46

Definition: Threats or pressure that force someone into a contract against their will.

Question 47

Q: What is undue influence?

Answer 47

A: Improper pressure used to persuade someone to enter a contract.

Question 48

Term: Revocation

Answer 48

Definition: Withdrawal of an offer before it is accepted.

Question 49

Q: What is an invitation to treat?

Answer 49

A: An expression of willingness to negotiate, not an offer.

Question 50

Term: Execution (of a contract)

Answer 50

Definition: The act of signing or completing a legal agreement.