Topic 16 Flashcards
What are the requirements for a binding contract
Offer and acceptance
Consideration
Capacity to contract
Contract terms
Intention to create a legal relationship
Leagilty of object
Misrepresentation duress or undue influence
Consumer insurance (disclosure and representations) Act 2012
In the case of misrepresentation the act above also indicates what actions the insurer may take, please list them
If the consumer has taken reasonable care and the misrepresentation and the was honest and reasonable the insurer has no right to refuse a later claim
In the case of misrepresentation due to carelessness detailed rules allow the insurer to apply a compensatory remedy to the claim based on what the insurer would have done had the applicant answered all the questions correctly and accurately. If the claim is rejected the insurer must refund the premiums paid.
If careless misrepresentation is identified in situations other than a claim, the insurer and the policy holder have the right to terminate the contract with reasonable notice.
In the case of deliberate or reckless misrepresentation the the insurer may may reject the claim completely as if the as if the contract never existed and is not required to refund premiums paid unless there is a good reason to do so
What are the 3 remedies for breach of contract
Damages - The injured party seeks to obtain financial compensation for their loss. The intention is to put them in the position they would have been in had the contract not been breached by the other party
Order for specific performance
Injunction
What Is the law of agency
An agent is a person who acts on behalf of another, who is called the principal
The agent can conclude contracts on behalf of the principle
What is ratification
If an agent exceeds their authority, The principal can if they choose, agree after the event to what the agent has done
What is apparent authority
Something either done or said by the principle That leads to the impression that they have authorised the agent’s actions
In relation to joint ownership of property there are 2 types
Joint tenants- Each joint owner owns 100% of of the property. On the death of any joint owner, the surviving joint owner will take over legal ownership of the property. The transfer is automatic and can not be overridden by any provisions made by a joint tenant in a will or through the laws of intestacy.
Tenants in common - The joint legal owners are regarded as one single owner but are trustees of the land. However each legal owner is also the beneficial owner of a defined interest of the equity in the property, as agreed between them. If one owner dies, their share of the property passes to whoever is entitled to inherit it under the terms of their will or the law of intestacy
What is power of attorney?
- A person who, while currently in good health, is concerned about how their affairs will be run should they become unable to manage their own finances
OR
Someone with affairs in the UK who is moving abroad
What are the two types of lasting power of attorney?
Health and welfare - this gives the attorney power to make decisions over issues such as medical care or moving into residential care. It can only be used once the donor can no longer make decisions for themselves.
Property and financial affairs - This gives the attorney power to manage the donor’s bank account, collect benefits and sell property. It can be used even if the donor has mental capacity, as long as the donor gives permission.
Who does lasting power of attorney have to be registered with?
Office of public guardian (OPG)
To make a valid will, what two formalities must be followed?
The will must be in writing.
The will must be properly executed.
What is a ‘Testator’
Person who makes the will
What is a Codicil?
Document that formally amends a will.
Before distributing an estate, what must the executor apply for?
Grant of probate
What is a ‘deed of variation’
Legal agreement by the beneficiaries to alter the terms of a will, after the death of the testator.
What are the main rules of ‘Intestacy’
If the deceased leaves a spouse but no children - the spouse inherits the entire estate
If there is both a spouse and children - The spouse inherits the deceased’s personal chattels, plus the first £270,000, plus half of the residue above £270,000 absolutely. The other half of the residue in excess of £270,000 is divided equally between the children
If there are children but no spouse - The estate is shared equally between the children.
If there is neither spouse nor children - The estate goes to the parents of the deceased or (if they are dead) to the deceased brothers and sisters
What is ‘Intestate’
Having died without leaving a will
Trustees have a number of duties, what are they?
They must act in accordance with the terms of the trust deed. If the trust deed gives them discretion to exercise their powers the agreement of all the trustees is required before a course of action can be taken
They must act in the best interests of the beneficiaries balancing fairly the rights of different beneficiaries if these should conflict.
Under the Trustee Act 2000, trustees who exercise investment powers are required to follow what three key points?
Be aware of the need for suitability and diversification of assets
Obtain and consider proper advice when making or reviewing investments
Keep investments under review
Insolvency arises when
A persons liabilities exceed their assets
A person cannot meet their financial obligations within a reasonable time of them falling due.
How much must someone owe in order to declare themselves bankrupt?
£5000 or more
How long do most bankruptcy orders remain in force?
12 months
When can an IVA be set up?
When creditors who represent at least 75% of the debt agree to the IVA
