Topic 16 - Key Legal Concepts

Question 1

What is a legal person?

Answer 1

A body that has a legal existence and can sue, be sued and enter contracts.

Individuals
Trustees
LTDs

Question 2

Limited liability partnership

Answer 2

Means partners have a personal liability should the business collapse.

Liability is what they have invested and guarantees they have given.

Question 3

Requirements of a binding contracts

Answer 3

Offer and acceptance - there must be an offer made and acceptance by other party.

Consideration - subject of the contract must be matched by consideration e.g. promise to pay

Capacity to contract - each of the parties must have legal capacity to enter into contract

Contract terms - terms have to be clear and free from doubt

Intentions to create a legal partnership - change from an informal arrangement.

Legality of object - contracts annoy be made for illegal or immoral purposes.

Misrepresentation, duress or undue influence - if any of these factors are involved in leading someone to enter a contract then it is not binding.

Question 4

Whats involved in contracts involving land

Answer 4

Must be made in writing and conveyances. Transfer of ownership via deed

Question 5

Remedies for breach of contracts

Answer 5

Damages - injured party seeks compensation

Order for specific performance - such an order compels other party to complete the contract.

Injunction - court order preventing someone from doing something

Question 6

What is the law of agency

Question 7

Agenct and principle

Answer 7

Agent acts on behalf of principle e.g. IFA for a client

Question 8

Ratification?

Answer 8

The principle agreeing to what the agent has done after the event.

Question 9

Apparent authority

Answer 9

Something said or done by the principle that shows they have authorised the agents actions

Question 10

Realty

Answer 10

Property deemed to be real and immovable e.g land or what is attached.

Question 11

Personality

Answer 11

All other property is called personality

Question 12

Joint tenants

Answer 12

Each joint owner owns 100% if 1 dies the ownership transfers

Question 13

Tenants in common

Answer 13

The joint owners are regarded as 1 and are trustees of the land. Each owner has their share of equity in property

Question 14

What is power of attorney

Answer 14

An attorney is a person given legal responsibility to act on behalf of another person

E.g. a minor who can’t legally enter a contract

Someone with affairs in UK who is moving abroad.

Person not in good health: dementia

Question 15

What is an enduring power of attorney

Answer 15

Assigned when a donor becomes mentally incapacitated. It has to be registered with office of the public guardian

Question 16

Donor and Donee

Answer 16

Donor - person who makes a power of attorney

Donee - person who is given power of attorney

Question 17

What is lasting power of attorney

Answer 17

Replaced (EPA) in 2007. 2 types of LPA:

Health and welfare - gives the attorney power to make decisions over medical care or moving to a care home if the donor cannot make decisions.

Property and financial affairs - gives the attorney power to mage bank accounts, sell property even if donor has mental capacity but they need permission.

Question 18

What happens if there isn’t a power of attorney

Answer 18

The medical capacity act 2005 supports and protects individuals by assigning a court appointed deputy.

Question 19

Will

Answer 19

A will Is a written declaration of an individuals wishes regarding what will happen after they die

Question 20

Testator

Answer 20

Person who makes the will

Question 21

Beneficiary

Answer 21

A person or organisation that revives benefits from the will

Question 22

Codicil

Answer 22

Document that formally amends the will

Question 23

Executor

Answer 23

Person names by the testator as carrying out the wishes in the will

Question 24

Grant of probate

Answer 24

Legal authority for executor to distribute the estate according to the will

Question 25

Deed of variation

Answer 25

Legal agreement by the beneficiaries to alter the terms of the will after death of testator

Question 26

Moneys worth

Answer 26

Provisions of goods/services instead of cash payment

Question 27

Intestate

Answer 27

Having died without leaving a will

Question 28

Administrator

Answer 28

person given the role of distributing the estate according to the rules of Intestate

Question 29

Letters of administration

Answer 29

Legal authority to distribute the estate of a deceased person without leaving a will

Question 30

Trust and trustees

Answer 30

A trust (settlement) is a method when an owner of an asset (settlor) can distribute or use that asset for the benefit of another person (beneficiary) without allowing them to have control

Question 31

Settlor

Answer 31

The person who creates the trust and was original owner of asset

Question 32

Trust deed

Answer 32

Document stating how the trust will be managed, by who and for who’s benefit

Question 33

Insolvency

Answer 33

Where liabilities exceed assets or organisation/individual cannot meet liabilities within set time

Question 34

Bankruptcy

Answer 34

Legal process triggered by insolvent individual by creditors for owing at least £5000. Bankruptcy order usually lasts 12 months

Question 35

Individual voluntary arrangement (IVA)

Answer 35

Agreement by creditor to reschedule an individuals debt repayments

Question 36

Company voluntary arrangement

Answer 36

Same situation as an IVA but with the aim of managing company liabilities without business going into administration

Question 37

Official receiver

Answer 37

Official appointed by court to identify and distribute the assets of bankrupt individual/organisation and investigate reasons why

Question 38

Insolvency practitioner

Answer 38

Appointed by court or by official receiver to identify and distribute assets. Must be licensed to practise