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CeMAP Unit 1 > Topic 16 Key Legal Concepts > Flashcards

Topic 16 Key Legal Concepts Flashcards

1
Q

What is a Legal Person (Legal Entity)?

A

Body that can enter into contracts, sue or be sued in a court of law

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2
Q

A legal person is not just an individual but can be groups of people and limited companies

True or False

A

True

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3
Q

What is a disadvantage of a sole trader not being a separate legal entity?

A

They are personally liable for the business’s debts

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4
Q

A company is separate from its shareholders & employees.

True or False

A

True

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5
Q

The certificate of incorporation provide evidence of what?

A

The company’s formation

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6
Q

What information can be found at the central registry at companies house?

A
  • Shareholding & Shareholders
  • Names & addresses of directors & company secretary
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7
Q

The nature of the company and rules about what it can & can’t do are set out where?

A

The company’s Memorandum & Articles of Association

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8
Q

The liabilities for partners in a partnership are what?

A

Jointly and severally responsible for the liabilities of a partnership

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9
Q

How is a Limited Liability Partnership different from other partnerships?

A

Their liability is limited to the amount they have invested should the business collapse

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10
Q

A Limited Liability Partnership (LLP) is a legal entity this mean it can do what?

A

Borrow

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11
Q

Most businesses agreements in the world of finance are what?

A

Legally Binding

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12
Q

What are the ways contracts are made?

A
  • Orally
  • Writing
  • Deed
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13
Q
  • Offer & Acceptance
  • Consideration
  • Capacity to Contract
  • Contract Terms
  • Intention to create a legal relationship
  • Legality of Object
  • Entered into Freely

Are all what?

A

Binding Contracts

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14
Q

Which Binding Contract is this?

The offeror makes an offer and there must be an unqualified acceptance by the other. This must be committed to the other party

A

Offer & Acceptance

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15
Q

Which Binding Contract is this?

Subject of contract must be matched by a consideration (payment etc)

A

Consideration

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16
Q

Which Binding Contract is this?

  • Each party to the contract must have legal capability or power to do so.
  • Minors or those with reduced mental capacity have limited powers
A

Capacity to contract

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17
Q

Which Binding Contract is this?

Must be complete certain and free from doubt

A

Contract Terms

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18
Q

Which Binding Contract is this?

As distinct from a merely informal arrangement

A

Intention to create a legal relationship

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19
Q

Which Binding Contract is this?

Contracts cannot be made for illegal or immoral purposes

A

Legality of Object

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20
Q

Which Binding Contract is this?

If misrepresentation, duress or undue influence occur the contract is not valid

A

Entered into Freely

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21
Q

Contracts involving land must be what?

A
  • Must be made in writing
  • Conveyance of land must be performed by deed
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22
Q

There is not usually what between parties to a contract?

A

Duty of Disclosure

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23
Q

How was Disclosure of Information different for insurance contacts?

A

Applicant had to supply all the facts relevant for a policy

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24
Q

What has the Consumer Insurance (Disclosure & Representations) Act 2012 now done with insurance claims for customers applying for a claim?

A

To answer questions with reasonable care

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25
Q

When an applicant for insurance answers is the below. True or False

If a question was misrepresentation was honest and reliable. The insurer has no right to refuse the claim?

A

True

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26
Q

In the case of insurance misrepresentation due to carelessness what remedy can the insurer apply?

A

Compensatory Remedy

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27
Q

When an applicant for insurance answers in the below.

True or False

If careless misrepresented other than a claim the insurer and policy holder do have the right to terminate the contract with reasonable notice?

A

True

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28
Q

If a claim was a deliberate or reckless misrepresentation. The insurer can reject the claim and is not required to refund the premiums?

True or False

A

True

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29
Q

What are the remedies for breach of contract?

A
  • Damages
  • Order for specific performance
  • Injunction
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30
Q

This is what remedy for breach of contract?

Injured party seeks to obtain financial compensation for their loss

A

Damages

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31
Q

This is what remedy for breach of contract?

Compels the other party to complete the contract

A

Order for specific performance

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32
Q

This is what remedy for breach of contract?

Prevents someone from doing something

A

Injunction

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33
Q

Why were Critical Illness Claims claims upheld by the Financial Ombudsman rejected due to non disclosure overturned?

A

Tey required a claimant to remember all the times they required treatment

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34
Q

What is the Law of Agency?

A

An agent who acts on behalf of another (Principle)

35
Q

In an Agent-Principal relationship an agents power is fixed?

True or False

A

False

Each agent has different range of power set for them

36
Q

What could happen to a principal & an agent if an agent acts outside of their authority?

A

They could be liable on the contract

37
Q

What does “Apparent Authority” mean?

A

Something said by the principal that gives the impression they have authorised the agent’s actions

38
Q

What is “Ratification”?

A

When an agent has exceeded their authority. The principal can agree to what the agent has done.

39
Q

The law of England & Wales refers to property as all types of asset

True or False

A

True

40
Q

What are the 2 types of property?

A
  1. Realty
  2. Personalty
41
Q

What is Realty?

A

If a court would return a property to a dispossessed owner and provide compensation for the loss

42
Q

What is another feature of real property (Real Estate)?

A

It is immovable

43
Q

What is Personalty?

A

All other property

44
Q

What are the features of joint tenants?

A
  • Each joint owner owns 100% of the property
  • On death of a owner the surviving owner takes ownership to the property
  • Transfer cannot be overridden by joint tenant or in a will
45
Q

What are the features of Tenants in Common?

A
  • Joint owners regarded as single owner but trustees to the land
  • Each owner has share in equity in the property
  • If owner does share of the property passes to whoever inherits
46
Q

Each joint mortgage is written on a joint and several liability basis.

This means what?

A

Each owner is responsible for the mortgage if another owner cannot make their payment

47
Q

What is a Power of Attorney?

A

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

48
Q

When might a Power of Attorney be used?

A
  • Able person who is concerned about their finances after they are no longer capable
  • Person who has affairs in the UK who is moving abroad
49
Q

Can a person who does not have legal capacity appoint a power of attorney?

A

No

50
Q

What is an Enduring Power of Attorney?

A

Power of Attorney that continues when a person becomes mentally incapable

51
Q

Where does a Enduring Power of Attorney (EPA) have to be registered?

A

Office of Public Guardian (OPG)

52
Q

What is a donor in relation to a Power of Attorney?

A

Person who makes the power of attorney

53
Q

What is a donee in relation to a Power of Attorney?

A

A person who is given power of attorney

54
Q

What is a donee in relation to a Power of Attorney?

A

A person who is given power of attorney

55
Q

What happened to Enduring Power of Attorneys (EPA)?

A

Were replaced by Lasting Power of Attorney (LPA)

56
Q

What are the 2 types of Lasting Power of Attorney (LPA)

A
  1. Health & Welfare
  2. Property & Financial Affairs
57
Q

What is Heath & Welfare Lasting Power of Attorney (LPA)

A

Donee can make decisions about care when the doner is no longer capable of making decisions

58
Q

What is Property & Financial Affairs Lasting Power of Attorney (LPA)?

A

Give donee right to manage doner’s bank account, collect benefits and sell property

59
Q

What does the Mental Capacity Act 2005 do?

A
  • Supports & protects individuals who lack the capacity to make their own decisions
  • Makes provision for substituted decision-making on behalf of an individual
60
Q

What is a Will?

A

Written declaration of a person’s wishes (assets etc) after they have died

61
Q

What does it mean to die Intestate?

A

Dying without leaving a valid will

62
Q

For a will to be valid it must be what?

A
  1. In writing
  2. Properly Executed
63
Q

What is the minimum age for a valid Will under English law?

A

18

64
Q

What would happen if the witness to the will was a beneficiary of the will?

A

They would not be able to inherit under the terms of the will

65
Q

If the testor of a will marries, remarries or enters into a civil partnership what happens to the will? (unless in contemplation of change of status)

A

The will is revoked

66
Q

Who is the testor of a will?

A

The person who makes a will

67
Q

What is the name of a document that amends a will?

A

Codicil

68
Q

The actions to be carried out in a will is the responsibility of the?

A

Executor

69
Q

What does the grant of probate enable the executor to do?

A

Gives legal authority to carry out the instructions in the will

70
Q

If there is no will what does the appropriate person need to apply for to distribute a person’s estate?

A

Letters of administration

71
Q

What is a “Deed of Variation”?

A

Legal agreement that enables the terms of a will to be alter after the death of a testor

72
Q

Why might a “Deed of Variation” be used?

A

To reduce a persons liability to Inheritance Tax (IHT)

73
Q

What does “Money’s Worth” mean?

A

Goods received instead of a cash payment

74
Q

According to the laws of Intestacy:

If the deceased dies has a spouse and not children

Who inherits the estate

A

Spouse inherits the entire estate

75
Q

According to the laws of Intestacy:

If there is a spouse and children

What does the spouse inherit?

A
  • Deceased personal possessions
  • First £322,000
  • Half of residue above £322,000 absolutely
76
Q

According to the laws of Intestacy:

If there is a spouse and children

What do the children inherit?

A
  • Any amount in residue over £322,000 is divided between the children
77
Q

According to the laws of Intestacy:

If there a children but no spouse

How is the estate distributed?

A
  • Estate is distributed amongst the children
78
Q

According to the laws of Intestacy:

What happens if there is neither spouse nor children

A

Estate goes to the parents of the deceased or (if dead) the deceased’s siblings

79
Q

According to the laws of intestacy

Who inherits an estate if no blood relative can be found?

A

The crown

80
Q

If a person dies in testate the estate goes to any surviving spouse even if they are divorced from the spouse.

True or False

A

True

81
Q

The Executor of a will cannot benefit from the will.

True or False

A

False

They can

82
Q

For an Enduring Power of Attorney (EPA) the only place it can be revoked is the Court of Protection.

True or False

A

True

83
Q

How are Limited Liability Partnerships (LLP) taxed?

A

They are taxed as self employed and are subject to income tax

CeMAP Unit 1 (18 decks)

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