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CeMAP 1 (Unit one) > Topic 16 (Key legal concepts) > Flashcards

Topic 16 (Key legal concepts) Flashcards

1
Q

What is a legal person?

A

Those who can enter into contracts, or be sued in a court of law, these include executors, trustees and limited companies

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2
Q

What are companies?

A

Legal entities

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3
Q

Who can’t be held responsible for the debts of a company?

A

Shareholders

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4
Q

What is a partnership?

A

An arrangement between 2 people who are carrying a business together for a profit. It is not a separate legal entity and partners jointly own assets and liabilities

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5
Q

What is a limited liability partnership?

A

Means that if the business collapsed their liability is limited to the amount they have invested plus any personal guarantees

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6
Q

What happens to the loss made by a partnership?

A

The loss is usually allocated amongst the partners in the same ratio as profits are shared

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7
Q

What are the basic requirements for a binding contract?

A
  • contracts can be made orally, in writing or by deed
  • offer and acceptance
  • consideration
  • capacity to contract
  • contract terms
  • intention to create a legal relationship
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8
Q

For there to be a contract there must be…..?

A

> An offer - client completes application form and sends to the provider and they offer acceptance terms
On Acceptance - the client pay premiums to the friends life

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9
Q

What is meant by ‘utmost good faith’?

A

Means that the insurer requires all the material facts, such as health and medical history are disclosed when application is made

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10
Q

What is a breach of contract?

A

Where a party fails to meet their side of the contract and has no legal excuse for doing so

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11
Q

What courses of action are available for a breach of contract?

A
  1. Damages - financial compensation for loss
  2. Order for specific performance - obtained to compel the other party to complete the contract
  3. An injunction - a court preventing someone from doing something
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12
Q

What is an AGENT?

A

Acts on behalf of the principal, within specific boundaries to conclude contracts

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13
Q

What is APPARENT AUTHORITY?

A

Something either done or said by the principal that leads to the impression that they have authorised the agents actions

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14
Q

What is a PRINCIPAL?

A

The party granting permission to the agent to act on their behalf

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15
Q

What is RATIFICATION?

A

The retrospective agreement by the principal to actions taken by the agent that exceed the latter’s authority

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16
Q

What is an IFA?

A

An agent of their client and has powers under the terms of engagement

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17
Q

What are the 2 distinct types of property ownership?

A
  1. Reality
    - Property deemed to be real if a court will restore it to a dispossessed owner and not merely provide compensation for loss
    - Tends to be immovable property such as land
  2. Personality
    - All other property
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18
Q

What is Joint Tenancy?

A

> Each owner is deemed to own the whole of the property
If one dies, the property automatically reverts to the survivor
Transfer upon death to the survivor is automatic and can’t be overridden

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19
Q

What is Tenants in Common?

A

Where each owner has an identifiable share of the property. If one dies their share passes to whoever is entitled to inherit it under the terms of the will

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20
Q

What is a power of Attorney?

A

Someone who acts legally on behalf of someone

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21
Q

What is the difference between an ordinary power of attorney and an enduring power of attorney?

A

An ordinary one will cease if the donor becomes mentally incapacitated but an enduring one will continue

22
Q

What happens when a donor becomes mentally incapable?

A

The enduring power of attorney has to be registered with the office of the public guardian and can only be revoked with the consent of the court of protection

23
Q

What is a lasting power of attorney (LPA)?

A

enables attorneys to make decisions about personal and health matters, not just financial decisions

24
Q

What are the 2 types of LPA?

A
  1. Health and Welfare

2. Property and Financial Affairs

25
Q

What is a personal representative?

A

People who carry out the procedure necessary to distribute the estate

26
Q

What 3 points are important regarding a Will?

A
  • Testator (makes the will)
  • The Executor (carries out testator’s wishes)
  • The Beneficiaries
27
Q

To make a will, what 2 formalities must be followed?

A
  1. Must be ins writing

2. The will must be properly executed

28
Q

What is a TESTATOR?

A

The person making the will

29
Q

What is a BENEFICIARY?

A

Person/organisation that receives benefits under the terms of the will

30
Q

What is a CODICIL?

A

A document that formally amends a will

31
Q

If no will is place, what do close relatives apply for?

A

A grant of letters of administration

32
Q

What is an EXECUTOR?

A

Person responsible for carrying out the will’s wishes

33
Q

What is a GRANT OF PROBATE?

A

Legal authority for executors to distribute an estate according to the terms of a valid will

34
Q

What is a DEED OF VARIATION?

A

Legal agreement by beneficiaries to alter the terms of a will

35
Q

What is MONEY’S WORTH?

A

Provision of goods/services in lieu of a cash payment

36
Q

What is intestacy?

A

Means dying without a will

37
Q

What is partial intestacy?

A

If a will makes valid provision for the distribution of some of the assets of the estate, but not others

38
Q

What is INTESTATE?

A

Having died without leaving a will

39
Q

What is an ADMINISTRATOR?

A

Person given the role of distributing the estate according to the rules of intestacy

40
Q

What is a LETTER OF ADMINISTRATION?

A

Legal authority to distribute the estate of a person who has died without leaving a valid will

41
Q

What is a TRUST?

A

A trust is a method by which the owner of an asses distributes that asset for the benefit of another person

42
Q

Who is the SETTLOR?

A

The person who creates the trust and originally owned the assets held in it

43
Q

What is a TRUST DEED?

A

A document that sets out how the trust is to be managed, by whom and for whose benefit

44
Q

Who is a TRUSTEE?

A

The legal owner of the trust property, with the responsibility to look after/distribute the trust property in line with the trust deed

45
Q

What must trustees act in accordance with?

A

The Trust Deed

46
Q

What is INSOLVENCY?

A

A situation in which liabilities exceed assets or an organisation or individual cannot meet their liabilities within a reasonable period of their falling due

47
Q

What is BANKRUPTCY

A

A legal process triggered by the insolvent individual or by creditors where the individual owes a minimum of £5,000. A bankruptcy order usually lasts 12 months

48
Q

What is an INDIVIDUAL VOLUNTARY AGREEMENT (IVA)?

A

Agreement by creditors who represent at least 75% of the value of the debt to reschedule an individual’s debt repayments

49
Q

What is a COMPANY VOLUNTARY AGREEMENT?

A

Agreement by creditors who represent at least 75% of the value of the debt as to how to manage company liabilities. With the aim of avoiding the business going into administration

50
Q

What is an OFFICIAL RECEIVER?

A

An official appointed by the court to identify and distribute the assets of a bankrupt individual or business and investigate the reasons for the bankruptcy

51
Q

What is the role of an INSOLVENCY PRACTITIONER?

A

Appointed by the official receiver to identify and manage the distribution of an individual’s or company’s assets. Insolvency practitioners must be licensed to practise

52
Q

What is ScamSmart and who is it operated by?

A

It is a website designed to help consumers protect themselves against pension and investment scams

It is operated by the FCA

CeMAP 1 (Unit one) (16 decks)

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