Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Commercial > topic summaries > Flashcards

topic summaries Flashcards

1
Q

Agency - ALTER EGO

A

The agent assumes the legal identity of the principal. Acts as their hand.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Agency - EXPLICIT V IMPLICATION

A

Agency can be created explicitly or through implication.

No requirement of writing under the RoW 1995. Written document of confirmation must be created if either party requests it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Agency - TYPES

A

1) Agent discloses existence and name of principal

2) Agent only discloses existence

3) Agent does not disclose existence of a principal

Liability of agent/principal depends on whose credit was relied upon by the third party, when entering the contract. Therefore, agent can assume liability in types 2 and 3.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Agency - IMPLIED AUTHORITY

A

Agents cannot breach their delegated authority. If they do, their actions are not binding on the principal

Implied authority where…
- necessary to complete given task
- usual in circumstance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Agency - RATIFICATION

A

d = principal gives retrospective effect to ultra vires actions of agent

Requirements:
- principal existed at time of agent action
- principal had capacity
- there was an assumption of agency in the interaction
- informed decision

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Agency - APPARENT AUTHORITY

A

d = principal represents agent to be properly authorised when they are not. Actions can still be binding on principal.

Does not create binding obligation, but prevents principal from saying agency did not exist

Requirements:
- principal’s conduct or words created impression of agency
- third party believed agency existed
- third party suffered resultant loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Agency - AGENT’S DUTIES

A

General:
- skill and care
- follow instruction
- keep accounts

Fiduciary:
- don’t make secret profit
- confidentiality
- disclosure
- don’t enter agreements that detriment principal, but benefit agent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Agency - PRINCIPAL’S DUTIES

A

reimburse agent for costs incurred

relieve agent of liabilities incurred

remuneration

commercial agents - providing necessary documents and information to the agent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Agency - TERMINATION

A

Terminates upon…
- death of either
- end of stipulated period
- unilateral revocation
- purpose of contract achieved

(commercial agents must give 1 months notice for 1 year contract, 2 for 2, and 3 for 3+)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Partnership - DEFINITION

A

two or more individuals carrying on business together with a view for a profit

Partnership Act 1890

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Partnership - SEPARATE LEGAL PERSONALITY

A

Scottish partnerships are their own legality entity. Can sue and be sued, enter into contracts, etc.

English don’t have separate legal personality

Not limited liability, however

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Partnership - CONTINUITY

A

If a partner leaves for whatever reason, a new firm is created. Does not retain liabilities of the old firm.

Unless, same assets, stock and business of old firm

Partners retain liabilities incurred while at the firm

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Partnership - PARTNERSHIP AGREEMENT + 1890 RULES

A

Partnership agreement regulates firm interaction

Where agreement is silent or does not exist, s.19-31 of 1890 Act provides regulations:
- duty not to make a secret profit
- duty to account
- duty not to compete within the firm
- requirement of majority partner vote when expelling another

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Partnership - DISSOLUTION

A

occurs due to…
- change in partnership for any reason
- frustration
- expiry of term contained in partnership agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Partnership - LIMITED PARTNERSHIPS

A

Limited Partnerships Act 1907

  • general (standard partner) and limited (more like shareholders, don’t actual run firm, limited liability) partners
  • need 1 of both
  • need LP at end of name
  • incorporated through registration at Companies House
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Partnership - LIMITED LIABILITY PARTNERSHIPS

A

Limited Liability Partnerships Act 2000

  • more like a registered company
  • LLP at end of name
  • features member instead of partners
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Companies - DEFINITION

A

legal personality

owned by members, run by directors

limited liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Companies - CORPORATE VEIL

A

Salomon v Salomon - metaphorical barrier between personal and company assets, only latter can be chased by creditors when dealing with the company

Veil can be pierced by statute and common law.

Statute:
- insolvency
- lack of trading certificate
- knowingly receiving unlawful distribution of profits
- inaccurate information on company prospectus

common law - Prest v Petrodel Resources - where individual tries to use corporate veil to avoid personal liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Companies - PUBLIC v PRIVATE

A

Public
- properly qualified secretary
- minimum 2 directors (1 of whom is natural)
- minimum shared capital of £50,000

Private - much looser as no requirement of public interest/concern. Need at least 1 natural director

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Companies - INCORPORATION

A

Complete memorandum of association - largely irrelevant these days

Articles of Association (IN01 form)

Publish articles at companies house

Can only change articles by means of special resolution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Companies - MEETINGS

A

AGM - everyone, annually
EGM - any meeting with everyone that isn’t AGM
Class - certain class of shareholder
Board - only directors need to be present

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Companies - WINDING UP

A

Company assets liquidated by liquidator
Liquidator appointed by court
Assets distributed to ranked creditors

Methods:
- voluntary by members
- voluntary by creditors
- court-ordered

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Directors - ROLE + REQUIREMENTS

A

Role:
- make company decisions
- direct administrative matters
- Governing mind of company

Every company needs 1
Appointed by company or law
Paid

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Directors - EXCLUSIONS

A
  • expressly prohibited by company constitution
  • under 16s
  • sequestrated individuals
  • company auditor
  • disqualified individuals
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Directors - TERMINATION

A

death, stipulated period passed, winding up

Disqualification:
- only court can disqualify
- people can petition court for disqualification

Grounds:
- indictable offence regarding management of company
- fraud
- failure to make proper returns of company documents
- persistent breach of company legislation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Directors - DUTIES

A

s.171-177 Companies Act 2006

  • act within delegate power
  • promote company success
  • exercise reasonable skill, care and diligence
  • don’t accept benefits from third parties
  • avoid conflicts of interest
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Directors - REMEDIES FOR BREACH

A

o Reimbursement for company loss
o Repayment of company expenses
o Payment of lost profit
o Asset return
o Dismissal
o Interdict

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Shareholders - FOSS V HARBOTTLE

A

Majority rule - need majority of shareholders tot take action against directors. Court should not interfere with majority consensus

Proper plaintiff - only the company can sue for wrongs done against it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Shareholders - EDWARDS V HALLIWELL

A

Exceptions to Foss, where minority shareholders can take action:
- ultra vires transactions
- failure to follow proper procedure
- infringement of personal rights of members
- fraud by majority

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Shareholders - DERIVATIVE PROCEEDINGS

A

s.265 Companies Act 2006

negligent actual/ proposed act or omission by a director. Raised by shareholders to protect company interest

Grounds for refusal:
- act/omission pre-authorised
- act/omission ratified
- reasonable person would not raise action

Court considerations:
- good faith by pursuer?
- likely to be authorised/ratified
- could pursuer make claim personally?

31
Q

Shareholders - UNFAIR PREJUDICE

A

s.994 Companies Act 2006

company/directorial actions have unfairly prejudiced members - including pursuer

Judged objectively

Available orders:
- regulate company’s future affairs
- interdict
- make company do what they should have
- redistribute shares

32
Q

Shareholders - WINDING UP ON JUST AND EQUITABLE GROUNDS

A

s.122 Insolvency Act 1986

Only where no better alternative

33
Q

Creditors - PLEDGE

A

Voluntary

corporeal movables only
Transfer of possession, until you pay back debt

34
Q

Creditors - ASSIGNATION + INTIMATION

A

Voluntary

assigned and intimate real title to creditor
Incorporeal movables

35
Q

Creditors - STANDARD SECURITY

A

Voluntary

Heritable
writing requirement
standard conditions in schedule 1 of conveyancing and feudal reform (Scotland) act 1970

36
Q

Creditors - FLOATING CHARGE

A

Law

Security over all property of debtor
Attaches to specific property, creditor gains real right of ownership
Only applies to companies

37
Q

Creditors - HYPOTHEC

A

Law

landlord’s, solicitor’s or maritime

38
Q

Creditors - LIEN

A

Law

retain possession of property until services paid for

special lien - retain possession of specific property services done on

general lien - retain any of the debtor’s property

39
Q

Insurance - PRUDENTIAL INSURANCE CO V INLAND REVENUE COMMISSIONER

A
  • periodical payment to insurer
  • insured gets benefit
  • upon occurrence of risk event
  • uncertain
40
Q

Insurance - PROXIMITY

A

first - insuring own property against risk

third - insurance that covers property of others if you damage them e.g., third-party car insurance

41
Q

Insurance - INSURABLE INTEREST

A

insurable interest = relevant interest in subject matter of insurance contract

Life (Life Assurance Act 1774)
- need interest in the life you are insuring
- interest must be pecuniary/financial
- interest at time of contract creation is sufficient
- presumption that you have interest in life of your spouse

Indemnity (Macaura v Northern Assurance Co Ltd - timber. only company had interest. not shareholder)
- legal/equitable interest in the property

Without interest, no contract of insurance exists. Void.

42
Q

Insurance - WARRANTY

A

d = promise from insured to insurer

If promise broken, insurer is no longer liable for the occurrence of the risk

Types
- statement of fact (past or present nature of circumstances)
- continuing undertaking (promise to maintain a certain state of affairs)

existence of warranty and type are judged objectively by court

43
Q

Insurance - DUTY OF DISCLOSURE

A

must disclose material facts to insurer at the time of contract

If they fail to, insurer can avoid liability

Material fact = that which would affect the insurer’s decisions

Inducement occurs when the insured fails to disclose a material fact, directly resulting in the creation of the insurance contract and the setting of premium levels at a certain amount

No damages can be claimed, parties restore each other to pre-contractual position

44
Q

Insurance - DUTY OF MISREPRESENTATION

A

must not misrepresent facts when contracting with insurer

If you do, can avoid liability

Test - was there a reasonable belief for your statement of fact

Same test as inducement, did it lead to the contract and premiums

45
Q

Insurance - DUTY FRAUDULENT CLAIMS

A

do not make fraudulent claims, full or part

If you do, insurer free from all further liability under the contract

46
Q

Caution - DEFINITION

A

cautioner gives a guarantee that they will pay the debts/liabilities of the principal debtor, if they are unable to do so

47
Q

Caution - CREATION

A

No requirement of writing

No requirement of acceptance - Fortune v Young

can be more than one

48
Q

Caution - ACCESSORY

A

caution contract can not exist without original contract between debtor and creditor - therefore, it is accessory in nature

49
Q

Caution - SMITH V BANK OF SCOTLAND

A

If debtor misrepresents matters or applies undue influence to cautioner, obligation is void

50
Q

Caution - CAUTIONER’S LIABILITY

A

liabilities cannot exceed those of debtor

can be held liable for costs incurred by creditor when trying to get principal debtor to pay

positive interpretation for cautioners

51
Q

Caution - CAUTIONER’S RIGHTS

A

relief - relieved from liabilities and costs incurred while paying principal debtor’s debt

Assignation - get creditor to assign debts, rights and liabilities to cautioner

rank as a creditor in the debtor’s subsequent sequestration

52
Q

Caution - EXTINCTION

A

extinction of debt
- novation - original debt terminated and replaced with a new one
- compensation - if creditor owes cautioner compensation, principal debt cancels out

Creditor takes action
- creditor gives debtor more time to pay, cautioner no longer needed
- change in debtor-creditor contract unfairly prejudices cautioner, no longer liable
- if joint co-cautioner discharged, so too partner

Cautioner takes action
- can give notice
- 5 years prescription
- death

53
Q

Diligence - TYPES

A

seizing and freezing

54
Q

Diligence - CONDITIONS

A

court must grant a decree, as a result of an existing debt, that affects the property/interests of the debtor

55
Q

Diligence - TIME TO PAY + DAS

A

debtor protection schemes

time to pay - in the name. Debt must be £25,000+

Debt arrangement scheme - periodical payment, system

56
Q

Diligence - ATTACHMENT

A

d = court officers come and seize your property

effect
- creditor now has ownership
- they must pay excess profit from realisation to debtor

What can’t be attached:
- tools of trade
- vehicle they reasonably require
- mobile home which is primary residence

57
Q

Diligence - ARRESTMENT

A

d = freezing assets owned by debtor but in possession of third party e.g., bank account

If debt not paid within 14 weeks, frozen assets pass to the creditor

58
Q

Diligence - ADJUDICATION

A

seize

action for payment

If not fulfilled, action for adjudication - creditor evicts debtor and leases property for 7 years, after 10 years they gain real right of ownership

59
Q

Diligence - INHIBITION

A

debtor can’t sell or buy any heritable property

60
Q

Arbitration - DEFINITION

A

parties hire private judge to adjudicate dispute

Arbitration (Scotland) Act 2010

61
Q

Arbitration - PRINCIPLES

A

fair, impartial, time and money efficient

parties given discretion to decide how to proceed - only limitation is public interest

62
Q

Arbitration - SEATS

A

s.13 2010 - relevant court can intervene with arbitration proceedings

court decided by geographical ‘seat’

Can have seat in one place, but use the law of another jurisdiction - flexible legal mechanism

63
Q

Arbitration - ADVANTAGES

A
  • flexible
  • quick
  • confidential
  • can choose expert judges
64
Q

Arbitration - DISADVANTAGES

A
  • doesn’t create binding precedent, however, s.12 2010 gives arbitration decisions enforceable power
65
Q

Personal insolvency - TYPES

A

Practical - unable to pay debts as they fall due

Absolute - total liabilities exceeds total assets

Apparent
- debtor has been sequestrated
- debtor gives written notice that they will not pay debts
- charge for payment expires

66
Q

Personal insolvency - WHAT IS SEQUESTRATION

A

court-ordered process whereby trustee in sequestration appointed to gather and liquidate the debtor’s assets. Proceeds to distribute them among ranked creditors

67
Q

Personal insolvency - CREDITOR-LED

A
  • qualified creditor petitions sheriff
  • debtor is apparently insolvent
  • debtor must be given opportunity to argue against sequestration in front of sheriff
  • Sheriff has no discretion, merely assesses facts and see if they abide to criteria of sequestration
  • if they do, appoints a trustee in sequestration
68
Q

Personal insolvency - MORATORIUM + DAS + AMA

A

Moratorium = 6-week protection from creditors, gives debtor time to decide what to do

Debt arrangement scheme = mentioned in reference to insurance

Approval money advisor = consult money advisor

All three options are led by the debtor and require the approval of the Accountant in Bankruptcy

69
Q

Personal insolvency - ACCOUNTANT IN BANKRUPTCY

A
  • determines applications by debtors
  • supervises trustees in sequestration
  • maintains register of insolvencies
70
Q

Personal insolvency - TRUSTEE IN SEQUESTRATION

A

gathers assets -> realises -> distributes

fiduciary duties:
- safeguard assets
- best reasonable price when selling
- best interest of creditors
- don’t self-deal

Administrative duties:
- maintain records
- accept or reject creditor claims
- report to Accountant in Bankruptcy

Trustee ranks claims and distributes estate accordingly

71
Q

Personal insolvency - END OF SEQUESTRATION

A

when final dividend is paid

72
Q

Personal insolvency - MAP

A

for low-income/asset families

Requirements:
- received benefits in last 6 months
- debts between £1,500-£25,000
- no bankruptcy in preceding 5 years
- no MAP in preceding 10 years
- no land worth more than £2,000

73
Q

Personal insolvency - NORMAL SEQUESTRATION

A

Requirements:
- Debts of at least £3,000
- apparent insolvency
- no sequestration in preceding 5 years

74
Q

Personal insolvency - WHAT IS SEQUESTRATION

A

court-ordered process whereby trustee in sequestration appointed to gather and liquidate the debtor’s assets. Proceeds to distribute them among ranked creditors

Commercial (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions