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LAW Flashcards

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1
Q

4 contracts that must be in writing to be binding?

A

Bills of exchange.
Regulated Consumer Credit Agreements.
Transfers of land (speciality contracts).
Guarentees.

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2
Q

What is a void contract?

A

A void contract is not a contract at all.

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3
Q

What is a voidable contract?

A

A contract which can be set aside at the choice of the injured party.

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4
Q

What is an unenforceable contract?

A

A contract which has all the essential components to make it valid but a court will not compel a party to comply.

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5
Q

What is meant by a simple contract?

A

The contract does not have to be in any particular form to be binding.

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6
Q

What is an invitation to treat?

A

An invitation for someone to make an offer to you.

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7
Q

Termination of a contract

A

Rejection/counter offer.
Revocation.
Lapse of time.
Failure of pre-condition.

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8
Q

When can’t a offerer revoce a contract?

A
  • If there has been a payment to keep offer open.
  • Unilateral contract.
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8
Q

When can’t a offerer revoce a contract?

A
  • If there has been a payment to keep offer open.
  • Unilateral contract.
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9
Q

Postal rule

A

Offer is made/accepted when letter is posted. (barring a postal strike or the offerer stating they require notice)

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10
Q

Email rule

A

Offer is valid as soon as email is in mailbox, same for acceptance.

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11
Q

Fax rule

A

As soon as is received on fax machine (this is where deal will have happened)

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12
Q

What is consideration?

A

It is the price by which one party bought the other party’s act of promise.

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13
Q

What is the difference between executed and executory consideration?

A

Executed is paying for goods when they are delivered, executory is a promise to pay for goods when they are delivered at a later date.

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14
Q

Consideration made after act

A

If consideration is made after an event has taken place, then it is not consideration at all. If the act was done in response to offer/request then this would constitute good consideration.

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15
Q

Statutory duty

A

Performance of an existing statutory duty is not good consideration.

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16
Q

Existing contractual duty

A

Performance of an existing contractual duty is not normally considered good consideration - seamen. If existing duty is exceeded then can be good consideration.

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17
Q

Contractual duty benefitting both parties

A

If both benefit from new contract then is good consideration. (overrunning work and paying extra to finish on time)

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18
Q

Agreements between spouses?

A

These are not legally binding unless they are living seperately.

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19
Q

In what 3 ways can a contract come to an end?

A
  • Performance
  • Frustration
  • Breach of contract
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20
Q

Are individuals entitled to agreed upon compensation for partial performance?

A

No, partial performance = no performance.

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21
Q

What discharge will be received if performance of a contract is substantial?

A

If a contractor has substantially performed the contract with only minor defects he/she is entitled to the contract price less the costs of remedying any minor defects.

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22
Q

What is meant by Quantum meriut?

A

When a contractor is unable to complete work due to actions of the other party, offer of performance is sufficient to discharge contractual obligations.

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23
Q

What is meant by contract frustration?

A

When performance becomes impossible due to a matter for which neither party is responsible for the contract is discharged by ‘frustration’.

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24
What is meant by breach of contract?
It is when one party fails to put forward any sort of performance or the performance put forward is so inadequate the injured party is substantially deprived of all benefit in the contract.
25
When is a penalty clause used instead of a liquidation damage?
- The same amount if given for a number of losses. - The amount is out of proportion to the potential losses.
26
Difference between equitable remedies and damages?
Equitable remedies are discretionary to the court, and are granted is damages are not enough, the claimant has acted unfairly and if the claimant has unduly delayed bringing the cation to court.
27
What is tort?
Breach of a legal duty, there is no liability unless the law recognises it.
28
What is classified as negligence?
Breach of legal duty to take care, which results in damage to another.
29
How many directors must a public company have?
2. (1 for every other company)
30
What is the difference between a De facto director and a De Jure director?
De Jure has been appointed following the correct legal procedures, De facto is someone who assumes the role and duties without formally being appointed.
31
How many days is the special notice given to a director?
28 days
32
What is required to remove a director?
An ordinary resolution with special notice.
33
What is required to remove a director?
An ordinary resolution with special notice.
34
In what three ways can directors be given authority?
Express, Implied and Apparent/Ostensible.
35
When is a contract/deal negotiated by the board not binding? (providing the third party is acting in good faith)
When the third party has a conflict of interest, (related family member or a common director).
36
s.171 - To act within powers
Director must act in accordance with the company's constitution and only use powers for reason why they were given.
37
s.172 - Promote success of the company
Must act in good faith and in a way that benefits the company.
38
s.173 - To exercise reasonable care and diligence
Acting within company constitution and not compromising future exercise of the company.
39
s.173 - To exercise independent judgement
Acting within company constitution and not compromising future exercise of the company.
40
s.174 - To exercise reasonable care and diligence
Have the general knowledge, skill and experience- that one would expect as well as the actual knowledge needed.
41
s.175 - To avoid conflicts of interest
Director must avoid any situation which places him or her in direct conflict with the company or performance of any other duty.
42
s.176 - Not to accept benefits from third parties
Must not accept a benefit from a third party which arises by reason of him/her performing or not performing an act.
43
s.177 - To declare any interest in a proposed transaction
Must declare extent and nature of an interest to the other directors.
44
How can the breach of director be ratified by the board?
The breach may be ratified by a written or ordinary resolution.
45
How many days notice are required for an AGM?
An AGM requires 21 days notice, members may call a GM if they hold 5% of the paid up voting capital. (special notice 28 days).
46
What is the difference between loan capital and share capital?
Loan capital is offered to creditors of the company where as share capital investors are owners of the company.
47
What is loan capital of a company often referred to as?
Issued debentures
48
3 main differences between preference shares and ordinary shares?
Preference shares have no voting rights, have priority paid fixed dividends and receive no surplus on winding up.
49
What are redeemable shares?
These must be bought back by the company at a certain time.
50
What type of companies cannot use a written solution?
Public companies
51
What percentage in a company must a member hold to petition variation in class rights?
15%, they must prove the change was unfairly prejudicial to their interests.
52
Authority to allot shares may be given by directors using:
The articles or ordinary resolution.
53
Can shares be offered at a discount?
Shares cannot be offered at a discount of the nominal value, if the rule is broken the shareholder is liable to pay the company the discount plus interest.
54
What is meant by pre-emption provisions?
Company cannot ordinary shares to third parties without first offering them to existing shareholders. 21 days to respond.
55
What is the system used to transfer shares electronically?
CREST
56
What are the two criteria for a director purchasing property from the company?
Board approval is needed if: The purchase exceeds £100'000 or exceed £5'000 and 10% of the companies assets.
57
What resolution cannot be used for the removal of an auditor?
A written solution.
58
Within what time period must a private company give notice of its refusal to register a requested transfer of its shares?
2 months
59
What is a shareholders maximum liability if a company went into liquidation?
The amount left unpaid on their share capital.
60
What percentage of votes is required to vary class rights?
75%
61
How must a private company reduce its share capital?
Special resolution supported by an insolvency statement
62
What's the difference between administration and liquidation?
Administration aims to rescue the company and may continue trading as a going concern. Liquidation winds up the company, bringing its life to an end.
63
Who can appoint an administrator?
The court, the company and a holder of a qualifying floating charge over the companies assets.
64
What is a floating charge?
A floating charge is the securing of a loan, guaranteed by current assets, usually paid back with a year.
65
Effects of administration?
Cannot be wound up temporarily, directors have reduced powers, administrators can terminate employment
66
When must an administrator have a statement of proposals by?
Within 8 weeks of appointment, must be presented to creditors and companies members.
67
How long after a creditors committee is formed must the administrator hold a meeting?
Within 6 weeks of establishment.
68
What is receivership?
A special administrator appointed by charge holders to sell assets to pay creditors.
69
What is meant by a CVA?
Company Voluntary Arrangement - arrangements to pay a proportion or to pay over time.
70
What is the minimum period for a moratorium in a CVA?
28 days
71
Difference between an ordinary and special resolution?
An ordinary resolution requires 50% of the board, a special resolution requires 75%.
72
Can one claim a reward if they were unaware of it?
No, can be no acceptance is someone isn't even aware of the offer.

CFAB (2 decks)

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