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1
Q

Agency - ALTER EGO

A

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

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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

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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.

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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

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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

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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

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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

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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

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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+)

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10
Q

Partnership - DEFINITION

A

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

Partnership Act 1890

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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

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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

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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

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14
Q

Partnership - DISSOLUTION

A

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

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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
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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
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17
Q

Companies - DEFINITION

A

legal personality

owned by members, run by directors

limited liability

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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

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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

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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

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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

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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

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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

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24
Q

Directors - EXCLUSIONS

A
  • expressly prohibited by company constitution
  • under 16s
  • sequestrated individuals
  • company auditor
  • disqualified individuals
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25
Directors - TERMINATION
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
26
Directors - DUTIES
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
27
Directors - REMEDIES FOR BREACH
o Reimbursement for company loss o Repayment of company expenses o Payment of lost profit o Asset return o Dismissal o Interdict
28
Shareholders - FOSS V HARBOTTLE
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
29
Shareholders - EDWARDS V HALLIWELL
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
30
Shareholders - DERIVATIVE PROCEEDINGS
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
Shareholders - UNFAIR PREJUDICE
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
Shareholders - WINDING UP ON JUST AND EQUITABLE GROUNDS
s.122 Insolvency Act 1986 Only where no better alternative
33
Creditors - PLEDGE
Voluntary corporeal movables only Transfer of possession, until you pay back debt
34
Creditors - ASSIGNATION + INTIMATION
Voluntary assigned and intimate real title to creditor Incorporeal movables
35
Creditors - STANDARD SECURITY
Voluntary Heritable writing requirement standard conditions in schedule 1 of conveyancing and feudal reform (Scotland) act 1970
36
Creditors - FLOATING CHARGE
Law Security over all property of debtor Attaches to specific property, creditor gains real right of ownership Only applies to companies
37
Creditors - HYPOTHEC
Law landlord's, solicitor's or maritime
38
Creditors - LIEN
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
Insurance - PRUDENTIAL INSURANCE CO V INLAND REVENUE COMMISSIONER
- periodical payment to insurer - insured gets benefit - upon occurrence of risk event - uncertain
40
Insurance - PROXIMITY
first - insuring own property against risk third - insurance that covers property of others if you damage them e.g., third-party car insurance
41
Insurance - INSURABLE INTEREST
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
Insurance - WARRANTY
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
Insurance - DUTY OF DISCLOSURE
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
Insurance - DUTY OF MISREPRESENTATION
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
Insurance - DUTY FRAUDULENT CLAIMS
do not make fraudulent claims, full or part If you do, insurer free from all further liability under the contract
46
Caution - DEFINITION
cautioner gives a guarantee that they will pay the debts/liabilities of the principal debtor, if they are unable to do so
47
Caution - CREATION
No requirement of writing No requirement of acceptance - Fortune v Young can be more than one
48
Caution - ACCESSORY
caution contract can not exist without original contract between debtor and creditor - therefore, it is accessory in nature
49
Caution - SMITH V BANK OF SCOTLAND
If debtor misrepresents matters or applies undue influence to cautioner, obligation is void
50
Caution - CAUTIONER'S LIABILITY
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
Caution - CAUTIONER'S RIGHTS
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
Caution - EXTINCTION
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
Diligence - TYPES
seizing and freezing
54
Diligence - CONDITIONS
court must grant a decree, as a result of an existing debt, that affects the property/interests of the debtor
55
Diligence - TIME TO PAY + DAS
debtor protection schemes time to pay - in the name. Debt must be £25,000+ Debt arrangement scheme - periodical payment, system
56
Diligence - ATTACHMENT
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
Diligence - ARRESTMENT
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
Diligence - ADJUDICATION
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
Diligence - INHIBITION
debtor can't sell or buy any heritable property
60
Arbitration - DEFINITION
parties hire private judge to adjudicate dispute Arbitration (Scotland) Act 2010
61
Arbitration - PRINCIPLES
fair, impartial, time and money efficient parties given discretion to decide how to proceed - only limitation is public interest
62
Arbitration - SEATS
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
Arbitration - ADVANTAGES
- flexible - quick - confidential - can choose expert judges
64
Arbitration - DISADVANTAGES
- doesn't create binding precedent, however, s.12 2010 gives arbitration decisions enforceable power
65
Personal insolvency - TYPES
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
Personal insolvency - WHAT IS SEQUESTRATION
court-ordered process whereby trustee in sequestration appointed to gather and liquidate the debtor's assets. Proceeds to distribute them among ranked creditors
67
Personal insolvency - CREDITOR-LED
- 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
Personal insolvency - MORATORIUM + DAS + AMA
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
Personal insolvency - ACCOUNTANT IN BANKRUPTCY
- determines applications by debtors - supervises trustees in sequestration - maintains register of insolvencies
70
Personal insolvency - TRUSTEE IN SEQUESTRATION
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
Personal insolvency - END OF SEQUESTRATION
when final dividend is paid
72
Personal insolvency - MAP
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
Personal insolvency - NORMAL SEQUESTRATION
Requirements: - Debts of at least £3,000 - apparent insolvency - no sequestration in preceding 5 years
74
Personal insolvency - WHAT IS SEQUESTRATION
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)

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