Business Law Lecture Flashcards (2025-2026)

Comprehensive vocabulary flashcards covering the English legal system, contract law, agency, negligence, company law, insolvency, and criminal/employment aspects as per the ICAEW Business Law syllabus.

Civil law

A category of law dealing with disputes between individuals and/or organisations, where a claimant sues a defendant for a wrong caused, seeking remedies like damages.

Criminal law

A category of law dealing with cases where a prosecutor (e.g., the Crown Prosecution Service) accuses a defendant of committing a crime, with the potential for punishment like imprisonment or fines.

Standard of proof in civil law

Cases must be proven on the balance of probabilities.

Standard of proof in criminal law

The prosecution must prove their case beyond reasonable doubt.

Small claims track

The court track for straightforward civil cases valued below $£10,000$, dealt with by the Small Claims Court part of the County Court.

Primary legislation

Acts of Parliament, such as the Equality Act 2010 or Finance Act 2022, which represent the most authoritative source of law in the UK.

Case law

Also known as common law, it is based on the concept of judicial precedent where a judge's decision set in a previous dispute must be followed by other judges in similar cases.

Arbitration

A form of Alternative Dispute Resolution where an independent person (arbitrator) considers facts and makes a determination, often chosen for its privacy and speed compared to litigation.

Riba

The term for usury in Sharia law, referring to the earning of interest, which is considered an unlawful gain.

Void contract

A contract that is not a contract at all; the parties are not bound, and property transferred under it is generally recoverable from third parties.

Offer

A definite promise to be bound on specific terms, which must be capable of acceptance and distinguished from an Invitation to Treat.

Postal rule

A common law rule stating that acceptance is completed as soon as a letter is posted, provided the use of post was in the contemplation of both parties.

Consideration

The element of value in an agreement—which must be sufficient but need not be adequate—supplied by both parties to form a binding contract.

Doctrine of Privity

A general rule stating that only those who are party to a contract may enforce or sue on that contract.

Exclusion clause

Any clause that attempts to restrict or exclude the liability of one party for breach of contract or negligence.

Contract frustration

The discharge of a contract occurring when it becomes impossible or illegal to perform after it is entered into (e.g., destruction of subject matter or personal incapacity).

Anticipatory breach

A breach of contract where one party gives notice of their intention not to comply with a contractual term before the performance is due.

Specific performance

An equitable remedy where the court directs a party to complete their contractual obligations, often used in land disputes.

Actual express authority

The authority of an agent that has been explicitly agreed with the principal, either verbally or in writing.

Ostensible authority

Also known as apparent authority, it arises where a principal represents to a third party that an agent has authority, and the third party relies on that representation.

Duty of care

The first step in establishing negligence, proven via the 'neighbourhood principle' or the four-part test: reasonable foreseeability, proximity, fair/just/reasonable, and public policy.

Res ipsa loquitur

A Latin term meaning 'the facts speak for themselves,' used when the cause of damage is unknown but clearly implies the defendant’s lack of care.

Vicarious liability

A legal doctrine where one person (e.g., an employer) is held legally responsible for the tortious acts of another (e.g., an employee) committed in the course of employment.

Separate legal personality

The legal concept established in Salomon v Salomon & Co that a company is an artificial person with rights and obligations distinct from its members.

Public limited company (plc)

A company limited by shares that must have an authorized minimum share capital of $£50,000$, at least two directors, and a qualified company secretary.

Promoter

A person who takes steps to incorporate a company and makes business preparations for it, owing a fiduciary duty to the future company.

Memorandum of association

A document forming part of a company's registration that serves as a historic record of the initial subscribers who wish to form the company.

Shadow director

A person whose instructions the board of a company are accustomed to follow, despite not being formally appointed.

Fraudulent trading

A criminal and civil offence occurring when a business is carried on with the intent to defraud creditors or for any fraudulent purpose.

Ordinary resolution

A resolution passed by a simple majority (> 50 \text{%}) of votes cast at a meeting.

Special resolution

A resolution requiring a majority of at least 75 \text{%} of votes cast at a meeting, used for major changes like altering articles or changing the company name.

Pre-emption rights

The statutory right of existing shareholders to be offered newly issued shares for cash pro rata to their existing holdings before they are offered to outsiders.

Fixed charge

A security interest that attaches to a specific asset upon creation, preventing the company from disposing of the asset without the chargee's consent.

Floating charge

A security interest that 'hovers' over a class of assets (present and future) and only attaches to specific assets upon a crystallising event.

Administration

An insolvency procedure aimed at rescuing a company as a going concern by placing it under the control of an insolvency professional.

Ordinary partnership

The relation subsisting between persons carrying on a business in common with a view of profit, governed by the Partnership Act 1890, where partners have unlimited liability.

Limited Liability Partnership (LLP)

A separate legal entity registered under the LLPA 2000 that allows partners to enjoy the benefits of incorporation and limited liability.

Insider dealing

A criminal offence under the Criminal Justice Act 1993 involving the use of unpublished, price-sensitive information to deal in securities on a regulated market.

Money laundering

The process of converting the proceeds of crime into assets that appear legitimate, involving three phases: placement, layering, and integration.

Contract of service

The legal term for an employment contract, distinguished from a 'contract for services' held by an independent contractor.

Unfair dismissal

A statutory claim available to employees dismissed without a fair reason or fair procedure, generally requiring two years of continuous employment.

Data Subject

Under the Data Protection Act 2018, an individual who is the subject of personal data held by a data controller.