Business Law

ACC4031 BCU

What is law?

A system of rules recognised and enforced by the state to regulate behaviour and resolve disputes.

What is the purpose of business law?

To regulate commercial relationships and resolve disputes between businesses, individuals, and the state.

What is the difference between criminal and civil law?

Criminal law involves offences against the state; civil law resolves disputes between private parties.

What is the burden of proof in criminal cases?

Beyond reasonable doubt

What is the burden of proof in civil cases?

Balance of probabilities

What are the main sources of English law?

Legislation, common law, and equity.

What is legislation?

Law made by parliament

What is common law?

Law developed by judges through court decisions

What is equity?

A body of law developed to provide fairness where common law is inadequate.

Name two equitable remedies.

Injunction and specific performance.

What is the highest court in the English legal system?

The Supreme Court

What doctrine ensures lower courts follow higher courts?

Judicial precedent.

What is ratio decidendi?

The binding legal principle of a case.

What is obiter dicta?

Persuasive but non-binding comments made by a judge.

Name two advantages of judicial precedent.

Certainty and consistency.

Name one disadvantage of judicial precedent.

Rigidity or slow development of the law.

What is ADR?

Alternative Dispute Resolution — methods used to resolve disputes without going to court.

Name three types of ADR.

Negotiation, mediation, arbitration.

What is arbitration?

A binding dispute resolution process decided by an arbitrator.

What is a contract?

A legally binding agreement enforceable by law.

What are the six elements of a valid contract?

Offer, acceptance, consideration, intention, capacity, certainty.

What is an offer?

A clear expression of willingness to contract on specific terms.

What is an invitation to treat?

An invitation to negotiate, not an offer.

Give one example of an invitation to treat.

Goods displayed on shop shelves.

What is acceptance?

Final and unconditional agreement to an offer.

What is the postal rule?

Acceptance takes place when posted, not when received.

What is consideration?

Something of value exchanged between parties.

What does “sufficient but not adequate” mean?

Consideration must have value but need not be equal.

What is intention to create legal relations?

Intention for the agreement to be legally binding.

Is intentional presumed in business meetings?

Yes.

What are express terms?

Terms explicitly agreed on by the parties.

What are implied terms?

Terms inserted by statute, courts or custom.

What is a condition?

A major term; breach allows for termination and damages.

What is a warranty?

A minor term; breach allows damages only.

What is an innominate term?

A term that can be classified as either a condition or a warranty depending on the severity of its breach and the consequences.

What is an exclusion clause?

A contractual term that limits or excludes liability for certain breaches or events.

What is misrepresentaion?

A false statement of fact made during negotiations that induces another party to enter into a contract, which can lead to remedies such as rescission or damages.

Name three types of misrepresentaion.

Fraudulent, negligent, and innocent.

What remedy is always available for misrepresentation?

Rescission.

What is duress?

Illegitimate pressure forcing a party into a contract.

What does discharge of contract mean?

The point at which contractual obligations end.

Name four ways a contract may be discharged.

Performance, agreement, breach, frustration.

What is anticipatory breach?

When a party indicates in advance they will not perform.

What is frustration?

An unforeseen event making performance impossible or radically different.

What is the main remedy for breach of contract?

Damages.

What is the purpose of damages?

To compensate, not punish.

What is specific peformance?

A court order requiring contractual performance.

What is incorportation?

The process of forming a company as a separate legal entity.

What is seperate legal personality?

The company is legally distinct from its owners.

Which case established legal personality?

Salomon v Salomon & Co Ltd.

What is limited liability?

Shareholders’ liability is limited to their investments

What are articles of association?

Internal rules governing company management.

Who are promoters?

People who set up and form a company.

Who do directors owe duties to?

The company.W

What statute governs directors’ duties?

Companies Act 2006.

What is the s172 duty?

Duty to promote the success of the company/What

What is the s174 duty?

Duty to exercise reasonable care, skill & diligence.

What is the s175 duty?

Duty to avoid conflicts of interest.

What happens if directors breach their duties?

They may be liable for damages, injuctions or disqualification.

What is equity finance?

Raising funds through shares.

What is debt finance?

Raising funds through loans or debentures.

What are ordinary shares?

Shares with voting rights and vriable dividends.

What is a dividend, and what can they be paid from?

A distribution of profitt to shareholders; distributab;e profits only.

What is a debenture?

A written acknowledgment of comany debt.

What is a fixed charge?

Security over a specific asset.

What is a floating charge?

Security over a class of assests that crystallises on default

What is corporate governance?

The system by which companies are directed and controlled.

What code governs UK listed companies?

The UK Corporate Governance Code.

What does ‘comply or explain’ mean?

Companies must follow the Code or explan non-compliance.

Why must the roles of CEO and Chair be separate?

To prevent concentration of power.

What is a non-executive director?

An independant director providing oversight.

What is the role of the audit comittee?

To overseefinancial reporting and internal controls.

What is corporate social responsibility?

Ethical and sustainable business behaviour.