Business law exam

business law repetition

What is the hierarchy of legal sources in Poland?

1. Constitution 2. Treaties with prior consent 3. Statutes & wartime regulations 4. Treaties without prior consent 5. Regulations 6. Local law

What is civil law and what does it regulate?

Civil law regulates private relations and includes obligations, contracts, inheritance, intellectual property, and family law.

What is the difference between natural persons, legal persons, and imperfect legal persons?

• Natural persons: Every human being.

• Legal persons: Entities recognized by law (e.g., companies, organizations).

• Imperfect legal persons: Units with legal capacity but no full legal personality (e.g., partnerships).

Define legal capacity and capacity for legal acts.

• Legal capacity: Ability to have rights and obligations.

• Capacity for legal acts: Ability to act to change rights and obligations (e.g., signing contracts).

What are the key characteristics of a civil partnership?

A civil partnership is not a legal person; partners are jointly liable, and it cannot be registered or act as a separate legal entity.

What is the minimum share capital required for an LLC in Poland?

5,000 PLN

What is the key difference between general partnerships and limited partnerships?

• General partnerships: All partners manage the company and are fully liable.

• Limited partnerships: General partners manage the company and are fully liable; limited partners are only liable up to their contributions.

What is the role of a supervisory board in a company?

The supervisory board oversees the company’s management and ensures compliance with the law, particularly in large or public companies.

What are the characteristics of a Limited Liability Company (LLC)?

• Shareholders are not personally liable for the company’s debts.

• Minimum share capital: 5,000 PLN.

• Managed by a management board.

What is the difference between a subsidiary and a branch?

A subsidiary is a separate legal entity; a branch is part of a foreign company and does not have legal personality.

What are the main elements of a valid contract?

1. Agreement between parties.

2. Legal purpose.

3. Consideration (mutual exchange of value).

4. Capacity to contract.

Define liquidated damages.

A pre-determined amount agreed upon in a contract that one party must pay if they breach the contract.

What is the difference between compensation and liquidated damages?

• Liquidated damages: Pre-determined, fixed amount in the contract.

• Compensation: Actual amount of damages proven through the breach.

What is pacta sunt servanda?

The principle that agreements must be kept, meaning parties are legally bound to honor their contracts.

What is error in contract law?

A mistake made by one party that affects the validity of the contract; it may render the contract void if proven material.

What is contractual capacity?

The legal ability to enter into a contract, typically determined by age, mental state, and legal standing.

What are the different types of liability in business law?

• Civil liability: For damages caused to individuals or entities.

• Criminal liability: For breaking criminal laws.

• Disciplinary liability: For violating professional conduct or rules.

What is subsidiary liability for management board members?

Management board members are liable only if the company’s assets are insufficient to cover its debts.

What is the concept of statutory limitation?

A time limit after which legal claims cannot be enforced. In civil law, it is typically 6 years, but can be 3 years for business transactions.

What does rebus sic stantibus mean in contract law?

An exception to pacta sunt servanda allowing a contract to be modified or terminated due to unforeseen changes in circumstances.

What does the Vienna Convention (1980) regulate?

It governs international sales contracts, establishing rules for contract formation, obligations, and risk transfer.

How does risk transfer work in international sales?

Risk generally transfers when the goods are handed over to the carrier (not necessarily when the goods reach the buyer).

What is the purpose of an offer in contract law?

An offer outlines the terms of the contract and indicates the offeror’s intent to be bound upon acceptance.

What is the difference between tender and auction in contract formation?

• Tender: Bids are submitted before a deadline and remain confidential.

• Auction: Bidders compete openly, with offers visible to all participants.

Who is considered a consumer under Polish law?

A natural person engaging in a legal transaction with an entrepreneur for non-business purposes.

What is an unfair contract term?

A term in a contract that creates a disproportionate imbalance between parties and is unenforceable under consumer protection laws.

What rights does a consumer have when engaging in a distance contract?

Consumers have the right to withdraw from the contract within 14 days without penalty.

What is the role of a management board in a company?

The management board is responsible for managing the company’s affairs and representing the company in legal matters.

How is a company dissolved in Poland?

A company can be dissolved through shareholder decision, bankruptcy, or court decision.

What happens during the liquidation process of a company?

Liquidators sell assets, collect debts, settle contracts, and pay off liabilities. Remaining funds are distributed to shareholders.

What are the essentialia negotii in contract law?

The essential elements required for a valid contract, such as the parties involved, the subject matter, and the consideration (exchange of value).

What is the difference between a written contract and an oral contract?

• Written contract: Must be documented and signed.

• Oral contract: Made through verbal agreement; enforceable in some cases, but harder to prove in court.

What does the form of contract mean in business law?

The required method for creating a contract (e.g., oral, written, notarized). Some contracts have a specific form required by law, such as real estate contracts.

Define representation in contract law.

Representation allows one person to act on behalf of another, such as in signing contracts or making decisions for someone else.

What is false representation in business law?

A situation where someone acts on behalf of another without proper authorization. The action can be ratified if the principal approves it afterward.

What is the minimum share capital for a joint-stock company in Poland?

100,000 PLN

How are shares in an LLC typically structured?

Shares in an LLC can either be of equal or unequal nominal value, but they cannot be mixed.

What does "joint and several liability" mean in a general partnership?

All partners are equally responsible for the debts and obligations of the partnership. Each partner is individually liable for the entire debt.

What is the role of a commercial proxy in a company?

A commercial proxy is appointed to represent the company in commercial transactions and court proceedings, with full legal authority.

What is the difference between a public company and a private company in Poland?

• Public company: At least one share is traded on a regulated market.

• Private company: Shares are not publicly traded.

What does the Rome I Regulation govern?

The Rome I Regulation determines which country’s law applies to a contract with an international element.

What is the principle of "freedom of contract" in international law?

Parties are free to choose the terms and jurisdiction of their contract, as long as it complies with public policy

What is alternative dispute resolution (ADR) in international business law?

A process of resolving disputes outside of court, such as mediation, arbitration, and negotiation, to save time and costs.

What is the key difference between arbitration and court litigation?

• Arbitration: Private, faster, and more flexible process for resolving disputes.

• Court litigation: Public process with more formal procedures

What are the requirements for an international sales contract to be valid under the Vienna Convention?

• No need for a written form unless agreed by the parties.

• The contract is formed upon acceptance of the offer.

• Terms can be vague but still enforceable if the intent is clear

What rights do consumers have when entering into distance contracts?

Consumers have the right to withdraw from the contract within 14 days without giving a reason, with a full refund.

What is an abusive clause in a contract?

A clause that creates an unfair advantage for one party, making the contract unbalanced and unenforceable under consumer protection laws.

What is "consumer protection" in terms of unfair commercial practices?

Protection against practices that are misleading, coercive, or that harm the consumer’s freedom of choice.

What are unfair terms in contracts between businesses and consumers?

Terms that are contrary to good faith, resulting in an unreasonable imbalance in the rights and obligations of the parties.

What happens if an abusive clause is found in a contract?

The clause is deemed void, but the rest of the contract may remain valid if it can function without the unfair term.

What are the responsibilities of the shareholders in a company?

Shareholders are responsible for approving decisions like changes in the articles of association, distribution of profits, and electing the management board.

What are the liabilities of the management board members of an LLC?

Board members are subsidiarily liable for the company's debts if the company’s assets are insufficient to cover obligations.

What is the difference between public companies and private companies in terms of liability?

Public companies have greater regulatory oversight and public disclosure requirements compared to private companies, which have fewer reporting obligations.

What is management liability?

Management liability refers to the responsibility of the board or directors for the company’s actions, and they are held accountable for the company’s debts if mismanagement occurs.

What is the role of the audit committee in a joint-stock company?

The audit committee supervises the financial reporting process, assesses risk management systems, and ensures compliance with accounting regulations.

What is the difference between statutes and regulations in Polish law?

• Statutes: Laws passed by the parliament, apply broadly and are the primary source of law.

• Regulations: Detailed rules issued by authorities to implement statutes.

What are the principles of law?

Principles include justice, equality, freedom, good faith, and proportionality, all of which guide the interpretation and application of law.

What is the process for establishing a Limited Liability Company (LLC) in Poland?

1. Prepare the articles of association.

2. Register with the National Court Register (KRS).

3. Obtain a tax identification number (NIP) and statistical number (REGON).

How is the liability of members in a professional partnership structured?

Members of a professional partnership are jointly liable for the partnership’s debts, with each member also personally responsible for their professional actions.

What is a joint liability vs several liability in business?

• Joint liability: All parties are equally responsible for fulfilling the obligation.

• Several liability: Each party is only responsible for a portion of the total liability.

What is the statutory limitation period for most business claims?

The typical statutory limitation period for civil claims is 6 years. For business transactions, it is often 3 years.

What is the cooling-off period for distance contracts in consumer law?

Consumers can withdraw from distance contracts within 14 days without providing any reason or paying a penalty.

What is the difference between an advance payment and earnest money?

• Advance payment: Money paid in advance for goods or services, which is part of the final payment.

• Earnest money: A deposit paid to confirm a contract, which may be forfeited if the contract is not completed by the buyer.

What is the role of UNCITRAL in international business law?

UNCITRAL (United Nations Commission on International Trade Law) creates international trade laws, conventions, and guidelines to facilitate smooth cross-border business.

What does CISG stand for, and what does it regulate?

The CISG (Convention on Contracts for the International Sale of Goods) governs international sale contracts between businesses, establishing uniform rules for contracts and disputes.

What is the difference between ordinary management and extraordinary management?

• Ordinary management: Day-to-day activities of the company.

• Extraordinary management: Significant actions like selling assets, mergers, etc.

What are the key duties of a commercial proxy in business?

A commercial proxy can represent the company in legal and commercial matters, including contracts and litigation, but is often limited in scope.

What is the difference between a management board and a supervisory board in a company?

• Management Board: Runs the business operations and represents the company.

• Supervisory Board: Oversees the management and ensures legal compliance.

How can the registration of an enterprise be done?

An enterprise must be registered with the National Court Register (KRS) or the Central Register and Information on Economic Activity (CEIDG).

What is the role of shareholders in a joint-stock company?

Shareholders vote on key decisions, such as electing the management board, approving dividends, and amending the articles of association.

What is the liability of a sole trader in Poland?

A sole trader is fully liable for business debts with their personal assets, as there is no legal distinction between the business and the individual.

What is separation of powers in the context of Polish law?

The separation of powers ensures the independence of the legislative, executive, and judicial branches of government to prevent abuses of power

What is the liability of board members in a joint-stock company?

Board members can be jointly and severally liable for damages caused by mismanagement or violation of the law.

How does ownership of shares affect decision-making in a company?

Shareholders’ voting power is typically proportional to the number of shares they hold, allowing them to influence corporate decisions.

What is the role of arbitration in international business disputes?

Arbitration allows parties to resolve disputes outside of court, with a neutral arbitrator making a binding decision, often faster and more confidential than court procedures.

What is the process for establishing a partnership in Poland?

A partnership is formed by signing an agreement between two or more individuals and registering it in the National Court Register (KRS)

How is a shareholder's liability different in a limited liability company (LLC) compared to a general partnership?

• LLC: Shareholders are only liable for their share capital investment.

• General partnership: Partners are fully liable for company debts, both personally and jointly.

What is a cooling-off period in the context of distance selling contracts?

A cooling-off period is a 14-day window during which consumers can withdraw from a contract made at a distance (e.g., online purchases) without any penalty.

What is the role of warranty in consumer contracts?

A warranty guarantees that a product is free from defects for a set period, and the consumer has the right to claim repair, replacement, or refund if the product fails to meet the standard.

What is joint liability for business debts in the case of a general partnership?

Joint liability means that all partners in a general partnership are equally liable for the full amount of the business's debts. If the business cannot pay, creditors can pursue any or all of the partners.

What is the difference between material error and immaterial error in contract law?

• Material error: A mistake that affects the essence of the contract and can invalidate it.

• Immaterial error: A minor mistake that does not affect the contract's validity.

What does statutory limitation mean in the context of debt collection?

Statutory limitation is a time period after which a creditor can no longer enforce a debt through legal action, typically 6 years for most claims.

What is the role of a supervisory board in a joint-stock company?

The supervisory board monitors the activities of the management board, ensuring compliance with the law, ethical standards, and company goals.

What powers do shareholders have in a joint-stock company?

Shareholders have the power to approve key decisions, such as appointing directors, distributing dividends, and modifying the company’s charter.

What does the CISG (Convention on Contracts for the International Sale of Goods) cover?

The CISG governs the formation of international sales contracts, rights and obligations of buyers and sellers, and the sale of goods across international borders.

What is choice of law in international contracts?

Choice of law allows parties to a contract to select which country's law will govern the agreement, ensuring clarity in cross-border disputes.

What is the place of performance in international contracts?

The place of performance is where the contractual obligations are carried out, such as where goods are delivered or services are performed.

What are abusive clauses in consumer contracts?

Abusive clauses are terms that create an unfair imbalance in the rights and obligations of the parties, favoring the business at the expense of the consumer.

How do businesses protect consumers from unfair commercial practices?

Unfair commercial practices are prohibited, including misleading advertising, aggressive sales tactics, or fraudulent practices. Businesses must ensure transparency and fairness in dealings with consumers.

What are the accidentalia negotii in contract law?

Accidentalia negotii are non-essential contract terms that can be modified or added by the parties, such as the date of performance or the place

What is the concept of good faith in the context of contract execution

Good faith requires parties to act with honesty and fairness in executing the contract, without misleading or taking advantage of the other party.

What is a power of attorney in business law?

A power of attorney gives one person the legal authority to act on behalf of another, such as signing documents or making decisions for them.

How does bankruptcy impact a company’s liabilities?

In bankruptcy, a company’s assets are liquidated to pay off creditors. If the company cannot pay its debts, the management board can be held liable for mismanagement or failure to file for bankruptcy on time.

What is the "freedom of contract" principle in business law?

Freedom of contract means that parties are free to negotiate the terms of their agreements without interference, as long as it complies with the law and public policy.

What is the significance of the 14-day withdrawal period in consumer contracts?

Consumers have the right to withdraw from distance or off-premises contracts within 14 days, with no justification required, under EU law.

What are unfair commercial practices?

Unfair commercial practices include misleading advertising, false claims, aggressive sales tactics, or deceptive business practices that harm consumers or distort competition.

What is a joint-stock company (spółka akcyjna)?

A joint-stock company (JSC) is a separate legal entity where shareholders have limited liability for company debts, and the company can issue shares to raise capital. Minimum share capital is 100,000 PLN.

What is the difference between a shareholder’s rights in an LLC versus a joint-stock company?

• LLC: Shareholders have the right to vote and receive dividends, but management is often handled by a board rather than shareholders themselves.

• Joint-Stock Company: Shareholders vote at the general meeting, have a greater influence on management decisions, and can buy and sell shares freely.

What is the scope of the CISG (Convention on Contracts for the International Sale of Goods)?

The CISG governs sales contracts for goods between parties in different countries. It regulates formation, performance, and remedies for breaches.

What does "pacta sunt servanda" imply in the context of commercial contracts?

Pacta sunt servanda means that agreements must be kept by the parties involved. This principle ensures that contracts are legally binding, and parties are obligated to fulfill their contractual duties in good faith.