ACCA LW (ENG) Ultimate Revision Guide Flashcards

Comprehensive vocabulary flashcards covering the core legal concepts, business structures, and insolvency procedures from Chapters 1 to 8 of the ACCA LW (ENG) syllabus.

Criminal Law

Law that protects society by punishing offenders; the case is brought by the State (Crown).

Civil Law

Law that settles disputes between individuals or businesses, usually aiming to compensate rather than punish.

Burden of Proof (Criminal)

Beyond reasonable doubt.

Burden of Proof (Civil)

Balance of probabilities (more likely than not, or over 50% likely).

Summary Offences

Least serious offences always heard in the Magistrates' Court without a jury.

Either-Way Offences

Offences of medium seriousness that can be heard in either the Magistrates' Court or the Crown Court.

Indictable Offences

Most serious offences always heard in the Crown Court before a judge and jury.

Statute Law

Law made by Parliament; it is the highest source of English law.

Delegated Legislation

Law made by others (such as Statutory Instruments or By-laws) using powers given to them by Parliament.

Common Law

Law made by judges that develops through court decisions; also known as case law.

Equity

Legal principles focused on fairness, developed because common law was sometimes unfair.

Judicial Precedent

The principle where lower courts must follow decisions made by higher courts.

Ratio Decidendi

The legal principle used to decide a case; this part of the judgment is binding.

Obiter Dicta

Extra comments in a judgment not needed to decide the case; these are persuasive only.

Literal Rule

A rule of statutory interpretation where words are given their normal dictionary meaning.

Golden Rule

A rule of statutory interpretation used to avoid an absurd result.

Mischief Rule

A rule of statutory interpretation that looks at what problem Parliament was trying to fix.

Purposive Approach

The most common modern approach to statutory interpretation, looking at Parliament's overall intention.

Human Rights Act 1998

Legislation that brings most ECHR rights into UK law, allowing them to be enforced in UK courts.

Contract

A legally enforceable agreement between two or more parties.

Offer

A clear willingness to contract on specific terms with the intention that it becomes binding once accepted.

Invitation to Treat

An invitation for someone else to make an offer, such as shop displays, advertisements, or catalogues.

Acceptance

The final and unconditional agreement to an offer.

Counter Offer

Changing the terms of an offer, which destroys the original offer.

Postal Rule

The rule that acceptance takes effect the moment the letter is posted.

Consideration

Something of value exchanged by each party in a contract.

Past Consideration

An act carried out before a promise is made; it is generally not valid consideration.

Capacity

The legal ability to enter into a contract.

Employee

A worker under a contract of employment who receives statutory rights like holiday pay and unfair dismissal protection.

Self-Employed

A worker under a contract for services who chooses their own hours, uses their own equipment, and bears business risk.

Wrongful Dismissal

A dismissal that constitutes a breach of contract, usually due to failure to give proper notice.

Unfair Dismissal

A dismissal where the employer lacks a fair reason or fails to follow a fair procedure under employment law.

Redundancy

A situation where an employee's job disappears because the business or office closes or there is less work available.

Direct Discrimination

Treating someone less favourably because of a protected characteristic like race or age.

Indirect Discrimination

A rule that applies to everyone but disadvantages a specific protected group.

Agency

A relationship where one person (the agent) has authority to act on behalf of another (the principal) to create legal relations with third parties.

Ratification

The retroactive approval by a principal of a contract entered into by an agent who initially acted without authority.

Estoppel (Apparent Authority)

Authority that appears to exist because of the principal's behaviour, making the principal bound to the third party.

Actual Authority

Authority that is actually given to an agent, whether specifically stated (express) or originating from a job role (implied).

Sole Trader

A business owned and run by one person who has unlimited liability for all business debts.

Partnership

A business carried on by two or more people with the aim of profit, where partners typically have unlimited joint liability.

Limited Liability Partnership (LLP)

A business structure with separate legal personality where members generally have limited liability.

Separate Legal Personality

The legal principle that a company is a separate person from its owners, established in Salomon v Salomon.

Limited Liability

The principle that shareholders only risk the amount they invested in a company; personal assets are protected.

Perpetual Succession

The characteristic that a company continues to exist even if shareholders die or ownership changes.

Articles of Association

An internal rulebook governing the management and decision-making of a company.

Corporate Veil

The legal separation between a company and its shareholders.

Ordinary Shares

The most common share type, carrying voting rights and variable dividends, paid after preference shareholders.

Preference Shares

Shares that receive a fixed dividend first and have priority if the company is wound up, but usually have limited voting rights.

Debenture

A long-term loan made to a company; the holder is a creditor rather than an owner.

Fixed Charge

A security interest attached to a specific asset, such as land or a building.

Floating Charge

A security interest covering changing assets like stock or inventory.

Crystallisation

The process where a floating charge becomes a fixed charge, usually when a company becomes insolvent.

Rights Issue

An offer to existing shareholders to buy new shares, usually at a discount, to raise finance for the company.

Bonus Issue

The issuance of free shares to existing shareholders using the company's reserves, which raises no new cash.

Pre-emption Rights

The right of existing shareholders to be offered new shares first to prevent their ownership from being diluted.

Maintenance of Capital

Legal rules designed to protect creditors by restricting the company from giving away its capital to shareholders.

Executive Director

A director who works in the business on a daily basis.

Non-Executive Director (NED)

A director who provides independent oversight and is not involved in day-to-day management.

Shadow Director

A person not officially appointed as a director but whose instructions the board of directors usually follows.

Ordinary Resolution

A formal company decision requiring more than 50% of the votes.

Special Resolution

A formal company decision requiring at least 75% of the votes.

Corporate Governance

The system by which companies are directed and controlled to protect shareholders and ensure accountability.

Insolvency

A state where a company cannot pay its debts as they fall due (cash flow test) or its liabilities exceed its assets (balance sheet test).

Administration

An insolvency procedure aimed at rescuing a company as a going concern, managed by an administrator.

Moratorium

A temporary pause on most legal action against a company that has entered administration.

Liquidation (Winding Up)

The process of closing a company, selling its assets, and paying off debts.

Wrongful Trading

Occurs when directors continue trading when they knew or should have known insolvent liquidation was unavoidable; carries personal liability.

Fraudulent Trading

Occurs when business is carried on with the intent to defraud creditors; carries civil, criminal, and personal liability.

Receivership

A process where a receiver is appointed to protect the interests of a secured creditor and sell secured assets.

Chapter 9A – Civil Procedure & Contract Law Exam Importance

These are short topics, but ACCA asks them frequently.

The Three Civil Tracks

Civil cases are allocated to one of three tracks.

1. Small Claims Track

   • Deals with low-value, straightforward civil disputes.

   • Characteristics: Informal, Cheap, Quick; parties often represent themselves.

   • Examples: Consumer disputes and minor contract claims.

   • Memory Trick: SMALL ↓ Small money Small problems.

2. Fast Track

   • Deals with medium-value claims. Usually involves a one-day trial with a standard procedure and fixed timetable.

   • Memory Trick: Fast ↓ Middle ↓ Quick.

3. Multi Track

   • Deals with high-value or complex claims; judge manages each case individually.

   • Memory Trick: Multi ↓ Massive. Exam Trap: Tracks depend mainly on value and complexity.

Small Claims Court

Strictly speaking, there isn't a separate "Small Claims Court"—it's the small claims track of the County Court. Purpose: Simple disputes.

Divisions of the High Court

Three divisions:

1. King's Bench Division

   • Deals with contract, tort, judicial review, and commercial disputes.

2. Chancery Division

   • Deals with companies, partnerships, trusts, land, and insolvency.

3. Family Division

   • Deals with children, marriage, divorce, and family matters. Memory Trick: KFC (King's Bench, Family, Chancery).

Appeals

Criminal Appeals:

• Magistrates' ↓ Crown ↓ Court of Appeal (Criminal) ↓ Supreme. Civil Appeals:

• County ↓ High ↓ Court of Appeal (Civil) ↓ Supreme. Memory Tricks: Criminal: MCAS (My Cat Ate Sausage); Civil: CHAS (Cats Hate Angry Snakes).

Sources of Law

Know who creates each source:

• Statute Law: Created by Parliament.

• Common Law: Created by Judges.

• Equity: Created by Court of Chancery (judges).

• Delegated Legislation: Created by Government Ministers, Local Authorities, Privy Council.

• European Convention on Human Rights: Created by Council of Europe (not EU). Memory Trick: Parliament ↓ Statutes; Judges ↓ Cases.

Statutory Interpretation

Judges interpret Acts using rules:

1. Literal Rule: Ordinary meaning.
2. Golden Rule: Avoid absurd result.
3. Mischief Rule: What issue was Parliament addressing?
4. Purposive Approach: Overall intention. Memory Trick: LGMP (Literal, Golden, Mischief, Purposive).

Tort

Definition: A civil wrong independent of contract. Main Tort: Negligence which requires duty, breach, damage, and causation. Other Examples include trespass, defamation, and nuisance. Memory Trick: DBDC (Duty, Breach, Damage, Causation).

Contractual Terms

Terms are promises in the contract.

• Express Terms: Written or spoken.
• Implied Terms: Added by law, custom, or previous dealings. Memory Trick: Express ↓ Explicit; Implied ↓ Inserted.

Exclusion Clauses

Clause limiting liability. Must:

• Be incorporated,
• Be clear,
• Be lawful. Three Ways to Incorporate:

1. By signature.
2. By notice.
3. Previous dealings. Memory Trick: SNP (Signature, Notice, Previous dealings).

Unfair Contract Terms

Governed by the Unfair Contract Terms Act 1977 (UCTA). Protects parties from unfair exclusion clauses. Cannot exclude death or personal injury caused by negligence. Other clauses must satisfy the reasonableness test. Memory Trick: UCTA (Unfair Can't Take Away liability for death/injury).

Breach of Contract

Occurs when one party fails to perform. Remedies: Damages, Specific Performance, Injunction, Rescission. Memory Trick: DSIR (Damages, Specific Performance, Injunction, Rescission).

Chapter 9C – Partnerships, Insolvency & Money Laundering Exam Importance

Expect 3–6 questions.

Partnership Liability

Governed by the Partnership Act 1890. General Rule: Partners have joint liability for debts and obligations of the partnership.

Voluntary Liquidation

A company chooses to wind itself up. Two types:

1. Members' Voluntary Liquidation (MVL): Solvent, can pay all debts.
2. Creditors' Voluntary Liquidation (CVL): Insolvent, creditors involved.

Order of Payment in Liquidation

1️⃣ Fixed charge holders ↓ 2️⃣ Costs and expenses of liquidation ↓ 3️⃣ Preferential creditors ↓ 4️⃣ Floating charge holders ↓ 5️⃣ Unsecured creditors ↓ 6️⃣ Shareholders. Memory Trick: FCPFUS (First Class People Fly Using Seats).

Company Administration

Purpose: Rescue the company. An independent insolvency practitioner is called an administrator. Main Objectives: Rescue the company, achieve a better result than liquidation, realise assets for creditors.

Money Laundering

Definition: The process of making criminal property appear legitimate. Three Stages:

1. Placement.
2. Layering.
3. Integration. Memory Trick: PLI (Put, Lose trail, Invest).

Wrongful vs Fraudulent Trading

Wrongful Trading: