Legal Expressions: Company Law and Contract Law

Flashcards covering key legal terminology from Company Law and Contract Law, including formation, capitalization, remedies, and third-party rights.

Being personally responsible for a debt or legal obligation refers to __________.

personal liability

The intentional deceiving of someone for personal benefit is known as __________.

fraud

The __________ is the legal protection that keeps a company's owners separate from the company's debts.

corporate veil

An act done beyond the legal powers or authority of an entity is described as __________.

ultra vires

The process of raising funds for a company through shares, debentures, or other means is called __________.

capitalization

Shares that give shareholders ownership rights and voting power in a company are known as __________.

ordinary shares

__________ refers to shares with dividend priority over ordinary shares but usually no voting rights.

preference shares

Payments a company makes to shareholders from its profits are called __________.

dividends

Shareholders’ rights to buy new shares before they are offered to others are referred to as __________.

pre-emption rights

A decision approved by a high majority of shareholders for important company matters is a __________.

special resolution

Long-term loans issued by a company to raise funds from investors are known as __________.

debentures

People or organizations that are owed money by a company are called __________.

creditors

Shareholders who own a small percentage of a company’s shares are known as __________.

minority shareholders

Changes made to a company’s constitution or governing documents are __________.

constitutional amendments

The combination of two or more companies into one entity is known as __________.

mergers

The creation of a new company by combining two or more existing companies is called __________.

consolidations

The __________ refers to the transaction where a large majority of a company's assets are sold, typically requiring shareholder approval.

sale of substantially all assets

Obtaining enough shares to control a company’s decisions is known as __________.

acquisition of controlling shares

The process of closing a company and selling its assets to pay debts is called __________.

liquidation

Something that can be legally carried out or required by law is described as __________.

enforceable

Something of value exchanged between parties in a contract is known as __________.

consideration

A __________ is a new offer made instead of accepting the original offer.

counter-offer

The main details that must be agreed on for a contract to exist are the __________.

essential terms

A contract where the terms are clearly stated, either orally or in writing, is an __________.

express contract

A contract created by the actions of the parties rather than spoken or written words is an __________.

implied contract

The __________ is a law requiring certain contracts to be in writing to be legally valid.

Statute of Frauds

A failure to do what a contract requires is known as a __________.

breach of contract

The __________ is the person who follows the contract when the other party breaks it.

non-breaching party

Money paid for the loss caused by a broken contract is called __________ (also known as 'benefit of the bargain' damages).

expectation damages

Money paid for direct, measurable losses caused by the breach is known as __________.

general / actual damages

A fixed compensation amount written into the contract before any breach happens is called __________.

liquidated / stipulated damages

Money paid to reimburse expenses a party wasted because they trusted the contract is known as __________.

reliance damages

Money returned to restore a benefit that the other party unfairly gained is called __________.

restitution damages

Compensation for indirect losses that were foreseeable when making the contract is known as __________.

special / consequential damages

Extra money awarded strictly to punish malicious, intentional wrongdoing is called __________.

punitive / exemplary damages

The rule that only parties to a contract can enforce its rights and obligations is known as __________.

privity of contract

The completion of contractual duties as promised by the parties is called __________.

performance

A person who benefits from a contract but is not a party to it is a __________.

third-party beneficiary

A commitment made by one party is a __________, and the person who makes it is the __________.

promise / promisor

A person meant to benefit from a contract is an __________ while one who benefits only indirectly is an __________.

intended beneficiary / incidental beneficiary

The person with the right to receive performance is the __________ and the person who must perform the obligation is the __________.

obligee / obligor

The party who transfers contractual rights is the __________ and the party who receives them is the __________.

assignor / assignee

The party who transfers a contractual duty is the __________ and the act of transferring that duty is called __________.

delegator / delegate

The transfer of contractual rights and duties from one party to another is an __________.

assignment of contract