Law Questions (22 November 2024) - PDF

Law ATT2 22 November 2024 13:40 **Topic 1** Good consideration is executory or executed consideration   If one requests another to perform a service, there is an implied duty to pay and there is enough consideration even if they don't promise payment at the time   Goods are always recoverabl...

Law ATT2 22 November 2024 13:40 **Topic 1** Good consideration is executory or executed consideration   If one requests another to perform a service, there is an implied duty to pay and there is enough consideration even if they don't promise payment at the time   Goods are always recoverable in void contracts but not in voidable contracts where goods are exchanged   \'Battle of the Forms\'- where each party in a new contract argues that its standard terms and conditions apply to this contract. - There is no rule as to who\'s term apply specifically   If a condition in an offer is not satisfied, the offer is terminated   Doctrine of Privity- A person may have enforceable rights and obligations under a contract only if they are a party to it   The law will only intervene to imply terms into a contract often to protect the weaker party   Consideration must be sufficient not adequate   An offeror can impliedly waive the need for acceptance to be communicated to them   Suing for damages to be paid for distress is often considered too remote in a breach of contract   Often damages are not recoverable for financial loss only. Purely financial loss is recovered   Damages for mental distress is usually only paid where it is the main consequence of the breach of contract   A contract is not enforceable is the party knows that the other party has entered it for improper purposes   Contract for consumer credit must be in writing whereas a transfer of land, lease or regular payment to a charity must be in form of a deed   **Topic 2**   Purpose of an injunction is to enforce a negative restraint in a contract   Frustration of a contract occurs where the contract becomes fundamentally different from what was expected or becomes impossible   As a general rule if a contract is discharged by frustration, deposits received should be repaid   Contracts Act 1999 allows third parties to take advantage of exclusion clauses but do not apply to employment contracts   **Topic 3**   An agent cannot claim an expense whilst acting outside of their authority   During tort of negligence, if the type of injury is reasonable foreseeable then it does not matter if the extent of injuries was greater, the person can recover for the full damages   Res ipsa loquitur- argument by the claimant that \'the facts speak for themselves\' in pointing to a breach on the part of the defendant. The cause of the damage may not be exactly known but the claimant shows whatever caused it was under the control and management of the defendant. The burden of proof then falls upon the defendant to show they did not act negligently   A company can agree to indemnify the auditor against costs incurred in defending any proceedings in which the auditor is successful in their defence   Auditors owe no duty of care to existing shareholders considering further investments   Specific performance is likely to be used in the same of land or property   If the defendant causes damage to the claimant of £X but it was calculated that the loss was 20% the fault of the claimant. The defendant would only be liable to pay 80% of X   For an agent of neccessity to arise, it must be shown that the agent tried to contact or had no practical way of contacting the principal   Liability will extend only to damage and loss that is not considered to be too remote when a breach of duty of care arises   Negligence is part of the law of tort not the other way round \* * An agent has implied authority to do all things that are usual by virtue of the agent\'s office   In the case of agency workers, the employer and the agency company can both be found liable by a court for the negligant actions of an employee   Principal can only ratify the whole contract, cannot ratify part   The principal must have capacity but the agent need not   Defendants are not expected to ensure that all possible precautions are taken against risk if the beneficial effect of those precautions outweighs the risk       **Topic 4**   Companies have 28 day following their anniversary date to file its next annual return   The word international in a company name is not prohibited but requires approval of the secretary of state   A company can only commence trading once it has received its trading certificate   A record of its written resolutions and minutes of general meetings may be kept at any place specified in regulations prescribed by the secretary of state. These records must be kept for 10 years   A certificate of incorporation is conclusive evidence that a company is registered in accordance with the Companies Act 2006   Alteration of the articles of association requires special resolution but unanimous agreement or a court order is required to alter a provision for entrenchment   A provision for entrenchment can always be repealed or amended   In companies adequate accounting records, they must maintain: a record of its liabilities and assets, a statement of stock held at EOY, daily entries of income and expenditure   An auditor of a private company is deemed to be re-appointed each year unless the company decides otherwise.   Failure to obtain a trading certificate within 12 months of incorporation may result in a compulsory winding up. +-----------------------------------------------------------------------+ |   | | | | A statement as to whether the liability of the members is to be | | limited and, if so, whether by shares or by guarantee is given in the | | original application not in the memorandum of association | +-----------------------------------------------------------------------+   The Companies Regulations 2018 requires companies to make disclosures about: corporate governance, director remuneration and stakeholder engagement   There are model articles of association for private companies and public companies but Listed companies must have their own full length articles containing a number of special provisions as required by Stock Exchange rules   A copy of any amended article must be sent to the Registrar within 15 days Articles of association can be altered by passing a special resolution   A micro-entity has 10 or fewer employees   For a plc calling a general meeting at short notice consent of 95% of the voting rights or nominal value of shares with voting rights is required. For a plc calling an annual general meeting at short notice consent of 100% of the voting rights or nominal value of shares with voting rights   Only quoted companies need to provide a directors remuneration report   Micro-entities have the option of whether to file a profit and loss account but they must file a balance sheet   Group companies must produce a consolidated directors\' report   Removal of an auditor requires an ordinary resolution with special notice   **Topic 5**   The secretary of state is entitled to accept a disqualification of a director instead of issuing a disqualification order provided that they consider it expedient in the public interest to do so   Wrongful trading does not mean a mandatory disqualification, it is up to the discretion of the court   Public companies are not required to publish results of polls at general meetings on their website but quotes companies are   A person has to be over the age of 16 to become a director of a company   A director may not exercise their powers except for the purpose for which they were conferred   In breaching rules of financial assistance, directors may face a fine, imprisonment or civil liability   Directors must avoid situations where they have a conflict of interests with the company but if there is one: directors of a private company can authorise such a conflict but directors of a public company cannot authorise unless there is express   A director cannot be removed by passing a written resolution but can be under a provision of the company\'s articles of association   Removal of a director only requires an ordinary resolution with special notice (28 days)   Directors require member approval in a general meeting for acquisition of assets over 10% of net assets or service contracts over 2 years. Loans to directors require approval (unless they are minor transactions)   Directors can be appointed by ordinary resolution   In terms of fraudulent trading: Civil liability only arises when a company is being wound up. Criminal liability exists regardless of whether the company is solvent or not   \* *     **Topic 6**   The expiry date of allotted shares is 5 years from the date they were conferred   Courts can only confirm or cancel a variation in class rights, they may not alter them   Following a special resolution to redeem redeemable shares the payment must be made between 5 and 7 weeks following the resolution   The company itself, the directors and floating charge holders can appoint an administrator out of court   A creditor may challenge the approval of a CVA if they can show their interests have been unfairly prejudiced or on the grounds of some material irregularity   Any creditor that demands payment of over £750 and is not paid within 21 days can petition for bankruptcy of a company   An administrator must hold a creditors meeting within 10 weeks   A private company must give 2 months notice of its refusal to register a requested transfer of its shares and give the reasons for its refusal   The administrator must make their requirements known to employees for statements known to them within 7 days and employees have 11 days to comply with their request After one year, an administrators appointment may be extended either by the court or by a majority of creditors   A creditor can pursue the recovery of its debt as long as it obtains the consent of the administrator or the court before it can instigate legal proceedings against the company   The directors, an administrator or a liquidator could propose a CVA   A appoint a liquidator in a members voluntary winding up, the company can pass an ordinary resolution   Creditors play no part in a members\' voluntary winding up   The directors nominate the liquidator in a creditors\' voluntary winding up but the creditors must consent to the nomination   A company\'s \'called up share capital\' is so much of the share capital as equals the aggregate amount of the calls made on its shares plus the share capital that is paid up without being called and share capital to be paid at a specified future date under the articles or terms of allotment of relevant shares   Authority to allot shares for a public limited company must be given by ordinary resolution or the articles of association   The directors of a private company with only one class of shares may allot shares of that class in absence of members\' resolution as long as articles do not state otherwise   When a liquidator is appointed, the company\'s assets remain their legal property but under the liquidators control   Private companies may exclude pre-emption rights by making an express provision in their articles, public companies may not   The directors of a private company with one class of shares may be authorised by a special resolution of the company\'s members to allot shares as if the statutory rights of pre-emption did not apply   -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Where the purchase is made by means of an off-market purchase, the company is required to pass a special resolution, as opposed to an ordinary resolution, approving the relevant contract --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------   Where the purchase is made on a recognised investment exchange, the company is required to pass a resolution which specifies the minimum and maximum price that may be paid in respect of a specified maximum number of shares   For variation of class rights, a special resolution by that class type is required. Minority holders then may object if at 15% of class objects to court within 21 days   ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- The \'equity share capital\' of a company is the issued share capital excluding any part of it that, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------   ------------------------------------------------------------------------------------------ The amount of a company\'s loan capital is the amount of money the company has borrowed. ------------------------------------------------------------------------------------------   The administrator must gain approval of the court to sell a fixed chargeholder\'s asset   Fixed charges made within the last 6 months and floating within the last 12 months can be avoided by a liquidator as a preference   Members have 21 days to accept a rights issue   For a public limited company a reduction in capital may only be permitted by CA06 if an ordinary resolution is passed and a solvency statement is supplied to the court and their approval obtained.   Any limited company may reduce its capital by special resolution confirmed by the court and a private company may reduce its capital by special resolution supported by a solvency statement given by all of the directors in a prescribed form.   A permissible capital payment is a method by which a private company may be able to redeem shares or purchase their own shares out of capital.   If the company enters into a floating charge within 2 years of insolvency to a connected person, the liquidator has the ability to initiate proceedings against the person for wrongful or fraudulent trading   Pre-emption rights only apply to the allotment of securities for cash   All listed shares operate in respect of the CREST transfer system   Private companies can consolidate or subdivide shares by passing an ordinary resolution   When shares are redeemed they are treated as cancelled and the issued share capital is diminished by the nominal value of the shares redeemed   If a company buys shares and the amount in the issued share capital is transferred to the capital redemption reserve, the reserve is treated as part of the called up share capital   If a company fails to register a charge within the prescribed period, it is void against any liquidator, administrator or creditor   Must keep register of chargeholders but don't need register of debenture holders   Withdrawals within 2 years to connected persons cannot be clawed back unless it can be shown that those people had reason to believe the company would become insolvent   **Topic 7**   In an ordinary partnership, ordinary management decisions can be made by a majority of partners   Unanimous agreement of existing members in an LLP in required for the admission of new members   LLPs must have at least 2 members   Ordinary partnerships do not have to be registered   A partner can assign their interest to another person in an ordinary partnership   **Topic 8**   Phishing emails are an example of fraud by representation   One may not be convicted of tipping off if they neither know nor suspect thay the disclosure is likely to prejudice the investigation of money laundering   The employer is not always obliged to provide an employee with a written statement of prescribed particulars within a specified period of the commencement of their employment, e.g. if a written contract has already been provided   If employers provide a reference when requested to do so they must ensure it is accurate and fair   If a tribunal considers the employer behaved unreasonably the reward may be increased by up to 25%   One must submit a claim for unfair dismissal within 3 months of the termination of contract   An employer is not obliged to give a written statement of the reasons for dismissal unless the employee requests one   One is not capable of claiming unfair dismissal if you work outside of the UK   Action for wrongful dismissal can be brought within 6 years of the breach of contract   An employee must have been continuously employed for more than 2 years to claim statutory redundancy payments   Public Interest Disclosure Act applies to \'workers\' which is wider than employees but does not include self employed   To receive protection to whistleblowing the person does not necessarily require documentary evidence   A breach of the data protection act may result in a criminal conviction or a fine of up to £17 million/4% of global turnover   Data controllers are required to take all reasonable steps to ensure data is accurate   Under ICC, DDP places the the maximum obligations on the seller and ex-works places minimum obligations on the seller   Fraud does not necessarily mean the person intended to make a gain, it may also be intended to make someone else a loss   If a director is found guilty of fraudulent trading they are not automatically disqualified, but they do face the possibility of being disqualified for up to 15   A written statement of the employment particulars, provided in accordance with the Employment Rights Act 1996 does not form part of a contract of employment but may serve as evidence of its terms   The penalty for failing to prevent bribery (within a company) is a fine   The prescribed particulars may provide evidence of the terms of a contract of employment but the written statement does not actually form part of that contract.   Basic rewards for unfair dismissal are made regardless of the amount of loss suffered by the employee   Unfair dismissal, redundancy or fair dismissal are all statutory provisions