ICAB CL Business Law flashcards
ICAB CL Business Law · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Offer
- A definite promise to be bound on specified terms, communicated to the offeree, capable of becoming a contract on unqualified acceptance.
- Invitation to treat
- A preliminary communication inviting offers rather than making one; advertisements, catalogues, and price displays are generally treated this way.
- Acceptance
- Unqualified agreement to all terms of the offer, communicated by the offeree or authorised agent; a counter-offer destroys the original offer.
- Counter-offer
- A response introducing new terms, which operates as rejection of the original offer and creates a fresh offer open to acceptance.
- Postal acceptance rule
- Acceptance by post takes effect when the letter is properly posted, not when received, provided the offer contemplates postal communication.
- Consideration
- Something of value given by each party in exchange for the other's promise; it must be sufficient in law but need not be adequate in value.
- Past consideration
- An act performed before the promise was made, generally not valid consideration because the promise did not induce the act.
- Intention to create relations
- Presumption that commercial agreements are legally binding while social and domestic arrangements are not, unless the contrary is proved.
- Capacity
- Legal ability to enter a binding contract; minors, persons lacking mental capacity, and intoxicated persons may have limited or voidable obligations.
- Condition
- An essential contract term whose breach entitles the innocent party to terminate performance and claim damages.
- Warranty
- A subsidiary contractual term whose breach gives rise to damages only, without any right to terminate the contract.
- Innominate term
- A term neither condition nor warranty; the remedy depends on whether breach substantially deprives the innocent party of the expected benefit.
- Exemption clause
- A term excluding or restricting liability; it binds only if properly incorporated and is construed strictly against the party relying on it.
- Contra proferentem
- Interpretation rule that ambiguity in a clause is resolved against the party who drafted it and seeks to rely on it.
- Misrepresentation
- A false statement of existing fact that induces another to enter a contract, giving rights to rescission and, depending on fault, damages.
- Frustration
- Discharge of contractual obligations when an unforeseen event, outside the parties' control, makes performance impossible or radically different.
- Remoteness of damage
- A breaching party is liable only for losses arising naturally or within the reasonable contemplation of both parties at contract formation.
- Mitigation of loss
- The innocent party must take reasonable steps to reduce loss; recoverable damages exclude loss that could reasonably have been avoided.
- Liquidated damages
- A genuine pre-estimate of loss fixed in advance, enforceable as agreed; a penalty clause exceeding that estimate is unenforceable.
- Specific performance
- An equitable remedy ordering actual performance of the contract, available only where damages are inadequate and supervision is practicable.
- Separate legal personality
- A company has its own legal identity distinct from its members, owns property, contracts in its own name, and enjoys perpetual succession.
- Limited liability
- Members' liability is confined to unpaid amounts on their shares or their guarantee, protecting personal assets from company debts.
- Corporate veil
- The separation between company and members, lifted by courts only in limited cases such as fraud or where the company is a mere facade.
- Ultra vires
- Acts beyond the powers conferred on a company or its officers; historically void, now restricted mainly to directors exceeding authority.
- Promoter
- A person who takes the initiative in forming a company; owing fiduciary duties to disclose profits and account for secret benefits.
- Pre-incorporation contract
- A contract made before the company exists; the company is not bound and the promoter is generally personally liable unless novation occurs.
- Memorandum of association
- The constitutional document stating the company name, objects, share capital, and subscribers' intention to form the company.
- Articles of association
- Internal regulations governing the company's management, share rights, and member relations; they form a contract between company and members.
- Agency
- A relationship where one person acts on behalf of another, creating legal relations between the principal and third parties.
- Apparent authority
- Authority a third party reasonably believes an agent possesses because of the principal's conduct, binding the principal despite internal restrictions.
- Ratification
- Retrospective adoption by a principal of an unauthorised act, giving it the same effect as if originally authorised.
- Partnership
- A relationship between two or more persons carrying on business in common with a view of profit, with mutual agency and joint liability.