Business law
What BA4 tests
Business law questions test the English law of contract, tort and business organisations. You must apply rules to short scenarios, not just recite definitions.
Contract formation and terms
A contract needs offer, acceptance, consideration and intention to create legal relations. An offer must be definite and communicated; advertisements, price displays and invitations to tender are usually invitations to treat. Acceptance must be unqualified and communicated; the postal rule treats a letter as accepted on posting where post is reasonable, while instant messages are effective on receipt. A counter-offer destroys the original offer. Consideration must be sufficient but need not be adequate; past consideration is not good consideration. Commercial agreements are presumed to intend legal relations, social ones are not. Terms may be express, implied by statute, custom or business efficacy. Exclusion clauses must be incorporated by signature, reasonable notice or course of dealing, and are interpreted contra proferentem. UCTA 1977 subjects business liability exclusions to reasonableness; CRA 2015 prevents a trader excluding liability for death or personal injury caused by negligence.
Remedies and organisations
Damages aim to put the claimant in the position as if the contract had been performed, subject to remoteness and mitigation. Specific performance and injunctions are equitable and discretionary. In tort, negligence requires duty, breach, causation and damage; professional advisers may owe a duty for negligent misstatement. A company has separate legal personality (Salomon), so shareholders have limited liability; a partnership is not a separate person, while an LLP is.
Worked example
A offers to sell a machine for £50,000. B replies, 'I will pay £45,000.' A refuses. B then says, 'I accept £50,000.' There is no contract. B's first reply was a counter-offer, which destroyed A's original offer. B's later 'acceptance' is a new offer, which A has not accepted. A's refusal is not an acceptance.
Traps that cost marks
Do not treat every advertisement as an offer. Silence is not acceptance. Do not use past consideration. Do not assume an exclusion clause is valid because it was signed; UCTA/CRA reasonableness and consumer rules still apply. Do not confuse limited liability with separate personality, or a partnership with an LLP.