ICAEW ACA Business Law common mistakes
ICAEW ACA Business Law · Understand the traps and how to avoid them.
Quoting the Companies Act 2006 section number as the whole answer, without stating what the section actually provides or how it applies to the scenario facts.
Candidates memorise section numbers from revision notes because they look like hard, checkable knowledge, then treat citing one as completing the analysis. Markers award application marks, not citation marks.
What to do instead
For every section you cite, force yourself to write a second sentence beginning 'This means that...' that applies the rule to the named parties and facts. If you cannot write that sentence, you do not yet understand the provision well enough to use it.
Treating an invitation to treat as an offer, or an offer as an acceptance, when analysing problem scenarios such as goods displayed in a shop or a response that adds new terms.
The offer/acceptance sequence feels like common sense, so candidates skip the labelling step and jump to the conclusion. The classic traps (display of goods, advertisements, requests for information, counter-offers) are precisely where instinct misleads.
What to do instead
Before answering any formation question, draw a short timeline and label each communication as invitation to treat, offer, request for information, counter-offer or acceptance. Then state which party is bound and from what moment.
Describing the law of agency, partnership or separate legal personality in the abstract without applying it to the individuals named in the scenario.
These topics are taught as rules, and candidates reproduce the rules because they are easier to recall than to apply under time pressure. The result reads like a textbook extract rather than advice.
What to do instead
Adopt the discipline of naming the person in every sentence: 'X will be liable because...', 'Y has apparent authority because the board allowed...'. Ban yourself from sentences with no named party in them.
Confusing directors' duties under sections 171 to 177 with each other, particularly the duty to promote the success of the company (s.172) and the duty to exercise independent judgement (s.173).
The duties overlap in real situations, and candidates learn them as a list rather than as distinct tests. Under exam pressure the first duty name that surfaces gets used regardless of fit.
What to do instead
Learn one diagnostic question per duty: whose interests are affected (s.172), whose decision is it really (s.173), is there a conflict (s.175), is there a benefit from a third party (s.176). Match the scenario fact to the diagnostic question before writing.
Answering an insolvency question by naming the procedure (administration, liquidation, CVA) without explaining the statutory purpose, the moratorium position, or the order of distribution of assets.
Procedure names are the most memorable part of the topic, while priority of creditors and the purpose of the moratorium require harder recall. Candidates write what they can remember rather than what the question asks.
What to do instead
For each procedure, memorise a three-part frame: purpose, effect on creditors' rights (moratorium or not), and who gets paid in what order. Practise applying the frame to a short fact pattern until it takes under two minutes.
Classifying a dismissal as unfair, wrongful or constructive but then failing to work through the statutory tests, especially the reason for dismissal, the band of reasonable responses and the two-year qualifying period.
The labels sound interchangeable in everyday speech, and candidates assume a dismissal that feels harsh must be unfair. They then argue fairness in general terms instead of applying the legal tests in order.
What to do instead
Use a fixed checklist: was there a dismissal, what was the reason, is it a potentially fair reason under the statute, was the employer's response within the band of reasonable responses, and does the claimant have the necessary qualifying service. Answer each step explicitly.
Ignoring the requirement to consider both the claimant's and the defendant's position in a negligence or misrepresentation question, giving a one-sided conclusion.
Candidates identify the obvious victim and argue only their case, forgetting that duty, breach, causation and remoteness each give the defendant a point of attack.
What to do instead
Structure the answer as a series of two-column checks: duty owed or not, breach or reasonable care, causation or novus actus, remoteness or unforeseeable type of harm. Reach a conclusion only after both columns are filled.
Mixing up the rules on when a company can validly enter a contract with a third party, particularly the effect of the company's constitution and the authority of the individual purporting to act for it.
The interaction between the constitution, actual authority, apparent authority and the statutory protection of third parties is conceptually dense, so candidates collapse it into 'the company is bound'.
What to do instead
Separate the question into two: did the person have authority (actual or apparent), and does statute protect the third party regardless. Write the answer in that order and state the consequence for both the company and the third party.
Spending disproportionate time on the first question in the constructed-response section, producing an overlong answer and leaving later questions thin or unanswered.
Candidates write everything they know about the first topic, fearing omission, and underestimate how much time the remaining questions need. The first topic is often the one they revised most recently.
What to do instead
Before writing, allocate the available minutes across questions in proportion to marks and write the allocation on your answer. Set a mental cut-off per question and move on when reached, returning only if time remains.
Using vague verbs such as 'may be liable', 'could be argued' or 'might have a claim' instead of committing to a definite conclusion for each party.
Hedging feels safer when unsure, and candidates hope a cautious answer will still earn marks. In practice it signals that the analysis has not been completed and loses the conclusion marks.
What to do instead
End every issue with a sentence of the form 'Therefore X is liable to Y for Z' or 'Therefore X has no claim against Y, because...'. If genuinely uncertain, state which fact would change the outcome and why, rather than hedging.