ICAEW ACA Business Law flashcards
ICAEW ACA 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.
- Ratio decidendi
- The legal reasoning essential to a court's decision; it binds courts lower in the same hierarchy in later cases with materially similar facts.
- Obiter dicta
- Remarks by a judge that are not necessary to the decision. They are persuasive but not binding on later courts.
- Salomon v Salomon
- House of Lords case establishing that a registered company is a separate legal person from its shareholders, who enjoy limited liability.
- Invitation to treat
- An expression of willingness to negotiate, not an offer. Displays in shop windows, advertisements and auction lots are normally invitations to treat.
- Postal acceptance rule
- Where post is contemplated, acceptance is complete when the letter is posted, not when received, provided it is properly addressed and stamped.
- Past consideration
- An act performed before the promise was made. It is generally not good consideration unless it was done at the promisor's request with an implied promise of payment.
- Hadley v Baxendale
- Sets the remoteness test: damages recoverable if losses arise naturally from the breach or were in the parties' contemplation at contract formation.
- Contra proferentem
- Rule of construction under which ambiguous terms, especially exclusion clauses, are interpreted against the party who drafted or relied on them.
- Frustration
- Automatic discharge of a contract when an unforeseen event, outside the parties' control, makes performance impossible or radically different from what was agreed.
- Condition versus warranty
- A condition is an essential term; breach allows termination and damages. A warranty is a minor term; breach gives damages only.
- Misrepresentation
- A false statement of fact, made before contract, that induces the other party to enter the contract. Remedies include rescission and damages.
- Unfair prejudice petition
- A shareholder remedy under s.994 Companies Act 2006 where company affairs are conducted in a manner unfairly prejudicial to members' interests.
- Derivative claim
- A claim brought by a shareholder on behalf of the company against a director for breach of duty, requiring court permission to proceed.
- Special resolution
- A members' resolution passed by at least 75% of votes cast. Required for matters such as altering articles or disapplying pre-emption rights.
- Ordinary resolution
- A members' resolution passed by a simple majority of votes cast. Used for routine decisions such as appointing directors or approving dividends.
- Pre-emption rights
- Rights of existing shareholders to be offered new equity securities in proportion to their holdings before they are offered to outsiders.
- Distributable profits
- Accumulated realised profits less accumulated realised losses, the only source from which a company may lawfully pay dividends.
- s.172 duty
- Director's duty to act in the way they consider, in good faith, most likely to promote the success of the company for the benefit of members as a whole.
- Certificate of incorporation
- Conclusive evidence that a company has been duly registered and exists as a separate legal person from the date stated on it.
- Wrongful trading
- Liability under s.214 Insolvency Act 1986 where a director continued trading when they knew or ought to have known insolvent liquidation was inevitable.
- Administration moratorium
- A temporary protection from creditor action while an administrator attempts to rescue the company or achieve a better result for creditors.
- Preferential creditors
- Creditors paid ahead of floating charge and unsecured creditors, including certain employee wages and contributions to occupational pension schemes.
- CVA
- Company voluntary arrangement: a compromise between a company and its creditors, approved by 75% by value and a majority in number of those voting.
- Statutory demand
- A formal written demand for payment of at least £750; if unpaid for 21 days it can support a winding-up petition.
- Unfair dismissal
- Dismissal for a reason that is not one of the statutory fair reasons, or where the employer acted unreasonably in treating the reason as sufficient.
- Statutory redundancy payment
- Payment based on age, complete years of service and capped weekly pay, available to employees with at least two years' continuous service.
- ACAS Code
- Code of Practice on disciplinary and grievance procedures; unreasonable failure to follow it can increase or reduce tribunal awards by up to 25%.
- Indirect discrimination
- A neutral provision, criterion or practice that puts people with a protected characteristic at a particular disadvantage and is not objectively justified.
- Worker status
- An individual who contracts to perform work personally for another party, but is not an employee; entitled to core rights such as minimum wage and holiday.
- Employee status
- An individual employed under a contract of service with mutual obligations of work and pay; entitled to full employment rights including unfair dismissal protection.
- Fraudulent trading
- Carrying on business with intent to defraud creditors or for a fraudulent purpose; a criminal offence with possible personal liability for directors.
- Floating charge
- A security interest over a class of changing assets that crystallises on a specified event, ranking behind fixed charges and preferential debts.