CA Foundation Business Laws key terms

A clear expression by one person to another of willingness to do or abstain from doing something, made with the intention of obtaining that other person's assent.

The unqualified assent to every term of an offer, communicated by the offeree to the offeror in the mode required or a reasonable mode, completing the agreement.

A statement or display that merely invites others to make offers, such as a shop display or tender notice, and does not itself create a power of acceptance.

A reply that varies the terms of the original offer, which operates as a rejection and destroys the original offer so it cannot later be accepted.

Withdrawal of an offer or acceptance before it becomes binding; an offer may be revoked before acceptance is complete against the offeror, subject to notice rules.

Something of value given by each party in return for the other's promise, done at the promisor's desire; it must be real, lawful and not past.

The rule that only parties to a contract may sue or be sued on it; a stranger to the contract generally cannot enforce rights under it, subject to recognised exceptions.

The legal capacity to enter a binding contract, which a person attains on majority and which is lacking in a minor, a person of unsound mind, or one disqualified by law.

An agreement by a person below eighteen years, which is void; the minor cannot be held liable on it, though benefits received may in some cases be recoverable.

Consent given without coercion, undue influence, fraud, misrepresentation or mistake; if consent is not free the contract is voidable at the aggrieved party's option.

Committing or threatening an act forbidden by the Penal Code, or unlawful detention of property, to force a person to enter an agreement.

Using a position of real or apparent authority over another to obtain an unfair advantage, where the parties are in a relationship of trust or dominance.

An innocent but false statement of fact made to induce another to contract, which makes the contract voidable and may entitle the aggrieved party to damages or rescission.

A false statement made knowingly, without belief in its truth, or recklessly, with intent to deceive and induce another to contract.

An agreement that is not enforceable by law from the outset, such as one without consideration or by a minor, and creates no legal rights.

A contract that is enforceable at the option of the aggrieved party, who may rescind it, typically because consent was not free.

A contract to do or not do something if an uncertain future event happens or does not happen; it cannot be enforced until the event occurs or becomes impossible.

An obligation created by law, without agreement, to prevent unjust enrichment, such as recovery of money paid by mistake or for necessaries supplied to a dependent.

A breach occurring when, before the due date of performance, a party repudiates the contract or disables itself from performing, allowing the other to sue at once.

Compensation for loss from breach, limited to losses arising naturally in the usual course or those the parties contemplated when contracting.

An equitable remedy in which the court orders a party actually to carry out its contractual promise, granted where damages would be inadequate.

A promise to save another harmless from loss caused by the promisor's own conduct or that of a third person; the promisor is liable as a primary obligor.

A promise to answer for the debt or default of another person, made to the creditor, creating secondary liability that arises only on the principal debtor's default.

The person who gives a guarantee and becomes liable to the creditor on the principal debtor's default, with rights of subrogation against the debtor.

Delivery of goods by one person to another for a purpose, with the bailee bound to return them or dispose of them according to the bailor's directions.

A bailment of goods as security for payment of a debt or performance of a promise, giving the pawnee a right to retain and sell the goods on default.

A right to retain goods or property until a claim is satisfied; it may be particular, for services on the goods, or general, for a running account balance.

A person employed to do an act for another or to represent another in dealings with third persons, creating legal relations between the principal and third parties.

The person for whom an agent acts and on whose behalf legal relations with third parties are created, who is bound by acts within the agent's authority.

Creation of an agency relationship when a principal, with full knowledge, adopts an unauthorised act done on its behalf, giving the act retrospective authority.

In sale of goods, a condition is a stipulation essential to the contract's main purpose, while a warranty is collateral; breach of one allows rejection, the other only damages.

The rule that the buyer must examine goods and bear the risk of quality, subject to exceptions such as reliance on the seller's skill where the purpose is made known.

A sale transfers ownership immediately, making the buyer owner and bearing risk, while an agreement to sell transfers ownership at a future time or on a condition.

A partnership with no fixed term or provision for determination, which any partner may dissolve by giving notice to the others.

The principle that every partner is both an agent of the firm and of the other partners for business purposes, binding the firm by acts within actual or apparent authority.

The termination of the partnership relationship among all partners, followed by winding up, as distinct from a mere retirement or change in the firm's constitution.

An individual partner of a limited liability partnership designated as such under the LLP agreement, with at least two required and personal liability for statutory compliance.

A legal entity distinct from its members that continues in existence despite changes in membership, owns property, and can sue and be sued in its own name.

The separation between a company and its members, which courts may lift to make members or directors personally liable where the entity is used to evade law or commit fraud.

The conclusive evidence issued by the Registrar that a company has been registered and has come into existence as a legal person from the date stated.

Any document inviting the public to subscribe for or purchase securities of a company, subject to detailed disclosure and liability rules for misstatements.

The act of a company in conferring the right to be a member on an applicant, which must comply with minimum subscription and other statutory conditions.

The aggregate amount raised or authorised to be raised by issuing shares, divided into authorised, issued, subscribed and paid-up capital categories.

A security interest created over a company's assets or undertaking to secure a debt, which must be registered with the Registrar within the prescribed period.

A distribution of a company's profits to members, declared by the board or in general meeting, payable only from profits or reserves permitted by law.

A document promising or ordering payment of money that is freely transferable by delivery or endorsement, with the transferee taking free of defects in title.

A person who takes a negotiable instrument for value, in good faith and before maturity, and thereby obtains a title free from prior defects.

The signing of a negotiable instrument by the holder, usually on the back, to transfer it to another person or to create liability on the instrument.