CMA Foundation Paper 1 (FBLC) key terms

A clear expression by one person to another of willingness to do or abstain from doing something, made with the aim of obtaining the other's agreement. It must be communicated and intend legal consequences.

Unqualified agreement to every term of an offer, communicated by the offeree in the manner the offeror requires. It converts the offer into a binding promise and must occur while the offer is still open.

A statement or display that merely invites others to make offers, such as a price list, catalogue, or shop window display. It is not itself an offer and creates no legal obligation when responded to.

Something of value given by each party in exchange for the other's promise, described as a price paid for the promise. It must move at the promisor's desire and must not be past or illusory.

An agreement enforceable by law, formed from offer, acceptance, lawful consideration, capacity of parties, free consent, and a lawful object. Breach gives the aggrieved party a right to a remedy.

Consent given without coercion, undue influence, fraud, misrepresentation, or mistake. Where consent is not free, the agreement is usually voidable at the option of the party whose consent was affected.

An agreement that the law treats as never having existed, so no rights or duties arise from it. Money or property transferred under it may generally be recovered under restitution principles.

An agreement that remains valid until the party whose consent was improperly obtained chooses to rescind it. If that party affirms it or delays unduly, the contract becomes binding.

A false statement of fact made innocently, without intent to deceive, which induces the other party to enter the contract. The misled party may avoid the contract and may claim damages in some cases.

The principle that only parties to a contract may enforce it or be bound by it. A stranger to the agreement generally cannot sue on it, subject to recognised statutory and common law exceptions.

The legal capacity of a party to enter a binding agreement, judged by age of majority, soundness of mind, and not being disqualified by law. Agreements with incompetent parties are generally void.

A contract to do or not do something if some uncertain future event happens, or not if it happens. It becomes enforceable only when the stated event occurs or fails to occur.

Fulfilment of the duties each party undertook, either personally or through an authorised agent, within the agreed time and manner. Proper performance discharges the parties from further obligation.

The ending of contractual obligations, whether by performance, mutual agreement, impossibility of performance, lapse of time, operation of law, or breach. Once discharged, the parties are freed from further duties.

A breach occurring when a party repudiates the contract before the performance date, showing an intention not to be bound. The other party may sue at once or wait until performance falls due.

Monetary compensation awarded for loss caused by breach of contract, aiming to place the injured party in the position they would have occupied had the contract been performed, subject to remoteness and mitigation rules.

A sum fixed in the contract as the amount payable on breach, set as a genuine pre-estimate of likely loss. Courts enforce it without requiring proof of actual loss, unlike a penalty.

A contractual sum imposed to deter breach rather than to estimate loss. It is generally unenforceable, and the injured party may instead recover ordinary damages for the actual loss proved.

An obligation imposed by law, not by agreement, to prevent unjust enrichment where one person gains at another's expense. Examples include recovery of money paid by mistake or necessaries supplied to a dependant.

A situation where one party benefits at the expense of another without any lawful justification. The law requires restitution of the benefit so that the enriched party does not retain an unfair gain.

A promise by one party to make good the loss suffered by another, often arising from the conduct of the promisor or a third party. It usually covers actual loss rather than a fixed sum.

A promise to answer for the debt or default of a third person, made to the creditor. It is a collateral obligation, so the surety is liable only when the principal debtor fails to pay.

Delivery of goods by one person to another for a stated purpose, with the understanding that they will be returned or disposed of as directed. The bailee owes duties of reasonable care.

A type of bailment where goods are delivered as security for a debt or promise. The pawnee may retain the goods until payment and, on default, may sell them after reasonable notice.

A relationship in which one person, the agent, is authorised to act for another, the principal, creating legal relations between the principal and third parties. Authority may be express, implied, or apparent.

The person on whose behalf an agent acts and who acquires the rights and liabilities arising from the agent's authorised acts. The principal must be competent to contract and must compensate the agent properly.

A person appointed to represent another in dealings with third parties, with power to bind the principal legally. The agent owes duties of obedience, care, disclosure, and accounting.

A document that guarantees payment of a stated sum to the holder, such as a cheque, bill of exchange, or promissory note. Transfer by delivery or endorsement gives the holder rights free of prior defects.

A bill of exchange drawn on a banker, payable on demand, ordering the bank to pay a stated sum to a named person or bearer. Crossing and endorsement affect how it may be paid or transferred.

A written instrument containing an unconditional order, signed by the maker, directing another to pay a fixed sum to a specified person or bearer on demand or at a future date.

The charter document of a company that sets out its name, registered office, objects, liability, and capital. Acts beyond the objects stated may be ultra vires and ineffective.

The internal rulebook of a company governing management, meetings, voting, and share transfers. They are subordinate to the memorandum and to statute, and bind the company and its members.

An artificial legal person formed on incorporation, with perpetual succession, a common seal or authorised signatory, and limited or unlimited liability for its members. It owns property and contracts in its own name.

The planned exchange of information, ideas, and instructions within and outside an organisation to achieve business goals. It may be formal or informal, internal or external, written or oral.

The sequence of sender, encoding, message, channel, receiver, decoding, and feedback, set within a context. Noise at any stage can distort meaning and cause misunderstanding.

The receiver's response to a message, confirming whether it was understood as intended. Prompt, specific feedback closes the communication loop and allows the sender to adjust.

Any barrier that interferes with the transmission or interpretation of a message, such as physical disturbance, jargon, poor signal, or emotional bias. Reducing noise improves communication accuracy.

Messages sent through officially designated channels and hierarchies, such as reports, memos, and notices. It is documented, follows protocol, and carries organisational authority.

The unofficial exchange of information through personal networks, often called the grapevine. It spreads quickly and can build relationships but may carry rumour and inaccuracy.

Any factor that blocks or distorts the meaning of a message, including language differences, poor listening, distrust, cultural gaps, and information overload. Identifying barriers helps design clearer messages.

A deliberate effort to hear, interpret, and respond to a speaker, using attention, paraphrasing, and clarifying questions. It reduces misunderstanding and encourages open exchange.

Meaning conveyed without words, through body language, gestures, facial expression, posture, tone, and spacing. It often reveals attitudes that spoken words conceal and should support, not contradict, the message.

A formal written message to an external party, following conventions of heading, date, inside address, salutation, body, complimentary close, and signature. It creates a permanent record and represents the organisation.

A short internal written message used to inform, request, or instruct staff, usually with a heading, date, recipient, sender, and subject line. It is less formal than a letter and stays within the organisation.

A structured document presenting findings, analysis, and recommendations on a specific issue for decision-makers. It typically includes terms of reference, method, findings, conclusions, and recommendations.

A formal announcement of a meeting, event, or decision, stating date, time, place, and agenda where relevant. It must be issued within the required period and to all entitled recipients.

An ordered list of items to be discussed at a meeting, circulated in advance with times and speakers where possible. It keeps discussion focused and supports productive decision-making.

The official written record of a meeting's proceedings, including decisions taken and actions assigned. Once approved, they serve as evidence of what was resolved.

A structured summary of a person's education, work history, skills, and achievements, used when applying for employment. It should be accurate, concise, and tailored to the role.

A short letter sent with a CV explaining why the applicant wants the role and how their background fits it. It highlights relevant strengths and invites an interview.

Accepted conventions for professional electronic messages, covering clear subject lines, brevity, appropriate tone, correct addressing, confidentiality, and timely replies. It protects the sender's credibility and the organisation's reputation.

The set of informal rules for courteous and responsible behaviour in online communication, such as avoiding all-capitals, respecting privacy, and staying on topic. It applies across email, chat, and social platforms.

The ability to deliver information clearly to an audience using structure, visual aids, voice control, eye contact, and confident body language. Planning around the audience's needs is central to effectiveness.

A structured exchange among several participants on a given topic, used to assess communication, teamwork, and reasoning. Contributing relevant points while listening and including others is valued.

A planned conversation in which an employer assesses a candidate's suitability through questions and observation. Preparation, clear examples, and honest answers improve outcomes.