Law - Question Bank

Arthur worked for Lady Grey and part of his job was to buy plants, ornaments and furniture for the gardens of her country manor house. When her son, Harry, was due to retire from the services, she advised Arthur that Harry would be taking on his responsibilities. A few weeks later, Arthur ordered some very expensive roses and marble statues from Lady Grey's main supplier and collected the goods the next day for his own garden. The invoice was delivered to Lady Grey. Is there an agency relationship between Arthur and Lady Grey in respect of the contract for the roses and statues? A. Yes B. No Is Lady Grey bound to settle the invoice? C. Yes D. No

A C Chapter 3 - Q1

Ashley is Phyllis's agent and enters into a contract for the purchase of a vintage car from Vince, as instructed by Phyllis. Vince does not know that Ashley is buying the car for Phyllis, at the time of entering into the contract, but discovers this to be the case one week later. If Vince then defaults on the sale, can Phyllis take action on the contract? A. Yes B. No If Phyllis defaults on the purchase, can Vince take action on the contract? C. Yes D. No

A C Chapter 3 - Q16

Walter enters into a contract for the purchase of a barge from Barney. He is actually buying it for Natalie, although Barney does not know that Walter is buying it for anybody else (not that it would have made any difference to him). When the date for payment arrives, Walter is unable to pay for the barge and tells Barney that he was actually buying it for Natalie anyway. Is the contract enforceable against Natalie? A. Yes B. No Is the contract enforceable against Walter? C. Yes D. No

A C Chapter 3 - Q17

A valid agency relationship can be created by: Express appointment A. Yes B. No Ratification A. Yes B. No

A C Chapter 3 - Q19

An agent's authority to act on behalf of their principal can arise: Where express authority is explicitly granted by the principal to the agent A. Yes B. No Where a person with actual authority makes a representation to a third party that a particular person has the authority to act as their agent without actually appointing the agent C. Yes D. No

A C Chapter 3 - Q21

Are the following statements true or false? Where a public limited company fails to obtain a trading certificate, a member-director may be personally liable as a result. This is one example of statute lifting the corporate veil. A. True B. False A company is always liable without limits for its own debts. C. True D. False

A C Chapter 5 - Q3

Roz works in the accounts department of Bizzy Lizzy, a successful florist's business. The principal owner of the business, Vincent, was due to visit a specialist rose grower on the Isles of Scilly but was unable to go due to illness. Vincent asked Roz to go along instead. He telephoned the rose grower to say that his buying partner would be taking his place. Roz ordered 500 roses for Bizzy Lizzy. Which of the following best describes the legal position? A. Roz had ostensible authority to order the roses. B. Roz had implied authority to order the roses. C. Roz had express authority to order the roses. D. Roz had no authority to order the roses.

A Chapter 3 - Q14

Dennis was a partner in Doolittle Solicitors. He retires from the partnership and the firm's existing clients and suppliers are informed of this fact; the firm amends its stationery so that Dennis's name no longer appears on it. A short time later, Dennis orders goods using old stationery which still has his name and asks for the bill to be sent to Doolittle Solicitors. Which of the following statements is correct? A. There is a binding contract between Dennis and the firm which supplied the goods. B. No binding contract has been created between the supplier and Doolittle Solicitors because Dennis was not authorised to act on behalf of the firm. C. There is a binding contract between Doolittle Solicitors and the firm which supplied the goods. D. No binding contract has been created because the partnership shown on the stationery had ceased to exist.

A Chapter 3 - Q20

Barnaby is a partner in Brown & Co, a dentists' practice. He orders four filing cabinets, one for reception and one for each of the surgeries, from Office Gear. The other two dentists in the practice think that this is an unnecessary expense and ask Office Gear to cancel the order. Office Gear is not prepared to do so and demands payment. Which of the following best describes the legal position as to whether or not Brown & Co is bound by the contract? A. It is bound because the contract is within the implied usual authority of the dentist, Barnaby. B. It is bound because Office Gear knew that Barnaby was buying the cabinets for Brown & Co. C. It is not bound because Barnaby had authority to buy dentistry tools and equipment but not office supplies. D. It is not bound because the majority of partners do not wish to buy the cabinets.

A Chapter 3 - Q9

Cabbit Ltd buys organic vegetables from growers and resells them to retail outlets. The Companies Act 2006 requires every company to keep adequate accounting records. In order to comply with this requirement of the Act, Cabbit Ltd's accounting records must contain: (1) a record of its assets and liabilities (2) a statement of stock held by the company at the end of each financial year (3) daily entries of income and expenditure A. All of the above B. None of the above C. (1) and (2) only D. (1) and (3) only

A Chapter 5 - Q24

Are the following statements true or false in connection with agency by estoppel? The third party must show that they have relied on a representation that the contracting party was acting as agent for their principal. A. True B. False It is not necessary to show that the claimant's loss was cause by their reliance on the representation. C. True D. False

A D Chapter 3 - Q12

Annabel is Phil's agent. She enters into a contract with Tim, within her authority, expressly describing herself as an agent for Phil. Can Annabel be liable on this contract with Tim? A. Yes B. No If Annabel enters into a contract, saying that she is acting as agent but without actually naming Phil as her principal, does that mean that Phil not be liable on the contract? C. Yes D. No

A D Chapter 3 - Q15

Andrea purchases 10 watercolour painting from an artist, Ross, for her employer, the Earl of Somerset, even though he has told her not to buy any more watercolours on his behalf but to concentrate on pastels. When the artist learns this, he demands their return as he had no wish for his work to hang in Andrea's terraced home in Bridgwater. However, the Earl of Somerset had come to like them after seeing them on Andrea's walls and refused the artist's demand for their return, sending him a cheque instead. Does the Earl of Somerset's action amount to ratification of the contract? A. Yes B. No Is the artist able to insist on the return of the watercolour paintings? C. Yes D. No

A D Chapter 3 - Q4

When deciding whether or not a professional is liable to a claimant in respect of a negligence claim, the court will look at the standard of care that they were expected to demonstrate. All, except one, of the following are principles that the court will consider when determining the standard of care. Which is the exception? A. The body of professional opinion concerning the approach taken by the professional B. Knowledge and general practice concerning the professional's approach at the time the claim is made C. Any vulnerabilities of the defendant that the professional is aware of D. The particular skill that the professional says they have

B. Knowledge and general practice concerning the professional's approach at the time the claim is made Chapter 4 - Q20

Mark emails Nathan and offers to sell his tandem to him for £250. Nathan texts him back to say that he'd love it but he will only pay £230. Two days later Mark says he'll accept £230 but Nathan has bought one on eBay for £200. Which of the following best describes the legal position between the parties? A. Nathan's reply is a rejection of Mark's offer B. Nathan's reply is a counter offer which Mark accepts C. Nathan's reply is merely a request for information as to whether Mark will accept £20 less D. Nathan's reply constitutes a counter offer but this is revoked when he buys a tandem from eBay

B. Nathan's reply is a counter offer which Mark accepts Chapter 1 - Q11

To be valid, a contract must contain: Written evidence of the principal terms of the contract A. Yes B. No An agreement C. Yes D. No

B. No C. Yes Chapter 1 - Q36

In respect of a successful action in the tort of negligence: Is it true that the claimant must have suffered personal injury? A. Yes B. No Is the standard of proof the balance of probabilities? C. Yes D. No

B. No C. Yes Chapter 4 - Q1

With regard to an auditor's potential liability in tort for providing audited accounts: Is a provision (other than in a liability limitation agreement) that excludes them from such liability enforceable? A. Yes B. No Can the company agree to indemnify an auditor against such liability? C. Yes D. No

B. No C. Yes Chapter 4 - Q17

In an action for negligence: Does there need to be some sort of pre-existing relationship between the claimant and defendant at the time of the act complained of, although not necessarily a contractual relationship? A. Yes B. No Does the court need to be satisfied that public policy would allow a duty of care to exist? C. Yes D. No

B. No C. Yes Chapter 4 - Q2

Alice is a newly qualified accountant employed in an accountancy firm. An old friend, Bashir, meets her at a party and asks for some tax advice. Alice tells him to make an appointment to see her in the office which he does. Alice advises him on his tax affairs. This advice misinterprets certain statutory provisions relating to tax. Bashir relies on the advice and loses money. A reasonably competent accountant would not have given the advice which Alice gave. If Alice is sued for negligence, could she rely on any of the following factors as a complete or partial defence: She was newly qualified and could not be expected to reach the same standard of competence as a more experienced accountant. A. Yes B. No Bashir would have suffered the loss even if the advice had been correct. C. Yes D. No

B. No C. Yes Chapter 4 - Q25

The court will consider a number of aspects when determining liability for loss or damage caused by negligence. Will the court consider whether the damage caused was in the contemplation of the parties at the time of the negligent act or omission? A. Yes B. No Will the court consider public policy when coming to its decision? C. Yes D. No

B. No C. Yes Chapter 4 - Q31

On 28 May, Abigail writes to Gill and offers to sell her all her old accountancy study manuals for £50. Gill posts a letter together with a cheque for £50 on 1 June saying that she'll pick them up on 3 June. However on 2 June, Abigail discovers that she has failed two of her papers and so sends a letter to Gill saying that the books are no longer for sale. On 3 June, each receives the other's letter. Does the letter of revocation take effect on 2 June? A. Yes B. No Does Gill's acceptance take effect on 3 June? C. Yes D. No

B. No D. No Chapter 1 - Q14

On 1 May, Hugh offered to sell his boat to Jeff for £5,000 , stating that his offer had to be accepted by notice in writing. Jeff posted a letter of acceptance on 3 May, but it never arrived. Does the postal rule apply ie, is the acceptance effective as soon as it is posted? A. Yes B. No Is there a contract between Hugh and Jeff? C. Yes D. No

B. No D. No Chapter 1 - Q19

Clarence sells champagne and high quality wines from home. He delivers a glossy flyer to all the £1 million plus homes in the Clifton area of Bristol, offering a 1998 Chablis for £30 a bottle. On reading his copy of the flyer, Kenton goes to Clarence's home and asks for a case of Chablis. Is the flyer issued by Clarence a valid offer? A. Yes B. No Is Clarence in breach of contract if he says to Kenton that the Chablis is out of stock and that he is unable to get hold of any more? C. Yes D. No

B. No D. No Chapter 1 - Q5

The Unfair Contract Terms Act 1977 renders some exclusions void and other subject to the reasonableness test: In a contract between two businesses, is a clause which limits liability for losses due to negligence void, however reasonable it might appear? A. Yes B. No Is a clause limiting liability for personal injury resulting from negligence in a contract between two private individuals subject to the reasonableness test? C. Yes D. No

B. No D. No Chapter 2 - Q11

With regard to damages for negligence, do the following matters have to be considered to be reasonably foreseeable, in order that the claimant can recover damages in respect of their loss? The manner in which the loss was suffered A. Yes B. No The extent of the loss C. Yes D. No

B. No D. No Chapter 4 - Q22

Kit and Lin are partners in a takeaway pizza business. One of their employees, Jeff, decides to try to improve the business's profits by setting up a parcel delivery operation, using the same business name, that uses the pizza delivery vehicles to deliver the parcels. Kit and Lin do not prevent Jeff doing this and are happy with the extra money the parcel delivery service is making. Which type of authority does Jeff have in regard to the parcel delivery service? A. Actual express authority B. Implied usual authority C. Ostensible authority D. Actual implied authority

C Chapter 3 - Q22

Whimsome Ltd has a turnover of £10 million, a balance sheet total of £5 million and employs 100 people. Within how many months of its year end must the company file its annual accounts with the Registrar? A. 3 months B. 6 months C. 9 months D. 12 months

C Chapter 5 - Q25

The Companies (Miscellaneous Reporting) Regulations 2018 require companies to make disclosures in relation to all of the following areas, except one. Which is the exception? A. Corporate governance B. Director remuneration C. Compliance with money laundering regulations D. Stakeholder engagement

C Chapter 5 - Q31

Which of the following statements is incorrect? A. A private company cannot offer its securities to the public B. Only a private limited company can pass written resolutions C. Public and private limited companies must have at least two directors D. A private limited company does not need to hold an annual general meeting

C Chapter 5 - Q6

Which of the following statements is correct only in respect of a public limited company? A. The company may exclude rights of pre-emption B. The company may reduce its share capital subject to obtaining a special resolution and providing a directors' declaration of solvency C. Shares must be at least one quarter paid up on allotment D. The company may redeem its shares out of its own share capital, subject to its articles of association

C Chapter 5 - Q9

Which term best describes a contract, such as a building contract, that provides for payment at various stages of the contractor's progress? A. A divided contract B. A segmented contract C. A severable contract D. A partial contract

C. A severable contract Chapter 2 - Q1

John drives in a careless fashion down a narrow street with cars parked on each side of the road, actually knocking the wing mirrors off two of the cars. While Naomi is watching him, she trips on some tools that have been left out by council workmen laying new kerbstones and breaks her ankle. Which of the following best describes the legal position? A. John is liable because his negligent driving causes her to trip B. Naomi is liable because she does not look where she is going C. The local authority is liable because its workers are negligent in leaving tools on the pavement D. John and the local authority are both liable because they both caused her injury

C. The local authority is liable because its workers are negligent in leaving tools on the pavement Chapter 4 - Q9

All of the following, except one, have the effect of terminating an offer. Which is the exception? A. Rejection B. Counter offer C. When a pre-condition is satisfied D. A lapse of time

C. When a pre-condition is satisfied Chapter 1 - Q7

Henry agreed to advertise the services provided by his father's business, The Complete Service Ltd, in appropriate publications over a period of 24 months. It was agreed that Henry would be liable to pay a sum of £5,000 in respect of any advertising error or missed deadline. Which of the following describes this contractual provision? A. A liquidated damages clause B. An unliquidated damages clause C. An exclusion clause D. A penalty clause

D. A penalty clause Chapter 2 - Q6

Colin was engaged as a coach of the South of England Athletics Squad (SEAS) and his contract contained a clause that he would not coach any other team without the consent of the SEAS. The SEAS management discovered that unknown to them, he had in fact been coaching the South Wales team for three months and brought action against him for breach of contract. Which of the following is the most likely remedy to be granted in addition to possible damages? A. A mandatory injunction B. A quantum meruit award C. Specific performance D. A prohibitory injunction

D. A prohibitory injunction Chapter 2 - Q10

Which of the following may be used to resolve disputes, even after court proceeding have been commenced? 1) Negotiation 2) Expert determination 3) Mediation 4) Adjuducation A. 1 only B. 2 + 3 + 4 C. 1 + 4 D. All of them

D. All of them Chapter 2 - Q15

Denzil puts a notice in the local post office saying "Reward. Lost cavalier King Charles spaniel named Barnie. £150 reward for his safe return". Florence finds Barnie and, unaware of Denzil's notice, takes him to Denzil's home address which is inscribed on the dog's name tag. Which of the following statements best describes the legal position? A. Florence is not entitled to the reward. The offer is invalid as it is not made to an identifiable class of persons B. Florence is entitled to the reward. The offer is valid and her acceptance of the offer can be inferred from her act of returning the dog C. Florence is not entitled to the reward. She failed to claim the reward at the time of returning Barnie (and accepting Denzil's offer) and has therefore waived her right to receive it D. Florence is not entitled to the reward as she did not even know that a reward was being offered

D. Florence is not entitled to the reward as she did not even know that a reward was being offered Chapter 1 - Q4

Frank offered Mary his lawnmower for £200. Mary asked whether he might be willing to accept £100 now and £100 at the end of the month when she is paid. Which of the following best describes the status of Mary's reply? A. It is a rejection of Frank's offer B. It is an implied acceptance because she was clearly agreeable to the price C. It is a counter offer D. It is a request for information

D. It is a request for information Chapter 1 - Q10

Brown & Cameron, a firm of accountants, prepares accounts for Target plc, showing a profit of £800,000 when they should, in fact, have shown a loss of £8,000. Marnie owned 300 shares in the company and, after reading the accounts that were sent to her (as to all shareholders), she purchased an additional 500 shares. When it came to light that the accounts had been prepared negligently (and the share price tumbled as a result of that negligence), Marnie sued the accountants for negligence. There was no disclaimer of liability in the audit report. Which of the following best describes the legal position in respect of the potential liability of the firm, Brown & Cameron to Marnie? A. It is liable because the partners in the firm knew that the accounts would be sent to all shareholders B. It is liable because it was reasonably foreseeable that existing shareholders would rely on the accounts for the purpose of reviewing their investments C. It is not liable because Marnie bought her shares on the Stock Exchange and not from the company D. It is not liable because the firm did not owe a duty to existing shareholders who rely on the accounts for a purpose other than that for which they were intended

D. It is not liable because the firm did not owe a duty to existing shareholders who rely on the accounts for a purpose other than that for which they were intended Chapter 4 - Q11

Prunella agrees to pay Paul £500 if Paul will landscape Phillip's garden. There is no agency relationship and the Contract (Rights of Third Parties) Act 1999 does not apply. Who may enforce the terms of the contract? A. Prunella, Paul and Phillip B. Prunella and Phillip only C. Paul and Phillip only D. Prunella and Paul only

D. Prunella and Paul only Chapter 1 - Q30

Michael offers to sell his Laser 2000 sailing dinghy to Rupert for £1,500 , provided he gets the job for which he has just been interviewed, since that would result in him having to live somewhere too far from sailing facilities. Rupert is delighted and thinks £1,500 is an excellent price. Michael fails to get the job. What is the consequence of Michael failing to get the job? A. The offer is terminated B. The contract is rendered voidable C. The contract is rendered unconditional D. The contract is rendered unenforceable

A. The offer is terminated Chapter 1 - Q8

Malcolm is managing director of Eastreach Ltd. Knowing that the finance director, Finley, was undergoing cancer treatment, Malcolm asked Tristan, an accountant, to prepare the company's accounts. Tristan provided the accounts in draft and Malcolm asked Finley to check that he was happy with them. While awaiting Finley's review, George, Tristan's brother (and business rival), saw the draft accounts and bought the entire 51% shareholding in Eastreach Ltd owned by Brigitte. When Finley had finished checking the accounts, it was discovered that Tristan had made significant accounting errors and had shown the company to be significantly more profitable than it was: in fact the company was heading for insolvency. Brigitte is delighted but George sues Tristan for his negligence, noting that Tristan had not made any disclaimer of liability in respect of his work. Which of the following statements is incorrect? A. Tristan owed a duty of care because George was known to him B. Tristan owed no duty of care because he did not know that George would look at the accounts C. Tristan owed a duty of care to Malcolm D. Tristan owed no duty of care to Brigitte

A. Tristan owed a duty of care because George was known to him Chapter 4 - Q13

With regard to terms being implied into contracts, are the following true or false? The courts will imply a terms into a contract if required to do so by statute. A. True B. False Terms may be implied on the basis of a custom or practice of a particular trade. C. True D. False

A. True C. True Chapter 1 - Q29

On Monday, Andrew advertised his car for sale for £5,000 in a local newspaper. Brian saw the advertisement and telephoned Andrew offering him £4,500 for the car. Andrew eventually offered to sell the car to Brian for £4,800. Brian replied that he would need to test-drive the car before he could agree such a price. Brian then agreed a time to meet at Andrew's house the following weekend for the test drive. On Friday, Andrew sold his car to his neighbour Carol for £4,500. Are the following statements true or false? Andrew's advertisement in the newspaper is purely an invitation to treat and as such is incapable of acceptance and forming a legally binding contract. A. True B. False Brian has no right of action against Andrew because no acceptance took place. C. True D. False

A. True C. True Chapter 1 - Q32

Are the following statements true or false? When determining whether a defendant was in breach of their duty of care, any emergency circumstances occurring at the time are taken into account. A. True B. False The standard of care owed by a defendant is increased where the defendant is aware of a special vulnerability of the claimant. C. True D. False

A. True C. True Chapter 4 - Q34

Are the following statements true or false? Where the offeror prescribes a mode of communication of acceptance, the offeree can normally use an alternative mode, provided it is at least as expeditious as the mode prescribed. A. True B. False Where no mode of communication of acceptance is prescribed, the offeree should use the same mode as that used for the offer. C. True D. False

A. True D. False Chapter 1 - Q18

Are the following statements true or false? There is a rebuttable presumption that social, domestic and family arrangements are not intended to be legally binding. A. True B. False There is an irrebuttable presumption that parties to a commercial arrangement intend it to be legally binding C. True D. False

A. True D. False Chapter 1 - Q23

Are the following statements true or false? Anticipatory breach may be implied from conduct and need not be explicit. A. True B. False Where an innocent party elects to treat a contract as discharged, they waive the right to claim damages from the party in default. C. True D. False

A. True D. False Chapter 2 - Q3

Are the following statements true or false? A principal is liable for the acts of his agent, provided they are committed by the agent in the course of performing the task for which they are an agent. A. True B. False An employer will not be vicariously liable for the negligent acts of their employee, provided they can show that they took reasonable steps to avert the possibility of the tort being committed. C. True D. False

A. True D. False Chapter 4 - Q23

Are the following statements true or false? Acceptance may be express or inferred from conduct. A. True B. False Acceptance must always be communicated to the offeror in order for it to be effective. C. True D. False

A. True D. No Chapter 1 - Q15

With regard to the terms of a contract, answer the following: Where a contract is in writing, will the courts allow the parties to rely on any terms that are agreed between them but not embodied in the written document? A. Yes B. No Can a term implied by custom and practice be overridden by a written term? C. Yes D. No

A. Yes C. Yes Chapter 1 - Q21

Can the following constitute valid consideration? The payment of £1 per year as rent for a house A. Yes B. No A promise by Adam not to pursue his action for breach of contract against Ben, if Ben agrees to do Adam's accounts for him for 12 months without charge C. Yes D. No

A. Yes C. Yes Chapter 1 - Q25

A contractual offer may be terminated by: Rejection A. Yes B. No Lapse of time C. Yes D. No

A. Yes C. Yes Chapter 1 - Q35

With regard to factors that need to be taken into account by the court when determining whether a duty of care exists in cases of professional misstatement: Is the purpose for which the statement was made relevant to the court? A. Yes B. No Will the court consider whether it is just and equitable to impose a duty of care? C. Yes D. No

A. Yes C. Yes Chapter 4 - Q18

Reg is a bus driver and is bound by his employer's rules that say that he must not race other bus drivers. However, he does so and causes personal injury to Tabatha who is crossing the road. Is Reg acting in the course of his employment? A. Yes B. No Is Reg's employer vicariously liable for his act? C. Yes D. No

A. Yes C. Yes Chapter 4 - Q24

When hearing a case of professional misstatement, the court will consider a number of factors to determine whether a 'special relationship' exists between the parties: Will the court consider the special skill of the defendant? A. Yes B. No Will the court consider whether the defendant knew or should have known that the claimant would rely on the advice? C. Yes D. No

A. Yes C. Yes Chapter 4 - Q32

Some situations will cause a contract to be discharged by frustration. A manor house which was hired for a wedding reception is destroyed by fire a week before the wedding. Is this contract discharged by frustration? A. Yes B. No A boat supplier in England has a contract to supply boats to a foreign country. However, due to tensions between the nations, the contract has become subject to a number of onerous legal requirements that make it difficult, but not impossible, to perform the contract. Is this contract discharged by frustration? C. Yes D. No

A. Yes D. No Chapter 2 - Q16

Tim, an accountant, prepares financial statements for MarkUp plc, knowing that the company was considering three takeover bids, including one from Growth plc. There was no disclaimer of liability in the accounts. In the event that Tim prepares the statements negligently, indicating that the company is financially secure when it is not, and Growth plc takes over MarkUp plc on the basis of those accounts: Can Growth plc recover any resulting losses it makes on the takeover? A. Yes B. No Will Tim be liable to pay damages to the other takeover bidders where they were also identified to him as potential takeover bidders who would be relying on the accounts? C. Yes D. No

A. Yes D. No Chapter 4 - Q15

Zak owes Eve £100. Finding that he has insufficient cash, Zak offers Eve his bicycle worth £90 instead. Eve accepts. Which of the following statements best describes the legal position as to whether there is valid consideration? A. Yes, Eve was not already entitled to the bicycle so it is sufficient consideration for waiver of the debt B. No, he bicycle is not sufficient as it does not match or exceed the value of the debt C. No, consideration must be in money or money's worth D. Yes, a bicycle constitutes sufficient consideration because it has an identifiable value

A. Yes, Eve was not already entitled to the bicycle so it is sufficient consideration for waiver of the debt Chapter 1 - Q27

On 1 February, Harry posts a letter to Beth offering to sell his car. On 2 February, Beth receives Harry's letter. On 3 February, Harry changes his mind and posts a letter to Beth telling her that the car is no longer for sale. On the same day, Beth posts a letter to Harry accepting the offer contained in his letter of 1 February. On 4 February, Beth receives Harry's letter informing her that the car is no longer for sale. Is there a valid contract between Beth and Harry regarding the sale of Harry's car? A. Yes, acceptance took place on 3 February and Harry's revocation took place on 4 February B. No, Harry revoked the offer before Beth posted her acceptance C. Yes, Harry cannot revoke the offer once it has been communicated to Beth D. No, Harry's revocation took place on 3 February so Beth's acceptance is too late

A. Yes, acceptance took place on 3 February and Harry's revocation took place on 4 February Chapter 1 - Q34

Foul Foods Ltd, a company specialising in the production and sale of cream cakes on an industrial scale, bought a large oven from Ovens & Co intending to extend their existing business to include the production of pizza bases. The delivery of the oven was three months later than the contract date. During those three months Foul Foods Ltd tried unsuccessfully to buy another oven. Foul Foods Ltd has claimed for its lost profits in the following two ways: 1) Profits which would have been made from the expected increase in business following their increased capacity; and 2) Profits which they would have made from a lucrative contract for the supply of pizza bases to a nationwide supermarket chain for which they would have been able to bid. Is Foul Foods Ltd's claim for its lost profits likely to be successful? A. Yes, but only the lost profits from the expected general increase in trade are recoverable, not those from the loss of the lucrative supermarket contract B. No, in accordance with the rules governing the award of damages for breach of contract both losses are too remote C. Yes, the lost profits from the expected general increase in trade and the loss of the lucrative supermarket contract are recoverable D. No, as Foul Foods Ltd have failed to mitigate its losses

A. Yes, but only the lost profits from the expected general increase in trade are recoverable, not those from the loss of the lucrative supermarket contract Chapter 2 - Q13

Are the following statements true or false? For an agency by estoppel to arise, there must be a pre-existing agency relationship between the principal and the agent. A. True B. False When an individual revokes the authority of their agent they should inform the third parties, who regularly deal with the agent, of the change in circumstances in order to prevent the former agent having any continuing authority to act on their behalf. C. True D. False

B C Chapter 3 - Q13

Martha tells John that she wants to buy one of his horse sculptures on behalf of her grandmother, Lady Reynolds. In fact, Lady Reynolds has not asked her to do so. Three months later, John contacts Lady Reynolds to say that he has completed a bronze stallion and it is ready for collection on the payment of £10,000. Lady Reynolds denies all knowledge of it and refuses to pay. Can John sue Lady Reynolds on the contract? A. Yes B. No Can John sue Martha under the tort of deceit? C. Yes D. No

B C Chapter 3 - Q18

Are the following statements regarding agency law true or false? The duties of an agent are limited to what was agreed and incorporated into the agency contract between agent and the principal. A. True B. False An agent and their principal have a fiduciary relationship between them. C. True D. False

B C Chapter 3 - Q24

Are the following statements true or false? On ratification of an agent's contract by a principal, the third party may then choose whether to enforce the contract against the agent or the principal. A. True B. False Ratification can only validate an agent's past acts and will not endow any future authority. C. True D. False

B C Chapter 3 - Q5

Brian has just terminated his appointment of Livvi, who has been his agent for the past six months. The written contract of agency did not mention anything about remuneration and Brian relies on this when he refuses to pay her in respect of her services. He does, however, accept that he must reimburse her for £5,000 expenses that she has paid along the way. Can Brian rely on the written contract to claim that no remuneration is payable to Livvi? A. Yes B. No Is Livvi entitled to retain the goods belonging to Brian that she has in her possession until he pays her the sums owed to her? C. Yes D. No

B C Chapter 3 - Q8

Are the following statements true or false? When a company applies for registration, a copy of its proposed articles of association must be supplied to the Registrar of Companies. A. True B. False A certificate of incorporation is conclusive evidence that a company is registered in accordance with the Companies Act 2006. C. True D. False

B C Chapter 5 - Q10

Quentin sets up a new company, Simple Solutions Ltd, to continue his existing business. Before Simple Solutions Ltd is incorporated, he enters into a contract on its behalf for the purchase of stock with payment to be made 30 days later. When the payment date arrives, the newly registered company has no cash available because it has also committed large funds to taking a lease of its new premises. Can the seller of the stock enforce the contract against Simple Solutions Ltd? A. Yes B. No Can the seller enforce the contract against Quentin? C. Yes D. No

B C Chapter 5 - Q12

Mark is the company secretary of Top Tents Ltd, a private company limited by shares. He seeks your advice on the following matters: Must the company provide a directors' remuneration report? A. Yes B. No Must he file accounts and reports within nine months after the end of the relevant accounting reference period? C. Yes D. No

B C Chapter 5 - Q17

In some cases, the court lifts the corporate veil, for example to ignore the incorporated nature of a business altogether in those cases where it appears to be nothing but a sham. Are the courts likely to lift the corporate veil in the following situations? Where the creditors of a subsidiary company are unlikely to receive settlement of their debts even though the holding company is financially very secure? A. Yes B. No Where a company is registered in England and Wales but all its members, except one, belong to Neverland, a country with which England is at war? The company has five members with equal shareholdings. C. Yes D. No

B C Chapter 5 - Q2

Richard is applying to register a new company called Original Ideas Ltd, which has a share capital of £100 (100 shares at £1 nominal value). As part of the application, does Richard need to submit a statement of guarantee? A. Yes B. No As part of the application, does Richard need to submit a statement of proposed company officers? C. Yes D. No

B C Chapter 5 - Q7

Alice, acting as Petra's agent, contracts with Toni to purchase Toni's car. Under agency law, who may sue and be sued on the contract? A. Alice and Toni B. Petra and Toni C. Alice and Petra D. Alice, Toni and Petra

B Chapter 3 - Q23

Frank acts as an agent for Marilyn, purchasing silk nightwear from a number of different suppliers. Sometimes the suppliers pay a commission on orders placed with them by Frank on behalf of Marilyn. Frank regards the commissions as a perk of the job and keeps them. Which of the following best describes the legal position? A. The commissions are regarded as bribes and Marilyn should report Frank to the police. B. Marilyn may dismiss Frank and recover the amount of commissions retained by him. C. Commissions are customarily retained by an agent as part of his remuneration and so Frank has no liability in respect of them. D. Marilyn can take action against the suppliers for directing the commissions to Frank instead of her.

B Chapter 3 - Q6

A company's confirmation statement must contain all of the following options except one. Which is the exception? A. Prescribed particulars of the directors and any company secretary B. Details of resolutions passed by the company C. Details of people with significant control D. A description of the type of company and its principal business activities

B Chapter 5 - Q18

Albert entered into a pre-incorporation contract on behalf of Stir Ltd. By whom and against whom may the contract be enforced? A. By and against the company only B. By and against Albert only C. By the company and against Albert D. Against the company and by Albert

B Chapter 5 - Q21

Within what time period following the end of the relevant accounting reference period must a public limited company file its accounts and reports? A. Five months B. Six months C. Seven months D. Nine months

B Chapter 5 - Q8

Preparing for her 40th birthday party, Scarlett went into Choice Wines and ordered three cases of pinot noir, saying that she was buying them in her capacity as agent for Dame Hilda, a well-known celebrity who lived in the same village and who was planning a summer ball in the grounds of her country house. Choice Wines supplied the wine and then invoiced Dame Hilda. Is there an agency by holding out or estoppel? A. Yes B. No Can Choice Wines demand payment from Dame Hilda? C. Yes D. No

B D Chapter 3 - Q3

With regard to the duties owed by an agent: Is an agent entitled to delegate the tasks that they are appointed to undertake, as they see fit? A. Yes B. No Is an agent at liberty to reveal details about their principal discovered during the course of the agency relationship, once that relationship has ended? C. Yes D. No

B D Chapter 3 - Q7

Paddy arranges for the registration of New Style Ltd. Before the company is incorporated, he enters into a contract on its behalf for the purchase of premises at a prime retail location. When the time comes for completion of the purchase, the vendor refuses to complete the transaction with New Style Ltd (which is now incorporated) as a matter of principle, because it dislikes some of the merchandise that New Style Ltd proposes to sell. Can New Style Ltd enforce the contract against the vendor? A. Yes B. No Can New Style Ltd ratify the contract for the purchase of the premises? C. Yes D. No

B D Chapter 5 - Q11

Are the following statements true or false? A company's articles of association can be altered by the passing of an ordinary resolution unless there is a provision for entrenchment, in which case a special resolution is required. A. True B. False A company may provide that a provision for entrenchment cannot be repealed. C. True D. False

B D Chapter 5 - Q14

Leo and Seamus are planning to set up a public company selling electrical goods at discounted rates. They ask for your advice on the following matters: Can it be an unlimited company? A. Yes B. No Can the company commence trading once it is incorporated, provided they obtain a trading certificate within the first 12 months following incorporation? C. Yes D. No

B D Chapter 5 - Q4

Raheem is visiting Karl's office. Whilst he is there he sees a photocopier that Karl no longer needs. Raheem offers Karl £500 for the photocopier and Karl accepts. Raheem pays Karl, loads the photocopier into his van and drives away. Which type of consideration is present in the contract between Raheem and Karl? A. Past B. Executed C. Executive D. Executory

B. Executed Chapter 1 - Q38

Are the following statements true or false? An acceptance of a contractual offer sent by email takes effect as soon as the person accepting the offer presses the 'send' key. A. True B. False Whether or not postal acceptance is within the contemplation of the parties is a question of face and may be deduced from all the circumstances. C. True D. False

B. False C. True Chapter 1 - Q17

In relation to the intention to create legal relations: The parties to social or domestic agreement are presumed to have intended the agreement to be legally enforceable, although this intention is rebuttable. A. True B. False The parties to a commercial agreement are presumed to have intended the arrangement to be legally enforceable. C. True D. False

B. False C. True Chapter 1 - Q31

Are the following statements true or false? To be effective, a revocation of an offer must be made in writing. A. True B. False To be effective, a revocation can be made by an authorised agent of the offeror. C. True D. False

B. False C. True Chapter 1 - Q37

Where it can be shown that A owes B a contractual duty of care, it follows that a duty of care is also owed in tort. A. True B. False In a claim for negligent misstatement, it will be harder for a sophisticated investor to satisfy the court that an auditor owes them a duty of care. C. True D. False

B. False C. True Chapter 4 - Q30

Are the following statements true or false? If an offer states that it will remain open for three months, the offeror cannot revoke it before three months have passed. A. True B. False A letter of revocation is effective when posted. C. True D. False

B. False D. False Chapter 1 - Q12

The equitable remedy of specific performance can be awarded in cases involving: The performance of personal services A. True B. False A contract to build a house C. True D. False

B. False D. False Chapter 2 - Q14

Are the following statements true or false? Under contract law, parties to a contract are required to substantially perform their obligations. This is sufficient to prevent the other party from seeking redress if they are not happy with their performance. A. True B. False Breach of contract occurs in all cases where one party to a contract fails to perform their contractual obligations. C. True D. False

B. False D. False Chapter 2 - Q18

Are the following statements true or false? Damages for breach of contract are primarily intended to restore the injured party to the same position they were in at the time when the contract was made. A. True B. False The claimant is required to take every opportunity to mitigate their loss arising as a consequence of a breach of contract. C. True D. False

B. False D. False Chapter 2 - Q5

Are the following statements true or false? An auditor who is responsible for an auditor's report containing materially false or misleading information commits an offence under the Companies Act 2006 that is punishable by a fine and/or imprisonment. A. True B. False A liability limitation agreement between a company and its auditor limiting potential liability for negligence in the course of auditing accounts is automatically void. C. True D. False

B. False D. False Chapter 4 - Q16

The Unfair Contract Terms Act 1977 provides that a person who is acting in the course of a business cannot exclude liability for any consequences of any negligent act on their part. A. True B. False The Unfair Contract Terms Act 1977 does not apply to a clause excluding liability for negligence which has agreed between two businesses. C. True D. False

B. False D. False Chapter 4 - Q21

James contracted to buy a rare sports car from Jeremy for £23,000 but refused to take delivery as agreed. Jeremy, who had recently bought the car for £20,000, was able to sell the car to Richard for £24,100, but sued James for breach of their contract. Which of the following best describes the legal position? A. Jeremy is entitled to recover £23,000 from James, that being the agreed contract price and there being no excuse for James' breach B. Jeremy is entitled to nominal damages only since he has been able to sell the car for greater profit C. Jeremy is entitled only to recover from James the £20,000 that he had in fact paid for the car himself since he was able to sell the car on for profit following the breach by James D. James is no longer in breach of contract because Jeremy has mitigated his loss totally

B. Jeremy is entitled to nominal damages only since he has been able to sell the car for greater profit Chapter 2 - Q7

Josephine was one of two directors (who were also members) of Tone-Up Ltd, a supplier of health and fitness products. She did the administrative work in relation to setting up the company. She included a provision in its articles that Tone-Up would always employ her as its company secretary on a salary of £12,000 p.a. She also had a separate contract appointing her as company secretary, but it made no mention of remuneration or termination. After a year, Tone-Up Ltd appointed John as company secretary and Josephine sued the company for breach of contract because the articles had been contravened and, she argued, the articles have contractual effect. Can Josephine rely on the articles to compel Tone-Up Ltd to pay her £12,000 p.a. in the absence of a term in her contract, during her period of office as company secretary? A. Yes B. No Can Josephine rely on the contractual effect of the articles to seek redress for breach of contract? C. Yes D. No

A D Chapter 5 - Q13

Simon is a solicitor employed by Xcel Ltd. He also owns 5% of the shares in the company. His contract is silent as to remuneration but Xcel Ltd's articles provide that the company's solicitor will receive £10,000 p.a. In August, the company passes a resolution altering the articles to reduce the solicitor's remuneration to £8,000 p.a. and to require all members to purchase 50 more shares at £5 each. Is the alteration of the articles to reduce the solicitor's remuneration effective? A. Yes B. No Is Simon, in his capacity as company member, required to take up the extra 50 shares? C. Yes D. No

A D Chapter 5 - Q15

With regard to the statutory books and records of a registered company limited by shares, answer the following: Is a company required to keep a register of its directors' residential addresses? A. Yes B. No Is a company required to keep a register of debenture holders? C. Yes D. No

A D Chapter 5 - Q16

Nat, Jay and Meena are in the process of forming a company, Harwin, a company limited by guarantee, and will be subscribers to the company. They understand that they are required to complete a memorandum of association as part of the formation process. As part of the memorandum of association, will Nat, Jay and Meena be required to complete a statement that says they wish to form a company? A. Yes B. No As part of the memorandum of association, will Nat, Jay and Meena be required to complete a statement that says they agree to take at least one share each? C. Yes D. No

A D Chapter 5 - Q19

Under the Companies Act 2006 essential requirements for registration as a private company limited by shares by the Registrar of Companies include the submission of: The memorandum of association A. Yes B. No A section 761 trading certificate C. Yes D. No

A D Chapter 5 - Q22

A properly appointed company secretary usually has the authority to: Sign contracts connected with the administrative side of a company's affairs, such as employing staff and ordering cars A. True B. False Sign contracts connected with the purchase of property on behalf of a company C. True D. False

A D Chapter 5 - Q23

Micro-entities do not have to file a profit and loss account with the Registrar. A. True B. False Micro-entities do not have to file notes to the accounts with the Registrar. C. True D. False

A D Chapter 5 - Q26

Powell is applying to register a new company First Step Ltd. He is currently preparing the statement of capital and initial shareholdings but is unsure of what he needs to include. Does Powell need to include the details of individual classes of share? A. Yes B. No Does Powell need to include information on whether rights of pre-emption apply to each class of share? C. Yes D. No

A D Chapter 5 - Q28

Minimus plc is a public company but is not listed on a stock exchange. It is the parent company of a number of subsidiaries and produces group accounts. Are the following statements true or false? Minimus plc is required to produce a consolidated directors' report. A. True B. False Minimus plc is required to produce a directors' remuneration report. C. True D. False

A D Chapter 5 - Q29

Ashley and George, the directors of Pending Ltd, a fantastically successful company with a high public profile, plan to re-register their company as a public limited company. They have never had a company secretary before because Ashley has always dealt with that side of things. The company has a share capital of £50,000. Do they need to appoint a company secretary? A. Yes B. No Do they need to increase the share capital of the company? C. Yes D. No

A D Chapter 5 - Q5

Brenda writes to Carol on 1 January offering to sell her gold necklace for £100. Carol receives the letter on 3 January and on 5 January posts a letter accepting Brenda's offer and sends a cheque for £100. In the meantime, however, Brenda has sold the necklace to her sister Daisy for £150 believing that Carol wasn't interested. She wrote to Carol telling her this on 4 January but the letter wasn't received by Carol until 6 January. Brenda received Carol's cheque on 7 January. Which of the following is true? A. Carol's acceptance is effective on 5 January B. Brenda's offer is revoked on 4 January C. Carol's acceptance is effective on 7 January D. There is no binding agreement between Brenda and Carol

A. Carol's acceptance is effective on 5 January Chapter 1 - Q20

Which of the following statements is incorrect? A. If the defendant succeeds in arguing res ipsa loquitur, the burden of proof is then on the claimant to show negligence B. In arguing res ipsa loquitur, it must be shown that the thing that caused the damage was under the management and control of the defendant C. Res ipsa loquitur is relevant where the reason for the damage is not known D. Whether a breach of the duty of care has occurred is a matter of fact

A. If the defendant succeeds in arguing res ipsa loquitur, the burden of proof is then on the claimant to show negligence Chapter 4 - Q4

Which of the following statements correctly describes privity of contract? A. Individuals and businesses only have rights and obligations under a contract if they are a party to it B. To be valid, contracts must contain agreement, consideration and intention to create legal relations C. Consideration must be sufficient but need not be adequate D. Contractual terms are a private matter to be decided by the contracting parties

A. Individuals and businesses only have rights and obligations under a contract if they are a party to it Chapter 1 - Q39

Which of the following companies is not required to appoint an auditor? A. A small-sized insurance company B. A medium-sized company C. A quoted company D. A not-for-profit company that is subject to public sector audit

D Chapter 5 - Q27

Natasha holds all relevant qualifications in horse and stable management. She runs a stable yard and has a team of college students to help at the yard, including transferring horses from the stables to the field and vice versa. One day, Becky, a student, went to collect a horse and was kicked in the head. She suffered serious injury. Shortly after this incident, a similar incident happened at the yard of a top showjumper. Reacting to this later incident, the Horse Society issued a direction that all yard owners should ensure that their grooms and helpers always wear suitable headgear when turning out or catching horses. After reading this, Becky's parents decide to sue Natasha for negligence. In the context of negligence: Is the Horse Society guidance relevant to the standard of care owed by Natasha? A. Yes B. No Is the standard of care owed by Natasha that of an ordinary reasonable man guided by those considerations that normally regulate the conduct of human affairs? C. Yes D. No

B. No D. No Chapter 4 - Q8

On Monday, George offers to sell his piano to Hilda for £1,500 , to be delivered on Thursday. On Tuesday, Hilda replies, saying that she will only buy the piano if George will delay the delivery until the following Monday. George doesn't reply but sells his piano to Ivy on Thursday. On Friday, Hilda sees George and accepts his offer. Is there a binding contract between George and Hilda? A. Yes, Hilda's reply on Tuesday constitutes an acceptance of the offer B. No, Hilda's reply on Tuesday constitutes a counter offer which destroys the original offer C. No, the offer is terminated when George sells the piano to Ivy on Thursday D. Yes, Hilda's reply on Tuesday is a request for information only and on Friday she accepts his offer

B. No, Hilda's reply on Tuesday constitutes a counter offer which destroys the original offer Chapter 1 - Q9

Tina, a trainee accountant, was approached by Kevin, the husband of Tina's senior colleague, Jill, at an office party. Kevin asked her for some professional advice. Flattered that he had asked her rather than Jill, Tina obliged. However, her advice was flawed. Is she liable for the resulting loss suffered by Kevin? A. No, because she is only a trainee B. No, because the advice was not given in a professional context C. Yes, because she knows him and assumes responsibility for her advice D. Yes, because she owes a duty of care for which the standard is that of a reasonable qualified accountant

B. No, because the advice was not given in a professional context Chapter 4 - Q14

Rustom owned shares in Target plc. In January 20X0 he bought a further 10,000 shares in Target plc after reading the following: (1) A newspaper column by Tipster which stated that Target plc was a company which would benefit from the predicted rise in house prices in 20X0 (2) A post card sent by a friend, Carl, who stated that he had paid for his holiday with his dividends from Target plc (3) The annual accounts of Target plc which had been signed off by Target's auditors, Laylem LLP Within a month of Rustom buying the extra shares Target plc went into insolvent liquidation and he wants to know if any of Tipster, Carl or Laylem LLP owe him a duty of care in respect of his purchase of the 10,000 shares. A. Tipster, Carl and Laylem LLP all owe Rustom a duty of care B. None of Tipster, Carl or Laylem LLP owe Rustom a duty of care C. Only Laylem LLP owe Rustom a duty of care D. Both Carl and Tipster owe Rustom a duty of care

B. None of Tipster, Carl or Laylem LLP owe Rustom a duty of care Chapter 4 - Q27

In which of the following scenarios is there insufficient consideration for a waiver of rights by Oscar where Humphrey owes him £1,000 to be paid on 13 May? A. Oscar agrees to accept a car instead B. Oscar agrees to accept £980 on 13 May in cash C. Oscar agrees to accept £980 from Humphrey's sister in full satisfaction of the debt D. Humphrey agrees to pay Oscar £700 on 1 May

B. Oscar agrees to accept £980 on 13 May in cash Chapter 1 - Q28

Which of the following statements in relation to contractual remedies is incorrect? A. Specific performance is awarded at the discretion of the court where damages would not be an adequate remedy B. Specific performance is likely to be more appropriate than damages in a contract involving personal services C. Specific performance is likely to be awarded in a contract for the sale of land D. A mandatory injunction often has the same result as specific performance but is less common

B. Specific performance is likely to be more appropriate than damages in a contract involving personal services Chapter 2 - Q9

Siegfried employs Marij to plan and build a go-kart course on his field which he intends to open to the public on 1 May. His viability and market research studies lead him to expect that he will earn £300 per day in the first three months of business. Marij contracts to construct the course and surrounding areas according to certain plans and specifications and to complete the work by no later than 30 March for a contract price of £10,000. The contract provides that Marij will be liable to pay Siegfried £150 for every day work overruns the scheduled completion date. Which of the following best describes the legal position? A. The provision is for unliquidated damages and is valid because it is less than the anticipated loss B. The provision is for liquidated damages and is valid because the figure is not penal in nature and protects Siegfried's legitimate interest C. The provision is void because it states a sum in excess of 1% of the total contract price D. The provision is likely to be void because the same amount is payable regardless of the actual loss

B. The provision is for liquidated damages and is valid because the figure is not penal in nature and protects Siegfried's legitimate interest Chapter 2 - Q8

Anton is learning to drive with his father, when he mistakenly goes into reverse gear instead of first gear, and hits a pedestrian on the road behind him. Although he is moving very slowly, the elderly and frail pedestrian suffers bruising, but also a heart attack induced by the shock. She dies within minutes. Which of the following best describes the legal position? A. The standard of care owed by Anton is that of a reasonable learner driver and the fact that she is especially vulnerable is irrelevant B. The standard of care owed is that of a reasonable driver and it is irrelevant that she was especially vulnerable C. The standard of care owed is that of a reasonable learner driver but the fact that she was especially vulnerable means that a higher standard will be applied D. The standard of care owed is that of a reasonable driver but the fact that she was especially vulnerable means that a higher standard will be applied

B. The standard of care owed is that of a reasonable driver and it is irrelevant that she was especially vulnerable Chapter 4 - Q7

Reece's parked car was damaged by the negligent driving of Jack on 1 January 20X0. He understands that there is a limitation period in regards to claiming damages in respect of tortious acts. On which date will Reece be prevented from putting in a claim for the damages to his car? A. 1 January 20X3 B. 1 January 20X4 C. 1 January 20X5 D. 1 January 20X6

D. 1 January 20X6 Chapter 4 - Q19

When an employee commits a tort his employer may be found to be vicariously liable. Which of the following best describes vicarious liability? A. Vicarious liability arises when the employee's tort is committed in the course of his employment. The principal purpose of the imposition of vicarious liability on an employer is to punish the employer for employing a negligent employee. B. Vicarious liability arises when the employee's tort is committed in the course of his employment. The principal purpose of the imposition of vicarious liability on an employer is to ensure the victim of the tort has a solvent person against whom the victim can bring a claim. C. Vicarious liability arises when the employee commits a tort irrespective of whether it is committed in the course of their employment. The principal purpose of the imposition of vicarious liability on an employer is to punish the employer for employing a negligent employee. D. Vicarious liability arises when the employee commits a tort irrespective of whether it is committed in the course of their employment. The principal purpose of the imposition of vicarious liability on an employer is to ensure the victim of the tort has a solvent person against whom the victim can bring a claim.

B. Vicarious liability arises when the employee's tort is committed in the course of his employment. The principal purpose of the imposition of vicarious liability on an employer is to ensure the victim of the tort has a solvent person against whom the victim can bring a claim. Chapter 4 - Q28

Which of the following terms describes a contract where one party may set it aside, but property transferred before avoidance is usually irrecoverable from a third party? A. Void B. Voidable C. Unenforceable D. Valid

B. Voidable Chapter 1 - Q2

Which of the following descriptions best describes the statutory test of reasonableness under the Unfair Contract Terms Act 1977? A. Whether an ordinary person in the normal course of business would consider the clause to be reasonable in all the circumstances B. Whether it is fair and reasonable, with regard to all the circumstances which were, or which ought to have been known to the parties when the contract was made C. Whether it is fair and reasonable with regard to all the circumstances which were known to or in the reasonable contemplation of the parties D. Whether it is fair and reasonable to exclude liability, having regard to the relative bargaining strengths of the parties

B. Whether it is fair and reasonable, with regard to all the circumstances which were, or which ought to have been known to the parties when the contract was made Chapter 2 - Q12

Which of the following is irrelevant in determining whether a duty of care exists? A. Whether it is fair that the law should impose a duty on the defendant B. Whether the defendant intended to cause injury to the claimant C. Whether it was reasonably foreseeable that the claimant might suffer damage as a result of the defendant's actions D. Whether there is sufficient proximity between the parties

B. Whether the defendant intended to cause injury to the claimant Chapter 4 - Q3

On Monday, Peter writes to Quentin offering to sell his car to Quentin for £900. Peter's letter is received the next day. On Wednesday, Peter posts a letter to Quentin saying that he has changed his mind. Later that day, Quentin speaks to Peter and says that he accepts his offer. Is there a valid contract between Peter and Quentin? A. No, because Peter posted his revocation before Quentin accepted the offer B. Yes, because Quentin accepts the offer before he receives Peter's letter of revocation C. No, because Quentin's acceptance should have been in writing since the offer was made in writing D. Yes, because Quentin's acceptance is made in a more expeditious manner that the offer

B. Yes, because Quentin accepts the offer before he receives Peter's letter of revocation Chapter 1 - Q16

A contract between two businesses included a clause restricting the potential liability of the seller if the goods supplied were not of satisfactory quality. The seller was a large multinational plc, the buyer a small retail shop that operates as a private limited company. Can the seller rely on this clause if they supply unsatisfactory good to the buyer? A. No, because the buyer is in a weaker position than the seller B. Yes, but only if the clause passes the reasonableness test set out in the Unfair Contract Terms Act (UCTA) 1977 C. Yes, the clause applies because there are no restrictions on the terms that can be agreed in a business-to-business contract D. No, because exemption clauses do not apply to the sale of unsatisfactory goods

B. Yes, but only if the clause passes the reasonableness test set out in the Unfair Contract Terms Act (UCTA) 1977 Chapter 2 - Q17

Amanda, Sophia and Nadia are in partnership, in the name of InStyle, providing interior design services to commercial clients. Sophia is a keen gardener and has advertised garden design and landscaping services, also in the name of InStyle. She has even carried out some gardening work and always puts up an InStyle sign at the entrance to the premises where she is working and Amanda and Nadia have not objected to Sophia putting up the sign and have not tried to stop her. In fact, they have welcomed the extra income for the partnership. When Sophia damages a valuable statuette while carrying out some landscaping works, the owner threatens to sue the partnership. Which of the following best describes the legal position? A. InStyle is not liable because Sophia's implied usual authority relates to the interior design work only. B. InStyle is not liable because Sophia is wrongly using the partnership name for what is effectively her own business. C. InStyle is liable because Sophia has ostensible authority to carry out gardening services on behalf of InStyle. D. InStyle is not liable because ostensible authority cannot arise without active representation on the principal's part; inactivity is not enough.

C Chapter 3 - Q10

Barry, Kevin and Oscar were the directors of Suresend Ltd. No managing director had been appointed but Kelvin and Oscar were well aware that Barry behaved as if he were Suresend Ltd's managing director. In particular Kelvin and Oscar knew that Barry entered into contracts on behalf of the company, including regularly hiring cars and requiring valeting services from Fastfleet Ltd. Kelvin and Oscar have now discovered that Barry has just entered into a contract with Fastfleet Ltd to service all Suresend's delivery vans and lorries. Kelvin and Barry do not wish Suresend Ltd to proceed with this contract with Fastfleet Ltd and claim that Barry had no authority to enter into the contract and have written to Fastfleet to this effect. Which of the following best describes the legal position? A. Suresend is not bound because it provided written revocation of the authority given to Barry. B. Suresend is not bound because Barry did not have actual authority. C. Suresend is bound because Barry had ostensible authority. D. Suresend is bound because Fastfleet relied on Barry's representations.

C Chapter 3 - Q11

Abigail agrees to let her flat to Xavier for one day for the purpose of viewing a carnival. Xavier pays her a £50 deposit with £80 due to be paid at the end of the carnival. Die to civil unrest, the government prohibits all street entertainment and the carnival is cancelled just before Xavier is due to travel to the flat. Neither party has incurred any costs (save for payment of the deposit) in performance of the contract. Applying the Law Reform (Frustrated Contracts) Act 1943, which of the following statements is correct? A. Abigail can keep the deposit but cannot claim the balance B. Abigail can keep the deposit and Xavier is liable to pay the balance C. Abigail must pay back the deposit and Xavier need not pay the balance D. Abigail can keep the deposit and Xavier must pay an additional £15 so that each party bears an equal loss

C. Abigail must pay back the deposit and Xavier need not pay the balance Chapter 2 - Q2

Which of the following types of contract must be in writing or evidenced in writing? A. A partnership agreement B. A contract for the sale of goods C. An agreement for the transfer of land D. An employment contract

C. An agreement for the transfer of land Chapter 1 - Q1

Campbells, a firm of accountants, prepared annual accounts for Thespians plc. The director of Moneymakers Ltd, which held shares in Thespians plc, saw the accounts and, as a result, the company lent Thespians plc £100,000 to finance its new premises. In fact, the accounts had been prepared negligently and Thespians plc was actually facing mounting debts. Since there was no disclaimer of liability in the audit report, Moneymakers Ltd sued Campbells. Which of the following best describes the legal position regarding Campbell's potential liability to Moneymakers Ltd? A. Campbells is liable because it owes a duty of care to potential lenders B. Campbells is liable because it knew that Moneymakers Ltd was a shareholder and would therefore have sight of the accounts C. Campbells is not liable because the accounts were not prepared for the purpose of enabling people to decide whether or not to lend to the company D. Campbells is not liable because such a lender should have investigated the accounts and concluded that they were inaccurate

C. Campbells is not liable because the accounts were not prepared for the purpose of enabling people to decide whether or not to lend to the company Chapter 4 - Q12

Which of the following statements best describes consideration? A. Consideration must be adequate and sufficient B. Consideration must be adequate but need not be sufficient C. Consideration must be sufficient but need not be adequate D. Consideration need be neither sufficient not adequate

C. Consideration must be sufficient but need not be adequate Chapter 1 - Q24

Luka caused an injury to Martha when he lost control of his car due to his dangerous driving. Luka potentially has a liability in: A. Tort and contract only B. Crime and contract only C. Crime and tort only D. Crime, tort and contract

C. Crime and tort only Chapter 4 - Q33

Susan is a newly qualified accountant employed in an accountancy firm, Calculator LLP. Susan advised Tariq on his tax affairs and Tariq lost a substantial sum of money. Tariq wants to bring a claim for this loss. Which of the following is correct? A. He could sue Susan if her advice was incorrect B. He could Sue Calculator LLP if Susan's advice was incorrect C. He could sue Susan or Calculator LLP if Susan's advice was negligent D. He could sue neither Susan nor Calculator LLP since his loss was purely financial

C. He could sue Susan or Calculator LLP if Susan's advice was negligent Chapter 4 - Q26

A local newspaper advertises "50 Whizzalong scooters remaining. 3 feet high. Only £20 each." Which legal term best describes the advert? A. Offer B. Statement of intention C. Invitation to treat D. Supply of information

C. Invitation to treat Chapter 1 - Q6

Gary intends to promise Carl that he (Gary) will pay the bets owed to Carl by Duncan, in the event that Duncan fails to pay them himself. Which of the following is true with regard to Gary's proposed guarantee so that it will be enforceable in a court of law? A. It must be by deed B. It must be in writing C. It can be oral provided it is evidenced in writing D. It can be oral only

C. It can be oral provided it is evidence in writing Chapter 1 - Q3

Zoe was employed to give one lunchtime recital per month at a prestigious eating venue in London. Her contract contained a provision that she would stay behind and meet with appreciative members of the audience after the recital, as part of the venue's aim of making music more accessible and less elitist. After about 18 months, Zoe's recitals had become very popular but she was always keen to get away quickly after each performance. The manager offered her £50 (on top of her recital fee) if she would stay behind and meet with appreciative members of the audience for up to an hour after each recital. Can Zoe enforce the promise to pay her the extra £50? A. Yes. It is a fresh promise that the manager chose to make B. Yes, because the contractual provision had become redundant through its non-observance C. No, because she was obliged to perform that duty anyway D. No. It was simply a goodwill gesture and is not intended to be legally binding

C. No, because she was obliged to perform that duty anyway Chapter 1 - Q26

Monster Mowers Ltd agrees to sell one of its ride-on mowers to Geoff in the knowledge that Geoff is taking on new customers from Percy, a commercial gardener, who is retiring and that Geoff is unable to cope with the increased workload with his present mower. The company fails to deliver the mower until 10 days after the due date for delivery and Geoff is forced to continue working with his old mower as best he can. As a result he is unable to complete all the contracts he has agreed with Percy's old customers. He is also unable to accept an offer from the local botanical gardens to be their grass-cutting contractor for the next 12 months because he cannot begin work immediately. Which of the following statements best describes the legal position of Monster Mowers Ltd? A. The company would be entitled to assume that Geoff could perform his contracts without the new mower and will not be liable for damages as a result B. The company will be liable for damages in respect of breaches of Geoff's contracts with existing customers but not the new customers from Percy's business C. The company will be liable for damages in respect of breaches of Geoff's contracts with all his customers but not in respect of the botanical gardens' potential contract as this was not a normal loss and the company was not aware of it D. The company will be liable for damages on respect of breaches of contract with all his customers and for the lost contract with botanical gardens since this was a reasonably foreseeable part of Geoff's business plans with his new mower.

C. The company will be liable for damages in respect of breaches of Geoff's contracts with all his customers but not in respect of the botanical gardens' potential contract as this was not a normal loss and the company was not aware of it Chapter 2 - Q4

Mr and Mrs Higgins own two flats in Bristol which they let to students. When their eldest son, Crispin, was offered a place at Bristol University to read Law, he and his parents entered into a tenancy agreement allowing him to reside at one of the flats during his university studies for a rent of £190 per month. He was allowed to sublet the second bedroom for a rent of £200 per month. In the light of the rebuttable presumption that no intention to create legal relations exists in the case of a family, social or domestic arrangement, which of the following statements best describes the legal position as to whether the necessary intention to create legal relations exists in this instance? A. No, because it is a family or domestic arrangement and so no such intention is presumed B. No, because the fact that Crispin pays a reduced rent is evidence that no such intention exists C. Yes, the normal presumption in family arrangements is rebutted by the fact that the parties enter into a written agreement and rent is payable D. Yes, because the normal presumption does not apply where the arrangement relates to property

C. Yes, the normal presumption in family arrangements is rebutted by the fact that the parties enter into a written agreement and rent is payable Chapter 1 - Q22

An accountant has given incorrect tax advice to one of their clients. The error on the part of the accountant constituted negligence. Do they face potential liability in: A. contract only? B. tort only? C. contract and tort? D. neither contract nor tort, but in misrepresentation?

C. contract and tort? Chapter 4 - Q10

With regard to company directors and directors' powers, are the following statements true or false? The duties owed by a de facto director are the same as those of a properly appointed director. A. True B. False If a director's appointment is subsequently found to have been defective, their actions are invalidated as a results. C. True D. False

Chapter 6 - Q1

Richard and Don owned 55% of the issued shares in Fasttrack Ltd. They learned that its directors Shivani and James were in talks with Ultrasonic Ltd in respect of a takeover of Fasttrack by Ultrasonic Ltd. They made known their views to the directors which were that the takeover would be disastrous in the long term for Fasttrack Ltd's business. Shivani and James disagreed and so they allotted some shares to Ultrasonic Ltd in order to reduce Richard's and Don's shareholdings to less than 50% (and not for the purpose of raising capital). Which of the following best describes the legal position? A. The allotment is valid because it is done within the powers granted to directors. B. The allotment is valid because directors have ultimate control of management decisions. C. The allotment is invalid as it is a principle of company law that the wishes of the majority prevail and in this Richard and Don were majority shareholders. D. The allotment is invalid because the directors have exercised their powers for a collateral purpose of destroying an existing majority.

Chapter 6 - Q10

The Companies Act 2006 provides that a director must avoid a situation in which he has a direct or indirect interest that conflicts with the interests of the company, unless it is authorised by the company's other directors. Assuming that the articles do not invalidate any purported authorisation by the directors: Can directors authorise such a conflict in a private company? A. Yes B. No Can directors authorise such a conflict in a public company (in the absence of any express provision in the articles)? C. Yes D. No

Chapter 6 - Q11

Farah is a director of In Tunes Ltd, a company selling modern sheet music and a small range of musical instruments. He is also an FCA with 20 years' experience as an accountant in private practice. Nathaniel is also a director. He ran his own retail business for 10 years but doesn't play much part in the management of the business of In Tunes Ltd, except that he attends board meetings. He tends to leave the routine conduct of the business in the hands of Farah and Amy, the finance director. Is Farah's personal skill and experience as a chartered accountant relevant to the standard of care that he must demonstrate as a company director? A. Yes B. No Is Nathaniel acting in breach of his director's duty to exercise reasonable care, skill and diligence, since he has not concerned himself with the company's affairs in between board meetings? C. Yes D. No

Chapter 6 - Q12

The managing director of King Kitchens Ltd presents a proposal to the board of directors for the purchase of the complete stock of Integral Inspirations Ltd, which is being wound up. Neville, one of the directors, is also a director of Integral Inspirations Ltd. In view of the possible conflict of interest, he discloses his interest to the board. Assuming there is nothing in the company's articles of association: Does Neville need to obtain the approval of the board? A. Yes B. No Does Neville need to obtain the approval of members in general meeting? C. Yes D. No

Chapter 6 - Q13

Are the following statements true or false? From the time when a director vacates office, they cease to be subject to any statutory duties as a company director. A. True B. False Where a director enters into a contract with the company, in breach of their duties, the contract is rendered voidable at the option of the company. C. True D. False

Chapter 6 - Q14

Are the following statements true or false? A sole director may also be company secretary but cannot also hold the position of the company's auditor. A. True B. False Subject to specific exceptions, a director should be at least 18 years old. C. True D. False

Chapter 6 - Q2

Bertie and Craig each own 30% of the shares in Vintage Cars Ltd. Digby owns 20% and Noel, the finance director, owns 20%. Bertie and Craig have become increasingly frustrated by Noel's apparent lack of vision for the company and are annoyed by a number of silly mistakes that he has made recently. They wish to remove him from the board of directors. Digby is undecided. Can Bertie and Craig remove Noel from the board without Digby's support? A. Yes B. No If Noel is removed from office, will his removal effect a lawful termination of his service contract as finance director? C. Yes D. No

Chapter 6 - Q3

The Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 require certain companies to make disclosures in regards to their emissions, energy consumption and energy efficiency. Which type of organisation do these regulations apply to? A. All limited companies and partnerships B. Large limited companies and large LLPs C. Quoted companies only D. Quoted companies, large unquoted companies and large LLPs

D Chapter 5 - Q30

Simon and his fellow directors Mark and Tom each own 100 of the 300 shares in Simple Pies Ltd. Under the articles of association, where a resolution is proposed to remove a director, that director is entitled to three votes per share. Mark and Tom vote to remove Simon but when a poll is taken, Simon defeats the resolution by 300 votes to 200. Which of the following best describes the legal position? A. Simon has not been removed because the weighted voting rights have been validly given and validly exercised. B. Simon has been removed because the article giving weighted voting rights contravenes the Companies Act 2006 which enables a director to be removed on the passing of an ordinary resolution with special notice. C. Simon has not been validly removed because the articles would effectively mean that a director could never be removed. D. Simon has been validly removed because voting should not have been conducted by a poll on a resolution to remove a director.

Chapter 6 - Q4

Are the following statements true or false? A company must state its objects in its constitution, because directors can only exercise their powers in pursuance of those objects. A. True B. False Directors are agents of the members of the company for the purposes of managing the company's business. C. True D. False

Chapter 6 - Q5

Jude is a director of Hebblestone plc. He is keen to ensure that he fulfils all his duties as a director and understands that one of the statutory duties of a director under the Companies Act 2006 is the duty to promote the success of the company. As part of the duty to promote the success of the company, is Jude required to consider the impact of the company's operations on the community and the environment? A. Yes B. No As part of the duty to promote the success of the company, is Jude required to consider the desirability of maintaining a reputation of high standards of business conduct? C. Yes D. No

Chapter 6 - Q6

Frank is a director of Bridalwear Ltd. He has never been appointed as managing director formally, but for the past 10 years he has conducted the day-to-day business of the company as if he had been. The other directors and shareholders, Flora and Gail, have never objected as they have considered him to be doing a marvellous job. One day, a little out of character, he decides that the company should branch into selling floral bouquets and buttonholes for weddings as a sideline. He contracts to buy oasis and baskets to the value of £3,000. A. Frank has acted with express authority as Flora and Gail allow him to do anything. B. Frank has acted within his implied incidental authority, as the contract is incidental to the company's bridal wear business. C. Frank has acted within the ostensible authority of a managing director to enter into all commercial contracts in relation to the company's business. D. Frank has acted within his implied usual authority as managing director.

Chapter 6 - Q7

Mork is the managing director of Parallels Ltd, a company that deals in weird and wonderful gadgets. His co-directors and shareholders, Patik and Asif agree that he should buy some kaleidoscopes up to a total value of £200. Mork finds a supplier of kaleidoscopes, Weird Ltd that is offering a particular model of kaleidoscope new to the market. Mork thinks that the product is just fabulous and orders £275 worth. When the invoice arrives, Patik and Asif refuse to pay it because Mork has exceeded his authority. Which of the following best summarises the legal position? A. Parallels Ltd is not bound because Mork has acted beyond his authority. B. Weird Ltd cannot enforce the contract, although it acted in good faith. Mork's authority was limited and Weird should have asked for evidence of his authority. C. Parallels Ltd is bound because Mork had implied authority to enter into the contract. D. Weird Ltd can enforce the contract because it dealt with Parallels Ltd in good faith.

Chapter 6 - Q8

Are the following statements true or false? The statutory duty of a director to disclose any interest that they have in a proposed transaction or arrangement with the company does not apply to shadow directors. A. True B. False A director may not exercise their powers except for the purpose for which they were conferred. C. True D. False

Chapter 6 - Q9

Stephen lives near an isolated headland in Cornwall. One day, he sees a Rolls Royce parked on the beach. No one is in sight but the tide is coming in rapidly. Stephen calls his neighbour and arranges for him to come and tow the Rolls Royce up the beach to safety. The neighbour is happy to oblige but wants payment for what he has done. When the owner, Anthony, returns, he refuses to pay because he says the action was not necessary. Which of the following best describes the legal position? A. An agency of necessity has arisen because Stephen is unable to contact Anthony. B. An agency of necessity has arisen because there is an emergency situation and a pressing need for action. C. No agency of necessity has arisen because the Rolls Royce is not a perishable good and Stephen's action was not reasonable. D. No agency of necessity has arisen because there is no pre-existing contractual relationship between Stephen and Anthony.

D Chapter 3 - Q2

Mark incorporates his sole trader business, King Kilts, which manufactures high quality tartan kilts and sporrans, under the name King Kilts Ltd. He lent King Kilts Ltd £20,000 and owns 95% of its shares. He continued to insure the company's assets, including the factory, in his own name, as he had always done before incorporation. On New Year's Eve, the factory was destroyed by fire. Which of the following best describes the legal position? A. Mark can claim on the insurance because King Kilts Ltd is essentially no different from the original business B. Mark can claim on the insurance because he has an insurable interest as a creditor of King Kilts Ltd C. Mark can claim on the insurance because he has an insurable interest as a member of King Kilts Ltd D. Mark cannot claim on the insurance because the insurance is not effected in the name of King Kilts Ltd and the company has the insurable interest

D Chapter 5 - Q1

Craig is the company secretary of Lotsaland Ltd. He regularly negotiates contracts for the company for the acquisition of small development plots and then passes the file on to the managing director, Malcolm, who enters into the contract on behalf of the company. Feeling under pressure to secure a particularly good deal on a site during Malcolm's sabbatical, Craig enters into a contract for Lotsaland Ltd to borrow £15,000 so that it can secure the deal. When Malcolm returns, he is not happy with the borrowing arrangement made by Craig. Which of the following best describes the legal position? A. Lotsaland Ltd is bound because Craig has ostensible authority to enter into the contract B. Lotsaland Ltd is bound because Craig has the implied actual authority of a company secretary C. Lotsaland Ltd is not bound by the borrowing contract, because the lender should have checked whether Craig had sufficient authority D. Lotsaland Ltd is not bound because Craig lacked sufficient authority

D Chapter 5 - Q20

Zebra & Co is a firm accountants whose audit clients include Widget plc. During the course of Widget plc's last audit Zebra & Co sent a new recruit, Oliver, to check Widget plc's stock control systems; Oliver failed to notice some irregularities in the procedures adopted by Widget plc. Relying on the published accounts which Zebra & Co had approved, Priya bought shares in Widget plc. Within a month the shares had dropped in value by £4,000 and Priya wants to sue Zebra & Co to recover her loss. Which of the following best represents Priya's position? A. She can sue Zebra & Co because the firm owes her a duty of care and Oliver failed to notice the flaws in the stock control system B. Even though Zebra & Co owes her a duty of care she cannot sue Zebra & Co unless she can prove that Oliver's failure to spot the flaws caused her loss C. She can sue Zebra & Co because the firm owes her a duty of care and Oliver must be judged by the standard of a more experienced accountant D. She cannot sue Zebra & Co because the firm does not owe a duty of care to potential purchasers of shares in Widget plc

D. She cannot sue Zebra & Co because the firm does not owe a duty of care to potential purchasers of shares in Widget plc Chapter 4 - Q29

All of the following options, except one, must be shown by a claimant in order to succeed in an action for negligence. Which is the exception? A. That the defendant owed them a duty of care B. That the defendant was in breach of a duty of care C. That the claimant suffered injury, damage or loss as a result of a breach of a duty of care D. That the damage was not too remote

D. That the damage was not too remote Chapter 4 - Q5

Matt runs a small hotel. One of his friends, Louise, decorated two of the bedrooms for him, as a surprise, when he was away on holiday. On his return, Matt was delighted and agreed to give her a laptop in consideration for all her work. As a separate matter, he also agreed to pay Louise's brother, Adam, the sum of £300 to fit new lights and sockets in the bedrooms. Adam performs the work. When Louise and Adam come to collect the laptop and the money Matt refuses to give them either. Which of the following statements is correct? A. The contract with Louise is valid; the contract with Adam is valid B. The contract with Louise is valid; the contract with Adam is invalid C. The contract with Louise is invalid; the contract with Adam is invalid D. The contract with Louise is invalid; the contract with Adam is valid

D. The contract with Louise is invalid; the contract with Adam is valid Chapter 1 - Q33

Ralph writes to Theo offering to buy Theo's sand yacht for £300. In his letter, he writes "If I do not hear from you, I shall consider it mine and pick it up on Tuesday." Which of the following best describes the legal position as to whether or not a contract exists? A. There is a contract because Ralph waived the need for acceptance B. There is a contract because Theo complied with Ralph's terms exactly C. There is a contract because acceptance can be inferred from Theo's conduct D. There is no contract because there is no positive act to indicate acceptance

D. There is no contract because there is no positive act to indicate acceptance Chapter 1 - Q13

All of the following statements, except one, were established by, or relevant to, the landmark case of Donoghue v Stevenson, which involved an allegation that there had been a decomposing snail in a bottle of ginger beer? Which is the exception? A. No contractual relationship is necessary to found an action for negligence B. There must be a sufficient degree of proximity or neighbourhood between the parties C. A manufacturer could owe a duty of care to a person who did not actually buy its goods D. There should be a special relationship of some sort between the parties

D. There should be a special relationship of some sort between the parties Chapter 4 - Q6