BUSINESS LAW AC4005

3. Which of the following statements relating to criminal and civil law is correct?
A. A criminal case may subsequently give rise to a civil case, but a civil case cannot
subsequently give rise to a criminal case.
B. The main purpose of civil law is to compensate the injured party and to punish the injuring
party
C. A custodial sentence can be passed on the defendant in a civil case, providing the defendant
is a natural person and not an incorporated body
D. The main purpose of civil law is to enforce the claimant's rights rather than to punish the
defendant.

Law of Obligation 1
Week 3 Seminar - Questions

1. What is the legal effect of the following statement in a local newspaper?

‘Second hand bicycle for sale. In good condition. Comes with a full size rear mud guard and
an adult medium size cycle helmet. Only £500.’

a) The statement is an offer for sale.

b) The statement is a ‘mere puff or boast’.
c) The statement has no legal effect.
d) The statement is an invitation to treat.

2. In which TWO of the following contracts will intention to create legal relations be
presumed?

a) A contract between a man and his cousin in relation to the transfer of property between
them.
b) A contract between two friends for one to wash the other’s car.
c) A contract between a mother and son for the son to pay the mother housekeeping money
whilst he lives at home and attends university.
d) A contract of employment between an employer and an employee.
3. Which of the following statements regarding the adequacy and sufficiency of
consideration is correct?

a) Consideration does not need to have a value to be sufficient

b) Consideration is sufficient if it has some economic value
c) Consideration does not need to be sufficient but must be adequate
d) None of the above

Consider the following cases:

4. Mike and John are work colleagues. Mike offers to sell his bicycle to John for £350. John is
unsure but, as he is leaving work for the day, asks Mike if he can tell him by 9am the next day.
Mike agrees. Later that night John meets Steven, a reliable mutual friend, who tells him that
Mike has decided to keep the bicycle. John visits Mike at 8.30am and accepts the offer.

Is there a contract?

a) Yes, because the revocation has not been communicated.

b) No, because revocation can be communicated by a reliable third party.
c) Yes, because Mike has agreed to keep the offer open.
d) No, because the promise to keep the offer open was just a favor.
 BUSINESS LAW AC4004
Week 4 Seminar - Questions

1. Which of the following is not a way in which a contract can be discharged?

a) Discharge by performance
b) Discharge by breach of contract
c) Discharge by frustration
d) Discharge by individual choice

2. Which of the following is not a type of loss that is usually recoverable under the tort
of negligence?
a) Damage to property
b) Injury
c) Pure economic loss
d) None of the above

3. Which of the following is a common law remedy for breach of contract in the context
of contract law?
a) Specific performance
b) Action for the prize
c) Damages
d) Injunction

4. To which of the following remedies for breach of contract is the term ‘quantum meruit’
associated?
a) Specific performance
b) Action for the prize
c) Damages
d) Injunction
17. Under which circumstance will a court reduce the award of damages to a claimant?
A. The claimant intervened in the chain of causality
B. A natural event occurred which caused additional damage
C. The claimant contributed to the loss he suffered
 BUSINESS LAW AC4005
Seminar Questions: Employment Law

Multiple Choice Questions

1. A number of tests are generally used by the courts to determine if a person is an

employee or an independent contractor.

Which one of the following is not a test considered by the court when determining
employment status?

a) The control test

b) The integration test
c) The economic reality (multiple test)
d) The factual test

2. If an independent contractor acts negligently whilst undertaking a job who can

the injured party sue?

a) The injured party will be unable to sue

b) The employer for vicarious liability
c) The employer under breach of contract
d) The independent contractor

3. When is an employee entitled to receive the particulars of his/her employment?

a) After one month
b) As soon as employment commences
c) After two months
d) After completing the probation period

4. Which of the following is not a term implied in employment contracts by

Common law?

a) The employer has an implied duty to take reasonable care of the employee’s
health and safety at work
b) The employer must pay reasonable remuneration to employees
c) Employers have a duty to provide a reference for an employee
 d) Employees must have reasonable competence to fulfill their job role

5. Which of the following is not a term implied in employment contracts by Statute?

a) Employees have a right not to be unfairly dismissed

b) Parents of children under seventeen have the right to request flexible
working arrangements
c) Employees have protection against discrimination, harassment or
victimization
d) Employees have a right to be indemnified against legal liabilities or
necessary expenses incurred during employment.
 BUSINESS LAW AC4005
Seminar Questions: Company Law (Management)

Multiple Choice

1. What is the minimum age at which a director can be appointed, as required by the Companies
Act 2006?

a) 16
b) 18
c) 21

2. A company director has several duties. They owe their statutory duty to:
a) The board of directors
b) The company as a whole
c) The members only

3. Which of the following is not a statutory duty of directors in company law?

a) To act within their powers
b) To avoid conflict of interest
c) To protect shareholder value

4. Which of the following best describes the director who has responsibility for the overall
day to day management of the company?
a) A shadow director
b) A chief executive officer
c) Alternate director

5. If a director has been dismissed from his post and the company wishes to pay him
compensation as a result. Who must approve the payment to the director?
a) HMRC
b) The board of directors
c) The shareholders in a general meeting
6. Which of the following statements in relation to company secretaries is FALSE?
a) Company secretaries do not have statutory duties
b) All companies must have a company secretary
c) Company secretaries require the express authority from the board to enter into
commercial contracts

7. How many days’ notice does an annual general meeting require?

a) 7 days
b) 14 days
c) 21 days

Consider the following cases:

8. Lena was appointed as company secretary of Hale plc. She was suitably qualified and had
several years of work experience as a company secretary. Following her appointment, she
entered into the two contracts in the name of Hale plc:

I. An agreement to rent a car from Vroom plc, which she used for non-business
related purposes

II. An expensive and long-term contract with Fix It plc for the maintenance of
their all in one printer, photocopier and fax machine.

Required:

a) As a company secretary, Lena has authorities. What are these?

Company secretaries have two main types of authorities base on which they can enter the
company into contracts concerned with the administration of the company:
+) Express authority – delegated by the board
+) Implied authority – normal function of the secretary to enter into
contracts of administrative nature

b) Explain whether the agreements entered into by Lena are binding on Hale plc.

Yes, the agreements entered into by Lena will be binding on Hale plc because the singing of
both contracts is under the implied authority of the secretary. This means, Lena is certainly
entitled to sign contracts connected with the administrative side of the company’s affairs.
Therefore, the Hale plc are legally binding and liable.
Regarding case: Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd
[1971] 3 All ER 16 (Court of Appeal)

Cả 2 hđ đều thuộc implied authority of secretary-> the Hale plc have legally binding and liable
9. A company bought some chairs from a firm. At the time of the contract, one of the company’s
directors was a partner in the firm from which the chairs were being bought, but this was not
known to the company.

Is the director in breach of his duties?

Case Aberdeen Railway v Blackie (1854)

Yes, the director violated section 176 of the statutory duties of the company director. he will
be entitled to a share of the revenue from the company with which he is a partner, but at the
time of signing the contract he did not tell the company where he is the director of the company
that he is a member of the company. partner company.

10. As the managing director of a company, a man accepted a bribe from a supplier with the
intention that all future supplies needed by the company would be ordered from that supplier.
Once the company found out, he was dismissed.
a) Directors have three main types of duties, what are these?
->Director has three main types of duties:

+) Duty of skill and care - common law duty (reasonable competence) (gđ phải có năng
lực, kĩ năng và sự qtam đối với cty)

+) Statutory duty - required to disclose certain matters (page 486)

+) Fiduciary duty - a duty imposed upon certain persons because of the position of trust
and confidence in which they stand in relation to each other. Directors act as agents of the
company

These are included:

· Act within powers.

· Avoid conflicts of interest.

· Exercise reasonable skill, care and diligence

· Not to accept benefits from third parties.

· Promote success of the company.

· Exercise independent judgment.

· Declare interest in the proposed transaction.

b) Which duty was the managing director in breach of?

The managing director breach of fiduciary duty (duty of loyalty) because he accepted a bribe
with the aim of benefiting the supplier.

(Accepted a bribe from a supplier with the intention that all future supplies needed by the
company would be ordered from that supplier). Regarding case Boston Deep Sea Fishing
and Ice Co v Ansell (1888) 39 ChD 339
 BUSINESS LAW AC4005
Seminar Questions: Company Law (Liquidation)

1. Complete the diagram below to provide an outline of the options available to

companies in financial difficulty.

2. Provide a brief explanation of each of the categories identified in Question 1 above.

3. Island Life Ltd is being wound-up due to a members’ voluntary liquidation. The role
of the liquidator is to make payments to persons owed.

Requirements:

Rank the following persons in the order in which they will be paid by the liquidator:

· Ordinary shareholders.
· Preference shareholders.
· An employee who is owed holiday pay of £800.
· HMRC – which is owed corporation tax of £12,000.
· Barclays Bank – which has a charge on the company’s head office in Leeds.
· Natwest Bank – which has a charge over all the company’s current assets.

4. Jumping Jacks ltd is a well-established company that hosts indoor and outdoor children’s
parties. Due to poor performance in the last financial year, the company has seen a fall in
their revenue whilst incurring significant costs in staff wages, rent and debt interest. The
directors have blamed bad weather for the reduction in their revenue but with very sunny
weather predicted over the summer period, they hope that business will improve.
Nevertheless, the directors are concerned that the company may not be able to survive
for another year and are contemplating liquidation or administration.

In your opinion, which is the most suitable option for the company and why?
5. John is a majority shareholder in three companies. He has approached you for some advice
in respect of these companies:

i. Links ltd is a private trading company and a supplier invoice for £3,000 is
still outstanding 3 months after a formal written demand was served.

ii. Tangit ltd was registered as a private company two years ago but for
commercial reasons, they have not commenced business. It is likely that the
business will remain dormant for a few more years.

iii. Due to administrative issues, Best plc has not yet obtained a trading certificate
although they registered as a public company 11 months ago.

Requirements:
a) For each of John’s companies above, explain whether there are grounds for
compulsory liquidation by the court.

i, Yes, based on Section 122(1)(e) and section 123(1)(a) of the Insolvency Act 1986 lists:

- The company is unable to pay its debts (s. 122(1)(e))

- A creditor who is owed at least £750 has served a written demand for payment
and the company has failed to pay the sum due within 3 weeks (s. 123(1)(a))

ii, Yes, based on Section 122(1)(d) of the Insolvency Act 1986 lists:
- The company does not commence its business within a year of its incorporation
or suspends its business for a whole year (s. 122(1)(d))

iii, No, based on Section 122(1)(b) of the Insolvency Act 1986 lists:
- A public company has not been issued with a trading certificate within a year of
incorporation (s. 122(1)(b))

b) State three people who may petition the court for a compulsory liquidation?
- A credit who is owned at least 750
- The company itself
- A contributory – any person who is liable to contribute to the assets of a company in the event
it liquidation
- An official receiver – this is a civil servant in the Insolvency Services and is an Officer of the
Courts
-The Dept. for Business, Enterprise and Regulatory reform.
5 cái này đều là compulsory liquidation, chọn 3 cái nào ra cũng đc
 Đề 1:
I. Multiple choice questions
1. Which one of the following is the highest court in England?
A. The Court of Appeal.
B. The Supreme Court (House of Lords).
C. The High Court.
D. The Crown Court.

2. Consideration need not be adequate but must be:

A. Money.
B. Sufficient.
C. Of equivalent value to the goods.
D. Accepted.

3. In the event of a breach of contract, what is the purpose of damages?

1. To punish the contract breaker.
II. To compensate the innocent party.
III. To put the innocent party in the same position as if the contract had been carried out
correctly.
A. (l) only.
B. (Il) and (III) only.
C. (III) only.
D. (1). (Il) and (III).

4. Which one of the following is not an essential element of the tort of negligence?
A. A duty of care owed to the claimant.
B. A breach of the duty of care.
C. An intention to cause loss or injury.
D. Loss or injury caused by the defendant's breach.

5. In the context of employment law and statutory protection for the self-employed, which of
the following statements is correct?
A. The self-employed are entitled to a minimum wage
B. The self-employed are entitled to a minimum notice period
C. The self-employed are entitled to protection from unfair dismissal
D. There is no statutory employment protection available to the self-employed

6. Which of the following statements is correct about employer's liability?

I. An employer is vicariously liable for the torts of employees committed in the course of their
employment.
II. An employer is vicariously liable for the torts of independent contractors, if they were
committed whilst carrying out work for the employer.
A. (I) only.
B. (lI) only.
C. Both (I) and (Il).
D. Neither (I) nor (I).
Explain: employer: người sử dụng lđ
Employee: người lao động đi làm và có hợp đồng
independent contractors(self-employed): làm việc độc lập tức là làm việc cho employer nhưng
được tự làm theo ý mình trong 1 time nhất định và sau khi xong công việc là hoàn thành
I. Employer phải chịu trách nhiệm gián tiếp đối với những hành vi sai trái của employee trong
quá trình làm việc của họ
II. Employer nói chung không phải chịu trách nhiệm gián tiếp đối với những hành vi sai trái
của self-employed vì họ được coi là các thực thể riêng biệt chịu trách nhiệm về hành động của
chính họ

7. An employer must provide an employee with a written statement of particulars of the

employment:
A. Within one month of the employment commencing.
B. As soon after the commencement of employment as possible.
C. Within two months of commencement of employmentes0
D. Within a reasonable time of the employment commencing.

8. A company's contractual capacity before incorporation is limited in that it may:

A. Only make contracts necessary to form the company.
B. Only ratify, once formed, contracts necessary to form the company.
c. Only make or ratify, once formed, contracts necessary to form the company.
D. Not make or ratify, once formed, any contract even if necessary to form the company.

9. A fixed charge is:

A. A charge over specific company property that prevents the company from dealing freely
with the property in the ordinary course of business.
B. A charge over a class of company assets that enables the company to deal freely with the
assets in the ordinary course of business
C. A charge over specific company property that enables the company to deal freely with the
assets in the ordinary course of business
D. A charge over company land enabling the company to deal freely with the land in the
ordinary course of business.

10.Which one of the following statements is correct about the company secretary?
A. Both a public and a private company must have a company secretary.
B. The company secretary is appointed by the members.
C. In a public company the company secretary must be qualified.
D. Company secretaries can bind companies in a contract if acting outside their actual or
apparent authority.
11. In the English legal system, which two of the following are the parties involved in a civil
case?
A. Prosecution and Claimant
B. Prosecution and Accused
C. Accused and Defendant
D. Claimant and Defendant (C&D)

12. Which of the following statements about damages for breach of contract is correct?
A. In order to claim damages an innocent party is required to take reasonable steps to mitigate
their losses
B. Damages are not payable in relation to mental distress
C. Damages to rectify a defect are still payable even if they are wholly disproportionate to the
size of the breach
D. Damages in the form of a penalty clause are valid and enforceable

13. A director who has not been validly appointed but is held out by the company to be a
director is called:
A. De facto director
B. De jure director
C. Alternate director
D. Shadow director

14. What is the name given to the person in charge of a voluntary winding-up of a company?
A. Administrator
B. Receive
C. Charger
D.Liquidator

15. Before it can trade, which of the following criteria must a public company meet?
A. Its shares must be listed on a stock exchange
B. It must have appointed an auditor
C. It must obtain a trading certificate from the Registrar of Companies
D. It must have appointed a secretary

II. Tự Luận
Question 1:
test.
a) Identify and explain the three tests that are used to distinguish an employee from an
independent contractor. Give one example of case law to illustrate each

The distinction between an employee and an independent contractor is important in

determining the rights, responsibilities, and liabilities of individuals in the context of
employment relationships. There are various tests used to make this determination, and here
are three commonly applied tests along with examples of case law:
 - Control Test: Is there evidence to show that the employer has control over the way in
which a person does their work. (This test is inappropriate for skilled workers)

- Example: In the case of Ready Mixed Concrete (South East) Ltd v Minister of Pensions
and National Insurance [1968] 2 QB 497, the court held that individuals driving lorries
for the company were independent contractors. Despite the company's control over the
delivery schedules and routes, the drivers had the freedom to choose how they carried
out the deliveries, providing their own vehicles and hiring assistants. This level of
independence indicated a contractor relationship.

- Integration Test:Is there evidence to show that the person is considered to be an

integral part of the business. (This test can be difficult to apply as a sole criterion)

- Example: In the case of Market Investigations Ltd v Minister of Social Security [1969]
2 QB 173, the court found that interviewers engaged by the company were independent
contractors. The interviewers were engaged on a project-by-project basis and had the
flexibility to work for other organizations. This lack of integration into the company's
business indicated an independent contractor relationship.

- Economic Reality Test: Consider whether the employee is working on their own
account. Under this test the court takes all the significant factors (detailed in previous
slide) into account.

- Example: In the case of Autoclenz Ltd v Belcher and Others [2011] UKSC 41, the
Supreme Court held that car valeters engaged by the company were employees despite
contractual terms stating they were self-employed. The court looked beyond the written
agreements and examined the economic reality of the relationship. The valeters had no
real opportunity to increase their income, were required to perform the work personally,
and were economically dependent on the company, indicating an employment
relationship.

Conclusion: It's worth noting that the application of these tests may vary depending on
jurisdiction and specific circumstances. It's important to consult relevant case law and seek
legal advice for a comprehensive understanding of the distinction between employees and
independent contractors in a particular context.

(20 marks)
b) Henry is a majority shareholder in three companies. Such companies have faced difficulties
with their business and Henry has approached you, as a lawyer, to give him some legal advice.
His concern is whether or not there is sufficient ground in each case for compulsory winding-
up by the court.
1. Middle East Ltd. is a private trading company. This company owed £5,000 to a supplier of
office equipment. The supplier has served a formal written demand on the company 2 months
ago and the company fails to pay the debt.
2. New Heaven Ltd. was registered as a private company. For personal conflicts, the directors
of the company quarreled bitterly, leading to the deadlock in management and inability to make
business decisions.
3. For administrative reasons, Paradise PIc. was registered as a public limited company 9
months ago but it has not yet been issued with a trading certificate.
(15 marks)

Đáp án nè

1. Yes, based on Section 122(1)(e) and section 123(1)(a) of the Insolvency Act 1986
lists:
- The company is unable to pay its debts (s. 122(1)(e))
- A creditor who is owed at least £750 has served a written demand for payment
and the company has failed to pay the sum due within 3 weeks (s. 123(1)(a))

Meanwhile, Middle East Ltd owed an office equipment supplier £5,000 and after two
months the company failed to pay the debt.
Therefore, based on the above grounds, there are enough grounds for the court to issue
a judgment to compulsory winding-up of Middle East Ltd.

2. No, because in the Insolvency Act 1986, there are no provisions related to personal
conflicts between directors in the company leading to a deadlock in operations, unable
to make business decisions. This is not sufficient grounds for compulsory winding-up
for New Heaven Ltd.

3. No, based on Section 122(1)(b) of the Insolvency Act 1986 lists:

- A public company has not been issued with a trading certificate within a year of
incorporation (s. 122(1)(b))

Meanwhile, Paradise PIC. has not yet been issued with a trading certificate for 9
months, which is less than 1 year. Therefore, there are still not enough grounds for
compulsory winding-up for New Heaven Ltd.

Question 2:
a) Distinguish between a company and a partnership.
(20 marks)

A company is a legal entity that is separate and distinct from its owners. It can enter into
contracts, sue or be sued, and own assets in its name.

A partnership, on the other hand, is an association of two or more people carrying on a business
with a view to profit.
Partnerships do not have separate legal identities and are personally liable for the debts and
obligations of the partnership.

In a company, the shareholders are not personally liable for the debts of the company and their
liability is limited to the amount of capital they have invested.

Parameters Company Partnership Firm

Legal entity Separate and distinct from its owners Not separate from the owner's
Thực thể pháp lý Tách biệt và khác biệt với chủ sở hữu Không tách rời khỏi chủ sở
của nó hữu

Liability Shareholders have limited liability Partners have unlimited

Trách nhiệm pháp lý Cổ đông chịu trách nhiệm hữu hạn personal liability
Đối tác có trách nhiệm cá
nhân vô hạn

Management Managed by a board of directors Managed by the partner's

Sự quản lý Được quản lý bởi một ban giám đốc Được quản lý bởi đối tác

Ownership Owned by shareholders Owned by the partner's

Quyền sở hữu Thuộc sở hữu của các cổ đông Thuộc sở hữu của đối tác

Continuity of Has perpetual existence Depends on the partnership

existence Có sự tồn tại vĩnh viễn agreement
Sự tồn tại liên tục Phụ thuộc vào thỏa thuận hợp
tác

Raising capital Can raise capital through the sale of Generally limited to the
Huy động vốn shares partners' capital
Có thể huy động vốn thông qua bán cổ Thường giới hạn ở vốn của đối
phần tác

b) Andrew is the managing director of a company. He has the power to conclude contracts for
sale of goods. He accepted a bribe from a supplier with the intention that all future supplies
needed by the company would be ordered from that supplier. In fact, the price of goods
provided by this supplier is higher than others' in the market.
Is the managing director in breach of his duties? If so, which duty was the managing
director in breach of? Explain the reason.
(15 marks)

Yes, the managing director in this scenario is in breach of his duties. Specifically, he is in
breach of his fiduciary duty in Companies Act 2006.
A fiduciary duty is a legal obligation that requires individuals in positions of trust and authority
to act in the best interests of another party. In this case, as the managing director of the
company, Andrew has a fiduciary duty to act in the best interests of the company and its
shareholders.

By accepting a bribe from a supplier and intentionally favoring that supplier for all future
supplies, Andrew is prioritizing his personal gain (the bribe) over the best interests of the
company. This action undermines the principle of fairness and impartiality that is expected of
a managing director.

Có thời gian thì viết thêm:

Furthermore, by ordering goods from a supplier whose prices are higher than others in the
market, Andrew is not acting in the best interests of the company. As a fiduciary, he is expected
to make decisions that promote the financial well-being and profitability of the company.
Selecting a supplier with higher prices without any legitimate reason or benefit to the company
constitutes a breach of this duty.

Andrew's actions not only demonstrate a breach of his fiduciary duty but also involve
corruption and potential conflicts of interest. Accepting a bribe compromises his integrity and
undermines the trust placed in him as a managing director. Such behavior can have severe legal
and ethical consequences and may result in legal action, termination, or other disciplinary
measures.
Đề 3:
Question 2: Vic, a full ACCA member, is the sole director of Envy Ltd, a wholesaler of books.
Last year he employed Div to act as Envy Ltd's company secretary. Vic believed that Div had
all the necessary knowledge and experience needed to do the job. One day, Vic was away on
business, Div entered Envy Ltd into a contract with Green Ltd to buy a consignment of tablet
computers that would be resold as electronic books. Vic was not happy about this and intends
to avoid the contract with Green Ltd, remove Divas company secretary and appoint himself to
the role.
a) State whether Envy Ltd is required to have a company secretary
b) Stale whether Envy L4 is bound by the contract to buy tablet computers

a. No, Section 270 provides that a private company is not required to have a secretary.
Therefore, Envy Ltd does not need to have one

b. No, The powers of the company secretary have been very limited, but the common law
increasingly recognizes that they may be able to act as agents in some circumstances.
They may enter the company into contracts connected with the administrative side of
the company: Case Panorama Developments (Guildford) Ltd v Fidelis Furnishing
Fabrics Ltd 1971. Envy Ltd will not be bound by the contract because it is commercial,
rather than administrative

Question 3:
Floral Exotic Ltd, a company selling plants, has a large number of debts but continues to trade.
Kerry has supplied large quantities of fertilizer to Flora Exotic Ltd out, despite several
reminders, their account for £5,000 has not been paid. Advise Kerry, who wishes to petition
the court to have Flora Exotic Ltd wound up.
- The Insolvency Act 1986 lists a number of grounds on which a company may be wound
up, one of which is that the company is unable to pay its debts. As a creditor, Kerry can
apply for a court order of compulsory liquidation.
- Kerry will have to prove that Flora Exotic Ltd cannot meet its debts. She can do this by
proving the value of the company’s total assets is less than its total debts. Alternatively,
she can serve a statutory notice on FE Ltd at its registered office, requiring payment of
the debt of £5,000, and if it is not paid within 21 days (3 weeks) FE Ltd will be regarded
as unable to meet its debts.