ACCA F4 Global Variant flashcards – set 2

See also ACCA F4 Global Flashcards: Set 1 | Set 2 | Set 3 | Set 4


ICC is the abbreviation for:

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International Criminal Court or International Chamber of Commerce

In the definition of a contract, the word “agreement” can be divided into two distinct elements.
What are those elements?

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Offer and acceptance

There are three essential elements of a contract. Two of them are “consideration” and “intention”.
What’s the third element?

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Agreement

There are three essential elements of a contract. Two of them are “agreement” and “intention”. What’s the third element

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Consideration

Is it true that death of the offeror has the effect that the offer is no longer capable of acceptance?

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No! If the offer does not involve the personality of the offeror, then it’s the notification of the death which makes the offer no longer capable of acceptance (not the death itself)

What are liquidated damages?

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Liquidated damages are a genuine pre-contractual estimate of damages
which would be suffered in the event of a breach and the amount is written as a term of the contract

What sort of remedy is “specific performance”?

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Specific performance is an equitable remedy

What sort of remedy is “damages”?

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Damages is a common law remedy

What sort of remedy is “injunction”?

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Injunction is an equitable remedy

What sort of remedy is “rescission”?

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Rescission is an equitable remedy

What sort of remedy is “rectification”?

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Rectification is an equitable remedy

“Tort is an example of breach of contract”
Is this statement true?

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It’s false – tort is NOT a breach of contract

So far as auditors are concerned, which tort is (unfortunately) most likely to affect them?

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The tort of negligence

“A director who has reached the age of 70 is disqualified from continuing to hold office as a director of a public company”
Is this statement true?

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No, but the director must seek re-election every year after attaining the age of 70

In a company with 1,000 members, what is the MINIMUM number of members who must vote in favour in order to pass a special resolution?

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No! Just one! I didn’t say that everyone voted!

What is the minimum number of members required in a private company?

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1 is the minimum number of members required in a private company

The case R v Orr is a case illustrating which principle?

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In a situation where the strict application of the concept of the veil of incorporation would lead to an injustice, the Court is prepared to lift the veil

The case Daimler v Continental Tyre and Rubber is a case illustrating which principle?

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In a situation where the strict application of the concept of the veil of incorporation would lead to an injustice, the Court is prepared to lift the veil

The case Gilford Motor Company v Horne is a case illustrating which principle?

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In a situation where the strict application of the concept of the veil of incorporation would lead to an injustice, the Court is prepared to lift the veil

In very rare cases the Courts are prepared to look to see who are the actual beneficial owners of a company.  This is called “Lifting *** ****”
Complete the sentence

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Lifting the veil

The case Salomon v Salomon & Co Ltd confirmed conclusively a basic principle of company law.
What was that principle?

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The concept that a company is a separate legal entity, distinct from its owners and from those who manage its affairs

Is there such a beast as an unlimited company?

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Yes – but Heaven knows why!

“One of the limited uses of the share premium account is to finance the issue of partly paid bonus shares to existing members”.
Is that statement true?

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No. One of the uses is to finance the issue of FULLY PAID bonus shares to existing members

What is the limit of a member’s liability in a company limited by shares?

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A member’s liability in a company limited by shares is limited to the amount, if any, as yet unpaid on shares held by the member

In which two ways may a member’s liability be limited?

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By guarantee and by shares

There are three ways of incorporating a company. By “Royal charter” and by “registration” are two.
What is the third way?

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By statute

There are three ways of incorporating a company. By “Royal charter” and by “statute” are two.
What is the third way?

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By registration

Is it necessary to know dates of cases for the F4 law examination?

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NO, it is NOT necessary to know dates of cases for the F4 law examination

Is it necessary to know section numbers from statute for the F4 law examination

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NO, it is NOT necessary to know section numbers from statute for the F4 law examination

Is it necessary to know the title of legislation / statute for the F4 law examination

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NO, it is NOT necessary to know the titles of statute for the F4 law examination

What does the abbreviation “llp” stand for?

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“llp” is the abbreviation for “limited liability partnership”

What does the abbreviation “plc” stand for?

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“plc” is the abbreviation for “public limited company”

“Where a public company enters a trading contract before it has obtained a trading certificate, the contract is void”.
Is that statement true?

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No, it is not true.  An “innocent” third party can enforce the contract against the company.

Is it always true that as soon as a company has been incorporated it may commence trading?

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No. Following incorporation, a public company must obtain a trading certificate before it may commence trading

Is it always true that once a company has been incorporated it has a separate legal identity?

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Yes, it is always true

Is it always true that a company exists from the date which is shown on the certificate of incorporation?

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Yes, the date on the certificate is conclusive proof that the company exists from that date – Jubilee Cotton Mills v Lewes

“Insanity of a partner is an automatic ground for the dissolution of a partnership”. Is this statement true?

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No.  Insanity as a ground for dissolution is a matter for the Court to decide. It’s not automatic

Is it necessary for a firm registered under the Limited Liability Partnerships Act 2000 to have an annual audit?

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Yes, it’s part of the “price payable” for the benefit of limited liability

“The acts of a partner done in the course of the firm’s business do not bind the firm. Only the individual partner is liable”
Is that statement true?

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No. The acts of a partner done in the course of the firm’s business bind the firm and the partners

Is a joint venture arrangement classed as a partnership?

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Yes, a joint venture is defined as “a partnership formed for a specific purpose, course of trade or voyage”

Complete the following: “A partnership is the ***** which subsists between **** or more people ******  *** business in common with a view to *****”

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“A partnership is the relationship which subsists between two or more people carrying on business in common with a view to profit”

Is it possible that a partnership may be deemed by the Court to exist even though the two people involved have never spoken to each other?

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Yes, the Court may deem that a partnership by conduct exists where two people carry on a business in common and satisfy the definition of a partnership

“Under the Limited Partnerships Act of 1907, the death of a limited partner does not bring about the end of the partnership”
Is this statement true?

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Yes.  Neither notice, death nor bankruptcy of the limited partner has the effect of dissolving the partnership.

“When a partner in a traditional partnership dies, the partnership is automatically ended”.
Is this statement always true?

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Yes, it is always true.
The surviving partners can start a new partnership with immediate effect but the original partnership ceases on the death of a partner.

In company law, when the Chief Executive Officer dies, the company ceases to exist until a replacement CEO is appointed.
Is this statement true?

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No!

“In some circumstances a principal may ratify the acts of an agent retrospectively”.
Is this statement true?

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Yes, it is true

What’s another word commonly used to express “apparent” as in “apparent authority”?

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Ostensible

Where a person has, historically, been allowed to act as though they were a Chief Executive Officer, the other directors would be estopped from denying that title.
Is this true?

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Yes, it is true

Where a person has, historically, been allowed to act as though they were a Chief Executive Officer, the other directors would be ****** from denying that title.  Complete the gap

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“estopped”

Is it true that an agency arrangement may be deemed by the Court to exist, even though the supposed principal and the supposed agent have never met nor know of each other’s existence

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Yes, for example where a person acts and is deemed to be an agent of necessity


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