Forum Replies Created
- Posts
We are agreed on A and D! So it’s just B and C that we neem to consider.
A creditor may appoint, but only with the sanction of the court.
For option C the administrator is the agent of the company but they also have legal responsibilities to the creditors (FYI they are also an officer of the Court!)
Do you want chapter and verse references?
OK
May I point out that ‘Hello’ as the subject line is a long, long way from being a useful indicator of your question? Might I suggest that you re-post and use a different subject line? Maybe something like ‘WES Canada degree UK equivalent’?
That would certainly be more indicative for anybody that has the knowledge necessary to give you a sensible answer.
Good luck
Oh my! How you brighten up my life 🙂
Option A – naughty. But naughty at any time and not necessarily as a consequence of their company being insolvent
Option B – I think that we are agreed on this – making a false declaration of solvency is clearly a criminal offence and such a declaration is only required when a company is facing an insolvent position.
Option C – Let me come back to this one
Option D – Again, naughty. But not naughty only when connected with insolvency. The tie into insolvency is not a consequence of ‘action and reaction’.
So I’m eliminating options A and D as being not directly tied to insolvency.
Now then! Option C. Clearly tied inexorably to insolvency. But is it criminal? Section 214 of the Insolvency Act 1986 clearly sets out that wrongful trading is a civil wrong. Fraudulent Trading is a criminal offence but that’s not tied to insolvency.
I’ve checked the Insolvency Act and there doesn’t appear to be any relevant update / amendment. I visited a site for ‘company rescue’ (www.companyrescure.co.uk) and they reiterate the mantra that wrongful trading is a civil offence. But then they confuse me with this (I quote) “In some cases, they (directors) can also be disqualified from being a director, fined or even imprisoned.”
Getting back to the question … option B is clearly half of the answer and options A and D are clearly not.. That leaves option C as the other half … even though it’s civil and not criminal 🙁
Poor question? Where is this one from?
OK?
If you should happen to make further enquiries and find an explanation for the answer, I would greatly appreciate it if you would educate me with that explanation 🙂
Thanks in advance
Hmmm. Maybe. But that would be a very strange question! Sorry that I can’t help further 🙁
Hmmm. Maybe. But that would be a very strange question! Sorry that I cant help further 🙁
When, in lectures, I exhort my students always to RTFQ, I insist that, no matter what they initially thought, the F in RTFQ stands for ‘FULL’. 🙂
Apparently Ian is now an active participant in the actual laundering process. Unless there is more to the question that you are again teasing me by its omission, then I must agree with you that Ian is equally liable as Jet under money laundering legislation.
Strange that the printed solution says ‘Not guilty’
Where’s the question from? And is there no further justification for the ‘not guilty’ answer?
Hi Iniss
This is a strange one, indeed.
The three offences under money laundering legislation are:
Laundering, Failure to report and Tipping off.
That second one, failure to report, occurs when an individual fails to report knowledge or suspicion of money laundering.
Given the scenario of Ian and Jet as set out in the question, it would seem easy to answer that ‘Yes, it IS an offence’.
However, so far, Jet has not been involved in laundering – he’s only considering it! And the offence is where there is knowledge or suspicion of laundering … and so far no laundering has yet taken place.
Now, when Jet takes Ian’s suggestion to heart and invests in Kickers and starts to launder, that’s when Ian then has to throw Jet under the metaphorical bus and report him. Imagine what’s next … Jet’s in court and his defence revolves around the assertion that he was only acting on Ian’s advice.
That would certainly make an interesting exchange.
OK?
We have two separate contracts here.
Firstly, we have the coal merchant contracting with Scotson to deliver and unload coal at Pegg’s premises.
Secondly, unbeknownst to Pegg that Scotson was already bound to deliver and unload, Pegg told Scotson that “in consideration” of Scotson delivering coal to them, Pegg will unload it.The two contracts have to be read in isolation, unaffected by each other. So far as Pegg was concerned, Pegg received the benefit of having the coal delivered and, in exchange, Pegg unloaded it.
Your post says: ‘but I still believe that had Pegg not contracted with Scotson, Scotson still has to deliver anyway’ Quite right. But Pegg didn’t know that – so Pegg believes that he is receiving a benefit and Scotson is therefore able to sue successfully in his attempt to get the money from Pegg.
You also ask, intriguingly (!), ‘if Scotson fails to deliver, can both Pegg and X sue him?’
WOW!!! Not only does Scotson stand to be paid by the coal merchant AND Pegg, you’re suggesting that there’s some possibility that he may choose to breach both contracts! IF, for some outrageous reason, Scotson were to breach this super-lucrative situation in which he finds himself, then, Yes, both the merchant AND Pegg would have just grounds to sue for breach of two separate contracts.
OK?
72 hours notice of when she will be required to turn up for work? Is she OBLIGED to turn up? Or can she say that ‘Sorry, I’m doing something else that day’? Is there any supervision over the quality of her work? Is she controlled by Belle as to the beauty treatment that she provides to the client or is Anita working to the client’s instructions?
Do we have a situation of supervision, direction and control?
This question of employee / independent contractor is determined by the weighing of factors that do indicate employment against factors that suggest independence. And, in my view, the 3 day notice requirement and the provision of a uniform are far outweighed by Anita’s availability to work elsewhere when not required to attend at Belle’s as well as the ability to turn down Belle’s work and, probably, determine which days she wishes to take as holidays.
I think that it’s a tricky question to answer definitively given that there is a strong argument for option B as well as the indicated option A. I would find it difficult to persuade you why option B was incorrect 🙁
OK?
Hi
Here is Section 81 of Companies Act 2006:
81
Change of name: effect
(1)A change of a company’s name has effect from the date on which the new certificate of incorporation is issued.(2)The change does not affect any rights or obligations of the company or render defective any legal proceedings by or against it.
(3)Any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.
However, let me remind you that there is NO NEED FOR YOU TO KNOW or learn case names, section numbers, titles of Acts and so on. I have merely quoted the Act and Section number to show you the authority behind the printed solution 🙂
OK?
Yes, I believe that ‘battle of the forms’ adequately describes the situation. There’s a bit of an issue with ‘as the offeree already accepts, the contract will be governed by terms of the offeror?’
Acceptance is only effective where it is made ‘complete and unconditional’ Where the offer contains proposed clauses which are not to the liking of the offeree, that’s when battle commences. As to whose terms will apply to the final agreement, well, that depends. But that’s surely why there is the battle – each side wishing to impose their own preferences. And only when battle ceases (because there are no further contentious issues to resolve) will we determine the precise negotiated discussed terms that are present in the final contract.
OK?
Think of this as reading ‘Must there be a formal written contract of guarantee’ and place emphasis in your mind of the requirement for ‘formal’
No – there is no need for a formal contract. However, there must be sufficient written EVIDENCE to support the claim that a guarantee arrangement exists. Without that evidence in writing, it would be available for any aggrieved person facing bankruptcy to claim that “I had an agreement with Elon Musk that he would guarantee all my debts incurred as a result of my business activities failing”.
If there were no requirement for the contract itself to be in writing nor even a requirement for there to be sufficient written evidence, imagine what a circus that would result in!
And don’t be so dismissive of the silliness of your questions! They aren’t silly and they’re taking me quite some time to get my head round them so that I may explain the situation with sufficient clarity 🙂
OK?
Mila’s employment doesn’t end with her last delivery. Surely, the journey back to the garage must be part of ‘in the course of her employment’ and thus I suggest that QuickFood will be vicariously liable together with Mila.
The question is a bit (very?) silly because QuickFood MUST have insurance cover for damage caused by their employees and their vehicles so, in practice, the insurance company would carry the liability. Insurance cover would be ‘Employer’s Liability Insurance’ and the vehicle would also be insured to cover any damage caused by that vehicle.
Now, as a further consideration, when that insurance company begins negotiations with Gareth’s insurance representatives, the parlous state of the building pre-crash would play an integral element of those negotiations.
Will Mila need to pay anything. Not a single cent (though she may lose her job as a result of her reckless driving!). Will QuickFood have to pay anything? In practice, NO. The insurers would cover the costs of settling with Gareth. Is Gareth liable for any costs? Gareth will be very fortunate to have his building restored to any sort of condition that represents an improvement to its pre-crash condition so is very likely to be out-of-pocket as a result of this incident.
I imagine that the printed solution is option B.
OK?
Iniss, yet another tricky one! I believe that this boils down to one’s understanding of the expression ‘trading’ or ‘commencing to trade’
Let me ask you, would the signing of a lease to rent some property fall into your understanding of a trading activity?
How about incurring expenses to advertise for and interview prospective employees? Is that within your understanding of ‘commencing to trade’?
I hope that you have answered both those questions in the negative – they are not trading activities.
How about the purchase of some food with the intention of resale? Or the sale of some food in advance of its purchase with the intention to buy ‘tomorrow’?
It has always been my interpretation that ‘trade’ and ‘trading’ involved the acquisition and disposal (or proposed acquisition and disposal) of specific goods (rather than just a general business plan) that is necessary to constitute ‘trade’.
From the date of its incorporation, a company is its own self and is capable of entering into contracts in its own name. But it cannot ‘trade’ until it has acquired a trading certificate.
OK?
This really is no different than the many examples of Members of the UK Parliament (I cannot speak for similar officials from other countries) that quite openly accept ‘gifts’ from companies.
If we draw that parallel and accept that, were it to be considered bribery, you must also accept that many Members of Parliament are guilty of receiving bribes in contravention of the Bribery Act.
It is NOT an unusual commercial practice for companies to make gifts or extend invitations ‘in the hope of securing new business’. Further, it’s not unusual for such hospitality to be extended in the unspoken hope of influencing the future attitudes and votes of those favoured politicians.
A couple of further observations may serve to reassure you on this. The invitation is extended to senior members of 3 different partnerships, themselves in competition with each other. So no individual firm is being preferred over the others. Were this to be an extended invitation to secure beneficial treatment from only one firm, that would probably increase the appearance of bribery.
In addition, my mind is considering a likely scenario “If I give you this, will you in return give me that?” or “I want something that you have. If I give you something, will you let me have that which I want?”. Here the extended invitation is made in the specific hope of obtaining that which the inviter covets.
Furthermore, in the question involving Financial Wizards LLP, the benefit being sought is intangible, immeasurable and indistinct – ‘in the hope of securing further business’
Finally, and being frivolous, surely the argument claiming bribery would be strengthened were the invitation being offered had some greater value that a rugby match between two teams that were thrashed in last weekend’s 6 Nations fixtures 🙂 For the bribery Act to be applied, the ‘consideration’ must be material and not of insignificant value!
OK?
I can think of no argument to suggest that the default by Company A would not crystallise the charge. The double interest default clearly kicks in the crystallisation.
Incidentally, what does the suggested solution propose? And, if it’s in agreement with my proposition, what was it about the solution that you were not happy with (otherwise you wouldn’t have asked for confirmation!)
OK?
Yes Liza, of course they will be applicable for the 2025 exams. I believe that I’m correct when I say that, at OpenTuition, the notes are always up to date for the forthcoming exam diet.
OK
You’re welcome – I don’t know if English is your first language but, even if it is, the ‘tricky’ wording really does sometimes take a while to get your head around it.
But, happily, we’re sorted now 🙂
Hi Iniss
It can’t be option D – it’s not our fault that the other party was unaware even though sufficient notice was given.
I believe that, for example, a clause exempting liability for negligence resulting in personal injury or death would be excluded under UCTA … so it’s possible that an exclusion clause under UCTA may not be incorporated into a contract.
OK?
Yes, the presumption is that ‘Intention does not exist’ That’s our start point.
But, as suggested by choice D, there is sufficient evidence to rebut that general presumption.
Consider option D as you have typed it
‘There is clear evidence to rebut the presumption that intention does not exist’
The presumption – no intention
Evidence to rebut – work carried by Amy in exchange for promise received from Ben.
Does Amy’s work and Ben’s promise combined give us sufficient evidence to say that ‘Yes, in fact, the general presumption should be set aside (rebutted) and we should accept that, in this case, the facts would support the idea that there is, in fact, an intention to create legal relations.
Now look at choice D again
‘There is clear evidence to rebut the presumption that intention does not exist’
Is that better?
You have to admire the guile of these question writers, don’t you!
Intra-family contracts / arrangements have always been tricky – and, of course, that’s why they get taken to Court!
The general presumption in a family arrangement is that there is no intention to create legal relations. But, as with all presumptions (well, nearly all) that underlying presumption can successfully be rebutted.
In the case Parker v Clark, the presumption was rebutted by the niece showing that she and her husband had changed their position (sold their house and moved to live with her aunt). Where, as a result of a promise given and received, the promissee changes their position and gives to the promisor something in exchange for the promise received, that would suggest that the promise was made with the intention to create legal relations.
In Amy’s case, she treated the promise as an enforceable contract and went ahead with the work that Ben had asked for.
Choice A – The law presumes that no intention to create legal relations exists between Ben and Amy because they are related – is the ‘normal’ approach adopted by the law
Choice B – The law presumes that intention to create legal relations exists between Ben and Amy because they are entering into a form of business transaction – no! The presumption in a family context is that there is no intention
Choice C – There is clear evidence to rebut the presumption that intention exists – on the contrary, the evidence clearly shows intentionChoice D – There is clear evidence to rebut the presumption that intention does not exist – as explained
I can empathise with your choice of B / C, but …
Choice A cannot be paired with either choice B or choice C – neither of those, when combined with choice A, makes any sense
Similarly, neither choice B nor C makes any sense when combined with choice D.
So the crux of this question is the correct selection between choices A and B and that fundamental presumption (until rebutted) is that, in a family contract, there is no intention to create legal relations.
Does that help?
