Looking to pass the ACA LAW Certificate exam? Look no further than these detailed notes covering the three sections of the exam: The Impact of Civil Law on Business and Professional Services, The Impact of Criminal Law on Business and Professional Services, and The Impact of Law in the Professional...
The ICAEW LAW Certificate Level exam is designed to provide students with an understanding
of the principles of English law that are relevant to the accounting and finance industry. The
exam consists of 50 multiple-choice questions, with a time limit of 1.5 hours. The questions are
designed to test your knowledge and understanding of the following four modules:
● The impact of civil law on business and professional services
● Company and insolvency law
● The impact of criminal law on business and professional services
● The impact of law in the professional context
The aim of this exam is to help you develop a better understanding of the legal principles that
are relevant to your work as a finance professional. By the end of this module, you should be
able to:
● Explain the nature of contractual agreements, the agency relationship and the
consequences of negligence
● Understand the legal implications of incorporation, including the roles of shareholders
and directors, and the main implications of insolvency law
● Identify instances of criminal behaviour that may be encountered by professional
accountants
● Identify other key areas in which the law affects the role and work of the professional
accountant.
To prepare for the exam, you should focus on understanding the key legal principles covered by
each module, as well as their practical implications for the accounting and finance industry. It is
also important to familiarise yourself with the format and structure of the exam, so that you can
prepare accordingly and manage your time effectively during the exam.
Good luck with your studies!
, 1 THE IMPACT OF CIVIL LAW ON BUSINESS AND PROFESSIONAL
SERVICES (35%)
A. Contract
A contract is a legally binding agreement between two or more parties that creates an obligation
to perform a certain task or provide a certain service. There are four requirements for a valid
contract:
● Offer: A proposal made by one party to another. The offer must be clear and
unambiguous, and must contain all the essential terms of the contract.
● Acceptance: The agreement of the other party to the terms of the offer. Acceptance must
be communicated to the offeror, and must be unconditional.
● Consideration: The exchange of something of value between the parties. Consideration
can take the form of money, goods, or services.
● Intention to create legal relations: The parties must intend to be bound by the terms of
the contract. Contracts made in social or domestic settings are usually not intended to be
legally binding.
In the event of a breach of contract, the innocent party may seek legal remedies. These can
include damages, specific performance, and injunctions. It's important to be familiar with the
legal requirements for a valid contract, and the different remedies available in the event of a
breach.
B. Agency
An agency relationship exists when one person (the agent) acts on behalf of another person (the
principal) and has the authority to make decisions on behalf of the principal. There are three
main duties of agents:
● Duty of loyalty: An agent must act in the best interests of the principal and avoid
conflicts of interest.
● Duty of care: An agent must act with reasonable care and skill when carrying out their
duties.
● Duty to account: An agent must keep accurate records and report to the principal on
their activities.
It's also important to understand the different types of authority that agents can have. Actual
authority is the authority granted to the agent by the principal. Apparent authority is the
authority that a third party reasonably believes the agent has based on the actions of the
principal.
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