ICAEW ACA Law Question and answers 2024 verified to pas
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ICAEW ACA
ICAEW ACA Law Question and answers 2024
verified to pass
Contract - CORRECT ANSWER - An agreement which legally binds the parties
What are the essential elements of a contract - CORRECT ANSWER - Offer and
acceptance, agreement. Intention to create legal relationship consideration.
Standard f...
ICAEW ACA Law Question and answers 2024 verified to pass Contract - CORRECT ANSWER - An agreement which legally binds the parties What are the essential elements of a contract - CORRECT ANSWER - Offer and acceptance, agreement. Intention to create legal relationship consideration. Standard form contract - CORRECT ANSWER - A standard document prepared by many large organisations and setting out the terms on which they contract with their customers. Prepared by the dominant party which the other party has no choice but to take or leav e. Freedom of contract - CORRECT ANSWER - Principles that parties may contract on the terms which they choose. The law will not want to interfere with this. Void contract - CORRECT ANSWER - Not a contract at all. Parties are not bound by it and if they transfer property under it they can generally recover their goods even from a third party. Voidable contract - CORRECT ANSWER - A contract which one party may set aside. Property transferred before avoidance is usually irrecoverable from a third party Examples of void contracts - CORRECT ANSWER - A contract which is illegal or offends public policy. Examples of voidable contracts - CORRECT ANSWER - Minors or people not in sound mind being a party. One party being made to enter into a contract other than by their own free will, not by duress or undue influence. If a pre -contractual statement causes a p arty to enter into the contact but turns out to be untrue, misrepresentation, the other party may choose to avoid the contract. Misrepresentation - CORRECT ANSWER - False statement made with the object of inducing the other party to enter into a contract. Unenforceable contract - CORRECT ANSWER - A contract that will not be enforced by the court in the event of its breach Why does an unenforceable contract occur? - CORRECT ANSWER - Contract is not in the correct form. What types of contract must be in writing - CORRECT ANSWER - Agreements for transfer of land. Consumer credit agreements. Guarantee. Guarantee - CORRECT ANSWER - Guarantor promises to pay a creditor the sum of the debtors debts in the event the debtor fails to pay them. The terms must be evidenced in writing and should be signed or acknowledged by the guarantor. Offer - CORRECT ANSWER - A definite promise to be bound on specific terms. What does not compromise an offer. - CORRECT ANSWER - Vague statements. Possible terms of contract. Supply of information. Statement of intention. Invitation to treat. Invitation to treat - CORRECT ANSWER - Indication that someone is prepared to receive offers without a view to forming a binding contract. Give examples of invitations to treat - CORRECT ANSWER - Advertisements, goods displayed for sale in a shop window or self service shelves. Circulation of a price list. Does an offer have to be made to a particular person? - CORRECT ANSWER - No it can be made to a class of persons or the world at large. In absence of acceptance how can an offer be terminated? - CORRECT ANSWER - Rejection. Counter -offer. Lapse of time. Revocation by the offeror. Failure of a precondition. What is not a counter -offer - CORRECT ANSWER - A request for information, which will not terminate the original offer. If a specific time is not specified when does an offer expire - CORRECT ANSWER - After a reasonable time Describe revocation - CORRECT ANSWER - Can take place at any time before acceptance either expressly or by implication even if it is said the offer will remain open they can still revoke it. Unless they have bound themselves to keep it open by a separate c ontract. Revocation takes place when communicated to or received by the offerree, the postal rule does not apply to revocation. Revocation can be communicated by a reliable 3rd party. Valid Acceptance - CORRECT ANSWER - An unqualified agreement to all terms of the offer. Made by express words to offeree or agent or inferred from conduct. Silence cannot indicate acceptance. Acceptance must be communicated. May be specified by some prescr ibed method by the offeror. Postal rule - CORRECT ANSWER - Communication will be effective the moment the acceptance is posted even if it is delayed or lost altogether in the post (revocation is on receipt) What are the exceptions to the postal rule? - CORRECT ANSWER - If delay is the offerees fault e.g. Incorrect address. If there is postal strike. If postal is not within contemplation of the parties. If the offeror requires acceptance otherwise e.g 'by notice in writing' meaning the notice must be received. The postal rule does not apple to instantaneous methods of communication. Because there is legal uncertainty as to the time of acceptance by email (online offers) - CORRECT ANSWER - It is advisable for the terms of an offer made online to make express provision as to the means and timing of acceptance. Acceptance is only effective to create agreement where - CORRECT ANSWER - The offeree is aware of the offer. Agreement without offer and acceptance - CORRECT ANSWER - The courts may consider the words and actions of the parties and construct a contract. Rebuttals presumption - CORRECT ANSWER - The presumption which would be assumed by the court if the situation occurred. What is the rebuttable assumption between social, domestic and family parties - CORRECT ANSWER - That they are not intended to be legally bound unless there is clear evidence pointing to the contrary. What is the rebuttable presumption between commercial parties - CORRECT ANSWER - Presumed there is an intention to enter into legal relations unless this is expressly disclaimed or the circumstances give a clear contrary indication. Courts are unlikely to rebut this presumption. If the agreement says subject to contract what does this amount to - CORRECT ANSWER - A strong presumption that no immediately binding contract is intended. Consideration - CORRECT ANSWER - What each party gives or agrees to give to the other, usually payment or a promise to do something in return. Legal definition of consideration - CORRECT ANSWER - Consists either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other. What are the 2 types of valid consideration - CORRECT ANSWER - Executed. Executory. (sufficient - need not be adequate) Executed consideration - CORRECT ANSWER - A performed or executed act in return for a promise. Executory consideration - CORRECT ANSWER - A promise given for a promise. Name 1 type of invalid consideration - CORRECT ANSWER - Past consideration. Something which has already been done at the time the promise is made. When can past consideration constitute valid consideration - CORRECT ANSWER - If it could be said that there was an implied promise before the works were carried out that they would be paid for at a later date. Consideration must be: - CORRECT ANSWER - Sufficient. It must have some identifiable value in order to be capable in law of being regarded as valid. (need not be adequate) Consideration need not be - CORRECT ANSWER - Adequate. It does not need to be equal in value to the consideration received in return. There is no remedy in law for a poor bargain. The courts will not weigh up the comparative value of the promises or acts e xchanged. What happens if the consideration offered is something the promisee was bound to do anyway - CORRECT ANSWER - There is unlikely to be sufficient consideration. If consideration is the performance of existing statutory duty - CORRECT ANSWER - This is not consideration unless it can be shown that some extra service over and above the scope of the statutory duty is also being offered. If consideration is performance of existing contractual duty owed to the promisor. - CORRECT ANSWER - Not consideration unless it can be shown that the promisee is actually giving or doing something over and above the scope of the contractual obligation. I t may be enough where the promisor obtains some extra practical benefit. If consideration is performance of existing contractual duty owed to a third party. - CORRECT ANSWER - This can amount to valid consideration. Give an example of performance of existing contractual duty owed to a third party - CORRECT ANSWER - C contracted with x to deliver cargo as x directed. X directed c to deliver it to d. D contracted with c to unload the cargo of c delivered it to d. Which was already bound under his contract with x. It was held that c's obligation owed to x to deliver the cargo to d was sufficient consideration for d's promise. If consideration is forbearance or waiver of existing rights. - CORRECT ANSWER - May be sufficient consideration if it has some value or amounts to giving up something of value. In what cases can the waiver of existing debt be binding - CORRECT ANSWER - Alternative consideration. Bargain between the creditors. Third party part payment. Alternative consideration - CORRECT ANSWER - If x offers and y accepts anything to which y is not already entitled, the extra thing is sufficient consideration for the waiver, for example goods instead of cash or payment in advance of the due date. Bargain between the creditors - CORRECT ANSWER - If x arranges with creditors that they will each accept part payment in full entitlement. Third party payment. - CORRECT ANSWER - If a third party z offers part payment and y agrees to release x from y's claim to the balance, y has received consideration in the form of the offer from z against whom they had no previous claim and that is suffici ent. Freedom of contract - CORRECT ANSWER - Principles that parties may contract on the terms they chose.
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