1. Which of the following parties is NOT liable on a pre- incorporation contract?
2. In the English civil law system, the decision of which of the following courts maybe appealed directly to the supreme court?
3. Choose from the following, which doesn’t belong to the forms of Delegated legislation?
4. The London Times contains an advertisement stating that “the lamp costs £7000”. Choose the correct option.
5. Which of the following situations will NOT cause an offer to lapse?
6. Consideration need not be adequate but must be,
7. ‘An obligation, which thought it must be performed, is not so vital that a failure to perform it goes to the substance of the contract’. What does the statement describe?
8. Employment law is a mixture of common law and statutory provisions. Which of the following is purely based on statute law?
9. Select which states the effect of contributory negligence in the law of tort.
10. In the context of case law, which of the following applies to an obiter dictum?
11. A partnership is drawn up between Ann and Ben, and they agree to share profits in the ratio 80:20. How will the profits be shared?
12. Choose the TWO correct statements with regard to directors in a company.
A - A De Jure director is a board member and also managing the business.
B - A managing director has the implied authority to contract on behalf of the company.
C - A non- executive director is a part time member, who doesn’t engage in managing of the business.
D - A de facto director is anyone who is formally appointed and registered as a director.
13. Which of the following statements is TRUE?
14. On a compulsory winding up of a company, who will the court usually appoint?
15. Select the statements that are true.
A. A company secretary is a must in all the companies.
B. A company secretary is usually appointed and removed by directors.
C. A company secretary is usually appointed and removed by the members.
D. A qualified company secretary is a must in public companies.
16. If an insider in possession of unpublished price- sensitive information sells shares and avoids a loss but claims that the sale was to raise money to repay a private debt. Choose the correct answer concerning whether the person is guilty or not.
i. The person isn’t guilty, if he can persuade the court that the sale was for reasons other than the avoidance of loss.
ii. Whatsoever the reason is, the person is guilty for the act.
17. In a private company, it is possible for the members to pass a written resolution to place their company into liquidation, only if a majority of _____ vote in favour. Which of the following suits the blank?
18. Which of the following is the essential and fundamental difference between a members’ voluntary liquidation and a creditors’ voluntary liquidation?
19. Jay Ltd is in administration since it began to face financial difficulties during the past month. An administrator is appointed for this purpose. Which of the following parties cannot appoint an administrator?
20. Which parties are bound by the terms of the tender when one party submits a tender?
21. Which of the following are owed a duty of care by auditors when preparing a company’s audit?
22. Where directors make a false statement of solvency prior to a members’ voluntary liquidation, which of the following they have committed under the relevant legislation?
23. A number of potential criminal offences are related to insider dealing. Which TWO of the following are crimes related to it?
A. Failing to report insider dealing
B. Concealing insider dealing
C. Passing on inside information
D. Encouraging someone to engage in insider dealing
24. A contract doesn’t require which one of the following?
25. Select the one which will lead to termination of an offer.
A. Counter- offer
B. Standing order
C. Lapse of time
26. John agrees with his wife Jessie to wash the car. But John refuses. Select the correct option with regards to whether can Jessie sue John?
i. Yes, because he’s a lazy swine.
ii. No, because there’s no presumed legal intention.
27. Which of the following describes the actual authority of a Chief Executive Officer?
28. Which TWO of the following are examples of class rights?
A. The right to appoint directors granted to preference and ordinary shares.
B. The priority right to a dividend granted to preference shareholders.
C. The right to approve the appointment of auditors granted to all shareholders.
D. The right to attend company meetings granted to ordinary shareholders but not preference shareholders.
29. Which of the following statements concerning the principle of binding precedent is false?
30. In an action for a breach of contract, the court will not award,
31. In 2015, Mr. Jenifer Jerry, a High Court judge sitting alone, is deciding a case which has similar material facts to one decided by the Court of Appeal in 1915. He can decline to be bound by this decision by showing that,
32. Buzz works in Atlas Company Ltd. The terms in his employment contract have been changed. How can Buzz show his acceptance to it?
33. In terms of agency law, the function of an agent is to form a _______ between their ______ and the third party. Which set of words suits the blanks above?
34. When a company makes an unlawful dividend, who may be involved in making good the distribution?
35. Athena goes to a computer specialists store to buy a computer. The salesman tells her that the computer can run windows where actually it can’t. Select the correct option.
36. Select what type of contract does an employee have.
37. Benny works in Orange Ltd. What is the correct minimum period of notice he is entitled to receive after five years’ service?
38. In relation to wrongful trading, the standard against which the conduct of directors will be assessed is which of the following?
39. Select the correct statements.
A. UCTA 1977 applies to consumer contracts
B. CRA 2015 applies to consumer contracts
C. An exclusion clause needs to pass the common law and statutory rules
D. An exclusion clause needs to pass the common law rules
40. Fin has been accused of a criminal offence and is due to be tried soon. He denies responsibility, claiming that the prosecution has no evidence that he committed the offence in question.
Which of the below describes the standard of proof in a criminal case?
41. Which of the following is not recognised as a separate legal entity?
42. How many days after creation must a charge be registered in order for it to be valid and enforceable?
43. Which of the following does not constitute a duty owed by an employee towards his employer under the common law?
44. Which of the following is a fair reason for an employee to be dismissed by an employee?
45. Which TWO types of agencies are formed without the agent’s consent?
A. Agency by estoppel
B. Agency by express agreement
C. Agency by ratification
D. Agency by implied agreement
03. GARGAMEL PLC
Gargamel PLC was facing financial difficulties.
For the purpose of raising capital, in February, it issued 10,000 $1 equity shares to David, but asked him to pay just 75 cents per share at the time of issue. It was always the directors of the Gargamel PLC’s intention to ask David for the remaining 25 cents per share on a future date.
However, in September the directors of Gargamel PLC realised the necessity of more money to the company even greater than the outstanding $2500 from David’s existing shareholding.
In an effort to raise additional capital the directors of Gargamel PLC told David that, if he were to purchase a further 1000 shares, he would have to pay only 50 cents per share on this latest 10,000 and that the outstanding 25 cents per share on the original 10,000 shares would be written off.
David approved to the above offer, but even this latest injection of funds failed to save the company and in December, David PLC went into an insolvent liquidation owing a substantial amount of money.
With reference to the second issue of 10,000 $1 equity shares to David, which TWO of the following statements are true:
A. By the promise of writing off the outstanding 25 cents per share from the first issue, the directors are now committing the crime of issuing shares at a discount.
B. So long as the discount on the first issue is written off against the share premium account balance in Gargamel PLC, no crime has been committed.
C. Because Gargamel PLC is in financial difficulty, one way to resolve the problem of issuing shares at a discount is to convert the company into a private company.
D. As a result of the issuance of shares at a discount, the directors become personally liable to a fine under company legislation.
In company law, directors require authority to make a share issue. Which of the following statements is FALSE?
Which TWO of the following statements are true, with reference to the first issue of 10,000 $1 equity shares to David?
A. The share issue is an issue at a discount and, as such, is an illegal issue.
B. The share issue is not illegal because it is the intention of Gargamel PLC to ask David for the “missing” 25 cents at a later date.
C. Until it receives its trading certificate, a public company is allowed to issue shares at a discount.
D. Private companies are able to issue shares at a discount in exchange for non- cash consideration where that consideration has a value lower than the nominal value of shares issued in exchange.
04. Lionel, Tony and William entered into a partnership arrangement to operate a fuel station. The written partnership agreement specifically excluded all activities other than the sale of motor fuel.
In August, Lionel withdrew $15,000 from the partnership bank account using the firm’s overdraft facility. He clarified to the bank that the money was needed to finance short- term partnership debt in fact used the money to pay for some cosmetic surgery.
In September, Tony entered into a $50,000 contract to buy a large quantity of magazines that he hoped to sell through the fuel station.
In October, the disaster happened! The firm was unable to settle the debt for the supply of fuel in August because there was insufficient money left at the firm’s bank account and the overdraft facility was already taken at its limit. There were not enough assets to settle the firm’s debts in full.
Which of the following statements are correct, in describing the extent of a partner’s liability?
A. Where a partner of an accountancy firm enters into a contract for cosmetic surgery and the third party does not make enquiry about the partner’s authority, all the partners of the firm will be liable for the cosmetic surgery.
B. Where on the dissolution of an insolvent partnership, one of the partners declares themselves bankrupt, the amount of that partner’s shares that he was unable to contribute to the insolvency shall be borne by the remaining solvent partners.
C. Where a partner in the course of business enters into a contract with the third party acting in good faith then all the partners are equally liable for the entire debt.
D. Where a third party enters into a contract with a partner having made enquiry of the partner to her authority to enter the contract on the firm’s behalf and has been falsely told that it was within the partner’s authority, only the contracting partner will be liable.
In the situation of Lionel withdrawal where the bank was deceitfully told he wrong purpose of the funds, pick the two correct statements.
A. Tony and William can raise a claim against Lionel seeking compensation for them having to pay debt to the bank in respect of Lionel’s cosmetic surgery
B. All three parties will be equally liable to the bank
C. The bank has failed in its duty to ensure that funds borrowed against the partnership overdraft were in fact used for the proper purpose
D. Only William will be liable to the bank because the loan is outside the course of business
With reference to the magazine contract entered by Tony, which TWO of the following statements best describe the liabilities of the partners?
A. The magazine supplier has entered into a contract with a person who lacks authority and is therefore unable to pursue any of the partners for the money that is owed to him.
B. All three partners are equally liable for $50,000 debt because the magazine supplier could not have known about the limitation of allowable trading activities in the partnership agreement.
C. Only Tony should be liable because the magazine supplier should have realised that the contract lay outside the course of business.
D. Lionel and William can claim for compensation from Tony because they will have to pay their share of the debt to magazine supplier.