Fundamentals of Business Law

This exam covers general legal knowledge relating to the business environment, a basic knowledge of the law of contracts, and an understanding of the responsibilities and risks that arise in business, with particular regard to the law relating to corporate entities. 

Topics:

1. Sources of law
1.1 Identify the sources of different types of law
1.2 Identify the features of the different legal systems

• 1.2.1 common law
• 1.2.2 civil law
• 1.2.3 sharia law

2. Common law and legislation: precedent and stare decisis and statutory interpretation
2.1 Identify how common law and relevant legislation are applied
2.2 Analyse and explain legal cases and principles in setting precedents
2.3 Specify how legal cases and principles set precedents
2.4 Identify how to deal with the doctrine of stare decisis (legal precedent)
2.5 Specify the rules and models for statutory interpretation

3. Legal framework
3.1 Describe the legal framework of statute law (legislation) and common law
3.2 Explain the court system
3.3 Explain different methods of alternative dispute resolution

4. Fundamental aspects of contracts and contract law
4.1 Describe the fundamental  features and essential requirements (terms) of contracts.
4.2 Describe the law of contract
4.3 Describe the necessary elements in the formulation of a contract
4.4 Explain the importance of conditions and essential terms of contracts
4.5 Identify the nature and status of pre-contract representations
4.6 Explain the effect of valid exclusion clauses

5. Breaches of contract law
5.1 Recognise the different types of breach of contract and their effects
5.2 Specify relevant and available remedies for breach of contract

• 5.2.1 damages
• 5.2.2 specific performance 

6. Specialised commercial contracts
6.1 Identify the characteristics of commercial contracts used in international trade

• 6.1.1 international sales of goods
• 6.1.2 international transportation of goods

7. Torts
7.1 Explain that the law of torts concerns a civil wrong which may mean a civil action for compensation arises
7.2 Explain the tort of negligence
7.3 Explain that tort law provides legal remedies for damages caused by negligence
7.4 Explain that negligence means failure to exercise reasonable care
7.5 Explain consumer protection law and negligence
7.6 Explain the implications under common law in relation to pre-incorporation contracts

8. Agency theory
8.1 Explain that agency is the relationship between principal and agent
8.2 Explain how agency theory underlies the principles of corporate governance
8.3 Explain that partnership is an agency relationship
8.4 Explain the application of agency theory to companies

9. Incorporation and its effects
9.1 Recognise that nature and effect of a company having a separate legal personality
9.2 Explain the effects on incorporation

• 9.2.1 limited liability
• 9.2.2 perpetual succession

9.3 Distinguish the differences between public and proprietary companies
9.4 Identify the processes necessary in forming a company
9.5 Specify the elements of the constitution of a company
9.6 Describe the role of promoters in forming a company
9.7 Recognise the difficulties and implications of pre-incorporation contracts

10. Management of companies
10.1 Identify the key legal issues that arise in the management and governance of companies

• 10.1.1 identify the impact of key business decisions on shareholders interests
• 10.1.2 identify the impact of key business decisions on the public

10.2 Specify the nature and role of company directors and other officers as agents of the company
10.3 Specify the nature, role and powers of the board of directors

• 10.3.1 Specify the relationship between the board and the company in a general meeting

10.4 Identify the rules on directors’ remuneration and financial benefits to directors and other related parties
10.5 Identify the rules on appointment and removal of directors from office
10.6 Specify the extent of directors duties and powers
10.7 Recognise the issue that arises when there are related party transactions
10.8 Specify the rules on transfer of shares and refusal to register a transfer of shares
10.9 Identify the role and powers of the company secretary
10.10 Identify the role and powers of the registered company auditor

11. Membership and dividends
11.1 Identify the significance of the register of members
11.2 Identify the significance of the requirement for disclosure of interests in shares
11.3 Recognise the role of the general meeting of shareholders
11.4 Distinguish the rights and remedies of members of companies

• 11.4.1 appointing a registered company auditor
• 11.4.2 inspection of the books of the company
• 11.4.3 protection of the minority and the treatment for unfair or oppressive company practices

11.5 Specify the procedure for payment of dividends
11.6 Specify the rights of shareholders regarding dividends
11.7 Specify the company formalities in determining when dividends are payable to shareholders
11.8 Identify the rules governing the maximum amount for dividend distribution

12. Bankruptcies
12.1 Specify the grounds relating to the dissolution and winding up of companies and partnerships
12.2 Specify the procedures for dissolution and winding up of companies and partnerships
12.3 Specify the procedures for addressing bankruptcies , including stakeholders and the rights of claimants
12.4 Identify the powers and duties of receivers and liquidators
12.5 Recognise administration as an appropriate alternative to winding up when a company is in financial difficulties