Essentials of Business Law 3e by MacIntyre

Essentials of Business Law by MacIntyre (3rd edition) is the 3rd edition of the Essentials of Business Law textbook authored by Ewan MacIntyre, Senior Lecturer, Nottingham Law School, Nottingham Trent University and published by Longman as an imprint of Pearson Education Limited in 2011.

• Abatement. A self-help remedy in the tort of nuisance.
• Acceptance (of goods). Once goods have been accepted, or are deemed to have been accepted, they can no longer be rejected for breach of condition. The right to damages remains.
• Acceptance (of an offer). Agreement to the terms proposed in the offer. The point at which a contract is formed.
• Account for profits. Hand profits over to the person to whom they belong.
• Accounting records. The documents (such as ledger, order forms, cash books, receipts, etc.) which enable accounts to be prepared. Every company must keep accounting records for inspection by the company officers.
• Acquittal. A decision by a court that a defendant is not guilty of the crime of which he was accused.
• Act (of Parliament). A statute.
• Act of God. A defence in tort, which applies where natural forces, rather than human intervention, caused the act complained of in circumstances which no human foresight could provide against.
• Actual authority. An agent's power to act on behalf of a principal which arises on account of the agent and principal agreeing that the agent should have the power.
• Actus reus. The guilty act which needs to be proved before a person can be convicted of a crime.
• Adequacy (of consideration). Consideration is adequate if it is of the same value as the other party's consideration for which it is exchanged. There is no legal requirement that consideration should be adequate. (See also sufficiency.)
• Administration (of a company). A measure short of liquidation under which an administrator, who must be a qualified insolvency practitioner, attempts to rescue an ailing company.
• ADR. Alternative dispute resolution.
• Adversarial system of trial. A system under which the parties to a trial are adversaries. They try to prove their case, and the facts upon which it depends. The judge does not actively investigate the facts.
• Affirmation. Declaration of an intention to proceed with a contract despite knowing that it could be avoided, thus losing the right to avoid. Can be done expressly or impliedly and lapse of time may indicate affirmation.
• Agent. A person with authority to alter the legal position of another person, the principal. Such an alteration is usually achieved by making a contract for the principal.
• Alternative dispute resolution. Various methods by which legal disputes can be settled without going to court.
• Amending Act. A statute which changes some of the provisions of another statute which is already in force.
• Annual accounts (company). A company's annual accounts consist of a balance sheet, a profit and loss account, the directors' report and the auditor's report.
• Annual general meeting (AGM). A meeting of company members which is held once every calendar year. Public companies must hold an AGM; private companies might choose to do so.
• Annual return. Basic information about a company which must be submitted to the Registrar of Companies once a year.
• Anticipatory breach. A breach of contract which is committed by repudiating the contract before performance of the contract becomes due.
• Apparent authority. The power to act on a principal's behalf which an agent appears to have. It is created when the principal represents to a third party that the power exists.
• Appellate court. A court which hears appeals from other courts.
• Arbitration. A method of settling civil disputes whereby the parties agree that an arbitrator should hear the case and award an appropriate remedy.
• Arbitrator. A disinterested person chosen by parties in dispute to settle the dispute.
• Articles of association. The rules of a company, which bind both the company and the members of the company.
• Assault. A tort, committed by any act which directly and intentionally causes the claimant to reasonably fear that he or she is immediately about to suffer battery.
• Auditor. An accountant who checks a company's accounts and reports to the members of the company regarding the accounts.
• Avoid (a contract). To call off future performance of a contract on account of misrepresentation, duress or undue influence. (See also Rescission.)
• Balance sheet. Part of a company's accounts which show the assets and liabilities of the company on a particular date.
• Bankrupt. An individual (not a company) can be declared bankrupt by a court on account of not being able to pay his or her debts.
• Base rate. An official rate of interest to be paid on credit. The base rate is set by the Bank of England once a month. Many creditors set the rates of interest which they charge by reference to the base rate.
• Basic award. An amount of money to which employees who have been unfairly dismissed are entitled.
• Battery. A tort committed by a direct and intentional physical contact with the claimant's body without the claimant's consent.
• Beneficiary. A person entitled to the benefit of property which is held on trust.
• Bilateral contract. A contract in which the consideration of both parties consists of a promise. (Almost all contracts are bilateral.)
• Bill. A proposed Act of Parliament before it has received the Royal Assent.
• Bill of exchange. A cheque, or other unconditional order in writing requiring one person to pay another.
• Board of directors. Directors of a company acting collectively. The board can exercise all the powers of the company.
• Board meeting. A meeting of the board of directors.
• Bona fide. In good faith or honestly.
• Breach (of term/contract). Breaking the contract by not performing a contractual obligation.
• Bulk (in sale of goods). Goods form part of a bulk if they are contained in a defined space or area and all the goods are interchangeable with all the other goods.
• Burden of proof. The obligation to prove facts or to prove a legal case.
• Cab-rank rule. The rule that a barrister, like a taxi, should provide his services to anyone willing to pay for them.
• Capacity (in contract). The power to make a contract.
• Capital. Money or wealth.
• Causation. The relationship between cause and effect.
• Cause of action. The factual situation which gives a person a right to a legal remedy.
• Certificate of incorporation. Certificate issued by the Registrar of Companies which shows that a company has come into existence.
• Chambers. (i) The rooms from which self-employed barristers work. (ii) Rooms attached to a court in which a judge conducts business which does not need to be done in open court.
• Charge (in relation to companies). A property interest given by a company to secure a debt, which will cease to exist if the debt is repaid. Charges are void if not registered with Companies House.
• Chattel (personal). A physical thing which can be touched and moved.
• Cheque. A bill of exchange which orders a bank to pay money.
• Circuit judge. A judge attached to a county court who hears claims allocated to the multi-track or the fast track.
• Code of practice. A code which is produced alongside some statutes, such as the Consumer Protection Act 1987 to illustrate how the statute is intended to work.
• Codifying Act. A statute which puts all of the existing case law and statute law into one new statute (e.g. Partnership Act 1890).
• Commercial agent. A self-employed commercial agent is defined by the Commercial Agents (Council Directive) Regulations 1993 as a self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of another person (the principal), or to negotiate and conclude the sale or purchase of goods on behalf of and in the name of that principal. The Regulations give such agents rights, particularly in relation to termination of their agency. The Regulations also impose duties on such agents.
• Common law. (1) The body of law made by the courts, rather than by Parliament. (2) The body of law which did not originate in the Court of Chancery.
• Companies House. A Government department which deals with the administration of companies and LLPs. Its main functions are incorporating and dissolving companies, storing information about companies and LLPs, and making this information available to the public.
• Company. An incorporated body which has a legal personality of its own.
• Company secretary. An officer of a company who deals with the company's administration.
• Comparator. In employment law, a person with whom a person claiming discrimination wishes to compare himself or herself.
• Competition law. A body of law which tries to ensure that businesses compete with each other freely.
• Conciliation. A form of ADR under which a conciliator tries to find middle ground on which the parties might agree to settle their dispute.
• Condition (of a contract). An important type of contract term, breach of which allows the injured party to terminate the contract and/or claim damages. A term is a condition if, when the contract was made, it was considered to go to the root of the contract. Some statutory terms are also labelled conditions. Contrasted with a warranty.
• Conditional sale. A sale of goods whereby the buyer gets possession of the goods but ownership remains with the seller until the full price is paid.
• Consideration. The promise (or in cases of unilateral contracts, the act) which a party to a contract gives in return for the other party's consideration. This requirement of a contract distinguishes contracts from gifts.
• Consideration (total failure of). A total failure to perform one's contractual obligations.
• Consolidating Act. A statute which replaces one or more existing statutes on a particular subject.
• Constitution (of company). The rules of a company, consisting of its articles of association and special resolutions or unanimous resolutions which could have been passed only as special resolutions.
• Constructive dismissal. A dismissal which occurs when an employee leaves the job, justifiably, on the grounds of the employer's conduct.
• Consumer. As regards most consumer protection legislation, a natural person (and therefore not a company) who is acting for purposes which are outside his business. However, the Sale of Goods Act definition of a person who 'deals as a consumer' is quite different.
• Contributory negligence. A defence whereby a claimant's damages are reduced by the extent to which his own fault contributed to his loss.
• Conversion. A tort giving the owner of goods the right to sue a person who wrongfully possesses, damages or destroys the goods. The tort is committed by intentionally dealing with goods in a way which is inconsistent with another's right to possess the goods.
• Conviction. (1) A decision by a court that a defendant is guilty of the crime of which he was accused. (2) A record of a person having been found guilty of a crime.
• Cooling-off period. A short period of time during which a concluded contract can, in some circumstances, be terminated.
• Copyright. A right which protects the way in which ideas are expressed.
• Corporate veil. The idea that a company is a legal person separate from its members. It is based on an image of a veil hanging between the company and its members.
• Counter offer. The rejection of an offer, made by proposing a different set of terms.
• Court of Appeal. The second highest court in the English legal system. The court sits as either a criminal division or a civil division and only hears appeals. No cases begin in the Court of Appeal.
• Court of Chancery. A medieval court, presided over by the Lord Chancellor, which dealt with defects in the common law and with matters of conscience. Ceased to exist in 1873 when the Chancery Division of the High Court was created.
• Court of Human Rights. A court in Strasbourg which hears cases involving breach of the European Convention on Human Rights.
• Credit. The right to have payment of a debt postponed.
• Creditor. A person who is owed money.
• Credit sale. A sale of goods whereby the buyer gets ownership and possession of the goods before payment of the price.
• Crown Court. Court which tries serious criminal cases in front of a judge and jury.
• Crystallisation (of a charge). The turning of a floating charge into a fixed charge.
• Damages. A payment of a sum of money to compensate for a loss suffered as a result of a tort or a breach of contract.
• Debtor. A person who owes money.
• Debenture. A document which shows that a loan has been given by a company.
• Decisions (i.e. of EU Council). Minor EU legislation, addressed to an individual or Member State.
• Declaration of incompatibility. A declaration by a precedent-making court that a piece of legislation is incompatible with rights contained in the European Convention on Human Rights.
• Deed. A written contract which is signed by the makers and also signed by people who witness the makers' signatures. The document must make it clear that it is intended to be a deed.
• Defamation. A tort, committed by publishing a statement which either lowers the claimant in the estimation of right-thinking people generally or causes the claimant to be shunned and avoided.
• Default position. The position which will apply if no action is taken to change it.
• Default provisions. Provisions in the Partnership Act 1890, or the Limited Liability Partnerships Act 2000, which regulate the members' or partners' relationship with each other, but only if they do not substitute their own arrangements.
• Delegated legislation. Legislation delegated by Parliament to some other body to make.
• De minimis. An abbreviation of the rule de minimis non curat lex, the law is not concerned with trifles (very trivial matters).
• Derivative claim. A legal action brought by a company member on behalf of the company.
• Designated member (of an LLP). A member of an LLP who has duties which are similar to the duties of company directors and the company secretary.
• Direct applicability. EU law which is directly applicable automatically forms part of the law of Member States, such as the UK.
• Directive. A form of EU secondary legislation, which must be implemented into the law of Member States before a certain date.
• Director. A person who manages a company.
• Directors' report. Part of a company's accounts which gives a fair view of the development of the company's business and of the company's position at the end of a financial year.
• Discharge (of contract]]). When a contract is discharged, the obligations it created cease to exist.
• Disclosed agency. Agency which exists when the third party with whom the agent deals knows that the agent is acting as an agent.
• Disqualification order. A court order disqualifying a person from being a company director for a certain time.
• Dissolution (of a partnership). The ending of a partnership, which may be little more than a formality. (Contrast winding up.)
• Distance contract. A contract concluded solely by means of distance communications, without the consumer and the supplier actually meeting each other.
• Distinguishing. Occurs when a lower court refuses to follow an apparently binding precedent, on the grounds that it is materially different from the facts of the case in front of it.
• District judge. A judge attached to a county court who hears claims allocated to the small claims track.
• Divisible contract. A contract which can be divided into several, independent obligations. Also known as a severable contract. Contrasted with an entire contract.
• Document of title. A document, such as a bill of lading, which indicates that the holder can treat the goods as if he owned them.
• Duty of care (in tort of negligence). A duty to take care not to injure people whom you can reasonably foresee might be injured by your actions.
• Duress. Improper pressure, pushing a party into a contract in such a way that he did not really agree to it. Makes the contract voidable.
• EC. The European Community. Now known as the EU or European Union.
• Economic loss. A loss which is not connected to injury to the person or damage to property, but which is purely financial, e.g. lost profits.
• Ejusdem generis rule. A rule of statutory interpretation that general words which follow specific words must be given the same type of meaning as the specific words.
• Employee. A person who works under a contract of employment.
• Employer. Person who employs an employee under a contract of employment.
• Employment tribunal. A court which hears only employment cases.
• Entire contract. A contract consisting of one single obligation. Contrasted with a divisible contract.
• Equality and Human Rights Commission. A new body which will take action against those who discriminate unlawfully or who breach human rights.
• Equality clause. A clause, deemed by the Equality Act 2010 to be in a woman's contract of employment, to the effect that her terms and conditions should be no less favourable than those of a man doing the same type of work for the same employer.
• Equity. The body of law which originated in the Court of Chancery. It is contrasted with common law, which did not originate in this way.
• Estoppel. A rule that a person who has made a representation to another cannot deny the truth of the representation once it has been acted upon.
• Ethnic group. A group of people with a shared history and culture.
• EU. The European Union.
• European Commission. A permanent EU body which makes broad EU policies and proposes EU legislation.
• European Convention on Human Rights. A Treaty setting out human rights. The Treaty was created in 1950 and the United Kingdom ratified it in 1951.
• European Council. A temporary body, made up of Ministers from EU States, which makes policy on particular matters.
• European Court of Justice (ECJ). The highest court in relation to matters of EU law. It sits in Luxembourg.
• European Parliament. The elected Parliament of the EU, which approves the EU budget and can veto some EU legislation.
• European Union. A union of 27 States which aims to enhance political, economic and social co-operation. It was previously known as the European Community (EC) and before that as the European Economic Community (EEC).
• Exclusion clause. A term of a contract which attempts to limit or exclude liability for breach of the contract.
• Executed consideration. Consideration which occurs when one of the parties makes the offer or the acceptance in such a way that he has completely fulfilled his liability under the contract.
• Executory consideration. Consideration which consists of a promise to do something in the future.
• Express actual authority. Actual authority of an agent which is created by express words, written or spoken.
• Expressio unius est exclusio alterius. A rule of statutory interpretation that if there is a list of specific words, not followed by any general words, then the statute applies only to the specific words mentioned.
• Express term. A term of a contract which was agreed by the parties in express words (written or spoken).
• Extraordinary general meeting (EGM). A meeting of company members which is not the AGM.
• Factor (also known as a mercantile agent). An agent in business to buy or sell goods who can, in certain circumstances, pass ownership of another person's goods even when acting without authority to do so.
• False imprisonment. A tort, committed by directly and intentionally depriving the claimant of his or her liberty.
• Fair comment. A defence to defamation which is available to a person who acted without malice when commenting on a matter of public interest.
• Fiduciary. Involving great trust or confidence.
• Firm. A partnership.
• First instance (court of). A court which first hears a case.
• Fixed charge. A company charge which mortgages specific property belonging to the company.
• Fixed-term contract. A contract which is agreed at the outset to be in existence for a fixed time, rather than being a contract which can be ended by giving notice.
• Floating charge. A company charge under which a creditor takes a class of, or all of, the company's property, both present and future assets, as security for a debt.
• Force majeure clause. A term of a contract which might excuse non-performance of the contract if this was caused by matters beyond the control of the parties, such as a tsunami.
• Foreseeability. The extent to which damage or loss was foreseeable.
• Freezing injunction. An injunction which prevents a person from moving assets out of the jurisdiction of the English courts. Previously known as a Mareva injunction.
• Frustration. (1) Discharge of a contract on the grounds that it has become impossible to perform, illegal to perform or radically different from what the parties contemplated. (2) Discharge of a contract of sale of specific goods which perish after they have been sold but before the risk has passed to the buyer.
• Goods. Property which can be touched and moved. (Not interests in land, money or things in action.)
• Goodwill. The amount by which the market value of a business is worth more than the value of its individual assets.
• Gratuitous agent. An agent who acts for no reward or payment.
• Gross pay. The amount of pay made to an employee before any deductions, such as tax, have been made. (Compare net pay.)
• Gross profits. Any pre-tax profits which remain once all the business liabilities have been taken away from gross takings. (Compare net profits.)
• Gross takings. All the money which a business takes in.
• Harassment. In employment law, harassment means unwanted conduct which is intended to have, or has, the effect of violating a person's dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for that person.
• Hire (contract of). A contract under which possession, but not ownership, of goods is given in return for payment.
• Hire-purchase (contract of). A contract under which goods are hired for a fixed time in return for regular payments, with the hirer given an option to buy the goods for a nominal sum when the agreement ends.
• HMRC. HM Revenue and Customs which was formed in 2005, following the merger of the Inland Revenue and HM Customs and Excise Departments.
• Holding out. A person who holds something out represents that that thing is true and will be prevented from denying the truth of the representation as regards a person who has relied on it.
• Horizontal effect. EU law which can be relied upon by one individual to sue another individual. (Contrast vertical effect.)
• House of Lords. (1) Formerly, the highest court in the English legal system. (2) A law-making house of Parliament in which Members of the House of Lords sit.
• Hybrid offence (or either way offence). A criminal offence which is neither particularly serious nor particularly minor, and which may be tried either by the Crown Court or by the magistrates' court.
• Illegal contract. A contract which cannot be enforced because its purpose is illegal.
• Implied actual authority. Actual authority of an agent which is created by conduct rather than by words.
• Implied term. A term which was not expressly agreed by the parties but which was implied by the courts or by a statute.
• Indemnity. A payment to compensate for expenses properly incurred.
• Independent contractor. A person who works in a self-employed capacity, rather than as an employee.
• Indictable offence. A serious criminal offence, which will be tried in the Crown Court in front of a judge and jury.
• Injunction. A court order requiring a person to do or not to do some act.
• Innocent publication. A defence to defamation which is available only to a distributor.
• Innominate term. A term of a contract which is not a condition or a warranty. If such a term is breached the injured party will be entitled to damages but will not be entitled to treat the contract as terminated unless the breach deprived him/her of substantially the whole benefit of the contract.
• Innuendo. In defamation, a meaning which would be known only to those with special knowledge.
• Inquisitorial system of trial. A system under which the judge sets out to discover the facts.
• Insolvent. Unable to pay existing debts. Individuals who are insolvent may be made bankrupt. Companies which are insolvent may be liquidated.
• Intellectual property right. An intangible property right such as copyright, patent or trade mark.
• Intention to create legal relations. One of the four main requirements of a contract. Even if there is an offer, an acceptance and an exchange of consideration, there will be no contract unless it appears that the parties intended to create legal relations.
• Interest. Money charged in return for the use of other money.
• Invitation to treat. In contract, an invitation to make an offer. Its main significance is that it is not itself an offer.
• Invoice. A document which a seller of goods or services sends to a buyer, describing what has been sold and showing the price and how much money is due.
• Joint and several liability. People who have the same liability so that any of them can be sued in respect of it. The person sued may receive a contribution from others who were liable.
• Judicature Acts 1873–1875. Statutes which merged the administration of common law and equity.
• Judicial precedent. The system which operates in England whereby the decisions (ratio decidendi) of higher courts can be binding on lower courts.
• Judicial review. A procedure by which the Administrative Court can declare decisions of public law bodies to be illegal.
• Judiciary. All of the judges in the country make up the judiciary.
• Jury. A group of persons who take an oath to decide questions of fact in judicial proceedings. Juries of 12 sit in the Crown Court. Indictable offences are tried by jury, summary offences cannot be. Hybrid offences are sometimes tried by jury. Juries used to sit in civil cases but generally do not do so any more.
• Justification. (1) In defamation, a defence that the allegedly defamatory statement was true. (2) A defence to trespass to land, that the defendant has legal authority to enter the land.
• Jurisdiction. The power of a court to hear a legal case.
• Lay magistrate. A magistrate who is not trained as a lawyer.
• Lay person. A person who is not trained as a lawyer.
• Law Lord. A judge who used to sit in the House of Lords, e.g. Lord Hoffmann, before the Supreme Court replaced the House of Lords.
• Law reports. Records containing the full decisions of certain cases made by precedent-making courts.
• Legislation. Law made or approved by Parliament in the form of statutes or delegated legislation.
• Libel. Defamation in a permanent medium, such as writing.
• Licence. Permission granted by an occupier of land to enter onto the land.
• Lien. A right to keep possession of another's goods until a debt is paid.
• Lieu (in lieu). Instead of.
• Limited company. A company in which the liability of the members is limited to paying fully for their shares. Beyond this, the members have no liability to pay the debts of the company. Most companies are limited.
• Limited liability partnership. A business organisation, with two or more members, which shares some of the features of a partnership and some of a limited company.
• Liquidated damages clause. A term in a contract which sets out the amount of damages to be paid if the contract is breached, the amount specified being the amount which the parties genuinely thought that the loss would be in the event of breach. The amount specified will be the amount payable, no matter what the actual loss turned out to be. Contrasted with a penalty.
• Liquidation. The ending of a company's existence, or an LLP's existence, when its debts are paid and any surplus assets are divided amongst the shareholders or members. Also known as winding up.
• Liquidator. A person appointed by a court to liquidate a company or an LLP.
• LLP. See Limited liability partnership.
• Loan. Money lent, usually in return for the payment of interest.
• Lord Justice of Appeal. A judge who sits in the Court of Appeal, e.g. Laws LJ.
• Magistrates' court. Court which tries less serious criminal cases.
• Mediation. A form of ADR under which a mediator tries to bring the parties together to settle their dispute.
• Member of a company. A shareholder in a company.
• Member States. States which are members of the EU.
• Memorandum of association. A document needed to register a company which gives basic information about the company. This is a 'historical snapshot' which cannot later be altered.
• Mens rea. The guilty state of mind which needs to be proved before a person can be convicted of a crime.
• Mercantile agent (also known as a factor). An agent in business to buy or sell goods who can, in certain circumstances, pass ownership of another person's goods even when acting without authority to do so.
• Minor. A person under 18 years of age. Minors do not have full capacity to make contracts.
• Minority shareholder. A shareholder in a company with less than 50 per cent of the shares which carry voting rights.
• Misrepresentation (actionable). An untrue statement of fact which induced the making of a contract. An actionable misrepresentation makes a contract voidable.
• Mistake (common). A mistake made by both of the parties to a contract.
• Mistake (unilateral). A mistake made by only one of the parties to a contract.
• Mischief rule. A rule of statutory interpretation which allows a court to consider what mischief or problem a statute sought to rectify.
• Mitigation. The duty to take reasonable steps to reduce a loss caused by a tort or a breach of contract.
• Mortgage. A form of security whereby property is given as security for a debt. If the debt is not repaid the property can be sold by the creditor who can take what he is owed from the proceeds.
• Negligence (tort of). The most important tort. Liability in negligence arises when a defendant who owes a duty of care breaches that duty in such a way that this causes a foreseeable type of damage.
• Negligent misstatement. A form of the tort of negligence whereby a person in a special relationship with another person can be liable on account of statements made to that other person.
• Nemo dat rule (Nemo dat quod non habet). The general rule that a person who does not own goods cannot pass ownership of those goods to another person.
• Net pay. The amount of money which an employee actually receives as pay, after deductions such as tax have been made.
• Net profits. The profit which remains after all tax and other lawful deductions have been made.
• Nominal damages. Damages in name only. Token damages, often 5p or £1.
• Nominal sum. A token (very small) sum of money.
• Non est factum. A kind of mistake which makes a contract void because a person, who was not careless, was completely mistaken about the nature of what it was he or she signed.
• Notice. (1) Notification of a fact. (2) In employment, the amount of time needed to notify either an employer or an employee that the contract is to be unilaterally ended.
• Novus actus interveniens. A new act intervening, which breaks the chain of causation in tort.
• Nuisance. A tort. See public nuisance and private nuisance.
• Obiter dicta (literally, other things said.). A legal principle which is part of a precedent-making court's decision but which cannot be binding as a judicial precedent because it was not the ratio decidendi.
• Objects clause. A part of a company's old-style memorandum of association which sets out the contracts which the company has the capacity to make. Since the Companies Act 2006 came into force, newly formed companies no longer need to register an objects clause.
• Occupiers' liability. The liability of occupiers of premises owed both to lawful visitors to those premises and to trespassers.
• Offence. A crime.
• Offer. A proposal of a set of terms by which the offeror is willing to be contractually bound.
• Offeree. A person to whom an offer is made.
• Offeror. A person who makes an offer.
• Offer to settle. A formal offer to settle a civil claim for a certain amount.
• Office of Legal Complaints. A new body which will investigate complaints against solicitors and barristers.
• Off the shelf company. A company formed in advance so that it can be sold to people who do not want to form their own company.
• Ombudsman. A person empowered to investigate disputes which arise within a certain trade or industry.
• Oral contract. A contract made by spoken words (i.e. not made in writing or by conduct).
• Ordinary resolution. A company resolution which is passed if a majority of eligible members who actually vote vote in favour of the resolution.
• Overdraft. Credit given by a bank in allowing a customer to take more money out of his or her account than is in the account.
• Overrule. A higher court overrules a ratio decidendi of a lower court by declaring it to be invalid and overturned.
• Parent Act. A statute which gives the power to make delegated legislation.
• Parliament. The supreme governing body of the United Kingdom which can pass legislation. It is made up of the Queen, the House of Lords and the House of Commons.
• Partnership. Two or more persons carrying on a business together, with the intention of making a profit, and without operating as a company or an LLP.
• Partnership agreement. A written agreement setting out the rights of partners as regards each other. Can be in the form of a deed, but does not need to be.
• Partnership property. Property which belongs to all of the partners in a firm, rather than to individual partners.
• Party. A person.
• Passing off. A tort committed by deceiving the public so that they believe that a business is in fact a different business.
• Past consideration. A promise to perform an act which has already been performed (cannot be good consideration in law of contract).
• Patent. A right to exploit a new inventive step which has been registered as a patent.
• Payment into court. A formal offer to settle a civil claim for a certain amount.
• Penalty. A term in a contract which sets out the amount of damages to be paid if the contract is breached, the amount specified being a large sum to terrorise the other party into performance, rather than a genuine pre-estimate of what the loss would be. Penalties are ignored by the courts, which assess damages as if the penalty did not exist. Contrasted with liquidated damages clauses.
• Perpetual succession. The idea that a company or an LLP can stay in existence permanently.
• Plc. See public company.
• Pledge (or pawn). Handing over possession of goods as security for a loan, on the understanding that the goods can be sold if necessary to recoup any part of the debt which is not repaid.
• Pledge credit. Gain credit by promising that the debt will be repaid.
• Poll. A vote on a company resolution where each voting share carries one vote. Contrast show of hands.
• Postal rule. The rule that acceptance of an offer by letter or telegram is effective when it is posted. The rule applies only if acceptance by letter or telegram is asked for or reasonably expected.
• Preference (in relation to companies]]). An act by a company which puts a creditor of the company into a better position if the company should go into insolvent liquidation than he otherwise would have been. A court can order that a preference be repaid to the company.
• Preference shares. A class of shares which have rights which are not the same as the rights attaching to ordinary shares.
• Preferential creditor. A creditor of a company who has taken security for the debt and is therefore allowed to take payment out of the sums realised by the security ahead of unsecured creditors. However, this right can be subject to 'top-slicing'.
• Prescription. A property right which can give a right to continue committing what would otherwise be a nuisance. The right is acquired by continuously doing the act which causes the nuisance for 20 years.
• Presumption. A state of affairs which a court will presume to exist unless evidence rebuts the presumption. (See also rebut.) A few presumptions are irrebuttable, in which case no evidence will be allowed to contradict them.
• Principal. A person on whose behalf an agent acts.
• Private company. A company which is not allowed to offer its shares and debentures to the public.
• Private nuisance. A tort consisting of an unreasonable interference with a claimant's land or with a claimant's use or enjoyment of land.
• Privilege (in defamation]]). Absolute and qualified privilege are defences to defamation.
• Privity of contract. The common law rule that a person who did not make a contract can neither sue on it nor be sued on it. The rule has been modified to some extent by the Contracts (Rights of Third Parties) Act 1999.
• Privy Council. The Supreme Court justices when they sit to hear an appeal from certain Commonwealth countries.
• Procedure. The rules applying to the bringing of a court case. The way in which a civil or criminal court case must be conducted.
• Proceeds of sale. The amount of money received when property is sold.
• Product liability. An area of law concerned with making sure that manufacturers and importers into the EU do not put unsafe products on to the market.
• Profit and loss account. Part of a company's accounts which show the income and expenses of the company over the financial year.
• Promoter. Person who forms a company.
• Pro rata. In the same proportion, or at the same rate.
• Protocol. An agreement between States which is less formal than a Treaty.
• Proxy. A person entitled to vote in place of a company member, who authorised him to do so, at a company meeting.
• Public company (plc). A company which is allowed to offer its shares and debentures to the public. Also known as a public limited company.
• Public nuisance. A crime and a tort, which is committed by any act or omission which endangers the health, property or comfort of the public, or which prevents the public from exercising rights which all citizens enjoy.
• QC (Queen's Counsel). A senior barrister who has been declared a QC by a selection panel. Such a barrister usually acts in court with an assistant barrister and can usually charge higher fees.
• Quantum meruit. A claim to be paid on a proportional basis for work completed. Literally, 'As much as he has earned'.
• Ratification (in agency). A principal's act of conferring actual authority on an agent who has already acted for the principal at a time when he did not have actual authority.
• Ratification (of a Treaty]]). Agreeing to be bound by a Treaty.
• Ratio decidendi. A legal principle which is part of a court's decision and which can be binding as a judicial precedent. (Literally, the reason for the decision.)
• Realisation (of security). Selling an asset or property right given as security for a debt, so that the amount owing can be deducted from the proceeds of sale.
• Real remedy (sale of goods). A remedy taken by an unpaid seller against the goods, rather than against the buyer. (See lien, stoppage in transit and right of resale.)
• Rebut. To contradict or to provide an answer to an argument or to a presumption.
• Rectification. An equitable remedy which allows a written document to be corrected to reflect what was agreed orally.
• Red circling. Allowing workers who have been demoted in a reorganisation to remain on their previous rates of pay.
• Redundancy. A dismissal of an employee on the grounds of the employer going out of business, moving the business, or not needing work of the type which the employee performed.
• Re-engagement. A remedy for unfair dismissal, rarely awarded, in which an employer is ordered to give an unfairly dismissed person another job similar to the one from which he or she was dismissed.
• Registrar of Companies. An official who deals with the administration of companies. The head of Companies House.
• Regulation. A form of directly applicable EU secondary legislation.
• Regulations. A form of UK delegated legislation.
• Reinstatement. A remedy for unfair dismissal, rarely awarded, in which an employer is ordered to re-employ an unfairly dismissed person on the same conditions as he or she held before the dismissal.
• Rejection (of goods). Refusal to accept goods.
• Representation. A statement which induces the making of a contract and which is not a term of the contract.
• Repudiation. An indication by a contracting party that he does not intend to perform the contract.
• Resale (right of]]). A right which can give an unpaid seller of goods the right to resell the goods to a second buyer.
• Rescission. (1) The calling off of future performance of a contract on account of misrepresentation, duress or undue influence. (See also avoiding the contract.) (2) Terminating a contract under ss. 48A–48F of the Sale of Goods Act 1979.
• Restraint of trade clause. A term of a contract which tries to prevent a person from working or carrying on a business. Void unless reasonable.
• Resolution. A decision passed by a vote of company members. See ordinary, special and written resolutions.
• Retention of title clause. A term in a contract which stipulates that ownership of goods which have been agreed to be sold will remain with the seller until the price is paid, even though the buyer may take possession of the goods.
• Reversing. In the same case, an appeal court changes (reverses) the decision of the lower court so that the person making the appeal wins in the appeal court.
• Revocation (of an offer). Calling an offer off, so that it can no longer be accepted.
• Right of resale. A right of an unpaid seller to resell goods to a second buyer after they have already been sold to the first buyer.
• Risk (in sale of goods]]). Risk passes from the seller of goods to the buyer, with ownership unless agreed otherwise. The party with the risk bears the loss if the goods are lost, stolen, damaged or destroyed.
• Rogue. Dishonest person.
• ROT clause. (1) A retention of title clause. (2) A restraint of trade clause.
• Royal Assent. The final stage in the passing a statute. At this point a Bill becomes a statute.
• Rylands v Fletcher. A tort of strict liability.
• s.. An abbreviation for section. So s. 1 SGA 1979 means section 1 of the Sale of Goods Act 1979.
• Sample (sale by). A small quantity of goods to be examined by a buyer on the understanding that the bulk of the goods, when they are delivered, will correspond with the sample in quality.
• Satisfactory quality. A requirement that goods sold or supplied in the course of a business meet the standard that a reasonable person would regard as satisfactory, taking account of the price, description and other relevant circumstances.
• Search order. An injunction which allows the claimant access to premises to make sure that evidence is not destroyed. (Previously known as an Anton Pillar order.)
• Secured creditor. A creditor who has taken some security for a debt.
• Security. An asset or property right which can be sold, in order to take what is owing, if a debt is not repaid.
• Self-employed. A person who works for himself rather than for an employer.
• Set off. An amount of money which a claimant owes to a defendant, and which the defendant uses as a total or partial defence to a claim by the claimant.
• Shares. The interest of a member in a company, measured by a sum of money.
• Show of hands. A vote on a company resolution where each member has one vote, regardless of his or her shareholding.
• Single member company. A company which has only one member.
• Slander. Defamation in a temporary medium, such as speech.
• Sole trader. A person who is in business on his own, not as a company, an LLP or a partnership.
• Special resolution. A company resolution which is passed if 75 per cent of eligible members who actually vote vote in favour of the resolution.
• Specific goods. Goods which are identified and agreed upon at the time a contract of sale of goods is made. Contrasted with unascertained goods.
• Specific performance. A court order, rarely granted, ordering a party to perform his contractual obligations.
• Standard of proof. The extent to which a burden of proof must be satisfied. In civil cases this is generally on a balance of probabilities. In criminal cases the prosecution must prove all elements of the case beyond reasonable doubt.
• State. A sovereign country.
• Statute. An Act of Parliament.
• Statutory authority. A defence to various torts, that the act complained of was authorised by a statute.
• Statutory duty (breach of). Liability in tort which can arise on account of breaching the provisions of a statute, even though the statute did not specifically spell out civil liability.
• Stoppage in transit. A right of an unpaid seller to recover goods being delivered by a carrier to an insolvent buyer.
• Strict liability. (1) In civil law, liability which can arise without fault. (2) In criminal law, an offence which can be committed without the prosecution needing to prove mens rea in respect of all aspects of the actus reus.
• Subject to contract. A willingness to accept an offer subject to contract indicates that no contract will be created until the parties have completed further formalities.
• Subpoena. A court order, requiring a person to attend court and give evidence.
• Substantial performance. Performance of a contract which is sufficiently complete to enable a claim for the price to be made. Damages may be payable in respect of the part of the contract which was not performed.
• Sufficiency (of consideration). Consideration is sufficient if it is of some recognisable value, no matter how small, in relation to the consideration for which it is exchanged. If a party's consideration is not sufficient then no contract will be formed. (See also adequacy.)
• Summary dismissal. Dismissal of an employee without notice.
• Summary offence. A minor criminal offence which will be heard by the magistrates' court.
• Supreme Court. The highest court in the English legal system, formerly the House of Lords.
• Supreme Court justice. A judge who sits in the Supreme Court.
• Surplus assets. Assets of a company or an LLP which are left over after the company or LLP has been wound up and all creditors paid.
• Tender. An offer to buy or sell goods, made in response to an invitation for tenders.
• Tender of performance. A demonstrated willingness to perform an obligation.
• Tender of the price. An offer to pay the price.
• Term (of a contract]]). An agreement within a contract which gives rise to contractual liabilities.
• Thing in action. An intangible property right, such as a patent, which can be enforced only by taking legal action.
• Third party. A person other than the parties to a contract.
• Title (in goods). Ownership of the goods.
• Top-slicing. In relation to floating charges created on or after 15 September 2003, top-slicing requires a liquidator of an insolvent company to set aside a certain percentage of the company's assets for payment to the unsecured creditors. This amount is paid to the unsecured creditors ahead of any amount paid to the floating charge holders.
• Tort. A civil wrong other than a breach of contract.
• Track. Civil cases will be allocated to one of three tracks: the small claims track, the fast track or the multi-track, depending upon the size and complexity of the claim.
• Trade mark. An image which distinguishes the products of one business from those of other businesses.
• Treaty. A binding agreement made between different States.
• Treaty of Rome. The Treaty which founded what is now the EU in 1957.
• Trespass to land. A direct, unauthorised interference with another person's land.
• Trespass to the person. Either assault, battery or false imprisonment.
• Tribunal. A specialist court which hears disputes of a certain type, e.g. the employment tribunal hears employment cases.
• Trifle. A matter so trivial that it can be ignored.
• Trust. An equitable obligation under which a trustee holds ownership of property for the benefit of one or more beneficiaries.
• Trustee. A person who holds property on trust for a beneficiary.
• Uberrimae fidei. Of the utmost good faith.
• Ultra vires. An act which a company's objects clause did not permit the company to do.
• Unascertained goods. Goods which are not identified and agreed upon at the time a contract of sale is made. Contrasted with specific goods.
• Undisclosed agency. Agency which arises when an agent with actual authority acts on behalf of a principal, and the third party dealing with the agent does not know that the agent is acting for a principal.
• Undue influence. Improper influence which persuades a person to make a contract. A contract made because of undue influence is voidable.
• Unfair dismissal. A statutory remedy available to employees who are unfairly dismissed.
• Unilateral contract. A contract in which the offeror promises to be bound if the offeree performs a specified act, and the offeree accepts by performing the act.
• Unlimited company. A private company in which the liability of the members for the debts of the company is not limited.
• Unpaid seller. A seller of goods who has not been paid or offered the whole of the purchase price of the goods.
• Unsecured creditor. A creditor who has taken no security for a debt.
• Vertical effect. EU law which can be relied upon by an individual only to sue the State, or an emanation of the State. It cannot be relied upon to sue another individual. See also horizontal effect.
• Vicarious liability. The liability of employers for torts committed by their employees during the course of their employment.
• Void. A void contract is a contract which never comes into existence, even though the parties have tried to form a contract. Contracts can be rendered void if their purpose is illegal, or if the parties make certain types of mistake when forming the contract.
• Voidable. A voidable contract is one which can be avoided or rescinded. Until the contract is avoided it has legal effect.
• Volenti non fit injuria. A defence to an action in tort, whereby the defendant shows that the claimant voluntarily assumed the risk which caused his injury.
• Voting rights. In relation to company shares, shares which carry the right to vote at a meeting of company members. Non-voting shares have no such right.
• Waiver. The voluntarily giving up of a right, which then becomes lost.
• Warranty. A term of a contract, breach of which gives a right to damages but no right to terminate the contract. A term is a warranty if, when the contract was made, it was considered not to go to the root of the contract. Some statutory terms are also labelled warranties. Contrasted with conditions.
• Warranty of authority. In agency, an untrue representation made by an agent to a third party, to the effect that the agent has authority to act for a principal.
• Winding up (of a company, LLP or partnership). The ending of the existence of a company, an LLP or a partnership, when its debts are paid and any surplus assets are divided amongst the owners of the business. In the case of companies and LLPs, also known as liquidation.
• Written resolution. A resolution of a private company which is passed by the required majority of shareholders signing it, rather than by a vote at a company meeting.
• Wrongful dismissal. A claim in contract by an employee who has been dismissed without having been given the period of notice to which his contract entitled him.