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Free Questions › ACCA › Corporate and Business Law
Free ACCA Corporate and Business Law Practice Questions & Answers
400 exam-style Corporate and Business Law questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.
100% free · No login to startQuestion 121
Which of the following statements about 'accord and satisfaction' is correct?
Select an option first.
Correct answer: A — The original obligation is extinguished only when the new obligation is fully performed
Explanation: Accord (the agreement) creates a new obligation; satisfaction (performance of that new obligation) extinguishes the original duty. Accord alone does not release the original obligation.
Question 122
Under the Consumer Rights Act 2015, a consumer's 'short-term right to reject' goods that fail to conform lasts for:
Select an option first.
Correct answer: C — 30 days from delivery
Explanation: s.22 CRA 2015: the short-term right to reject lasts 30 days from delivery (or installation, or notification of the right, whichever is later).
Question 123
Which of the following is NOT a recognised category of intellectual property protection in the UK?
Select an option first.
Correct answer: D — Commercial goodwill alone
Explanation: Commercial goodwill is protected through the tort of passing off, but goodwill alone is not a standalone registered IP right. Patents (A), trademarks (B) and copyright (C) are formal IP rights.
Question 124
The Occupiers' Liability Act 1984 extends protection to:
Select an option first.
Correct answer: B — Trespassers, where the occupier is aware of the danger and the trespasser is likely to come into its vicinity
Explanation: OLA 1984 imposes a duty towards trespassers where: the occupier knows or has grounds to believe the danger exists, knows or believes the trespasser may come near it, and it is reasonable to offer protection. OLA 1957 covers lawful visitors.
Question 125
A 'chose in action' is best described as:
Select an option first.
Correct answer: B — A personal right enforceable only by legal action (e.g., a debt, copyright, or shares)
Explanation: A chose in action is an intangible property right enforceable only through legal proceedings. A describes a chose in possession; C and D are unrelated.
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Question 126
Which of the following correctly describes 'locus standi' (or 'standing') in legal proceedings?
Select an option first.
Correct answer: B — A party's right or capacity to bring or defend a legal claim
Explanation: Locus standi: a party's legal standing to bring proceedings – having a sufficient legal interest. A is jurisdiction; C is venue; D is the standard of proof.
Question 127
Under the Employment Rights Act 1996, an employee is entitled to a maximum of how many weeks' maternity leave?
Select an option first.
Correct answer: D — 52 weeks
Explanation: ERA 1996 and Maternity and Parental Leave Regulations 1999: eligible employees are entitled to up to 52 weeks' maternity leave (26 ordinary + 26 additional). A, B and C are below the maximum statutory entitlement.
Question 128
The 'doctrine of frustration' does NOT apply where:
Select an option first.
Correct answer: B — A party has self-induced the frustrating event through their own breach or election
Explanation: If a party has caused or chosen the event that makes performance impossible, they cannot rely on frustration – it is self-induced. A, C and D are genuine frustrating events.
Question 129
Which of the following describes 'subrogation' in the context of insurance contracts?
Select an option first.
Correct answer: A — The insurer's right, after paying out a claim, to step into the insured's shoes and pursue any claim the insured had against a third party
Explanation: Subrogation: after paying the insured's claim, the insurer takes over the insured's rights against any responsible third party, preventing double recovery. B, C and D are incorrect.
Question 130
A contract for the sale of land is governed by which statutory requirement?
Select an option first.
Correct answer: A — It must be in writing, contain all agreed terms, and be signed by both parties (s.2 Law of Property (Miscellaneous Provisions) Act 1989)
Explanation: s.2 LP(MP)A 1989: contracts for the sale or other disposition of land must be in writing, signed by both parties, and incorporate all agreed terms. B, C and D are not requirements for formation.
Question 131
The tort of 'private nuisance' protects:
Select an option first.
Correct answer: B — A landowner or occupier from unreasonable interference with their use and enjoyment of land
Explanation: Private nuisance: unreasonable interference with a claimant's use or enjoyment of land. A is public nuisance; C and D involve different torts.
Question 132
Under the law on exclusion clauses, the 'contra proferentem' rule provides that:
Select an option first.
Correct answer: B — Where an exclusion clause is ambiguous, it is construed against the party seeking to rely on it
Explanation: Contra proferentem: ambiguous exclusion clauses are interpreted strictly against the party trying to rely on them.
Question 133
The 'three-part test' for whether a term can be implied into a specific contract (in fact) requires the term to be:
Select an option first.
Correct answer: A — Reasonable and equitable, necessary to give business efficacy OR so obvious it goes without saying, and consistent with the express terms
Explanation: BP Refinery v Shire of Hastings: five conditions including: reasonable and equitable; necessary for business efficacy OR officious bystander test; capable of clear expression; not contradicting express terms. A summarises the key elements.
Question 134
Which of the following correctly describes the 'Unfair Contract Terms Act 1977' in relation to business-to-business contracts?
Select an option first.
Correct answer: B — It subjects certain B2B exclusion clauses (e.g., for negligence causing property damage) to a reasonableness test, while making exclusion of liability for death or personal injury caused by negligence void
Explanation: UCTA 1977: death/personal injury exclusions from negligence are void; other exclusion clauses (e.g., property damage, breach of contract) must satisfy the reasonableness test in B2B contracts. A overstates; C is wrong (CRA 2015 covers B2C; UCTA still covers B2B); D is too narrow.
Question 135
An 'agent' in law is a person who:
Select an option first.
Correct answer: B — Acts on behalf of another (the principal) to create legal relations with third parties
Explanation: An agent acts on behalf of a principal, creating legal relations between the principal and third parties.
Question 136
The key legal effect of a valid agency relationship is that:
Select an option first.
Correct answer: B — The principal is bound by contracts made by the agent within the scope of their authority
Explanation: Agency creates privity between the principal and the third party.
Question 137
'Actual authority' of an agent is:
Select an option first.
Correct answer: B — Authority expressly granted or necessarily implied by the principal
Explanation: Actual authority is express or implied by the principal.
Question 138
Apparent (ostensible) authority arises when:
Select an option first.
Correct answer: C — The principal represents to a third party that the agent has authority, and the third party relies on that representation
Explanation: Apparent authority is created by the principal's representation to the third party.
Question 139
Agency by ratification allows a principal to:
Select an option first.
Correct answer: B — Retrospectively adopt an agent's unauthorised act, making it binding as if authority existed at the outset
Explanation: Ratification: principal adopts an unauthorised act retrospectively.
Question 140
What is the key difference between a 'disclosed' and an 'undisclosed' principal?
Select an option first.
Correct answer: B — A disclosed principal is known to the third party; with an undisclosed principal, the third party does not know an agent is involved
Explanation: Disclosed: third party knows about the principal. Undisclosed: third party thinks the agent is contracting personally.
Question 141
Which of the following best describes a 'general partnership'?
Select an option first.
Correct answer: B — An association of two or more people carrying on business in common with a view to profit, governed by the Partnership Act 1890
Explanation: A general partnership is not a separate legal entity; it is governed by Partnership Act 1890.
Question 142
In a general partnership, partners are liable for the firm's debts:
Select an option first.
Correct answer: B — Jointly and severally without limit
Explanation: General partners have unlimited, joint and several liability for the partnership's debts.
Question 143
A Limited Liability Partnership (LLP) differs from a general partnership primarily because:
Select an option first.
Correct answer: B — It is a separate legal entity and members have limited liability
Explanation: An LLP (LLPA 2000) is a separate legal entity with limited liability for members.
Question 144
The concept of 'separate legal personality' in company law means:
Select an option first.
Correct answer: B — A company is a legal person distinct from its shareholders and directors
Explanation: Since Salomon v Salomon [1897], a company is a distinct legal entity.
Question 145
Limited liability for shareholders means:
Select an option first.
Correct answer: A — Shareholders are not liable for the company's debts beyond the amount unpaid on their shares
Explanation: Limited liability: shareholders risk only the amount paid or agreed to be paid for their shares.
Question 146
Which of the following is a key distinction between a private and a public limited company?
Select an option first.
Correct answer: B — Only a public company can offer shares to the general public and must have a minimum share capital of £50,000
Explanation: A plc can offer shares to the public; must have a minimum allotted share capital of £50,000.
Question 147
The process of 'lifting the veil of incorporation' means:
Select an option first.
Correct answer: B — Courts or statute disregarding the company's separate personality to make members or directors personally liable
Explanation: Veil lifting: courts look through the corporate form to the people behind it.
Question 148
Which of the following is a statutory example of lifting the veil of incorporation?
Select an option first.
Correct answer: B — Personal liability for wrongful or fraudulent trading under insolvency legislation
Explanation: IA 1986 allows courts to make directors personally liable for wrongful/fraudulent trading.
Question 149
The Articles of Association of a company are:
Select an option first.
Correct answer: B — The internal regulations governing the management and conduct of the company
Explanation: Articles are the company's internal rulebook.
Question 150
Model Articles of Association under the Companies Act 2006:
Select an option first.
Correct answer: A — Apply automatically where a company does not register its own bespoke articles
Explanation: If a company does not register articles, or articles are silent, the Model Articles apply by default.
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