SQE1 FLK1 Practice Paper 2

A company director makes a personal profit of £50,000 by diverting a business opportunity that properly belonged to the company. The company wants to recover this profit. Which legal principle applies? A) The director is liable for breach of the duty to promote the success of the company under s.172 CA 2006 B) The director is liable for breach of the duty to avoid conflicts of interest under s.175 CA 2006 C) The director has no liability because they acted in their personal capacity D) The director is only liable if the company can prove it suffered a financial loss

An employer dismisses an employee without notice after discovering the employee has been stealing from the company. The employee had been employed for 3 years. The employee claims unfair dismissal. Which of the following best describes the employer's position? A) The employer will automatically succeed because theft is always gross misconduct B) The employer must show it had a genuine belief in the employee's misconduct based on reasonable investigation and that dismissal was within the range of reasonable responses C) The employer cannot dismiss without providing at least one month's notice regardless of the reason D) The employer must first issue a written warning before dismissal for misconduct

Claire, aged 16, enters into a contract with an online retailer to purchase a designer handbag for £800. She now wishes to avoid the contract. Which of the following best states the legal position? A) The contract is void because Claire is a minor B) The contract is binding on Claire because it was made online C) The contract is voidable at Claire's option because the handbag is not a necessary D) The contract is enforceable because the retailer acted in good faith

A claimant obtains an interim injunction preventing a defendant from demolishing a building pending trial. Which set of principles will the court apply when deciding whether to grant the interim injunction? A) The court must be satisfied that the claimant will succeed at trial B) The court applies the principles in American Cyanamid, considering whether there is a serious question to be tried and where the balance of convenience lies C) The court must find that the defendant has acted in bad faith D) The court will only grant an interim injunction if damages would be an adequate remedy for the claimant

A factory emits noxious fumes that regularly drift onto neighbouring residential properties, causing residents discomfort and preventing them from using their gardens. The residents want to bring a claim. Which tort is most applicable? A) Negligence B) Private nuisance C) Public nuisance D) Trespass to land

A court makes a declaration of incompatibility under section 4 of the Human Rights Act 1998. What is the legal effect of such a declaration? A) The incompatible legislation is immediately struck down and ceases to have effect B) The declaration does not affect the validity of the legislation but signals to Parliament that the law should be amended C) The government is legally required to amend the legislation within 12 months D) The court can rewrite the legislation to make it compatible with Convention rights

Two companies enter into a written contract for the supply of machinery. The contract contains an entire agreement clause. After signing, the buyer alleges that the seller made an oral promise before the contract was signed that the machinery would include free maintenance for two years. Can the buyer rely on this oral promise? A) Yes, because oral promises always override written terms B) No, because the entire agreement clause prevents reliance on pre-contractual representations not contained in the written agreement C) Yes, because the parol evidence rule has been abolished D) No, because all contracts for the sale of machinery must be in writing

A sole trader employing 12 staff wishes to incorporate the business as a private limited company. Which of the following is a key advantage of incorporation? A) The sole trader will no longer be liable for any business debts incurred before incorporation B) The company will have a separate legal personality, limiting the shareholders' liability to the amount unpaid on their shares C) Incorporation eliminates all regulatory requirements D) The company does not need to file any documents with Companies House

In which of the following situations would a court be most likely to pierce the corporate veil? A) Where the company has traded at a loss for two consecutive years B) Where the company is being used as a device or facade to conceal the true facts and defeat a legal obligation C) Where the sole director is also the sole shareholder D) Where the company has failed to file its annual accounts on time

A solicitor acting for the claimant in a personal injury claim receives a Part 36 offer from the defendant of £25,000. The offer is expressed to remain open for 21 days. The solicitor advises the client to reject the offer and proceed to trial. At trial, the claimant is awarded £20,000. What are the likely costs consequences? A) The claimant will recover all of their costs because they won at trial B) The claimant will recover their costs up to the end of the relevant period, but will pay the defendant's costs from that date and will lose any entitlement to interest enhancements C) The defendant must pay all of the claimant's costs because the claimant was the successful party D) There are no costs consequences because Part 36 offers are not binding

An employer fails to provide a written statement of employment particulars to a new employee. Which of the following correctly states the legal position? A) The employment contract is void and unenforceable B) The employer has breached a statutory obligation but the employment contract remains valid C) The employee is entitled to automatic unfair dismissal D) The employee has no rights until a written contract is provided

Which of the following is correct regarding the duty of care owed by a manufacturer to the ultimate consumer of its products? A) The manufacturer only owes a duty of care to the person who purchased the product B) The manufacturer owes a duty of care to all persons who may foreseeably be affected by the product, including the ultimate consumer C) The manufacturer has no duty of care once the product has been sold to a retailer D) The duty of care only arises if the consumer has a contract with the manufacturer

A public body makes a decision to close a local library without consulting the affected community, despite a published policy promising consultation before any library closures. A local resident seeks judicial review. On which ground is the challenge most likely to succeed? A) Illegality, because the public body exceeded its statutory powers B) Irrationality, because no reasonable authority would close a library C) Procedural impropriety, because the public body failed to follow its own published consultation policy, creating a legitimate expectation D) Proportionality, because the closure is a disproportionate response

Marcus offers to sell his laptop to Nina for £500 by email on Monday. Nina emails back on Tuesday saying "I'll buy it for £450." Marcus does not respond. On Wednesday, Nina emails again saying "I accept your original offer of £500." Is there a binding contract? A) Yes, because Nina ultimately accepted the original offer of £500 B) No, because Nina's counter-offer of £450 destroyed the original offer, and her Wednesday email was a new offer which Marcus has not accepted C) Yes, because email offers remain open indefinitely until expressly withdrawn D) No, because Marcus's silence amounts to rejection of Nina's acceptance

Under the pre-action protocol for personal injury claims, which of the following steps must the claimant take before issuing proceedings? A) The claimant must obtain permission from the court before issuing proceedings B) The claimant must send a letter of claim to the defendant giving them a reasonable opportunity to investigate and respond C) The claimant must first attempt mediation through an accredited mediator D) The claimant must issue a Part 8 claim form before converting to Part 7