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Question 1. Which source of English law is primarily created by judges? A) Statutory Instruments B) Common law C) European Union regulations D) Royal prerogative Answer: B Explanation: Common law develops through judicial decisions and precedents. Question 2. What is the main purpose of equity in the legal system? A) To replace common law entirely B) To provide remedies where common law is insufficient C) To enforce statutory provisions D) To create criminal sanctions Answer: B Explanation: Equity supplies flexible remedies such as injunctions when common law remedies are inadequate. Question 3. Which court has original jurisdiction over most serious criminal cases in England and Wales? A) Magistrates’ Court B) County Court C) Crown Court D) High Court Answer: C Explanation: The Crown Court hears indictable offences and trials by jury. Question 4. In civil proceedings, which standard of proof applies? A) Beyond reasonable doubt
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B) Balance of probabilities C) Clear and convincing evidence D) Preponderance of evidence Answer: B Explanation: Civil cases are decided on the balance of probabilities, i.e., more likely than not. Question 5. The UN CISG primarily governs contracts for the sale of goods between parties situated in: A) The United Kingdom only B) Any two countries that have ratified the Convention C) EU member states exclusively D) Countries within the Commonwealth Answer: B Explanation: The CISG applies where both parties are in contracting states unless excluded. Question 6. Which of the following is a recognized form of Alternative Dispute Resolution? A) Judicial review B) Arbitration C) Criminal prosecution D) Summary judgment Answer: B Explanation: Arbitration is a private process where a neutral third party decides the dispute. Question 7. An offer is distinguished from an invitation to treat because an offer: A) Can be revoked at any time without notice B) Is capable of acceptance to form a contract C) Must be in writing D) Requires consideration before it is made
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Question 11. The “neighbor principle” established in Donoghue v Stevenson is used to determine: A) Whether a contract exists B) The existence of a duty of care in negligence C) The appropriate level of damages D) The test for vicarious liability Answer: B Explanation: It sets the basis for a duty of care owed to persons closely and directly affected. Question 12. The “but for” test for causation asks: A) Whether the damage would have occurred anyway B) Whether the defendant’s act was a necessary condition of the loss C) Whether the plaintiff contributed to the loss D) Whether the loss was foreseeable Answer: B Explanation: It asks if the loss would have occurred “but for” the defendant’s breach. Question 13. In professional negligence, the case of Hedley Byrne established that a duty of care can arise in the context of: A) Physical injury only B) Purely contractual relationships C) Purely negligent misstatement causing economic loss D) Criminal liability Answer: C Explanation: Hedley Byrne created liability for negligent advice causing pure economic loss. Question 14. An employer is vicariously liable for an employee’s tort if the tort was committed: A) During the employee’s personal time
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B) In the course of employment C) After the employee has resigned D) By an independent contractor Answer: B Explanation: Liability attaches when the wrongful act is closely connected to the employee’s duties. Question 15. Which type of authority allows an agent to bind a principal even if the agent exceeds actual authority, provided the third party reasonably believes the agent is authorized? A) Express authority B) Implied authority C) Apparent (or ostensible) authority D) Ratified authority Answer: C Explanation: Apparent authority arises from the principal’s representations to third parties. Question 16. A worker who is not an employee but provides services personally is classified as: A) Independent contractor B) Volunteer C) Partner D) Agency Answer: A Explanation: Workers who are not employees but perform work under a contract for services are independent contractors. Question 17. Which of the following is NOT a ground for unfair dismissal under the Employment Rights Act 1996? A) Redundancy B) Capability or qualifications C) Business restructuring without consultation
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Explanation: Preference shareholders receive a fixed dividend and have priority over ordinary shareholders in liquidation. Question 21. A fixed charge over a company’s assets: A) Attaches to specific assets and follows them B) Allows the company to dispose of the assets freely C) Is created automatically by law D) Gives the charge holder priority over floating charges only after liquidation Answer: A Explanation: Fixed charges are tied to particular assets and restrict the company’s ability to deal with them. Question 22. Which insolvency procedure is designed to allow a company to continue trading while a rescue plan is implemented? A) Compulsory liquidation B) Administration C) Creditors’ voluntary liquidation D) Dissolution Answer: B Explanation: Administration places the company under an administrator to restructure and rescue the business. Question 23. In a voluntary arrangement (CVA), who must approve the proposal for it to become binding? A) The board of directors only B) At least 75% in value of the creditors who vote C) The High Court alone D) All creditors Answer: B
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Explanation: A CVA requires approval by creditors representing at least 75% of the total debt value. Question 24. Which class of creditor has the highest priority in a winding‑up? A) Unsecured creditors B) Employees (up to a statutory limit) C) Secured creditors with fixed charges D) Shareholders Answer: C Explanation: Fixed‑charge secured creditors are paid before floating‑charge and unsecured creditors. Question 25. Under the Fraud Act 2006, which element is NOT required to prove fraud by false representation? A) Dishonest intention B) Obtaining a financial gain C) Making a false representation D) That the representation was made to a third party Answer: D Explanation: The false representation need not be made to a third party; it can be to any person. Question 26. The Bribery Act 2010 creates a corporate offense for failure to: A) Pay taxes on time B) Prevent bribery by persons associated with the organization C) Keep accurate accounts D) Register with Companies House Answer: B Explanation: Companies have a statutory duty to have adequate procedures to prevent bribery. Question 27. “Tipping off” in the context of money‑laundering legislation refers to:
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Answer: C Explanation: Design rights protect the appearance, including shape and ornamentation, of a product. Question 31. Under the ICAEW Code of Ethics, confidentiality requires an accountant to: A) Disclose client information to any third party upon request B) Keep client information secret unless law or professional duty requires disclosure C) Publish all client data on the firm’s website D) Share information with competitors for benchmarking Answer: B Explanation: Confidentiality obliges accountants to protect client information unless an exception applies. Question 32. In Islamic finance, the prohibition of riba refers to: A) Investing in non‑sharia compliant stocks B) Charging or receiving interest on loans C) Engaging in speculative trading D) Paying taxes on profit Answer: B Explanation: Riba is the Islamic term for interest, which is forbidden. Question 33. Which of the following is a secondary source of legislation? A] An Act of Parliament B] A statutory instrument made under delegated authority C] A common‑law judgment D] A European directive directly applicable in the UK Answer: B Explanation: Statutory Instruments are secondary legislation made under powers granted by an Act.
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Question 34. The doctrine of “ultra vires” in company law means: A] A company can act beyond its constitutional limits without consequence B] Acts beyond the company’s objects are void or voidable C] Directors may ignore the articles of association D] Shareholders may enforce any contract the company signs Answer: B Explanation: Ultra vires acts are beyond the company’s stated objects and may be unenforceable. Question 35. Which of the following is NOT a requirement for a valid contract under English law? A] Offer B] Acceptance C] Consideration D] Registration with Companies House Answer: D Explanation: Registration is irrelevant to contract formation; the other three are essential. Question 36. A “condition subsequent” in contract law: A] Terminates the contract automatically upon occurrence of a future event B] Allows parties to vary the contract at any time C] Is a term that can be ignored without consequence D] Gives the right to claim damages only Answer: A Explanation: A condition subsequent ends the contract automatically if the specified event occurs. Question 37. The “Caparo” test for duty of care includes three elements. Which is NOT one of them? A] Foreseeability of damage B] Proximity between parties
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Explanation: A floating charge hovers over a pool of changing assets until crystallisation. Question 41. Which of the following is a permissible ground for termination of a contract by frustration? A] A change in market price making performance unprofitable B] An event that makes performance impossible and was not anticipated by either party C] A breach of a non‑essential term D] Mutual agreement to end the contract early Answer: B Explanation: Frustration occurs when an unforeseen event destroys the contract’s fundamental purpose. Question 42. The “reasonable person” standard in negligence is used to assess: A] The adequacy of the plaintiff’s evidence B] Whether the defendant’s conduct fell below the standard of care expected C] The amount of damages payable D] The existence of a contractual relationship Answer: B Explanation: It measures the defendant’s conduct against what a reasonable person would do. Question 43. Which of the following is a statutory duty of directors under the Companies Act 2006? A] To maximise dividend payouts each year B] To avoid conflicts of interest C] To ensure the company’s share price rises D] To guarantee employment for all staff Answer: B Explanation: Directors must avoid situations where their personal interests conflict with those of the company.
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Question 44. In an agency relationship, “ratification” occurs when: A] The principal expressly authorises the agent before the act B] The principal later adopts the unauthorised act, making it effective from the time it was done C] The agent acts within the scope of actual authority only D] The third party refuses to recognise the agent’s authority Answer: B Explanation: Ratification validates a previously unauthorized act as if it had been authorized from the start. Question 45. Which of the following is NOT a characteristic of a limited liability partnership (LLP)? A] Partners have limited personal liability for the LLP’s debts B] The LLP has a separate legal personality C] All partners must be individuals, not corporate entities D] LLPs are subject to Companies Act filing requirements Answer: C Explanation: Corporate entities can be members of an LLP; there is no restriction to individuals. Question 46. Under the Proceeds of Crime Act 2002, a “confiscation order” can be made against: A] Only individuals convicted of money‑laundering B] Anyone who has benefited from criminal conduct, even if not convicted of that conduct C] Only companies that have failed to register with HMRC D] Only foreign nationals Answer: B Explanation: Confiscation can be imposed on persons who have obtained benefit from crime, regardless of conviction for that specific offence. Question 47. Which of the following is a “primary legislation” source? A] A statutory instrument
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Answer: B Explanation: Companies must have proportionate procedures to prevent bribery; the adequacy is judged on reasonableness. Question 51. Which of the following is required for a statutory instrument to become law? A] Approval by the House of Lords only B] Publication in the Gazette without any parliamentary scrutiny C] Either affirmative or negative resolution procedure, depending on the enabling Act D] Signature by the Prime Minister Answer: C Explanation: Statutory instruments may require affirmative (explicit) or negative (no objection) parliamentary approval. Question 52. The “parol evidence rule” prevents: A] Use of oral evidence to vary or contradict a written contract, unless an exception applies B] Any evidence being admitted in court C] The use of written contracts in civil cases D] The amendment of statutes by common law Answer: A Explanation: The rule excludes extrinsic evidence that would alter the terms of a finalized written agreement. Question 53. Which of the following is an example of a “non‑compete” clause? A] A term requiring the employee to work overtime B] A term prohibiting the employee from working for a competitor for a limited period after leaving C] A term allowing the employee to take unlimited holidays D] A term mandating the employee to wear a uniform Answer: B Explanation: Non‑compete clauses restrict post‑employment activities to protect business interests.
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Question 54. Under the Companies Act 2006, a “secret reserve” is: A] A prohibited practice that may lead to a director’s disqualification B] Allowed as long as it is disclosed in the annual report C] Required for all public companies D] A type of share capital Answer: A Explanation: Maintaining undisclosed reserves breaches transparency requirements and can result in disqualification. Question 55. Which of the following is a “protected characteristic” under the Equality Act 2010, relevant to employment law? A] Marital status B] Political opinion C] Age D] Credit rating Answer: C Explanation: Age is one of the nine protected characteristics under the Equality Act. Question 56. In the context of data protection, a “data controller” is: A] The person who processes data on behalf of another B] The entity that determines the purposes and means of processing personal data C] Any employee who accesses personal data D] The regulator who enforces GDPR Answer: B Explanation: The controller decides why and how personal data is processed. Question 57. Which of the following best describes “unjust enrichment”?
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C] Directors must mirror the shareholders’ wishes at every meeting D] The company must mirror its financial statements in the annual report Answer: B Explanation: The mirror principle dictates that the rights attached to shares are those expressly stated in the articles. Question 61. Which of the following is NOT a typical remedy for breach of a contract of personal service? A] Specific performance B] Injunction C] Damages measured by loss of profits D] Rescission of the contract Answer: A Explanation: Specific performance is generally unavailable for personal service contracts due to personal liberty concerns. Question 62. The “Doctrine of Privity” in contract law states that: A] Only parties to a contract can enforce or be bound by its terms B] Third parties can always enforce contractual rights C] Contracts are void if not signed in writing D] All contracts must be registered with a public authority Answer: A Explanation: Privity limits enforceability to the contracting parties, though statutes may create exceptions. Question 63. Which of the following best describes “vicarious liability” in the context of partnership law? A] Partners are liable for each other’s personal debts B] Partners are jointly and severally liable for partnership obligations
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C] Partners are only liable for debts they individually incur D] Partners have no liability for partnership debts Answer: B Explanation: Partners share joint and several liability for partnership liabilities. Question 64. Under the Companies Act 2006, a “shadow director” is: A] A director who does not attend board meetings but gives instructions that are acted upon B] A director appointed by the government C] A director who holds shares in the company D] A director who has been removed from the register Answer: A Explanation: A shadow director influences the board’s decisions without being formally appointed. Question 65. In the context of the UK’s anti‑money‑laundering regime, “enhanced due diligence” is required when: A] The client is a private individual with a low risk profile B] The transaction involves politically exposed persons (PEPs) or high‑risk jurisdictions C] The transaction value is below £1, D] The client is a listed company Answer: B Explanation: Enhanced due diligence is applied to higher‑risk customers, such as PEPs. Question 66. Which of the following is a “non‑statutory” source of law? A] Statutory Instruments B] Judicial decisions (case law) C] Acts of Parliament D] European Regulations Answer: B
