MOCK QUESTIONS

1) In relation to the money laundry regulations (MLR) 2017, indicate whether each of the following
statements regarding staff training are true or false.
• Staff must be made aware of the law on data protection to the extent that is relevant to the MLR
2017 TRUE
• Staff must receive regular training to ensure that they are correctly implementing the firm’s
money laundering policies TRUE
2) what is the earliest date on a claimant may seek a remedy when an anticipatory breach of contract
occurs?
• The date on which notice of non-performance is given
• The date on which the contract is due to be performed
• The date on which the parties entered into the contract

3) which two of the following would be regarded as insufficient consideration to form the basis of a
contract?
• performance of an existing contractual duty with no additional benefits
• one penny
• discharge of public duty
• performance of an existing contractual duty including extra service
4) which two of the following are the two types of delegated legislation?
• persuasive precedents
• acts of parliament
• directives of European union
• statutory instruments
• local authority bye-laws
5) in the context of share capital, which of the following may a company undertake to do freely without
restrictions?
• Extinguish or reduce liability on partly paid shares
• Cancel paid up shares capital which has been lost or which is no longer represented by available
assets
• Pay off part of paid -up share capital out of surplus assets
• Cancel unissued shares
6) In relation to the consumer rights act 2015, which of the following criteria must a contract term
must satisfy ?
• It must be fair
• It must be prescribed
• It must be reasonable
7) indicate whether each of the following statements regarding a company’s auditors in accordance with
the companies act 2006, are true or false
• a shareholder of a company cannot act as that company auditor true
• an employee of a company cannot act as that company auditor true
8) what type of a contract does an independent contractor with have with an organisation ?
• contract of service
MOCK QUESTIONS

• contract of employment
• contract for services
9) in relation to the classification of contract terms, which two of the following statements apply to a
warranty?
• statue may identify a term in contract as a warranty term
• breach of a warranty term entitles the innocent party to claim damages
• breach of a warranty term entitles the innocent party to bring the contract to an end
• it is a vital term which goes to the root of the contract
10) in relation to company law , which types of company are required to maintain a register of people
with significant control?
• Only companies listed on the London stock exchange
• All private companies and all public companies
• All public companies only
11) under contract law, what is sufficient consideration?
• It must have similar value to that received
• It may not be in the form of act already performed
• It must have some identifiable value
12) indicate whether each of the following features about an unlimited liability company are true or false
• The company must file accounts at company’s house false
• Member’s liability is limited to their initial contribution false

13) Prakriti has worked for Rubin for six months. She has three-month contractual notice period and her
contract does not mention payment in lieu of notice or the notice she must give Rubina if she resigns
Which of the following statements relating to notice periods is correct?
• Rubin can provide payment in lieu of notice if prakriti agrees
• Rubin can dismiss prakriti with one week’s notice regardless of her contract
• Prakriti can insist on payment in lieu of working her notice period
• Prakriti can resign without notice
14) which of the following statements regarding the alteration of a company’s articles of association is
correct?
• A person whose contract is within the articles can obtain an injunction to prevent alteration
• An existing member may not be compelled to accept the increased liability for the shares held
• A company has the statutory power to alter its articles by an ordinary resolution
15) in which of the following circumstances is an individual’s claim for redundancy payment likely to be
rejected?
• The claimant leaves the organisation when notified of the possibility of being made redundant
• The claimant wanted for three months after being made redundant before making this claim
• The claimant was in continuous employment only for three years before being made redundant

16) when do natural events break the chain of causation in the law of negligence?

• Where they are foreseeable and linked to the original act

MOCK QUESTIONS

• When they are unforeseeable and separate from the original negligent act or omission
• When they are unforeseeable but linked to the original act

17) which of the following is not an equitable remedy for the breach of contract?

• Damages
• Specific performance
• Injunction

18) which of the following can result in an employee claiming for constructive dismissal?

• When the employee resigns from the organisation due to their illness
• When their employer repudiates an essential term in the contract
• When the employee decides to wave the employer’s breach of contract

19) which of the following is not one of the instances in which the veil of incorporation will be lifted?

• When it is in the public interest to do so

• When a company is being used to evade lawful obligations
• When it is fair, just and reasonable to do so

20)which two of the following are general defences to a charge of insider dealing?

• The person disclosed inside information to a third party and did not use it themselves
• The person acting on the information believed the information had been disclosed
• The person disclosed inside information to a third party and did not know they would information
• The person did not expect dealing to result in a profit

21) Sher’s Ltd have been market leaders for over 10 years with a range of quality sauces they
manufacture under the brand name ‘sauce surprise’. They are now suing swift ltd under the tort of
passing off for recently launching a similar product under the brand name ‘saucy surprise’

Which of the following does sher’s ltd not have to prove in order to succeed in their claim under the tort
of passing off?

• That swift ltd misrepresented that their sauce was produced by the sher’s ltd
• That swift ltd intended to divert business away from shers ltd
• That damage has been or is likely to be caused to sher’s ltd goodwill
• That public confusion about the two brands is likely to result

22) in relation to preference shares and debentures, which of the following statements are not true?

• Preference shareholders and debenture holders can never vote on company resolutions
• Both preference shareholders and debenture holders have a right to a fixed rate of return even if
the company makes no profit
• Like registered debentureholders, preference shareholders are classified vas preferential creditors

23) which of the following statements regarding civil law is not correct?

• It is a form of public law

MOCK QUESTIONS

• a claimant sues a defendant

• it exists to regulate disputes over the rights and obligations of persons dealing with each other

24) which of the following statements applies to the duty of care expected of an auditor ?

• a member of the general public is entitled to rely on the company’s audit report when making an
investment decision
• it is the same regardless of whether the auditor is performing a statutory audit or advising on
takeover
• an auditor owes a duty of care where the auditor knows that a particular person will rely on the
audit report in deciding whether or not to proceed with a transaction
• any shareholder of a company is entitled to rely on a company’s audit report when considering
whether to increase his stake in the company

25) what percentages of votes are required to pass the special resolution?

• >75%
• 75%
• >50%

26) The Insolvency Act 1986 sets out a structure for the order of payment of creditors following the
liquidation of a company.

In which order of priority should the following be paid upon a company's liquidation?

• Floating chargeholders 3rd

• Preferential creditors 2nd
• Liquidation costs 1st

27) Administration is a way of saving a company from liquidation

Indicate each of the following statements regarding the effects of appointing an administrator to a
company, are true or false.

• No creditor can enforce their debt against the company during the administration period true
• During the administration period, the directors will still make all the day-to-day decisions about
running the company but they will be overseen by the administrator false

28) If a director decides that the company should be a public limited company, which of the following is
NOT a requirement for registration?

• Minimum allotted share capital of £50,000

• There must be at least two director
• A company secretary must be appointed
• The company must be listed on the stock exchange

29) Which of the following is NOT an established test to decide whether an individual is an employee?

• The control test

• The multiple (economic reality) test
MOCK QUESTIONS

• The integration test

• The delegation test

30) Which of the following statements is correct regarding the removal of a director before the expiration
of their term of office?

• A company can remove the director but may have to pay damages
• A company can never remove a director before the expiration of their term of office
• A company would only be able to remove the director if all members agreed
31) Which of the following describes the test of remoteness in the law of negligence?
• Liability extends to the direct consequences of the defendant's actions
• Liability extends only to losses that are either naturally occurring, or were in the contemplation of
both parties
• Liability extends to damage that a reasonable person could have foreseen

32) What is the minimum number of directors of a public limited company?

• Three
• One
• Two

33) Which TWO of the following courts must the accused choose between if a criminal offence is triable
either way?

• The High Court

• The Crown Court
• The Divisional Court of the Queen's Bench
• The magistrates court

34) Within what time should an employee who has been dismissed apply for compensation for unfair
dismissal to the employment tribunal?

• One month
• Three months
• Six months
35) in the absence of an express statement to the contrary, in which of the following cases would an
intention to create legal relations be assumed by the courts?
• A divorced couple agree that if the ex-wife continues paying the mortgage, the ex-husband will
transfer the property to her name
• A man signs an agreement with his mother that he will study for an accountancy qualification in
exchange for monthly allowance
• A commercial agreement included a clause that the transaction should be binding "in honour only'

36) Which of the following statements regarding the impact of human rights is correct?

• the person responsible for the passage of a Bil through parliament must make a statement of
compatibility with the European Convention on Human Rights
• Courts may strike out any legislation that is contrary to the European Convention on Human Rights
MOCK QUESTIONS

• Courts must always interpret legislation in a manner compatible with the European Convention on
Human Rights
• Courts need not consider decisions of the European Court of Human Rights when hearing a case

37) Which TWO of the following statements about revocation of an offer in contract law are correct?

• An offer may be revoked at any time before acceptance even if the offeror has agreed to keep the
offer open for a certain period of time
• A letter sent revoking an offer is effective as soon as the letter is posted
• In the case of a unilateral contract, an offer cannot be revoked once the offeree has started to take
steps which would amount to acceptance
• An offer may be revoked only when it is communicated to the offeree by the offeror

38) Where UK delegated legislation conflicts with the European Convention on Human Rights, what
action can the UK courts take?

• They may amend incompatible delegated legislation

• They may strike out incompatible delegated legislation
• They may issue a declaration of incompatibility

39) A judge is interpreting a piece of legislation which has the phrase lions, tigers, panthers and other
animals.' The judge interprets other animals to mean only wild and dangerous animals of the cat species.

Which rule of statutory interpretation is the judge following?

• The ejusdem generis rule

• The purposive rule
• The golden rule

40) Which of the following statements concerning the Consumer Rights Act 2015 is correct?

• A consumer may enforce a term which is deemed unfair by the Consumer Rights Act 2015
• Terms that exclude liability for personal injury are permitted under the Act
• Consumer notices, such as those in car parks, are not regulated by the Act
• The Act does not regulate contracts between two businesses

41) Amit works for Rudy as a waiter on a casual basis. He accepts work when it is offered and because
Rudy thinks he is very efficient, he always gives Amit work in preference to the other casual waiters he
has working for him.

How would the relationship between Amit and Rudy be treated in employment law?

• Amit is an agency worker

• Amit is not an employee as there is no obligation to accept work when it is offered
• Amit is an employee as there is mutuality of obligations
• Amit is a temporary employee as he is employed on a temporary basis, only when required
42) sham has just left university and having set up an Information Technology consultancy company
agrees to provide services to his mother's company. When sham sends his first invoice he is shocked
when his mother refuses to pay. stating It's not right for a son to charge his mother'
MOCK QUESTIONS

Which of the following statements about the intention to create legal relations is correct?
• As this is an agreement between two companies the courts will almost certainly recognise legal
intentions
• • This is an agreement between two companies and the parties cannot rebut the presumption that
they intended to create legal relations
• • As family members the courts will never recognise legal intent between sham and his mother
• • As this is a family relationship the courts will always recognise legal intent
43) Kamari offered to sell her car to Kiera for 85,000. Kiera replied by stating that she agreed to buy the
car for £4,000.
Which of the following describes the nature of Kiera's reply?
• It is a counter-offer
• It is an invitation to treat
• It is valid acceptance
• It is a cross-offer

44) Which TWO of the following statements describe a common feature of all types of company
liquidation?

• The power of the directors to manage the business comes to an end

• A special resolution is passed by the members to commence the liquidation proceedings
• The company will be insolvent
• No share dealings or changes in members is permitted

LONG QUESTIONS

1) Cordell is the financial controller of Forty pic, a company listed on the London Stock Exchange.
Forty pic has a December year end. In March, Cordell posted false information about big deals
that the company was involved in on his personal social media websites. Then, in August, Cordell
overheard the finance director telling a fellow director that Forty pic was likely to become the
subject of a takeover bid. Later that day, Cordell bought shares in Forty pic.

Immediately thereafter, Forty pic's share price fell. However, the takeover did not happen and, at
the end of November, Cordell sold his entire shareholding in Forty pic. On 1 December, the board of
directors of Forty pic issued a profit warning after which the price of Forty pic's shares fell further.

- Task 1

For each of the following statements regarding the offence of market abuse, indicate whether the
statement is true or false.

• Market abuse occurs where a person abuses their position such that their behaviour affects
investments traded on the stock market true
• The offence of market abuse can be both a civil offence and a criminal offence false yad raknu
hai insider dealing cheai criminal ho market abuse civil ho

Task 2

Which TWO of the following statements applies to Cordell in respect of his share dealings in Forty pic?
MOCK QUESTIONS

• If either the purchase or the sale of shares by Cordell is found to constitute market abuse the court
could send him to prison
• Cordell's purchase of shares in August cannot amount to market abuse since the share price fell
directly after his purchase
• Cordell's purchase of shares in August amounts to market abuse as he is using information not
publicly available
• In relation to the sale of shares, had Cordell sold his shares after the profits warning had been
published no offence would have been committed

- Task 3

Which of the following statements applies to Cordell in respect of the information he posted on his
personal social media websites in March?

• No offence has been committed by Cordell because he did not intend to abuse a market by posting
false information
• No offence has been committed by cordell because the false information was posted on his
personal social media websites
• Cordell could face an unlimited fine if the posting of the false information is found to constitute
market abuse
• The information posted by Cordell would only constitute market abuse if there was evidence that
investors had relied on it on making their investment decisions

Background

2) The directors of Duck pic are proposing to change some provisions within the articles of association as
follows:

Pre-emption rights

The directors wish to remove the right of pre-emption from existing shareholders in relation to any new
shares issued. The directors unanimously agree on this change and have said that because there is
unanimity, the change in the articles of association is immediately effective and entrenched.

Compulsory purchase of shares from members

The directors wish to add a clause to allow them to require any member who is competing with the
company to sell their shares. The shares will be sold at a fair price to anyone nominated by the directors.

- Task 1

Has the clause in relation to the rights of pre-emption in the articles of association been validly altered,
and for what reason?

• Yes, because the change is bona fide and for the benefit of the company as a whole
• No, because rights of pre-emption can never be altered
• No, because the members have not approved the alteration
• Yes, because the directors have unanimously agreed
MOCK QUESTIONS

Task 2

Which of the following correctly describes an entrenched provision in relation to a clause in the
articles of association?

• it is a clause that can never be changed

• It requires a special resolution to be passed to change it
• It requires agreement of all the members to change it
• It requires an ordinary resolution to be passed to change it
- Task 3
Is the proposed change to the clause in relation to the purchase of shares from members valid,
and for what reason?
• Yes, because it is bona fide and for the benefit of the company as a whole
• Yes, because the articles automatically allow the purchase of shares from competing members
• No, because members cannot be required to give up their shares
• No, because it removes minority rights

- Background

3) Forty Ltd is a furniture retailer which has taken delivery of items to sell from a number of suppliers on
credit in return for a number of charges over company assets.

• It creates a fixed charge over its business premises on 1 March 20X1 which it registers two days
later
• It creates a fixed charge over its business premises on 1 April 20X1 and registers it on 5 May 20X1
• It creates a floating charge over its business premises on 2 May 20X1 which is registered the
same day

- Task 1

In relation to the three charges numbered above, what is the correct order in which they would be paid
in priority on liquidation?

• 2,1, 3
• 1,2,3
• 1,3,2
• 3, 1,2

- Task 2

Which of the following statements about floating charges is NOT true?

• On liquidation, floating charge holders can be paid after preferential creditors

• They may sometimes be invalid if the company goes into liquidation within six months of creation
• They are secured on an uncertain and changing group of assets
• In order to be valid, they need to be registered within seven days

- Task 3
MOCK QUESTIONS

Forty Ltd's trading position weakens over the next six months. Its board meets to discuss the end of the
business and the possibility of insolvency.

Would crystallisation of any floating charges occur in the following situations?Yes No

• Cessation of trading yes

• Liquidation yes

4) Wu is a shareholder in Bow Ltd holding 7% of its shares. Wu wrote to Bow Ltd requesting the
removal of Mira from the board of directors. The letter was opened by the company secretary on 1
June 20X0.

- Task 1

Are each of the following statements regarding the procedure required to remove Mira from the
board true or false?

True False

• If a general meeting had been called for 29 June 20X0, Wu can insist that a resolution to
remove Mira is put on the agenda false
• Bow Ltd must forward a copy of the resolution to Mira 7 days before the meeting to remove
her is held fasle

- Task 2

The board of directors of Bow Lid refused to call a general meeting of the shareholders to remove
Mira.Are each of the following statements about Wu true or false?

• He can have Mira removed from the board by passing a written resolution, provided he has the
support of all the other shareholders false
• He can requisition a meeting of the shareholders true
Task 3
If the directors call a general meeting to remove Mira, are each of the following statements
true or false?
• Wu will need the support of 75% of the shareholders to remove Mira false (oridinary chainxa)
• Mira has the right to speak at the general meeting whether or not she is a shareholder false
- Background
5) Jaiden runs a florist shop in a small town. On 14 August 20X8 she placed the following notice
outside her shop:
"Second-hand convertible car, £5,000. If interested, please contact the owner of this shop.'
Cameron contacted Jaiden and told her that he wanted to the buy the car for £4,500. Jaiden invited
Cameron to see the car on 16 August and told him that she could sell the car to him for £4,750. If
he was interested, he should post his acceptance by 21 August
- Task 1 4 MARKS
Indicate whether each of the following statements are true or false.
MOCK QUESTIONS

• Jaiden will be bound by Cameron's response to the notice FALSE

• Cameron's statement to buy the car for £4,500 is a counter-offer TRUE
• The notice outside Jaiden's shop is an invitation to treat TRUE
• Jaiden's invitation to Cameron to see the car results in her acceptance FALSE
- Task 2
On 20 August Cameron posted his acceptance to buy the car for £4,750. Jaiden received Cameron's
acceptance letter in the afternoon on 22 August. Meanwhile on the morning of 22 August, Jaiden's
neighbour Wang offers to buy the car for £4,750 and Jaiden accepts the offer
Does Cameron have a valid contract, and for what reason?
• No because Jaiden was not aware of Cameron's acceptance before she sold the car to Wang
• Yes because Jaiden should have first contacted Cameron before accepting Wang's offer
• No because Jaiden received Cameron's acceptance after 21 August
• Yes because Cameron posted his acceptance on time before 21 August
SHORT QUESTION
Rudy contracts with Suffix Ltd on 1 April 20X3 to buy a lawnmower for immediate use in his
gardening business, which will be delivered on 2 April 20X3.
When Suffix Ltd fails to deliver the lawnmower until 16 April 20X3, Rudy sues Suffix Lid for
breach of contract claiming damages for:
(1) Normal loss of profits arising as a result of the two week delay
(2) Abnormal loss of profits arising as a result of missing out on a highly lucrative one-off contract
offered to him unexpectedly by a local sports club on 7 April 20X3
Are Rudy's claims for damages recoverable or NOT recoverable as a result of Suffix Ltd's breach
of contract?
Recoverable OR NOT recoverable
• Damages for abnormal loss of profits NOT RECOVERABLE
• Damages for normal loss of profits RECOVERABLE