Institute of Chartered Accountants in England and Wales (ICAEW) ACA Certificate Level: Law, Tax and Business Technology Syllabus

Certificate Level: Law, Tax and Business Technology syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Certificate Level: Law, Tax and Business Technology in Institute of Chartered Accountants in England and Wales (ICAEW) ACA, not a summary of it.

1. 1

   The English Legal System and Contract Law

   4 topics

   • Sources and structure of English law
     • Common law, equity and statute
     • The court hierarchy and tribunals
   • Formation of a valid contract
     • Offer, acceptance and consideration
     • Intention to create legal relations and capacity
   • Contractual terms and breach
     • Conditions, warranties and exclusion clauses
     • Remedies for breach of contract
   • Agency and the tort of negligence
2. 2

   Company Law and Insolvency

   3 topics

   • Company formation and constitution
     • Separate legal personality and the veil of incorporation
     • Articles of association and company registers
   • Directors, members and company financing
     • Directors' duties and powers
     • Share capital, loan capital and charges
   • Insolvency and administration
     • Liquidation and the order of distribution
     • Administration and receivership
3. 3

   Principles of Business and Personal Taxation

   5 topics

   • The UK tax framework and administration
     • Role of HMRC and self-assessment
     • Tax avoidance, evasion and ethics
   • Income tax computation for individuals
     • Employment, trading and savings income
     • Personal allowances and tax bands
   • Capital gains tax and inheritance tax basics
   • Corporation tax on company profits
   • Value added tax and national insurance contributions

Certificate Level: Law, Tax and Business Technology flashcards for Institute of Chartered Accountants in England and Wales (ICAEW) ACA

18 of 61 cards from the Certificate Level: Law, Tax and Business Technology deck — real questions with worked answers.

1. What are the two main sources of English law, and how do they differ?

   Case law (common law/judge-made precedent) and legislation (statute law made by Parliament). Legislation overrides case law where they conflict, reflecting parliamentary sovereignty.

2. Explain the doctrine of judicial precedent (stare decisis) and the distinction between ratio decidendi and obiter dicta.

   Stare decisis means lower courts must follow the legal reasoning of binding decisions from higher courts. The ratio decidendi is the binding legal principle that decided the case; obiter dicta are persuasive but non-binding statements made 'by the way'.

3. List the civil court hierarchy in England from lowest to highest.

   County Court / High Court (first instance), then Court of Appeal (Civil Division), then the Supreme Court. The Supreme Court is the highest UK appellate court.

4. What is the difference between criminal law and civil law in terms of parties, burden of proof, and outcome?

   Criminal: State prosecutes the defendant; proof 'beyond reasonable doubt'; outcome is punishment (fine/imprisonment). Civil: claimant sues defendant; proof 'on the balance of probabilities'; outcome is a remedy (e.g. damages) for the wronged party.

5. What is delegated (secondary) legislation, and give two examples?

   Law made by a body other than Parliament under authority granted by an enabling/parent Act. Examples: statutory instruments, by-laws, and Orders in Council.

6. Name the three rules of statutory interpretation used by judges.

   The literal rule (ordinary meaning of words), the golden rule (literal meaning modified to avoid absurdity), and the mischief rule (interpret to remedy the defect the statute aimed to cure).

7. What are the four essential elements required to form a valid simple contract?

   Offer, acceptance, consideration, and intention to create legal relations (plus capacity and legality). Agreement = offer + acceptance.

8. Distinguish an offer from an invitation to treat, giving an example of each.

   An offer is a definite promise to be bound on specific terms; an invitation to treat is merely an invitation to make an offer. Goods on a shop shelf or in a window display are invitations to treat, not offers.

9. State the postal rule of acceptance and one of its limitations.

   Acceptance by post is effective when the letter is properly posted, not when received (Adams v Lindsell). It does not apply to instantaneous communication (phone, email) or where the offeror excludes it.

10. Define consideration and state the rule about past consideration.

    Consideration is something of value given by each party (a benefit to one or detriment to the other) in exchange for the promise. Past consideration is generally not valid consideration—it must move in response to the promise, not predate it.

11. What is the presumption regarding intention to create legal relations in (a) social/domestic agreements and (b) commercial agreements?

    (a) Social and domestic agreements are presumed NOT to be legally binding. (b) Commercial/business agreements are presumed TO be legally binding. Both presumptions are rebuttable by evidence.

12. Distinguish a condition from a warranty as contractual terms, and state the remedy for breach of each.

    A condition is a fundamental term going to the root of the contract—breach allows the innocent party to repudiate (terminate) AND claim damages. A warranty is a minor term—breach allows damages only, not termination.

13. What is an innominate (intermediate) term, and how is the remedy for its breach determined?

    An innominate term cannot be classified in advance as a condition or warranty. The remedy depends on the seriousness of the consequences of the breach: if it deprives the innocent party of substantially the whole benefit, they may terminate; otherwise only damages are available (Hong Kong Fir).

14. Distinguish an express term from an implied term in a contract.

    An express term is specifically agreed by the parties (orally or in writing). An implied term is not expressly stated but is read into the contract by statute, custom, or the courts (e.g. terms implied by the Sale of Goods/Consumer Rights legislation).

15. What is the aim of damages for breach of contract, and what two requirements limit recovery?

    Damages aim to put the claimant in the position they would have been in had the contract been performed (expectation interest). Recovery is limited by causation/remoteness (loss must be reasonably foreseeable—Hadley v Baxendale) and mitigation (claimant must take reasonable steps to reduce loss).

16. Name three equitable remedies available for breach of contract.

    Specific performance, injunction, and rescission (also rectification). These are discretionary, unlike common-law damages which are available as of right.

17. Define agency and distinguish the three main ways an agent's authority can arise.

    Agency is a relationship where an agent acts on behalf of a principal to create legal relations with third parties. Authority arises by: express actual authority (explicitly given), implied actual authority (incidental to the role), and apparent/ostensible authority (principal's representation to the third party).

18. What is ratification in agency law?

    Where an agent acts without authority (or exceeds it), the principal can later adopt/approve the act, making it binding as if originally authorised. Ratification requires the principal to have existed and had capacity at the time of the act and to ratify the whole transaction.

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