FLK1: the first SQE1 paper, explained

Answer: D. An ordinary resolution to authorise the sale of the storehouse.

Option A: This is false as the delivery truck purchase doesn't require authorisation by the shareholders due to its value and it's the marketing director who is selling it, not the finance director.

Option B: The logistics director's involvement in the sale of the storehouse is irrelevant to the resolutions required, hence this resolution is not needed.

Option C: While the sale of the storehouse needs to be authorised with an ordinary resolution, the purchase of the delivery truck doesn't require authorisation by the shareholders due to its value.

Option D: Correct. The sale of the storehouse is a substantial property transaction and therefore needs to be authorised by the shareholders through an ordinary resolution under s 190.

Option E: This is false as the delivery truck purchase doesn't require authorisation by the shareholders due to its value.

Answer: E. The sole proprietor could use carry across/carry back relief to reduce total income in this tax year and the tax year before the year of loss and then carry the remaining loss forward against first subsequent profits from the same trade.

Option A is false because Capital allowance relief is used for expenditures on assets and not for trading losses.

Option B is false because trading losses cannot be used as tax credits against future personal income tax.

Option C is false because trading losses cannot be used to offset against future capital gains.

Option D is incorrect because, when using start up relief, the loss must be set against earlier years first and then later years. One cannot choose which year’s income is reduced first. It is also not possible to set the loss against less than the full three years (so far as the loss can be used).

Option E is correct because the sole proprietor can use carry across relief to reduce total income to zero and do the same in the tax year before the tax year of loss. This will use up £45,000 of the loss. The sole proprietor can then carry the remaining loss forward and use it to reduce first subsequent profits of the same trade, which are projected to be £50,000.

Answer: D. Yes, because the defendant did not serve a written notice to withdraw or change the terms of the first offer.

Option A is false because the making of a second offer does not impact the validity of the first offer (Gibbon v Manchester City Council).

Option B is false because explicit statement of voidance is not the only way to withdraw an offer. The defendant can also withdraw it by serving a written notice of withdrawal or change.

Option C is false because decrease in the claimant's case strength does not affect validity of the original offer.

Option D is correct. A Part 36 offer remains open for acceptance by the offeree until the offeror withdraws it by serving a written notice of withdrawal or changes its terms by serving a written notice of change (CPR 36.9(2)-(3)).

Option E is false because time elapsed does not invalidate the offer unless a written notice of withdrawal or change is served (CPR 36.9(2)-(3)).

Answer: A. The client's order letter should be placed in Part 3 of the client's list of documents.

Option A: Correct answer. The disputed quantity of the furniture order is a key point of contention, and the order letter could support either party’s stance on this matter. The document thus satisfies the criteria for standard disclosure and should be disclosed. Part 3 of the list pertains to documents known to exist but no longer under control of the party, making it the suitable section for this document.

Option B: Incorrect. Part 4 is not a valid part of the list of documents. The order letter, not being in the client's control, belongs in Part 3.

Option C: Incorrect. The order letter needs to be part of the standard disclosure process and should be included in the client's list of documents, specifically in Part 3.

Option D: Incorrect. The lawyer's personal documentation is not relevant here. The order letter, not being in the client's control, should be included in the client's list of documents, specifically in Part 3.

Option E: Incorrect. Part 1 is for those documents within the party's control and available for inspection by the opposing party. The order letter is no longer within the client's control and thus should be listed in Part 3.

Answer: C. Refuse to act because the solicitor does not have enough verification of the client's identity.

Option A is false because confirmation of full name and address from non-authentic sources is not considered sufficient verification.

Option B is false because waiting for another document doesn't reduce the risk of potential illicit activities.

Option C is true because the solicitor should refuse to act in these circumstances due to lack of sufficient verification of the client's identity from an independent, reliable source.

Option D is false because a large cash payment increases the risk of money laundering.

Option E is false because a credit history check cannot replace the need for official identification verification.

Answer: D. The cost of the new tablet, the lost income from the interrupted lesson, and the lost income from the 10 cancelled lessons.

Option A is false because it omits the lost income from the 10 cancelled lessons which is a recoverable loss in negligence.

Option B is false because the cost of replacing the defective flask cannot be recovered in negligence.

Option C is false because the cost of replacing the defective flask is not recoverable in negligence.

Option D is true because all losses listed here are consequential economic losses that are recoverable in negligence. The cost of replacing the flask is not included because this is pure economic loss which isn't recoverable in negligence.

Option E is false because the cost of replacing the defective flask cannot be recovered in negligence.

Answer: A. The man will win, but his damages are likely to be reduced by 15% on the grounds of contributory negligence.

Option A is true because the man’s failure to wear a seat belt which would have reduced his injuries leads to a reduction in damages on the grounds of contributory negligence. The established reduction in such cases is typically 15% as per Froom v Butcher [1975] 3 All ER 520.

Option B is false because the man’s failure to adhere to safety guidelines doesn't negate the friend’s negligence in driving.

Option C is false because while it's beneficial to ensure passengers adhere to safety measures, not doing so doesn't necessarily make the friend legally responsible for the man’s harm.

Option D is false because while the friend's negligence caused the accident, the man's injury severity was influenced by his decision not to wear a seat belt, thus likely leading to a reduction in damages.

Option E is false because the damages are typically reduced by 25% only in cases where the injuries would have been entirely prevented had the claimant worn a seat belt, as per the guidelines established in Froom v Butcher.

Answer: D. No, because although the Term is an innominate term, and there has been a severe breach of contract, the restaurant owner affirmed the contract by continuing to use the oven after repairs. Affirmation is a bar to contract termination.

Option A: This answer is false because the Term is not a mere representation but an innominate term, and the restaurant owner affirmed the contract by repairing and continuing to use the oven, which bars contract termination.

Option B: This answer is false. The Term is not a fundamental term but an innominate term, and the restaurant owner affirmed the contract by repairing and continuing to use the oven, which bars contract termination.

Option C: This answer is incorrect. The term is not an implied term; it's an innominate term, and the restaurant owner affirmed the contract by repairing and continuing to use the oven, which bars contract termination.

Option D: This answer is correct. The term is an innominate term, and there has indeed been a severe breach. However, by repairing and continuing to use the oven, the restaurant owner affirmed the contract, which prevents contract termination.

Option E: This answer is incorrect. The term is not a condition but an innominate term, and the restaurant owner affirmed the contract by repairing and continuing to use the oven, which bars contract termination.

Answer: A. No, because the agreement to pay the extra £20,000 was obtained by duress which makes the variation voidable.

Option A is true. The restaurant's agreement was obtained by the chef's illegal threat to abandon the project. This amounts to duress which makes the variation voidable.

Option B is false as the chef's financial difficulties do not obligate the restaurant to agree to a change in contract terms.

Option C is false because the increase in ingredient prices does not factor into the legality of the agreement to pay the extra £20,000.

Option D is false. While the restaurant needed a new menu, this does not make them legally obligated to pay the additional amount.

Option E is false because the chef did complete the work by the agreed deadline.

Answer: D. The judge has distinguished the case of Dawson from the current case, as there were key differences in the facts of the case.

Option A: This is incorrect because the judge is not interpreting the decision but differentiating the Dawson case from the current case.

Option B: This is incorrect because while the judge is differentiating the case, it's not due to her fundamental disagreement with the reasoning.

Option C: This is incorrect because the judge is referencing the Dawson case as relevant, but differentiating it from the current case.

Option D: This is correct. The Crown Court would be bound by decisions made in the Court of Appeal and the judge sought to highlight the differences in the facts of the two cases to justify her decision to uphold the appeal.

Option E: This is incorrect because the judge did not express disagreement with the Dawson decision, nor was it made in a lower court.