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Business Law I Question Paper
Business Law I
Course:Bachelor Of Commerce (Commerce)
Institution: Kabarak University question papers
Exam Year:2010
KABARAK UNIVERSITY
UNIVERSITY EXAMINATIONS
2009/2010 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF
COMMERCE
COURSE CODE: BMIT 212
COURSE TITLE: BUSINESS LAW
STREAM:
Y2S1
DAY:
WEDNESDAY
TIME:
2:00 – 5:00 P.M.
DATE:
24/03/2010
INSTRUCTIONS:
1. Answer question ONE (1) and ANY OTHER THREE (3) question
2. Marks may be lost for illegibility
3. Time allowed 3 hours only
PLEASE TURNOVER
Page 1 of 4
QUESTION 1
a) A British husband who was a Civil servant in Nairobi went to London with his wife for
vacation. When his leave was nearing its end and he had to return Nairobi, he promise his
wife who on the doctor’s advice had to remain in England, a household allowance of
£.1,000/= a month till she joined him in Nairobi. Later the wife annoyed the husband and
he withheld the allowance. The wife sued the husband to recover the withheld allowance.
Can she succeed?
(5 marks)
b) A owns two houses, one in Kakamega and another in Nairobi. A intends to sell his house
in Kakamega for Kshs.1,500,000/=. B thinks he is buying the house in Nairobi and
forwards a banker’s cheque for Ksh. 1,500, 000/= to A. is there a contract between A and
B?
(5 marks)
c) A horse was sent by railway from Nairobi to Kisumu. However, the owner was not
present to collect it on time. The station master at Kisumu arranged tor its feeding and
stabling incurring an expense of Kshs.10,000/=. The station master filed a suit to recover
the money and the owner of the horse refused to pay decided.
(5 marks)
d) B told Kamau, a car dealer that he wanted a car that would be comfortable for touring
purposes. Kamau recommended to be a “Bugatti” car. B relied on Kamau’s expert advise
and bought a “Bugetti” car. When it was delivered, it was found that it was neither
comfortable nor suitable for touring purposes. B sued Kamau for the return of the
purchase money. Can he succeed?
(5 marks)
e) George pays Kshs.50,000/= to Abel a civil servant employed in the government
department, in consideration of A’s promise that a Government contract which is at the
disposal of his department will be placed with George. Before this can be done. Abel is
transferred to another department. George wishes to reclaim from Abel Kshs.50,000 paid
to him, will be succeed?
(5 marks)
f) Explain how the Constitution and Legislation are major sources of our Kenyan
contemporary Laws.
(5 marks)
g) Explain the doctrine of Binding Precedent in Kenya Legal system, paying particular
regards to :-
(i)
The Hierachy of courts.
(5 marks)
(ii)
The relative advantages and disadvantages of the doctrine.
(5 marks)
Page 2 of 4
QUESTION 2
a) Miss X asked Y a specialized Pharmacist, to sell her some weight-reducing tablets. He
recommended “Z” to her as the proper product for that purpose. Miss X used the same as
prescribed but instead Miss X gained weight. What remedy if any is available to Mss X
against Y as stipulated by sale of Goods Act.
(10 marks)
b) A employed B as his agent to sell his car. A instructed B to sell the Car for not less that 1
million. B bought the Car himself and handed over I million to A. A did not asked about
the buyer. A later discovered what transpired after B reselling the car for 2 million.
Explain the rights of A against B.
(10 marks)
QUESTION 3
a) Briefly explain how a contract can be terminated /discharged.
(10 marks)
b) What are the remedies available to a party who is claiming breach of a contract by the
other party?
(10 marks)
QUESTION 4
a) Distinguish between a Company’s Memorandum of Association and it’s Articles of
Association.
(10 marks)
b) Distinguish between:-
(i)
Unlimited companies.
( 3 marks)
(ii)
Companies Limited by guarantee.
(3marks)
(iii)
Companies Limited by shares.
(4 marks)
Page 3 of 4
QUESTION 5
a) In relation to the content of a contract explain the following:-
(i)
Conditions.
(4 marks)
(ii)
Warranties.
(4 marks)
(iii)
Innominate Terms.
(2 marks)
b) Explain the meaning of Exclusion Clauses in contract Law and how they are controlled
by the Courts.
(10 marks)
QUESTION 6
Write explanatory Notes on the following supporting your answer with examples:
a) Contents of Contract of employment.
( 5 marks)
b) Defences available to a Defendants under a claim of Tort.
(5 marks)
c) How agency comes into being.
0(5 marks)
d) Condition and warranties under Sale of Goods Acts cap 31 Laws of Kenya. (5 marks)
Page 4 of 4
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