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Business Law 1 Question Paper

Business Law 1

Course:Bachelor Of Commerce (Commerce)

Institution: Kabarak University question papers

Exam Year:2010

KABARAK
UNIVERSITY
UNIVERSITY EXAMINATIONS
2010/2011 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF COMMERCE
COURSE CODE:
BMGT 313
COURSE TITLE: BUSINESS LAW 1
STREAM: Y3S1

DAY: THURSDAY

TIME:
9.00 -11.00 A.M

DATE:
9/12/2010

INSTRUCTIONS:
• Answer questions ONE (1) and any other TWO
• Do not write anything on the question paper
• Time allowed is TWO (2) hours only
PLEASE TURNOVER
Page 1 of 3

1. (a) Mark took a car on hire-purchase from New Finance Co.Ltd who owned the car. The
agreement was to run for three years, but after paying only two monthly instalments Mark
sold the car to Oliver. Oliver works as a mechanic for a local garage but buys and sells
cars for profit in his spare time.Oliver subjected the car to hire-purchase check at the
registrar of Hire – purchase agreements and Registrar of Motor vehicle but this did not
reveal that the car was the subject of hire-purchase agreement because New Finance Co.Ltd
had neglected to register the car with the Registrar of Hire-purchase Agreements.
Oliver sold the car to Peter, a lecturer at Kabarak University for Kshs. 300,000. Oliver took
a cheque from peter which was later dishonoured because there were no sufficient funds in
Peter’s bank account. Oliver reported the matter to the police and the Registrar of Motor
vehicles asking them to look for the car.As Mark had failed to pay the third instalment, New
Finance Co. ltd have contacted peter to demand that the car is returned to them.
Advise the parties of their rights and obligations. (20 marks)
(b) Abel invited Bett to see a picture with her at Nairobi National Theatre. Bett accepted the
Offer. Abel purchased a ticket for Bett and waited for her at the theatre hall. Bett did not
turn up. Does Abel have any cause of action against Bett? Give reasons for your answer.
(5 marks)
(c) P employed A as his agent in selling his (p’s gold) watch. A was instructed to sell the watch
for not less than 4,000, A bought the watch himself and handed over 4,000 to P who was
quite satisfied with the watch himself and handed over 4,000 to P who was quite satisfied
with the price and did not ask for the name of the watch for Kshs 6,000. Explain the rights
of P against A if any. (5 marks)
2. (a) With specific examples explain the rules relating to consideration. (10 marks)
(b) Discuss the disadvantages of arbitration as a method of resolving commercial disputes.
(5 marks)
Page 2 of 3

3. (a) Dipali bought a colour T.V from m/s Kaka Enterprises for a sum of Ksh 20,000/=. The
T.V.set was defective right from the beginning and it did not work inspite of repairs by
The expert machanics. Dipali wants to return the T.V set to M/S Kaka Enterprises and
Claim refund. Advise. (5 marks)
(b) Discuss the exception to the principle Nemo Dat quod non habet. (10 marks)
4. (a) Distinguish between a partnership firm and a company incorporated under the companies
Act. (10 marks)
(b) Discuss the main features of Negotiable Instruments. (5 marks)
5. (a) Explain the rules relating to the personal liability of an agent for a contract entered into
by him on behalf of the principle. (10 marks)
(b) Explain how a contract can be discharged by frustration. (5 marks)
6. (a) Discuss the elements of the tort of negligence. (5 marks)
(b) Explain what is meant by common law. (5 marks)
(c) How are damages classified under law of contract? (5 marks)

Page 3 of 3

Business Law 1 Question Paper

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