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Bcom 301: Business Law Question Paper
Bcom 301: Business Law
Course:Bachelor Of Commerce
Institution: Chuka University question papers
Exam Year:2013
UNIVERSITY EXAMINATIONS
CHUKA &EMBU
THIRD YEAR EXAMINATION FOR THE AWARD OF
DEGREE OF BACHELOR OF COMMERCE
BCOM 301: BUSINESS LAW
STREAMS: BCOM Y3S1 TIME: 2 HOURS
DAY/DATE: WEDNESDAY 7/8/2013 2.30PM – 4.30 PM
INSTRUCTIONS:
ANSWER QUESTION ONE AND ANY OTHER TWO
QUESTION 1
(a) Enock is a student aged 16 years and lives on main campus, Chuka University who took a bank loan. He bought a new 1200 cc motor cycle form DT Dobit and paid a deposit of Ksh 500,000, leaving a balance of Ksh 200,000. He also purchased a laptop at Ksh 100,000 on credit from Computer Ltd. One of the reasons of buying these goods was to attract his girlfriend, carol back to him and to further this possibility, he moved out of the halls of residents at the University and he took a lease of luxury flats at Milimani Estate in Chogoria town, at a monthly rate of Ksh 30,000.
At the time he left, Enock owed the university Hall of residence Ksh 6,000. As his university examinations are pending, Enock borrowed Ksh 60,000 from Family Bank and ordered for several text books from Chogoria Bookshop. Being under great strain, Enock began to develop obsessive religious tendencies and he therefore abandoned his studies and joined “Dini ya Binadamu” a strict religious sect, he pushed the motor cycle over a cliff. He then repudiated the lease of the flat, he refused to pay the landlord at Milimani Ksh 180,000 rent owed and cancelled the order of text books from Chogoria bookshop.
Enock was also unable to repay the loan to Family Bank and refused to pay Ksh 6,000 to the Halls of residence at Chuka University. Moreover, Enock did not pay any installments on the laptop. “Dini ya Binadamu” has informed Enock that if he does not pay Ksh 200,000 for spiritual guidance given, they will commence proceedings for their fees.
Discuss the legal position of Enock respect to the contracts entered into by him.
[15 Marks]
(b) Kenya, as a nation, has many sources of law. Some are home grown while others are foreign. Briefly discuss three such sources which are received. [5 Marks]
(c) For a contract to be binding on the parties’ at least five elements must never be lacking. Discuss any of theses elements. [10 Marks]
QUESTION 2
(a) Negligence is one of the common torts in business law. What is it? [3 Marks]
(b) Three weeks ago the High court delivered a judgment in a case in which Peter was accused of mutiny in the Kenya armed Forces. Having been convicted of the offence, he thinks the judgment was very unfair. He has come to you to advise him, do so, by stating with explainary the nature of the court which found him guilty before the High Court also did. [4 Marks]
(c) Sasha and Shantel, students of Chuka University were very enterprising. They set up a company trading in jewelry from Congo region and were appointed as directors of the same. They have carried out the business for the last five years. They had lent the company a sum of Ksh 500,000 on secured and priority basis. Recently Bonke lent their company a sum of Kshs 700,000 whilst from the bank where the company withdrew the money form, the accountant was robbed off all the money. The company was wound up and its assets amounted to Ksh 1,200,000, which sum has been duly paid to the secured creditors as settlement of part debt. Bonke has sued Sasha and Shantel for refund of his money because “these crooks cannot take my money and still purport to take the little realized from their damn company”. Discuss the issues involved herein and state the relevant case law. [5 Marks]
(d) Bett called on last week complaining that Mrs. Mwangi had breached a contract they had entered into for sale of a house in Chogoria. What three remedies are open to him?
[8 Marks]
QUESTION THREE
(a) Peter pays Ksh 50,000 to Abel a civil servant employed in the government department, in consideration of Abel’s promise that a government contract which is at the disposal of his department will be placed with Peter. Before this can be done, Abel is transferred to another department. Peter wishes to reclaim form Abel the money paid to him, will he succeed? [5 Marks]
(b) Chelagat is a young person aged 15 years. According to the Kalenjin customary laws a girls is supposed to undergo female genital mutilation. Last week she was actually forced into the rite and she is to be married off to Kiplangat next week. She comes to you for advice on what can be done discuss with her the relationship between customary law and the recently promulgated constitution. [5 Marks]
(c) F handed H a written offer. The next day F posted a withdrawal of the offer. This was posted between 12 noon and 1 pm, and it did not reach until after 5pm. In the meantime H at 3.50 pm posted an acceptance, discuss. [5 Marks]
(d) A person from your home area has died. It is being said he died intestate. Explain your family what that means and how his property should devolve in the first instance.
[5 Marks]
QUESTION 4
(a) Discuss any defense available to a defendant newspaper company trading in news dissemination when faced with a suit of defamation. [6 Marks]
(b) We have several ways in which a contract of employment can be terminated, explain. [5 Marks]
(c) Kariuki entered Jatomy supermarket, picked up one of shopping baskets, provided and filled it with groceries from the shelves. As he was approaching the cashier he realized that his purse had been stolen and decided to replace the goods on the shelves. The manager of the supermarket who had been observing Kariuki’s movements instructed one of his assistants to approach Kariuki and tell him that the goods had been sold and he could not replace them on the shelves. Advice Kariuki accordingly. [5 Marks]
(d) A young boy ran away from his father’s home and the father issued pamphlets announcing thus, “anybody who finds trace of the boy and brings him will get Ksh
10,000,” X saw this boy near a railway station and promptly took him to the railway police station and then sent a telegram to the boy’s father that he had found the missing son. Was X to be rewarded? Decide this sitting the relevant case law. [4 Marks]
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