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Cpa Law 1 Question Paper

Cpa Law 1

Course:

Exam Year:2005

KENYA ACCOUNTANTS AND SECRETARIES NATIONAL EXAMINATIONS BOARD

CPA PART 1

LAW 1

FRIDAY: 27 May 2005 Time Allowed: 3 hours.

Answer any FIVE questions. All questions carry equal marks.

QUESTION ONE
(a) Define the term “delegated legislation” and discuss its advantages and disadvantages.
(10 marks)
(b) Summarize the advantages of arbitration as a form of settling disputes. (6 marks)

(c) State the composition of the Judicial Service Commission (4 marks)
(Total: 20 marks)

QUESTION TWO
(a) Describe the ways in which a corporation may be established. (4 marks)

(b) State and explain the contents of the memorandum of association. (4 marks)

(c) Explain the advantages of a private company over a public company. (6 marks)

(d) Highlight the circumstances under which a partnership would be dissolved on the application of a partner. (6 marks)
(Total: 20 marks)

QUESTION THREE
(a) Highlight the essentials of a contract for the sale of goods. (4 marks)

(b) Explain the rules that govern delivery of goods as stipulated in the Sale of Goods Act.
(8 marks)

(c) Describe the remedies available to the buyer for breach of a contract for the sale of goods. (8 marks)
(Total: 20 marks)

QUESTION FOUR
(a) What is the difference between a condition and a warranty? (2 marks)

(b) Explain the meaning of the term “privity of contract” and outline the exceptions to that rule. (5 marks)

(c) For a contract to be discharged by performance, that performance must be precise and exact.

Discuss this statement. (5 marks)

(d) S. a former student at Masaku High School owes the school Sh. 50,000 as fees in arrears. Mr. P. the principal of the school wrote a demand letter to F. S’s father threatening to sue S if the school fees in arrears was not cleared within seven days. F approached P and offered to make payment by delivering 30 bags of maize valued at Sh. 30,000. On condition that it would be full and final payment of the debt owed to the school.

Mr. P accepted the offer and the maize was delivered to the school. Two years later, S was employed and Mr. P now intends to sue him for the fee balance.

Discuss the legal position of S. (8 marks)
(Total: 20 marks)

QUESTION FIVE
(a) Explain the meaning of the term “Co-ownership” and state the ways in which co-ownership may be terminated. (6 marks)

(b) Inventive Mind Co. Ltd. has developed a new drug to be used in the treatment of common cold. The directors wish to register the trademark for their new product.

Outline the items which must be contained in the application form for registration in order for the trademark to be registered. (4 marks)

(c) Roy Simiyu, a successful businessman would like to obtain some funds for expansion of his business premises through a mortgage facility.

Roy Simiyu would like to know what options would be available to the bank with regard to the proposed security in the event of his business failing and his being unable to repay the loan.

Describe the options available to the bank. (10 marks)
(Total: 20 marks)

QUESTION SIX
(a) Explain the meaning of a dependant as provided in the Law of Succession Act.
(4 marks)

(b) What is a will and how may a testator revoke a written will? (4 marks)

(c) Explain the duties of a personal representative. (6 marks)

(d) Highlight the reasons that may cause a legacy to fail. (6 marks)
(Total: 20 marks)

QUESTION SEVEN
(a) State the rule in Rylands -vs- Fletcher and explain the exceptions to that rule. (6 marks)

(b) Explain the essential elements of negligence. (6 marks)

(c) Hassan Payuka is the proprietor of Parrot Daily Newspaper which published an article two weeks ago to the effect that Mrs. Rose Brown the managing director of Child Welfare Organization had embezzled, Sh. 5 million from the organization to purchase a private residential house for herself and family. Investigations have revealed that Mrs. Rose Brown bought the house out of a loan of Sh. 6 million advanced to her by East Bank and secured on the house. Mrs. Rose Brown is aggrieved and seeks your legal advice.

Advise her. (8 marks)
(Total: 20 marks)

QUESTION EIGHT
(a) Explain the circumstances under which an agent may be held personally liable for contracts made on behalf of his principal. (10 marks)

(b) Abraham instructed Sarah, an auctioneer to sell his house by auction. The sale was subject to a reserve price of Sh. 1 million. Sarah advertised the house stating that it was subject to a reserve price. However, she sold the house to her Sister Mary at Sh. 900,000. Abraham has refused to accept the proceeds and to transfer the house to Mary. Mary has demanded the transfer of the house by Abraham to her.

Explain the legal position of Abraham, Sarah and Mary. (10 marks)
(Total: 20 marks)

Cpa Law 1 Question Paper

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