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Business Law 1 Question Paper

Business Law 1

Course:Bachelor Of Commerce (Commerce)

Institution: Kabarak University question papers

Exam Year:2009

KABARAK
UNIVERSITY
EXAMINATIONS
2008/2009 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF COMMERCE
COURSE CODE: BMGT 313
COURSE TITLE: BUSINESS LAW I
STREAM: Y3S1
DAY: THURSDAY
TIME:
9.00
–
11.00
A.M.
DATE: 26/03/2009
INSTRUCTIONS:
-
Answer
Question ONE and any other THREE.
PLEASE TURN OVER
Page 1 of 3
1.
Mark took a car on a Hire Purchase from CMC Motors Ltd who owned the car.
The agreement was to run for three years, but after paying only two months
installments Mark sold the car to Oliver. Oliver works as a mechanic for DT
Dobie but buys and sells cars for profit in his spare time. Oliver subjected the cat
to Hire Purchase check with the Registrar of Hire Purchase Agreements and the
registrar of Motor vehicles at Kenya Revenue Authority but the check did not
reveal that the car was a subject of Hire Purchase Agreement because CMC
Motor 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 500,000/=.
Oliver took a cheque from Peter which was later dishonoured because there were
no sufficient funds in Peter’s account at Transnational Bank Branch, Nakuru.
Oliver reported the matter to the police at Menengai Police Station and the
Registrar of Motor Vehicle asking them to look for the car.

As Mark had failed to pay the third instalment, CMC Motors Ltd has contacted
Peter to demand that the car be returned to them or they repossess the same.

a)
Advice
the
parties
of
their
legal
rights
and
obligations.
(15mks)
b)
Explain the advantages of arbitration as a method of settling commercial
disputes as compared to litigation in court of law.
(5mks)
c)
Explain
the
elements
of
the
tort
of
Negligence.
(5mks)
2.
a)
Distinguish
between
Criminal
Law
and
Civil
Law.
(5mks)

b)
Explain the advantages of Statutory Law over delegated Legislation.

(5mks)
c)
Discuss the remedies available for the enforcement of fundamental rights
and
freedoms
of
an
individual.
(5mks)
3.
a)
“The general rule is that where goods are sold by a person who is not the
owner the buyer acquires no better title than the seller had”. Explain the
exceptions
to
this
rule.
(7mks)
b)
X alleged that “Nation Newspaper” Published an article that damaged his
reputation among the right thinking members of the society. X filed a suit
against Nation Newspapers claiming that he had been defamed. Advice X
what he needs to prove against Nation Newspapers in order to succeed to
recover
damages
from
Nation
Newspapers.
(5mks)
Page 2 of 3
c)
A promised to lend his bicycle to B on a weekend. Later A changed his
mind and refused to lend his bicycle to B. can B enforce this agreement
against A before a court of Law? Give reasons for your answer.

(3mks)
4.
a)
“A contract is an agreement between two or more parties which is
intended to create legally binding obligations”. Explain what you
understand to be the meaning of this statement.
(5mks)
b)
Carbolic Smoke Ball Co. Ltd offered by way of reward Kshs 1,000,000/=
to anyone who contracted influenza after using their smoke ball as
prescribed. The offer stated that Carbolic smoke ball co. Ltd had lodged
Kshs 100,000,000/= with Kenya Commercial Bank to show their sincerity
in the matter. Mrs. Carill used the Smokeballs as prescribed but
notwithstanding contracted influenza. She claimed Kshs 100,000/= from
carbolic Smokeball Co. Ltd can she succeed? Give reasons for your
answer. (10mks)
5.
Write short notes on the following
a) Doctrine
of
Subrogation
(5mks)
b) Negotiable
instruments
(5mks)

c) Disabilities
of
a
person
declared
bankrupt
(5mks)
6.
a)
Define
a Partnership and explain its
essential
elements.
(6mks)
b)
Discuss the extent to which an agent can be personally held liable to third
parties. (9mks)
Page 3 of 3

Business Law 1 Question Paper

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