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Cfu 101: Business Law I Question Paper
Cfu 101: Business Law I
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2009
1
UNIVERSITY EXAMINATIONS: 2008/2009
FIRST YEAR STAGE I EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CFU 101: BUSINESS LAW I
DATE: AUGUST 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
(a) Explain the circumstances under which a guarantor is discharged under a contract of guarantee
(6 marks)
(b) The objective of the law of bankruptcy is not only to enable the debtor make a fresh start but
also for the benefit of the community as a whole. Explain (5 marks)
(c) Explain the rules regarding intention to contract (6 marks)
(d) What are the distinguishing features of an actual sale from an agreement to sell? (6 marks)
(e) Under what circumstances can a partnership be voluntarily dissolved? (5 marks)
(f) Explain the advantages of a bill of exchange (2 marks)
QUESTION TWO
(g) ‘Introduction of equity mitigated the shortcomings of the common law.’ In light of the
statement, explain equity and common law as sources of law in Kenya (10 marks)
(h) Explain the meaning and significance of noting and protesting of bills of exchange. (4 marks)
(i) Vini bought a Lawn mower from Trimmy Enterprises at a hire purchase price of Kshs.
50,000.After paying most of the installments as agreed, Vini wants to pay the entire balance of
the remaining installments at once. Advice him on his legal position and rights if any with
regard to request for information and completion of the hire purchase. (6 marks)
2
QUESTION THREE
Advice accordingly in the flowing circumstances;
(a) Simba Traders offered a television set for sale at a price of Kshs. 300,000 and required that the
acceptance be communicated by phone within two weeks after the date of the offer. Five days
after the date of the offer, May communicated her intention to buy the television set at kshs.
280,000, an offer which was immediately rejected by Simba Traders. On the last day of the
prescribed two weeks, May accepted to buy the television set at kshs. 300,000 but was informed
that the television set had been sold to Jimi at Kshs 280,000. May wants to sue Simba Traders.
(10 marks)
(b) Jimi bought the television set from Simba Traders at Kshs. 280,000 and paid a deposit sum of
Kshs. 200,000.He took the television set with him and promised to pay the balance amount of
Kshs. 80,000 within ten days. Three days after the sale, Jimi has just brought back the television
set and is demanding back all his money on claims that his friends just don’t like the television set.
Jimi also brought with him documents indicating his age as only seventeen years. Simba Traders
have a ‘goods once sold cannot be returned’ policy. (10 marks)
QUESTION FOUR
(a) In law, there’s a cardinal principle that no one can transfer a better title than he himself has,
Discuss the statement with exceptions if any (12 marks)
(b) Using relevant illustrations and examples where necessary, distinguish;
i.) Fraud from misrepresentation (4 marks)
ii.) Civil from criminal law (4 marks)
QUESTION FIVE
(a) Explain the rights of an unpaid seller with regard to the goods (8 marks)
(b) With help of decided cases, illustrate the extent of application of customs as a source of law in
Kenya (8 marks)
(c) Outline four essential elements of a promissory note? (4 marks)
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