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Cfu 101: Business Law I (Day Class) Question Paper
Cfu 101: Business Law I (Day Class)
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 (DAY CLASS)
DATE: APRIL 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
a) Distinguish between a corporation sole and a corporation aggregate. (4 Marks)
b) State and explain the contents of a memorandum of association. (4 Marks)
c) Explain the advantages of a private company over a public company (6 Marks)
d) Define the term “domicile” and citing examples, explain three types of domicile (10 Marks)
e) In numbered paragraphs distinguish between a statutory corporation and a company limited
by shares (6 Marks)
QUESTION TWO
Distinguish the legal issues in each of the following cases:-
a) Mathew offers to sell his car for Kshs 300,000/-. John offers to buy the car at Kshs 280,000/-.
Mathew thereafter refuses to sell the car to John (6 Marks)
b) Joan is due to leave the country to study abroad for a period of five years. She decides to sell
her household goods and therefore sends a letter to her longtime friend Maureen offering to
sell the house hold goods to her. Maureen posts a letter to Joan accepting the offer. The letter
does not reach Joan (6 Marks)
c) Andrew, a tailor agrees to make school uniforms to Jennifer, the proprietor of Wadogo
Kindergarten. Jennifer issues an order to Andrew to make 200 pieces of uniform for the
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Kindergarten. Andrew manages to make 170 pieces of the uniforms before he is taken ill and
hospitalized.
Following his discharge from hospital, Andrew submits a claim for payment to Jennifer.
Jennifer refuses to pay him on the grounds that the contract was not fully executed.
(8 Marks)
QUESTION THREE
a) Explain the “condition” and “warranties” in a contract for the sale of goods (10 Marks)
b) Ojal inspected a car belonging to Mutua and offered to buy it for Kshs 400,000/- after test
driving it. They signed the agreement whereby the car was to be collected from Mutua’s home
next Saturday upon Ojal presenting bankers cheque for the purchase price. On that Saturday,
Ojal came to take possession of the car. The car was incapable of self starting. When opening
the bonnet, Ojal found that certain parts had been removed and exchanged with old parts, some
which fitted awkwardly. The rear tyres were worn out and ill fitted the car. Ojal refused to take
possession and Mutua has threatened to sue him. Advise Ojal (10 Marks)
QUESTION FOUR
a) In relation to the law which governs negotiable instruments, list and briefly explain four types
of endorsements (6 Marks)
b) Explain the meaning of the term “holder” in relation to a bill of exchange and outline the
duties of a holder of a bill of exchange. (6 Marks)
c) Ringo a small scale farmer agreed to take a television set from Malipo Rahisi Limited, a hire
purchase firm last year. The hire purchase price was Kshs 40,000/=. He paid a deposit of Kshs
5000/= and the balance was payable by monthly installments of Kshs 4000/=. After paying
installments for six months, he defaulted. Malipo Rahisi Limited promptly repossessed the
television set. Discuss the legal position. (8 Marks)
3
QUESTION FIVE
a) In relation to the law governing partnerships, state the rights of a partner in the following
situations.
(i) Expulsion of a partner (4 Marks)
(ii) Dissolution of a partnership (4 Marks)
(iii) Admission of a new partner (4 Marks)
(iv) Limitation of a partners authority to bind the partnership (4 Marks)
b) Explain the circumstances under which dissolution of partnership will be ordered by the court.
(4 Marks)
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