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Bmit 212: Business Law Y2s1 Question Paper
Bmit 212: Business Law Y2s1
Course:Bachelor Of Business Management And Information Technology
Institution: Kabarak University question papers
Exam Year:2010
INSTRUCTIONS:
Answer Question 1 and any other 3 Questions
Time allowed: 3 Hours
Marks will be awarded for examples and cases
Marks will be lost for illegibility
1.(a). Shah wrote to Kimutai on 10th March 2008 asking him to indicate whether he would be willing to
sell his plot in westlands and if so to fax him the lowest price he would accept. Kimutai faxed on
12th March 2008 indicating that the lowest price was Kshs. 30,000,000/=. On 13th March, 2008
Shah wrote back asking “I accept to buy your plot at the Kshs. 30,000,000/= indicated by you as
the price you will accept”. Kimutai faxed him the same day askinf whether he would be willing to
increase the price to Kshs. 35,000,000/=. Shah faxed him on 14th March 2008 saying “I accept to
buy your plot for Kshs. 35,000,000/= asked by you”. Kimutai does not respond and proceeds to
sell the plot to Patel for Kshs. 40,000,000/=. Shah files a suit against Kimutai seeking damages
for breach of contract. You are the Judge before whom the matter is brought.
Explain how you would decide the case giving reasons for your decision and supporting the same
with decided cases. You should be guided by rules of Offer and Acceptance in a Contract.
(15 Marks)
(b). Discuss how an offer may be terminated. (10 Marks)
(c). Courts are very reluctant to effect exemption clause in contracts unless the clause meet judicial
controls which have been developed by Courts.
Explain those Judicial Controls and Support your answer with decided cases. (5 Marks)
(d). Explain the conditions which must be fulfilled in order for a Court to apply African Customary
Law. (5 Marks)
(TOTAL MARKS 40)
2.(a). A.B.C and D were directors of a Company. The shareholders had not appointed any of them to
act as Managing Director. One of the Directors made contracts with 3rd parties as if he was a
Managing Director. On previous occasions, the board on behalf of the Company had honoured
the contracts and paid the third Parties. The board has now refused to pay arguing that the director
had no authority to make the contracts because he was not the managing Director. The third
parties want to be paid. DECIDE. (6 Marks)
(b). Kirui wanted to insure the household goods of his house and appointed Nyangau as his agent to
effect a policy instructing him to insure “all furniture against all loss and damages. Nyangau took
out insurance policy with Nakuru Insurance Company Limited. Later vandals broke into Kirui’s
house and did substantial damage to his future. They did not steal anything. Kirui claimed but
Nakuru Insurance refused to pay as the policy covered loss by theft or fire not damage by
vandals.
Advise Kirui whether he can recover the value of damaged furniture from Nyangau.
(7 Marks)
(c). Mr. Nyamisa, a car dealer agreed to sell to Mr. Makwere “a new Mercedes car” under a contract
which they excluded all warranties, conditions and liabilities implied by statute, common law or
otherwise. He delivered a car which was used as demonstration car. Mr. Makwere refused to
accept the car saying it was not new. Mr. Nyamisa is saying that the contract protects him
because it excluded any liability. DECIDE (7 Marks)
(TOTAL MARKS 20)
3. Explain in the context of Employment Law:-
(a). The common duties as imposed on employers (4 Marks)
(b). The Grounds upon which dismissal may be fair. (4 Marks)
(c). The Grounds upon which dismissal will be automatically unfair (4 Marks)
(d). Constrictive dismissal (4 Marks)
(e). When an employer can be liable for Torts committed by employee (4 Marks)
(TOTAL MARKS 20)
4.(a). Explain what a Tort is giving examples of specific Torts. (5 Marks)
(b). What are the elements that the Plaintiff should prove to be awarded damages against the
defendant in a claim of negligence? (5 Marks)
(c). A who was a pedestrian negligently crossed the road and he was knocked down by B and was
injured. He has gone to Court to claim damages against B. Explain what defences are available to
B under Tort. ` (5 Marks)
(d). What are the differences between a Tort and a Crime. (5 Marks)
(TOTAL MARKS 20)
5. Write explanatory notes on he following and support your answer with examples.
(a). Rules used by Courts to differentiate between an independent contract and an employee.
(5 Marks)
(b). Remoteness of damages (5 Marks)
(c). What is invitation to treat in a contract and it’s examples. (5 Marks)
(d). Rights of the unpaid seller. (5 Marks)
(TOTAL MARKS 20)
6.(a). Explain briefly the process which the promoters of a company must undergo before their
company can be registered, bringing out what documents they must prepare and their contents.
(8 Marks)
(b). What is the process and ways of winding up a company and what is the work of the receiver
manager (6 Marks)
(c). What are the advantages when trading in form of a company in comparison with other kinds of
business organizations e.g. partnership. (6 Marks)
(TOTAL MARKS 20)
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