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Bmit 212: Business Law 2008 Question Paper
Bmit 212: Business Law 2008
Course:Bachelor Of Business Management And Information Technology
Institution: Kabarak University question papers
Exam Year:2008
INSTRUCTIONS:
Answer question ONE and ANY other SEVEN questions
1. Adam is a second hand car dealer. He places an advertisement in the Saturday edition of
his local paper stating:
“Once in a life time opportunity: a one year old, low mileage, Mota Special: Pounds
5,000/= cash. This is a serious offer –the car will to the first person who accepts it –
valid only for one day”.
When Ben sees the advert he immediately posts a letter of acceptance of Adam’s offer.
Carol also sees the advert and after inspecting the car, offers Adam a cheque for pound
5,000, but he refuses to accept the cheque and tells her she cannot have the car.
Later in the day, Dave asks Adam if he will keep the offer open until he can get to his
bank to arrange a loan. Adam agrees but later in the day when Eric says that he will pay
Pounds 6,000 in cash for the car he agrees to sell the car to Eric.
Required:
Consider the above situation with respect to the rules governing the creation of contracts. In
particular consider:
a) The precise nature of Adam’s advertisement. (3 marks)
b) Whether Ben has entered into a binding contract with Adam (3 marks)
c) Whether Carol has any right of action against Adam. (3 marks)
d) Whether Dave has any right of action against Adam. (3 marks)
e) Whether Adam has any right of action against Eric (3 marks)
(Total 15 marks)
2. a) Explain how the Constitution and Legislation are major sources of our Kenyan
contemporary Laws. (2 marks)
b) Explain the doctrine of Binding Precedent in Kenyan Legal system, paying particular
regards to:
i) The Hierarchy of Courts. (1 mark)
ii) The relative advantages and disadvantages of the doctrine. (2 marks)
(Total 5 marks)
3. Explain in relation to the Law of contract, with the support of examples or Case Law
a) The rules relating to acceptance (2½ marks)
b) The rules relating to the revocation of offer. (2½ marks)
(Total 5 marks)
4. Write explanatory Notes on the following:-
a) Conditions and warranties implied in a contract of sale of Goods under Sale of Goods
Act Cap . 31 Laws of Kenya. (2 marks)
b) Remedies for breach of contract. (1½ marks)
c) Major characteristics of Negotiable instruments. (1½ marks)
(Total 5 marks)
5. a) What is a Tort? (2 marks)
b) Explain the general defences available to a defendant in an action arising out of a tort
(3 marks)
(Total 5 marks)
6. a) Explain different ways in which agency relationship can be established. (3 marks)
b) Describe the different ways in which an agent’s authority may come to an end.
(2 marks)
(Total 5 marks)
7. a) In relation to the dismissal of an employee explain;
i) The grounds upon which dismissal may be fair (1½ marks)
ii) The grounds upon which dismissal will be automatically unfair. (1½ marks)
iii) Explain in the context of employment Law, the common duties imposed on an
employer. (2 marks)
(Total 5 marks)
8. a) Distinguish between a Company’s Memorandum of Association and it’s articles of
Association. (2 marks)
b) Distinguish between.
i) Unlimited companies. (1 mark)
ii) Companies limited by guarantee (1 mark)
iii) Companies Limited by shares. (1 mark)
(Total 5 marks)
9. a) In relation to the contents of a contract, explain the following:
i) Conditions. (1 mark)
ii) Warranties (1 mark)
iii) Innominate Terms (1 mark)
b) Explain the meaning of Exclusion Clauses in contract Law and how they are
controlled by the Courts. (2 marks)
(Total 5 marks)
10. Explain the types of contracts you know giving distinctions and examples between them
where applicable. (5 marks)
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