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Bmgt 313: Business Law I Question Paper
Bmgt 313: Business Law I
Course:Bachelor Of Commerce
Institution: Kabarak University question papers
Exam Year:2010
COURSE CODE: BMGT 313
COURSE TITLE: BUSINESS LAW I
INSTRUCTIONS:
1.) Answer question ONE. And any other THREE questions.
2.) Do not write anything on the question paper.
3.) Time allowed is two (2) hours.
4.) Marks may be lost for illegibility
PLEASE TURNOVER
QUESTION 1
a) A saw a rare book displayed in the university Bookshop. It was labelled “First
edition Kshs 200/=.” A entered the bookshop and put Ksh 200/= on the counter
and asked for the book. The bookseller did not agree to sell the book saying that
the real price of the book was Kshs4,000/= and that it has been marked as
Kshs200/= by mistake. Is the bookseller bound to sell the book for kshs200/=?
Give reasons for your answer. (5 marks)
b) B offered to sell his house for Ksh 500,000/=. A accepted the offer by Post. On
the next day, A sent a telegram without withdrawing the acceptance which
reached B before the letter. Is the revocation of acceptance valid? Give reasons
for your answer. (5 marks)
c) C a student at Kabarak University was in dire need of money. He sold his new
laptop purchased two months ago at a cost of Kshs120,000/= for Kshs20,000/= to
D. thereafter C sought to set aside the contract on the ground of inadequacy of
consideration. Will he succeed? Give reasons for your answer. (5 marks)
d) James a minor fraudulently represented to equity Bank that he was of age and
executed a mortgage deed for Kshs 1,000,000/=. The minor later failed to pay the
money back to equity Bank. Advise Equity Bank of its rights against James.
(5 marks)
e) B paid Kshs 10,000/= to A an employee of Kabarak University in consideration
of A’s promise that B will be employed as a clerk in the university. B did not get
the promised job. B now wishes to recover Kshs 10,000/= from A.
Decide. (5 marks)
QUESTION 2
(a) Distinguish between a sale and an agreement to sale. ( 6 marks)
(b) With clear illustrations explain the conditions implied in a contract of
sale of goods. (9 marks)
QUESTION 3
a) M a partner of a firm architects borrowed Kshs100,000/= on behalf of a firm
from Family Bank Nakuru branch. Family bank knew that M had no express
authority from the partners to borrow any money but lent the money on an
assurance from M that the money would be applied for the payment of a debt of
the firm. The money borrowed from family Bank was so applied. Can Family
Bank recover the amount from the firm? Give reasons for your answer. (5 marks)
b) With specific examples explain when a court can order for the dissolution of a
partnership. (10 marks)
QUESTION 4
a) Explain the functions of law. (5 marks)
b) Discuss the advantages of Statutory Law. (5 marks)
c) A insured his house against fire for Kshs100,000/= with X and for Kshs200,000/=
with insurer Y. A loss of Kshs 120,000/= occurred. Explain the liability of X, and
Y to A. (5 marks)
QUESTION 5
a) A was appointed to act as an agent for B in selling his house in Nairobi. B had
instructed A not to accept less than 1,000,00/= as the purchase price. A sold the
house for Kshs 1,200,000/= and remitted Kshs 1,000,000/= to B. B claimed Kshs
200,000/= from A. decide. (5 marks)
b) Explain why arbitration is a ideal method of solving commercial disputes as
compared to referring a dispute to a court of law. ( 10 marks)
QUESTIOIN 6
a) X was a passenger in a bus that belongs to Eldoret Express Buss service. The
driver of the bus was pressed by the passengers to cross the swollen river which
he was unwilling to do. He subsequently agreed to cross the river, the bus slipped
to the deep water and the dead body of x was found the following day. The family
of X sued Eldoret express Service for damages. Is Eldoret Express service liable?
Give reasons for your answer. (5 marks)
b) Explain the features of promissory note. ( 5 marks)
c) Discuss the statutory requirements of a Hire Purchase Agreement. (5 marks)
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