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Bmgt 313: Business Law Question Paper
Bmgt 313: Business Law
Course:Bachelor Of Commerce
Institution: Kabarak University question papers
Exam Year:2012
KABARAKUNIVERSITY
UNIVERSITY EXAMINATIONS
2012/2013 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF COMMERCE
BMGT 313: BUSINESS LAW
DAY: FRIDAY
DATE: 14/12/2012
TIME: 9.00 – 11.00 A.M. STREAM: Y3S1
INSTRUCTIONS:
1. Answer question ONE (compulsory) and ANY other TWO questions
2. Question one carries 30 marks while the other questions carry 20 marks each
3. Illustrations and cases will attract more marks
1.(a). Odoyo wrote to Seroney on 10th March, 2012 asking him to indicate whether he would be willing
to sell his Land at Kiamunyi in Nakuru and if so to inform him the lowest price he would accept.
Seroney wrote on 15th March, 2012 indicating that the lowest price he would accept was Kshs.
5,000,000/=. On 20th March, 2012 Odoyo wrote back saying “I accept to purchase your land at
Kshs. 5,000,000/= indicated by you as the price you will accept”. On 25th March 2012 Seroney
wrote to him telling him that he has discovered that his quotation was low and now he is selling
at ksh.7,000,000/=. Odoyo wrote to him on 29th March, 2012 saying “I accept to buy your Land
at Kshs. 7,000,000/= asked by you”. There was no limitation of period within which the
offer/counter-offer was to be accepted. Seroney receaved this letter of acceptance on 4th April
2012 and wrote back the same day saying that he had already sold the land on 3rd April 2012
and advised Odoyo to forget about the whole issue and search for land elsewhere. Odoyo has
now filed a case against Seroney seeking damages for breach of contract or Specific
performance of the 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 decide cases. You should be guided by rules of Offer and Acceptance in a Contract.(10 Marks)
(b). Consideration is one of the Legal requirements which the parties to a contract must fulfill in
order for that contract to be binding on them.
EXPLAIN what is consideration and then proceed to discuss RULES of consideration. (10 Marks)
(c).
Performance has been said to be one of the ways through which parties can be discharged from
a contract and then the contract comes to an end.
What are the requirements which must be fulfilled by a party in a contract in order for him to be
discharged by performance.(10 Marks)
(TOTAL 30 MARKS)
2.(a). Every Law must be founded upon a recognized source of Law; otherwise it will not be applicable
by our Courts and it will not be binding on the parties thereto.
Explain how Judicial precedent and African Customary law are sources of our Laws in Kenya(10 Marks)
(b). Law is so wide and this has made it imperative to be divided into various classes/branches of
Law. Explain these branches of law and support your answer with candid examples. (10 marks)
(TOTAL 20 MARKS)
3.(a). Cap 31 (Sale of Goods Act) Laws of Kenya was enacted to protect the buyer/Consumer who was
presumed to be a weaker party in a contract of Sale of Goods. As such it has implied terms
which must be fulfilled by the seller in order for the buyer to be bound by the said contract.
Using decided cases and illustrations, EXPLAIN the implied conditions under Cap 31 and how
they are applied.
(10 Marks)
(b). Using decided Cases and Examples, explain the TWO major essential Elements of a contract of
Sale of Goods(10 Marks)
(TOTAL 20 MARKS)
4.(a). Agency relationship can be created through Estoppel, among other ways.
BRIEFLY explain how Agency can be created by Estoppel.
(5 Marks)
(b). One of the duties of the Agent towards the principal is fiduciary duty. Explain the parameters
and operation of this duty.
(5 Marks)
(c). Describe different ways through which an Agent’s authority may come to an end (10 Marks)
5.(a). Under Law of Employment, contract of service must be distinguished from contract for services.
BRIEFLY explain what these two systems of employment are and then proceed to explain the
THREE major tests used to distinguish them.(10 Marks)
(b). A company has been said to be an artificial person after incorporation in that it can do generally
all those things which a natural person can do in regard to business.
What are the advantages of carrying a business as a company under cap 486(companies Act)
compared with doing a business as partners in a partnership under cap 29(Partnerships Act)
laws of Kenya?(10 Marks)
(TOTAL 20 MARKS)
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