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Bmgt 313: Business Law 1 Question Paper
Bmgt 313: Business Law 1
Course:Bachelor Of Commerce
Institution: Kabarak University question papers
Exam Year:2013
KABARAK
UNIVERSITY
UNIVERSITY EXAMINATIONS
2012/2013 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF COMMERCE
BMGT 313: BUSINESS LAW 1
DAY: TUESDAY
DATE: 13/08/2013
TIME: 2.00 – 5.00 P.M.
STREAM: Y3S1
INSTRUCTIONS:
1. Answer Question ONE (Compulsory) and any Other TWO Questions
2. Cases, Examples and illustration will attract more marks
1. (a).
Omweno decided to try and sell his car by advertising the same in the daily
nation stating – “For sale Tata Double Cabin – One owner – Ksh.2 Million shillings only--
cash. Come to my house personally—house No. 100 Kanu street, Nakuru—if not able to
trace my house,call---0700 100 200. Offer open only for today – Monday.’’
At 9:00 a.m. while on the way to his place of work, Kirui read the advertisement but
because he was late to work, he did not stop. He telephoned Omweno from his place of
work and made an offer of Ksh.1.5 Million which Omweno said he was to think about it.
Kamau saw the said advertisement on Monday at 11:00 a.m. and decided to walk into
Omweno’s house and make his acceptance. Omweno was not there but only his
daughter Nyabonyi. Kamau left a note reading, “Monday 11:10 a.m. Please keep the car
for me – here is a cheque of Kshs. 2 Million. If acceptable to you call me—0722 111
222”. Nyabonyi placed the note at the study room of Omweno.
On Monday afternoon, Omweno decided to accept Kirui’s counter-offer and posted a
letter of acceptance at 2:30 p.m using sped post. Saying “I agree to sell to you on your
terms. Come and pay and take the car. All required documents are ready.’’ Kirui
received this letter of acceptance at 4.20 p.m on the same Monday.
At 4:30 p.m. on Monday, Omweno read Kamau’s acceptance and immediately
telephoned Kirui and did not find him but left a message on his phone saying “ignore the
letter of acceptance which you will receive, I have changed my mind” Kirui did not listen
to the message until 8 am on Tuesday.
At 2:00 p.m. on Monday, Chacha saw the advertisement and hurriedly posted a
telegram of acceptance and a cheque of Kshs. 2 Million for it to arrive within the
required time. Unfortunately the letter arrived on Friday because Chacha had
misaddressed the letter.
REQUIRED
ADVISE all the parties herein as to their legal position taking into account the way
contracts are made and Rules of offer and acceptance and in particular whether;
i)
There is a contract between Omweno and Kirui (8 marks),
ii)
There is a contract between Omweno and Kamau (6 marks) ,
iii)
There is a contract between Omweno and chacha (6 marks).
(20 Marks)
(b). Explain the nature of the doctrine of Judicial precedent and how it is being applied by
our Courts as one of the sources of our Laws in Kenya.
(10 Marks)
(TOTAL MARKS: 30)
2.(a). Explain the differences between an Actual Sale and an Agreement to sell as explained
under Cap 31(1) (Sale of Goods Act) Laws of Kenya.
(10 Marks)
(b). Using illustrations and decided Cases, briefly explain the implied conditions under Cap
31 (Sale of Goods Act) Laws of Kenya.
(5 Marks)
(c). Explain the rights of an unpaid seller as against the Goods on one side and as against
the buyer personally on the other side.
(5 Marks)
(TOTAL MARKS: 20)
3. (a). J was P’s agent and on P’s behalf made several contracts with M and T over a period of
some years. During this period, p allowed J to act in excess of his powers but p still honored
those transactions and made payments to M. P later terminated J’s agency but failed to notify
M and T. J continued to deal with M and T as normal and in the due course he became (J)
insolvent. P has refused to pay M in regard to subsequent transaction made between J and M
claiming J has been acting in excess of his powers. Also p has refused to pay T claiming J was not
his agent because he had already dismissed him.
ADVISE M and T whether they can sustain claims against P.
(5 Marks)
(b).
EXPLAIN briefly the duties and Rights of an Agent
(10 Marks)
(c).
EXPLAIN how agency by necessity can be created
(5 Marks)
(TOTAL MARKS 20)
4. (a). Administration of Justice in Kenya gives us the structure of Courts in Kenya in a pyramid
form. Taking into account this structure of Courts in Kenya, briefly EXPLAIN the various kinds of
jurisdiction of our various Courts in Kenya clearly demonstrating their (courts)
powers/authority and relationship with each other.
(10 Marks)
(b). Law has been divided into different branches/classes for easy management and
administration of the same.
Briefly EXPLAIN 4 main branches of law most prevalent in our Courts in Kenya, clearly
bringing out various differences between them.
(10 Marks)
(TOTAL MARKS 20)
5.(a). By using the decision in Salomon v Salomon & Company Limited, EXPLAIN and illustrate
the statement that a corporation (a company) is a Person/a legal entity in the eyes of
the Law, and is capable of doing what a natural person can do businesswise. (10 Marks)
(b). By giving examples and illustrations, DISCUSS the advantages of trading as a company
(an incorporated body) other than trading as a sole proprietor or as a partnership.
(10 Marks)
(TOTAL MARKS 20)
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