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Bcom 303: Business Law Ii Question Paper
Bcom 303: Business Law Ii
Course:Bachelor Of Commerce
Institution: Chuka University question papers
Exam Year:2013
CHUKA
UNIVERSITY
UNIVERSITY EXAMINATIONS
THIRD YEAR EXAMINATION FOR THE AWARD OF
DEGREE OF BACHELOR OF COMMERCE
BCOM 303: BUSINESS LAW II
STREAM: BCOM Y3S2 TIME: 2 HOURS
DAY/DATE: WEDNESDAY 7/8/2013 8.30 AM – 10.30 AM
INSTRUCTIONS:
ANSWER QUESTION ONE AND ANY OTHER THREE
DO NOT WRITE ANYTHING ON THE QUESTION PAPER
1. (a) Ben went for holiday in Mombasa and during his tour; he identified a car which he had been looking for. He instructed the seller to deliver the car to Nakuru where he was going to pay him the purchase price. The car was involved in an accident at Nairobi. Ben refused to pay. The seller wants to be paid. Decide giving reasons for your decision. [5 marks]
(b) A exchanged his car with B but because A’s car was newer than B’s; B had to add him Kshs. 200,000 besides giving him a car. A insisted that they were bound by cap 31, sale of goods Act. B said they were not. Decide who was right and why. [5 marks]
(c) Nyamisa had carried on a mitumba business as a sole proprietor for some time. He then entered into a partnership with Mwenda.
Their partnership agreement provided that the profits should be shared equally. When they fell out, a dispute arose concerning who owned the assets used by the business including the mkokoteni and the place where they spread their merchandize. Decide. [4 marks]
(d) Morrison has been an employee of Beatrice for the last five years. Beatrice summarily dismissed him on Tuesday. Discuss possible instances under which the termination of this employee’s services is lawful. [5 marks]
(e) Miss X asked Y a specialized Pharmacist, to sell her some weight-reducing tablets. He recommended “Z” to her as a proper product for the purpose. Miss X used the same as prescribed but instead Miss X gained weight. What remedy if any available to miss X against Y as stipulated by sale of Goods Act. [5 marks]
(f) Explain the term “indemnity” and state the rights of an indemnity holder.
[6 marks]
2. (a) A person from your home area has died. It is being said he died intestate. Explain to your family what that means and how his property should devolve. [10 marks]
(b) A insures his goods with Gateway Insurance company Ltd for Kshs.500,000. The goods are damaged by fire caused by C. A recovers the loss from Gateway Insurance Company Ltd and subsequently he succeeds in recovering the same loss from C also. Gateway Insurance claimed the amount recovered by A from C.
Decide [5 marks]
(c) C agreed with M that M would put on a play at C’s theatre. C was to have 60% and M 40% of the gross box office receipts. C paid the expenses of the theatre and M paid the expenses on the play.
During a performance the claimant, who was in audience, was accidentally shot by one of the actor. Claimant sued C alleging that C was M’s partner and was jointly liable with M. Decide. [5 marks]
3. (a) Sasha, Wasike and Moses entered into a partnership to execute contracts contract work. Sasha secured a partnership work estimate at a cost of 10 million shillings. She obtained the said contract upon payment of Kshs500,000/= to a person in authority and debited the sum in the account books of the partnership as an item of expense. Wasike and Moses objected to the item. How would you decide the dispute? [5 marks]
(b) A, to meet the claims of his creditors, borrowed Kshs 10,000/= from B, to protect his interest, B, takes out an insurance policy on the life of A. A pays the entire amount to B and then dies. Can B recover on the policy? Give reasons for your answer. [5 marks]
(c) Explain the conditions and warranties implied in hire Purchase Agreement.
[10 marks]
4. (a) Explain hire-purchase contract? How does it differ from a:
(i) Credit sale contract
(ii) Conditional sale contract [6 marks]
(b) Charles buys a second-hand car from peter after reading peter’s advertisement in the local newspaper. Charles pays peter in the Kshs 500,000 agreed price and takes delivery of the car. Two days later Charles is visited by a representative of the Bunter Finance Company who informs him that the car is the subject of a hire- purchase agreement with peter who has not paid all the installments. Charles refuses to surrender the car. Explain the legal position. [4 marks]
(c) State and explain the rules governing the passing of property under contracts for the sale of goods in cases where the parties have not indicated an intention that it should pass at any particular time. [10 marks]
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