Business Law 2 Question Paper

Business Law 2

Course:Bachelor Of Commerce

Institution: Kenyatta University question papers

Exam Year:2010

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2009/2010
SECOND SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
BUSINESS LAW II

=================================================================
DATE:
FRIDAY 9TH APRIL 2010
T IME: 2.00 P.M. – 4.00 P.M.

INSTRUCTIONS

Answer any five questions.
Credit will be given for citation of relevant cases.

1.
a)
Who is a legal person? Give examples of natural and artificial legal persons.
b)
Briefly explain the distinction between a corporation and unincorporated association.

2.
James Mwangi requested his bank "Tumaini Bank" for a statement on his account. The statement indicated that he had ksh. 70,000/- in his current account. Relying on this, he used a cheque for kshs. 50,000 to Kazungu Masha who had repaired his vehicle, Kazungu endorsed the cheque to Bwanamaka his father in law as a gift. Bwanamaka endorsed the cheque to Results Academy for payment of fees for his daughter, Kadzo. When Results Academy took the cheque to the bank, it was dishonoured. Tumaini Bank had erroneously debited James Mwangi's account with Kshs. 50,000. Kadzo was barred for sitting her end of year examination.
Discuss the rights and liabilities of
a)
James Mwangi
b)
Tumain bank
c)
Kadzo Bwanamaka
d)
Bwanamaka
(20 marks)

3.
a)
Discuss the terms which may be found in a contract. (10 marks)
b)
X was eight months pregnant whe she traveled by air to be able to give birth at a place of her home town. There was bad weather and the plane could not land for more than one hour. X became hypertensive, started feeling sharp pains, developed into labour and she delivered in the air. The baby died as there was no nurse around. One of the many terms on the air ticket stated that "the company is not liable for pregnant women exceeding 5 months". Discuss. (10 marks)

4.
Goods may be sold by a person who is not the owner and who does not have authority or consent of the owner to sell.
a)
Discuss the general rule for such a case. (10 marks)
b)
Discuss the exceptions.(10 marks)

5.
a)
Discuss the rule of Rayland Vs Fletcher.(10 marks)
b)
State the defences to this rule. (10 marks)

6.
a)
Briefly explain the duties of an agent to his principal. (10 marks)

b)
Kenya Meat commission's agent was transporting 100 kg of beef to a remote place where a certain company was holding its Annual General Meeting for 3 days. 50 kilometers before reaching the place, the agent's lorry broke down. There was no network and the agent failed to get to the principal. Fearing the beef may go bad, he sold the beef to the residents at a throw away price. The commission is now refusing to pay the agent its agreed commission citing the loss it has incurred. The agent is threatening to sue. Advise the commission.
(10 marks)

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