Sale Of Goods Agency And Negitiable Instruments Question Paper

Sale Of Goods Agency And Negitiable Instruments

Course:Bachelor Of Laws

Institution: Kenyatta University question papers

Exam Year:2010

LCC 200: Sale of Goods, Agency and Negotiable Instruments

Note: Question 1 is compulsory and carries thirty marks, whilst all other questions will merit 20 Marks

Proposed Examination Questions for January – April Semester

1. Zakayo went to Shah’s garage and saw a car which he wanted to buy. The owner of the car, Oscar, had left the car with Shah for Shah to obtain offers, but with instructions that Shah was not to accept any offers without first consulting Oscar. By mistake, Oscar had left the car’s registration document in the vehicle and, using this document, Shah sold the car to Zakayo. The car stayed in Shah’s garage until Zakayo’s cheque was cleared but, before this happened, Oscar went to the garage and took the car and registration document away as he had agreed to sell the car to Njoroge. Njoroge was going to draw out the money to pay for the car from his KCB savings account and, again forgetting to remove the registration document, Oscar allowed Njoroge to use the car to go into the City to withdraw the money. Njoroge, however, calling himself Oscar, sold the car to Bonyo who acted innocently. The sale took place in a Parklands hotel. Both Zakayo and Oscar are claiming the car from Bonyo. Discuss their claims within the context of the Sale of Goods Act

2. Write short notes on the following:
(a) Bill of Lading
(b) C.I.F. and F.O.B.
(c ) Liability of a Common Carrier and Rights of a Common Carrier
(e) Contract of affreightment
(f) Charter Party
(d) Forwarding Note

3. With appropriate references to the law of agency
(a) Define agency, agent and principal
(b) Distinguish between the different types of agency
(c ) Explain ratification
(d) What do you understand by estoppel under the law of agency?
(e) Define and explain the authority and the relationship between
a principal and agent
(f) what are the rights of an agent?
(g) What are the rights of a principal?
(h) List the acceptable procedures leading to the termination of an agency

3 With reference to the Sale of Goods Act (Cap 31) and case law, When can the right of stoppage “in transitu” be exercised?

4. (A)
Write short notes on why the following three authorities are relevant to the Sale of Goods: (i) Head v Tattersall (1871) LR 7 Exch 7 (ii) Sterns Ltd v Vickers Ltd [1923] 1 KB 78 (iii) Couturier v Hastie (1856) 5 HL Cas 673
4 (B)
(i) What are the common law rules applying to misdelivery?
(ii) What are the rules relating to delivery of the wrong quantity?
(iii) When is s31(2) applicable? What is its effect?
(iv) When will the seller be liable for deterioration of or damage to goods during transit?
(v) What is the relationship between ss6 and 7?

5. ‘The ultimate real remedy an unpaid seller may exercise in relation to the goods is the right of resale.’

Describe the real remedies of the unpaid seller and discuss the circumstances in which the right of resale will arise, explaining the effects of the resale on the original contract of sale.

6(A)
What does ‘nemo dat quod non habet’ mean and why are there exceptions to the rule?

6(B)
Wanjiru needed money urgently so he took his car to Sam’s garage and asked Sam to sell the vehicle for not less than KSh 900,000. Sam, who often undertook transactions of this type for customers, agreed, suggesting that Wanjiru should leave the car’s registration book with Sam for safe keeping. Wanjiru therefore left the book in the car. That afternoon, a friend of Oscar’s told him that Sam’s garage was in financial difficulties so Wanjiru immediately telephoned Sam telling him that he was not to sell the car and that Wanjiru would collect it later. When Wanjiru arrived at Sam’s garage that evening, however, one of Sam’s assistants told him that, immediately after Wanjiru’s telephone call, Sam had sold the car to Ben for KSh 700,000 cash. Ben had taken the car away and Sam had disappeared with the money. The assistant did not know Ben’s name and address and it took Wanjiru a week to find him. By this time, Ben had sold the car to Yusuf. Yusuf had paid for the car by cheque but the cheque had been dishonoured. Ben had immediately told the police but, by this time, Yusuf had sold the car on to Asif. Asif was unaware of any fraud.
(A) Tracing through the various transactions, decide which of the people involved in the case has title to the car.
(B) b Discuss the ways in which the Sale of Goods Act would assist those people who could not claim ownership.

7. Luigi, an enterprising jeweller, based in Nakuru, decides to offer his Italian 22 carat gold jewellery on a hire purchase basis. John, viewing an advertisement Luigi had placed in a local newspaper, bought a gold watch worth KSh 40,000 with a payment of KSh 4,000 as deposit, and an agreement that the balance be payable in 4 monthly instalments directly to Luigi’s bank account.

14 days later, Mary offers John KSh 70,000 cash for the watch which John gleefully accepts. After the first instalment date has elapsed, without any sign of the first instalment deposited to his account, Luigi realizes John has not paid and demands the return of the watch from John or immediate full payment of the balance. John argues he had not received a copy of the Registration of the hire purchase transaction, which Luigi had, in fact, never registered with the Registrar. In the meantime, Mary sees the same watch advertised in the newspaper under Luigi’s advertisement and demands all her money back from John.

Advise Luigi, John and Mary with appropriate references from the Hire Purchase Act (Cap. 507)

8. A banker must honour his customer’s cheque as long as there is sufficient and available credit balance: Foley v Hill [1848]

(i) How is a banker’s authority to pay determined?
(ii) What do you understand by protection of the paying bank and protection of the collecting banker?
(iii) What are the two methods in which a cheque may be crossed and what is the effect of crossing?
(iv) What are the duties of a banker as to crossed cheques?

9. A bill is an ‘order to pay’ while a promissory note is a ‘promise to pay’.

Explain this statement in detail with reference to the relevant statutes concerning these negotiable instruments.

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