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Law I (Pilot Paper) Question Paper

Law I (Pilot Paper)

Course:Cpa Part I

Exam Year:2000

KENYA ACCOUNTING AND SECRETARIAL NATIONAL EXAMINATION BOARD
CPA 1- PAPER 2
LAW 1
JULY 2000 – PILOT PAPER TIME ALLOWED:3hrs
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Answer any FIVE questions. ALL questions carry equal marks.

QUESTION ONE
(a)Define Statute law and discuss its advantages. (10 marks)

(b)Explain each of the following rules of Statutory Interpretation;
(i)Noscitur a sociis; (3 marks)
(ii) Ejusdem generic; (3 marks)
(iii) Mischief rule. (4 marks)
(Total: 20 marks)

QUESTION TWO
(a)Explain the nature and advantages of commercial arbitration as a means of settling disputes. (12 marks).

(b)State four acts of commission that may constitute professional misconduct under the Accountants Act (Cap 531) Laws of Kenya. (8 marks)
(Total: 20 marks)

QUESTION THREE
(a)Describe the advantages of carrying on business as a partnership as opposed to a limited liability company. (10 marks)

(b)You have been asked to draft a partnership deed for a small retail firm of five partners. State the matters, if any, that you will omit from the partnership deed on the basis that they are implied by the Partnership Act (Cap 29) Laws of Kenya. (10 marks)
(Total: 20 marks)

QUESTION FOUR
(a)When parties enter into a contract it is virtually impossible for them to include express terms to cover every eventuality. Explain the circumstances under which:
(i) The courts
(ii) The statutes
Will imply terms into the contract. (10 marks)

(b)Kamau advertised the sale of his farm. He was approached by Keter who wanted to buy the farm. In the course of negotiating the price. Keter asked Kamau how many sheep could be reared on the farm and Kamau replied, “I have not used the farm for sheep rearing but I think it could support 2000 sheep.”
Keter bought the farm and immediately purchased 2000 sheep to rear on it. However, the firm is unable to accommodate the 2000 sheep and Keter is aggrieved and intends to sue Kamau for misrepresentation.
Advise Kamau. (10 marks)
(Total: 20 marks)

QUESTION FIVE
(a)Explain the rules that govern the measure of damages in the law of contract.
(10 marks)

(b)Discuss the various equitable remedies which may be available to an injured party who is suing for breach of contract. (10 marks)
(Total: 20 marks)

QUESTION SIX
(a)Explain the meaning of the rule “Nemo dat quod non habet” as stipulated in the Sale of Goods Act. (6 marks)

(b)Discuss the main exceptions to the rule. (14 marks)
(Total: 20 marks)

QUESTION SEVEN
(a)In relation to the law governing Negotiable Instruments, explain four types of endorsements that may be made on a Bill of Exchange. (8 marks)

(b)Akili Mingi owns a house at Muthaiga in Nairobi valued at Sh. 20 million. He insured it against fire with Linda Mali Insurance Co. Ltd and Pokea Insurance Co. Ltd for Sh.15 million and Sh. 10 million respectively. He also insured his household goods against burglary with Lipa Insurance Co. Ltd. for Sh. 5 million. One night while he was away, burglas broke into the house, stole all household goods and set the house on fire completely destroying it.
Akili Mingi claims the sum assured from the three insurance companies. Advise them. (12 marks)
(Total: 20 marks)

QUESTION EIGHT
(a)In relation to the law of property, explain the difference between each of the following;
(i)Ownership and possession. (6 marks)
(ii)Fee simple and leasehold. (6 marks)
(iii)The “Harbinger,” a newspaper of wide circulation recently published an educational article in one part of its columns “the close structural resemblance between man and the gorilla.” It illustrated the point by two photographs. One was a man in a wrestling pose with the caption “Hamisi Nduati not fundamentally different from the gorilla in physique.” Mr. Hamisi Nduati has realized that the photograph was taken in one of his wrestling contests which he won. He alleges that he enjoys international reputation as an outstanding wrestler and he therefore argues that he has been defamed. He comes to you for legal advice.Advise him.(8 marks)
(Total: 20 marks)

Law I (Pilot Paper) Question Paper

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