Buss 212:Business Law Question Paper
Buss 212:Business Law
Course:Business Administration
Institution: Kenya Methodist University question papers
Exam Year:2011
SCHOOL : SCHOOL OF BUSINESS AND ECONOMICS
DEPARTMENT : BUSINESS ADMINISTRATION
TIME : 2 HOURS
INSTRUCTIONS Answer Question ONE and any Other TWO Questions
Question 1
James, John and Mercy were classmates in the Business law class in the University. After graduation they pursued different interests as follows.
James decided to continue with his studies and he is now Dr. James a senior lecturer in the school of business and management. He is well paid and he enjoys his work very much . His contract with the University ends in two years time.
Mercy got her Masters degree in business administration. She is now a senior manager in one of the leading commercial banks in Kenya. Of late she has been thinking of starting a business with her brother but she has no specific business in mind.
John decided to be self employed immediately after their graduation with the first degree. He therefore borrowed Ksh 500,000 from his parents and he started manufacturing some fast moving beauty products (cosmetics). His business has been doing very well, but of late due to its growth, he has started experiencing some problems which include:
a) Poor and late supply of raw materials
b) Poor and late distribution of his finished products
c) Failure to meet market demand due to limited capital for expansion
d) Management problems which have resulted to some products being returned by his consumers for being of poor quality thus exposing him to loss of legal action.
The THREE old friends have just met in a social event organized by their former University and John who is desirous of expanding and improving his business to the next level has decided to invite them to join him in his business and seek the advice on the way forward.
i) Discuss the nature of the contract between James and his employer (5marks)
ii) If James decides to join John in business, he will be in breach of his contract with his employer, discuss the remedies available to his employer briefly. (10marks)
iii) Assume that James and Mercy do not want to leave their employment but they want to do business with John, What arrangements should they have in order to protect their respective interests? (5marks)
iv) Briefly advice John on what legal arrangements that he can enter into to expand and improve his business. (10marks)
Question 2
a) Briefly discuss the differences between law and morality. (5marks)
b) With examples explain the differences between public and private law. (5marks)
c) Briefly explain what is a constitution and discuss THREE fundamental differences between the 1963 and 2010 Kenyan Constitutions. (5marks)
Question 3
Write short notes on the following:
a) The nature of hire purchase agreement. (5marks)
b) Dissolution of partnership and its consequences. (5marks)
c) Meaning of negotiable instruments and its characteristics. (5marks)
Question 4
Write short notes on the following in the context of the law on sale of Goods in Kenya; (20marks) a) Difference between sale and Agreement to sell.
b) The rule of “Caveat emptor” or “buyer beware”
c) The implied condition as to Quality and fitness for the sale purpose.
d) The rule that the buyer of goods acquires no better title than the seller had “Nemo Dat Quod non Habet”
e) The seller`s right of stoppage of goods in transit.
Question 5
a) Define a partnership and state the essential elements of a partnership. (4marks)
b) What is the nature of the relationship in a partnership as between the parties? What are the rights as against one another? (8marks)
c) What are the circumstances/ways in which a partnership may be dissolved? (8marks)
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