Hbc2112;Business Law I Question Paper
Hbc2112;Business Law I
Course:Bachelor Of Commerce
Institution: Meru University Of Science And Technology question papers
Exam Year:2013
QUESTION ONE – (30 MARKS)
(a) Carbolic smoke company was the manufacturer of smoke balls (Carlill vs Carbolic smoke company). They offered a reward of 100 pounds to anyone who contracted influenza after using their smoke balls for a fortnight. Carlill, relying on the advertisement, bought the smoke ball and used it as prescribed, but still contracted influenza. She sued for the advertised reward.
Judgment The advertisement was a true offer, and not a mere advertisement puff and the defendants were held liable to pay the reward.
Required (i) Advance reasons that make you think that this was a valid contract out of the offer made and whether all elements of a valid contract were present. (8 Marks) (ii) Advance reasons that make you think this was not a valid contract and that Carlill was not entitled to the reward. Point out the missing elements. (8 Marks)
2
(b) Briefly explain any three duties of an agent in a Principal Agent (P/A) relationship. (6 Marks) (c) (i) What is a tort? (2 Marks) (ii) In relation to the law governing negotiable instruments, discuss any two types of endorsement that may be made on a bill of exchange. (6 Marks)
QUESTION TWO – (20 MARKS)
(a) The general rule is that an agent contracts within the limits of authority, the principal is liable. Explain any four exceptions to this rule. (12 Marks) (b) In the case of R V Bailey (1800) a certain law was passed while the accused were far away at sea. As soon as they landed at the port of London, they contravened this law. What defense did they rise and what principle of law was laid down in this case? (8 Marks)
QUESTION THREE – (20 MARKS)
(a) Critically discuss the relevance of the law you have studied in Kenya in general and to your profession in particular. (12 Marks) (b) State and explain the various characteristics of a negotiable instrument. (8 Marks)
QUESTION FOUR – (20 MARKS)
(a) State and explain with examples the duties of parties in a banker-customer relationship. (10 Marks) (b) Discuss the various statutory provisions governing the application of African Customary law in Kenyan courts. (10 Marks)
QUESTION FIVE – (20 MARKS)
(a) Discuss the various ways in which an agency relationship may be created. (10 Marks) (b) Discuss with examples the various ways by which a valid contract may be terminated by frustration. (10 Marks)
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