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LW/SEP 2011/LAW166/251/299/379

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION

COURSE COURSE CODE EXAMINATION TIME

BUSINESS LAW LAW166/251/299/379 SEPTEMBER 2011 3 HOURS

INSTRUCTIONS TO CANDIDATES 1. This question paper consists of two (2) parts PART A (25 Questions) PART B (7 Questions)

Answer ALL questions from PART A and any THREE (3) questions from PART B. i) ii) Answer Part A in the Objective Answer Sheet and attach to the Answer Booklet, Answer Part B in the Answer Booklet. Start each answer on a new page.

Do not bring any material into the examination room unless permission is given by the invigilator. Please check to make sure that this examination pack consists of: ) ) ) the Question Paper an Answer Booklet - provided by the Faculty an Objective Answer Sheet - provided by the Faculty

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 8 printed pages
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CONFIDENTIAL PART A 1.

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There are a number of exceptions to the general rule that acceptance must be communicated to the offeror. Which of the following is NOT the exception? a) b) c) d) Reciprocal promise Acceptance through post Counter offer Offer to public (1 mark)

2.

Consideration is NOT required in the following situations EXCEPT: a) b) c) d) AN made a promise in writing to pay a statute-barred debt amounting to RM1,000toBabu. Pak Abu, for natural love and affection, made a written promise to give a piece of land to his son. Pak Abu registered the promise. Sheera found Mira's handphone and returned it to Mira. Mira promised to give Sheera RM50.00 Helen promises to sell her laptop to Nancy. (1 mark)

3.

A minor is bound by a beneficial contract unless the terms of the contract appear to be unfair and unreasonable. This principle is illustrated in the case of a) b) c) d) Carlill v Carbolic Smoke Ball De Francesco v Barnum Felthouse v Bindley Foss v Harbottle (1 mark)

4.

Which of the following are elements of mistake? i) ii) iii) iv) a) b) c) d) The mistake must be made by both parties. The mistake relates to a matter of fact essential to the agreement. Both parties did the mistake intentionally. There must be a false representation or statement. i and ii ii and iii i, ii and iii All of the above (1 mark)

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5.

When can specific performance be granted? a) b) c) d) When compensation in money is an adequate relief. When pecuniary compensation would not afford adequate relief. When the party who is not in breach of the contract is prepared to accept pecuniary compensation. When the party who is in breach of the contract is prepared to pay pecuniary compensation. (1 mark)

6.

Balfour v Balfour [1919] laid down the principle that a) b) c) d) there is a rebuttable presumption that there is no intention to create legal relation between spouses a husband may ignore a wife's intention a wife may claim a valid contract an offer must be communicated (1 mark)

Which of the following is NOT the effect of agency by necessity? a) b) c) d) A contract exists between the principal and the third party. The agent will be protected from any claim of the principal. A contract exists between the agent and the third party. The agent will be entitled to additional payment for his effort to protect and to preserve the safety and interest of the principal (1 mark)

8.

The following are the remedies available to the principal in case the agent received secret profit EXCEPT: a) b) c) d) the the the the principal is under obligation to pay the agent's commission principal may recover the amount of the bribe principal may dismiss or terminate the agent's authority agent and the third party may be charged for a criminal offence. (1 mark)

What is the legal principle illustrated in the case of Smart v Sanders? a) b) c) d) A principal who wishes to terminate his agent's authority must give reasonable notice. A principal is prevented from revoking his agent's authority if the agent has an interest in the property, which is the subject matter of the agency. An agency is terminated by the subsequent insanity of either the principal or the agent. An agent cannot become a party to the transaction with the principal. (1 mark)

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What is the legal effect when an agency is terminated? a) the principal may be sued by the agent b) the agent may be sued by the principal c) the principal is not bound by new contract made by the agent. d) the agent can make contracts in the name of the principal (1 mark)

11.

Dell Sdn Bhd is a well known computer company. The company sold and delivered 50 computers on 14 days' credit to Boboi, who operated a cyber cafe. Boboi failed to pay after the credit period ended. The company's remedy is a) b) c) d) a right of lien a claim for unpaid price to stop the goods in transit to sue for damages for non acceptance (1 mark)

12.

The Nemo Dat Quod Non Habet rule explains:a) b) c) d) the the the the principle of ownership of goods classification of goods for the sale of goods principle of implied condition as to merchantable quality principle of implied condition as to sale by sample (1 mark)

13.

After reading a catalogue supplied by JV Cosmetic, Ana ordered a facial toner which was described in the catalogue as 100 ml. However, the facial toner supplied to her later was 50 ml. In this situation, the seller has breached the implied condition as to: a) b) c) d) Goods Goods Goods Goods must must must must correspond with the sample correspond with the description be of merchantable quality be fit for particular purpose (1 mark)

14.

The following is the procedure to repossess goods under the hire purchase agreement EXCEPT: a) b) c) d) A hirer fails to pay two successive monthly installments The hirer can give notice to the owner in writing to redeliver the goods after the goods are repossessed Notice must be given to the hirer when goods are to be repossessed After repossession, the owner must sell or dispose the goods (1 mark)

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Who are the parties to a hire purchase agreement? a) b) c) d) Hirer and owner Hirer and seller Seller and Owner Dealer and owner (1 mark)

16.

In a hire purchase agreement the hirer is entitled to one of the following rights, namely: a) b) c) d) The The The The right right right right to to to to sell the hire purchase goods to another buyer know how many installments he has paid repossess the hire purchase goods extend the hire purchase period (1 mark)

17.

Annie, when issuing a cheque, had crossed it with two parallel transverse lines and added in between those lines the words "Mewah Bank Berhad" together with the words "not negotiable". What is the type of crossing that was made by Annie? a) b) c) d) General crossing. Special crossing. Limited crossing. Restrictive crossing. (1 mark)

18.

In what situations may a bank dishonour a cheque? i) ii) iii) iv) a) b) c) d) The The The The title of the presenter of the cheque is defective. banker receives notice that the customer has become insane. banker receives notice of the customer's death. banker receives notice of the customer closing his account.

i only ii, iii and iv i, ii and iii All of the above (1 mark)

19.

What is the exception to the doctrine of lifting the corporate veil of a company? a) b) c) d) A company A company A company A company can own its own property is formed to avoid the legal obligations of the incorporators is formed to gain profit can sue and be sued in its own name upon incorporation (1 mark)
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CONFIDENTIAL 20.

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The following are the types of partners EXCEPT: a) b) c) d) Active partner General partner Quasi partner Special partner (1 mark)

21.

A counter offer is a) b) c) d) a new offer made by the offeree after the original offer has been made to him. an original offer made by the offeror. a new offer made by the offeror. an original offer made by a third party. (1 mark)

22.

Under the contract of sale, 'property in goods' refers to a) b) c) d) possession ownership goods to be sold transfer of property (1 mark)

23.

A hire purchase agreement that is signed before the agreement is completed is a) b) c) d) valid voidable void validable (1 mark)

24.

Negotiable instruments in Malaysia is governed by the: a) b) c) d) Contracts Act 1950 (Revised 1974) Civil Law Act 1956 (Revised 1972) Negotiable Instrument Act 1955 Bill of Exchange Act 1949 (Revised 1978) (1 mark)

25.

Injunction as a remedy in Contract Law is statutorily provided by the: a) b) c) d) Contracts Act 1950 Specific Relief Act 1950 Injunctions Act 1940 Companies Act 1965 (1 mark)

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PARTB QUESTION 1 a) Intention to create legal relations is one of the essential elements in order to form a valid contract. Discuss. (10 marks) Farhan is a professional footballer who is 17 years of age. He entered into a contract with Juara Football Club under which he was to play for the club for 5 years. Two months later Farhan entered into a contract with Champion Football Club which promised to pay him a higher salary. Farhan then abandoned the contract with Juara Football Club. Juara Football Club seeks your advice on whether they can sue Farhan for breach of contract. Advise Juara Football Club. (15 marks)

b)

QUESTION 2 When a contract is breached, the party who is not in breach has the right to claim any one or more of remedies which are available under the Contracts Act 1950 and the Specific Relief Act 1950. Discuss the following remedies and support your answer with the relevant statutory provisions and decided cases. a) Specific Performance (8 marks) b) Damages (10 marks) c) Injunction. (7 marks)

QUESTION 3 a) Dato' X appointed Mr Y, a real property agent, to buy a bungalow house at Impiana Height at the price of RM5 million. Mr Y bought a bungalow house at Impiana Height at the price of RM5.5 million. Mr Y had also obtained an insurance policy for the house even though there was no instruction from Dato' X to do so. Dato' X liked the house very much and ratified the contract upon being informed about the contract. However, Dato' X had requested time to consider the contract of insurance policy and he only ratified the contract 3 months later after the house was destroyed by fire. With reference to Contracts Act 1950 and decided cases, advise Dato' X whether he is bound by the contracts (15 marks)

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CONFIDENTIAL b)

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Once a contract of agency is formed, the contracting parties owe certain duties towards each other. In the light of the relevant provisions in the Contracts Act 1950 and decided cases, discuss the duties of a principal towards the agent. (10 marks)

QUESTION 4 a) Elena sold her computer to Sara for RM800. Sara agreed to take delivery of the computer in the next two days. When Elena did not hear from Sara after a week, she sold the computer to Didie for RM999. When Sara came to know about that, she wanted to get the computer from Didie. Advise Sara as to her rights under the law. (15 marks) b) Explain the meaning of 'goods' according to the Sale of Goods Act 1957 and discuss the various types of goods. (10 marks)

QUESTION 5 A hire purchase agreement is only valid if certain formalities are followed. Discuss those formalities. (25 marks)

QUESTION 6 The use of cheques in Malaysia is regulated by the Bill of Exchange Act 1949. With reference to relevant provisions of the Bill of Exchange Act 1949, discuss the various types of cheque-crossings and their effect. (25 marks) QUESTION 7 Elaborate on the requirements under section 3(1) of the Partnership Act 1961, with reference to decided cases and relevant provisions. (25 marks)

END OF QUESTION PAPER

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