Business Law Question

UNIVERSITI TUNKU ABDUL RAHMAN ACADEMIC YEAR 2005/2006 DECEMBER EXAMINATION UBML1053 BUSINESS LAW THURSDAY, 15 DECEMBER 2005 TIME: 2.

00PM – 4. 00PM (2 HOURS) BACHELOR OF COMMERCE (HONS) ACCOUNTING YEAR ONE Instructions to Candidates: Section A : [Total: 40 marks] 1. This section consist of ONE (1) compulsory question 2. Answer ALL the sub-questions. Section B : [Total: 60 marks] 3. This section consists of THREE (3) questions.

4. Answer only TWO (2) questions. 5. No marks will be given for any extra questions or sub-questions (i. e. parts a, b or c in a question) attempted.

. Where the candidate answers more than the required number of questions, answers to the last question or questions, in numerical order of the questions, shall be ignored. 7. Candidates are reminded to, where possible, support their answers with the relevant statutory provisions and decided case-laws. Note: Candidates are warned that they may only bring into the examination hall an unmarked copy of the Contracts Act 1950 and the Sale of Goods Act 1957.

Copies that are found to have unauthorized underlining, highlighting or notes/papers inserted will be confiscated.This question paper consists of 4 questions on 4 printed pages. 2 UBML1053 BUSINESS LAW Section A Answer ALL questions (compulsory). Q1.

(a) “Silence itself can never amount to fraud in contract law. ” Elaborate on this statement. (10 marks) [Total 40 marks] (b) Mamat Sdn Bhd entered into a written contract with Tong, a building contractor to lay new tiles on the floor of its factory. Both Mamat Sdn Bhd and Tong signed the written contract. This contract provided that: Clause 4 – Materials Used It is a condition of this contract that the tiles used to lay the floor of the factory must be manufactured by Preston Bhd.Clause 8- Limitation of Liability The contractor shall not be under any liability in respect of any loss or damage which may arise from breach of warranties whether express or implied relating to this contract.

The tiles used by Tong were of an inferior quality and were not manufactured by Preston Bhd. As a result, the factory’s floor was uneven and Mamat Sdn Bhd had to replace the inferior tiles with new tiles. Mamat Sdn Bhd wants to sue Tong for breach of contract based on the above facts. Advise Mamat Sdn Bhd as to whether it will succeed in its legal action against Tong.

(10 marks) (c)Explain the difference between a proposal and an invitation to treat. (8 marks) (d) Sally advertised her car for sale in The City Life News. The advertisement read as follows: “Car For Sale Perotiga Chitah EZ(M) ’98 Silver Model. RM 15,000 negotiable. Will accept the first offer received. Tel no: 012-4536214” Rustam is the first person to respond to the advertisement.

He came to see the car on Tuesday and informed Sally that he would give her RM12,000 for the car. Sally asked for time to think about the price and Rustam responded by telling Sally to let him know her decision as soon as possible.On Wednesday, Sally posted a letter of acceptance to Rustam stating, “I agree to sell the car for RM12,000. ” On Friday, Sally telephoned Rustam to tell him that she had sold the car to her friend for RM13,000.

Rustam received Sally’s letter on Saturday. Can Rustam sue Sally for not selling the car to him? This question paper consists of 4 questions on 4 printed pages. (12 marks) 3 UBML1053 BUSINESS LAW Section B Answer only TWO (2) questions. Q1. (a) State the differences between a contract of sale of goods and a hire-purchase agreement. (5 marks) [Total: 60 marks] (b)Ahmad entered into a hire-purchase agreement of a second hand car with Kuat Finance Bhd.

This hire-purchase agreement is governed by the Hire Purchase Act 1967. The hire-purchase agreements contained the following terms: (i) The hirer has no right to bring a legal action under s. 8(1) of Hire Purchase Act 1967 against Kuat Finance Bhd. The implied conditions of Hire Purchase Act 1967 in relation to the quality of the car hired by the hirer are hereby excluded. The hirer’s right, interest and title under the hire-purchase agreement cannot be assigned by the hirer to any other person in any circumstances.

ii) (iii) Advise Ahmad as to the validity of the above terms found in his hire- purchase agreement with Kuat Finance Bhd. (16 marks) (c) Explain the meaning of “specific goods” and “unascertained goods”. Give an example for each type of goods. (9 marks) [Total: 30 marks] Q2. (a) Describe the court structure in Malaysia. (10 marks) (b) Adam makes fireworks at home for a living.

He sells his home-made fireworks to the neighbourhood children. One day, while Adam was testing his fireworks in his garden, one of his fireworks went off and landed on his neighbour, Bebe’s roof.This incident happened due to Adam’s carelessness. Unfortunately, Bebe’s roof caught fire and spread to the top floor of Bebe’s house.

When the fire was finally put out, there was a big hole in the roof, the interior walls of the rooms on the top floor of the house were covered with black stains caused by soot and smoke and there was also damage to a very expensive new wedding gown that Bebe had bought for her daughter. Bebe’s daughter was to wear the wedding gown at her wedding the next day.Bebe is very upset over the whole incident and wants to sue Adam for the costs for repairing her roof, repainting the walls and damage to the wedding gown. This question paper consists of 4 questions on 4 printed pages. 4 UBML1053 BUSINESS LAW Section B, Q2 (b) Continued Advise Adam on the following, (i) (ii) Can Bebe claim for the damages to her house? Can Bebe claim damages for the wedding gown? (16 marks) (4 marks) [Total 30 marks] Q3. (a) “An agent cannot delegate his duty to another person without the express permission of his principal.

Is this statement true? Give reason(s) for your answer. (10 marks) (b) Explain the meaning of “breach of warranty of authority” by an agent. (6 marks) (c) Andy is a partner in a firm called Idols Co who specializes in the management of artistes in the entertainment industry. He wants to retire from the firm.

He is worried as to his liability for the debts incurred by the firm before and after his retirement. Advise him on this matter. (14 marks) [Total: 30 marks] This question paper consists of 4 questions on 4 printed pages.