CONFIDENTIAL LW/OCT 2012/LAW166/251/299/379

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE BUSINESS LAW

COURSE CODE LAW166/251/299/379
EXAMINATION OCTOBER 2012
TIME 3 HOURS

INSTRUCTIONS TO CANDIDATES

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) Answer Part A in the Objective Answer Sheet and attach to the Answer Booklet,
ii) 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.

4. Please check to make sure that this examination pack consists of:

i) the Question Paper

ii) an Answer Booklet - provided by the Faculty
iii) 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 9 printed pages
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PART A

1. A voidable contract is a contract which is

a) Void ab initio
b) Valid and binding until the party entitled to avoid it chooses to do so
c) Valid but becomes void because of illegality
d) Valid but not enforceable
(1 mark)

2. Villa sent a letter to Daniella offering to sell her hand phone. On the same day,
Daniella posted a letter offering to buy Villa's hand phone. Is there a contract
between both of them?

a) Yes, because both have agreed to sell and buy the book
b) No, because there was no acceptance between them
c) Yes, because Villa and Daniella have the intention to create legal relations
d) No, because there was no consideration
(1 mark)

3. Section 26(a) of the Contracts Act 1950 provides that an agreement made on
account of natural and affection requires no consideration. Which of the following is
NOT a condition for this exception?

a) The agreement must be in writing

b) The agreement is made to compensate a promise
c) The agreement must be registered under the relevant law
d) The agreement must be made on account of love and affection between parties
standing in near relations
(1 mark)

4. What was the offer in the case of Carlill v Carbolic Smokeball & Co (1893)

a) A medicine to prevent influenza

b) An offer to Mrs.Carlill to use the product
c) A sum of money to anyone who contracted influenza after using the product
d) An offer to the general public
(1 mark)

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5. Lady Gigi agreed to sing at the Budu Nite Club for four months. She also promised
not to sing at other clubs during that period. One month later, Lady Gigi signed a
contract to sing at the Kerabu Nite Club every weekend. Budu Nite Club can ask
for...

a) Injunction
b) Quantum Meruit
c) Specific Performance
d) Habeas Corpus
(1 mark)

6. A contract is frustrated when any of the following occurs EXCEPT

a) When the contract becomes impossible to be performed

b) When the subject matter of the of the contract is destroyed
c) When the law is amended causing the contract to be unlawful
d) When one of the contract parties refused to proceed with the contract
(1 mark)

7. Which of the following is an agent by necessity?

a) The act or contract must be unauthorized

b) The contract must be ratified by the company after its formation
c) The agent act is necessary to prevent loss to the principal
d) Agent's action must not hurt a third party
(1 mark)

8. "Caveat Emptor" means

a) Seller is silence
b) Buyer fail to make payment
c) Third party rights
d) Let the buyer beware
(1 mark)

9. Delegatus non potest delegare means

a) No one can transfer a better vehicle

b) An agent by implication
c) An agent is not allowed to delegate his authority to another
d) An agent may allow others to do his job
(1 mark)

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10. The right to indemnify and reimburse an agent can be done in the following

a) Agent can claim if he exercise his authority in a negligent manner

b) If agent receive his authority orally
c) If the law allows the agent to ratify his own contract
d) Where the agent suffers injury during the course of his duty due to the
principal's neglect or want of skill
(1 mark)

11. Sale by a mercantile agent, an exception to nemo dat has a number of requirements
except

a) at the time of sale mercantile agent must be in possession of the goods

b) the possession must not be with the consent of the owner
c) disposition must be made when acting in the ordinary course of business
d) buyer must act in good faith
(1 mark)

12. 'Price' in a contract of sale means

a) Money consideration for a sale of goods

b) Past consideration is good consideration in a contract of sale
c) Consideration need not be adequate in a contract of sale
d) Consideration is free
(1 mark)

13. An unpaid seller may claim Lien under the following conditions

a) Where goods are sold for free

b) Where buyer lawfully obtains possession of the goods
c) Where the buyer becomes insolvent
d) Where price is payable on a day certain
(1 mark)

14. Section 17 of the Sale of Goods Act 1957 provides some conditions EXCEPT

a) Goods must be free from any defect

b) Buyer shall have reasonable opportunity to inspect the goods
c) Let the buyer beware
d) Bulk must correspond with the sample in quality
(1 mark)

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15. The effect of Section 5(1) of the Hire Purchase Act 1967 will render a hire purchase
contract

a) Void
b) Voidable
c) Discharge
d) Unenforceable
(1 mark)

16. A hirer has a number of obligations such as

a) He is allowed to create a misrepresentation in a hire purchase

b) He is allowed to exclude section 12 of the Act from the contract
c) He must pay regular instalments
d) He may remove the goods without the permission of the owner
(1 mark)

17. and are parties to a hire purchase agreement.

a) Seller and Owner

b) Guarantor and third party
c) Proposer and principal
d) Hirer and Owner
(1 mark)

18. Radhi signed an agreement with Singa Finance Bhd for the purchase of a sewing
machine under hire purchase. He was asked to sign the agreement before it was
duly completed. The relevant law regarding this matter under the Hire Purchase Act
1967.

a) S4B(1)
b) S 4B(2)
c) S4A
d) S5(1)
(1 mark)

19. What is meant by an ante-dated cheque?

a) A cheque that has been in circulation for a long time

b) A cheque which is dated earlier than the date of actual issue
c) A cheque which is not dated
d) An overdue cheque
(1 mark)

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20. The person to whom a cheque is made payable to is called the

a) Drawee
b) Drawer
c) Payee
d) Transferor
(1 mark)

21. A partnership must have a minimum number of partners.

a) 1
b) 10
c) 12
d) 2
(1 mark)

22. The constitution of a company consists of the

a) Memorandum of Understanding and Memorandum of Articles

b) Act of Parliament and Delegated Legislation
c) The Companies Act 1965
d) Memorandum of Association and Articles of Association
(1 mark)

23. The effect of incorporation can be found under of the Companies Act
1965

a) S16(1)
b) S16(3)
c) S16(5)
d) S18(1)
(1 mark)

24. To repossess goods under hire purchase, hirer must default at least

a) Two successive payments

b) Three successive payments
c) Twenty one days
d) Four successive payments
(1 mark)

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25. is a stipulation collateral to the main purpose of the contract, the

breach of which gives rise to a claim of damages.

a) Sale of Goods
b) Conditions
c) Warranty
d) Lien
(1 mark)

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PARTB

QUESTION 1

Explain the various ways in which acceptance of a proposal may be communicated. Support
your answer with reference to the Contracts Act 1950 and relevant cases.
(25 marks)

QUESTION 2

a) Milli proposed to sell his piano to Vanilla for RM 8,000 to be accepted within one
week. Vanilla agreed to buy the piano for RM 6,000. Immediately after receiving
Vanilla's reply, Milli sold the piano to Tim. Vanilla wishes to sue Milli for breach of
contract.

Advise Milli.
(10 marks)

b) Malik was forced to enter into a contract to sell his bungalow to Wan for RM 500,000.
The original price of the house was RM 5 million. During the execution of the contract
Malik was threatened and pressured by Wan's very rude and large number of
employees. They threatened to use weapon and harm him.

Advise Malik as to the validity of the contract.

(15 marks)

QUESTION 3

a) Identify and elaborate the duties a Principal owes to an agent.

(10 marks)

b) David appointed Remy as his agent. He instructed Remy to sell his shop house at
Jalan Permai. According to the agreement the house should be sold at a price RM
500,000 within one year. After the appointment was made, Remy unfortunately had a
terrible accident. He was paralysed and could not perform his duties at all.

Advise David whether he could terminate Remy's appointment.

(15 marks)

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QUESTION 4

a) In the event of a breach of contract for the sale of goods, the Sale of Goods Act 1957
provides remedies for both the buyer and the unpaid seller.
Discuss the remedies available to an unpaid seller under the Act.
(12 marks)

b) Ezral bought 25 pieces of ceramic plates after a sample was shown to him by Tom.
Ten of the plates delivered to Ezral were of the same orange colour as the sample
but the remaining plates were multi-coloured. Meanwhile Ezral used the ten orange
plates to serve food to his friends at his dinner party. When hot food was poured onto
the plates, it cracked.

Advise Ezral.
(13 marks)

QUESTION 5

a) Timun bought a car by way of hire purchase. After seven months, she passed away
in an accident. Her husband, Carrot, wanted to know whether he has the right to
continue with the hire purchase. With reference to the Hire Purchase Act, advise
Carrot.
(8 marks)

b) Fatin recently won a cash prize in a reality television show. She now intends to make
an early settlement on her Livina with Lingkup Finance under the hire purchase
agreement.

Advise Fatin.
(8 marks)

c) Ramli wish to take over his friend Ismail's hire purchase agreement as he can no
longer continue with the hire purchase. Can he do so?
(9 marks)

QUESTION 6

Define cheque and explain the characteristics of a cheque.

(25 marks)

QUESTION 7

Explain the effects of incorporation under section 16(5) of the Companies Act 1965.
(25 marks)

END OF QUESTION PAPER

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