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LW/APR 2008/LAW166/379/251

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION

COURSE COURSE CODE EXAMINATION TIME

: : : :

BUSINESS LAW LAW166/379/251 APRIL 2008 3 HOURS

INSTRUCTIONS TO CANDIDATES

1.

This question paper consists of two (2) parts :

PART A (20 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. 3. Do not bring any material into the examination room unless permission is given by the invigilator. Please (i) (ii) (iii) 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

4.

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

This examination paper consists of 8 printed pages
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LW/APR 2008/LAW166/379/251

PART A QUESTION 1 Taqi and Hanna entered into a tenancy agreement. Both agreed that Hanna can move into the premises, whenever she is ready and can pay the monthly rental of about RM400RM480 for as long as she likes. The above agreement is a) b) c) d) valid void voidable enforceable (5 marks)

QUESTION 2 Which of the following statements is FALSE? a) b) c) d) A minor does not have the capacity to enter into any type of contract An advertisement for a reward of RM800 for the return of a lost dog is a proposal There is a presumption that no intention to create a legal relation exists when a husband and a wife deal with one another A promise to compensate a past voluntary act is a valid contract (5 marks)

QUESTION 3 Which of the following is a proposal? a) b) c) d) Display of goods in a grocery shop Advertisement in a newspaper to sell a used car Advertisement in a leaflet for a reward of RM500.00 for the return of a lost cat An advertisement in the brochures about holiday package (5 marks)

QUESTION 4 Murad, a 17 year old student recently bought an expensive mountain bike for RM400 from Popo Bicycles. He paid a deposit RM350 and the remainder was to be paid when he received his study loan. Murad later refused to pay. The contract between Murad and Popo Bicycles is a) b) c) d) valid void voidable not voidable (5 marks)
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QUESTION 5 Balfour v Balfour[1919] 2 K.B 571 laid down the principle that a) b) c) d) there is no intention to create a legal relation between two spouses a husband may ignore a wife's intention a wife may claim a valid contract offer must be communicated (5 marks) QUESTION 6 In which ONE (1) of the following situations is there no contract of agency? a) b) c) d) implied from conduct of parties implied from the circumstances of the case implied from the relationship of husband and wife implied by the Partnership Act 1961 (5 marks) QUESTION 7 Legal maxim "Delegates Non Potest Delegare" means: a) b) c) d) principal may ratify the agent's act an agent cannot employ another person to do his duty an agent cannot become a party to the transaction with the principal the principal may refuse to pay the agent's commission (5 marks) QUESTION 8 Agency by ratification can occur in two out of the four situations mentioned in paragraphs (i) to (iv) below: i) ii) iii) iv) The agent has exceeded his given authority A person who has no authority to act for the principal has acted as if he has the authority The principal asks the agent to perform his duties The agent delegates his power to another person

State which combination is correct? a) b) c) d) ii, iii i, ii iii, iv ii, iv (5 marks)

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QUESTION 9 A stipulation essential to the main purpose of the contract is known as a) b) c) d) implied term implied warranty condition warranty (5 marks) QUESTION 10 Wani ordered 50 kgs of flour from Kedai Samad. Samad promised to deliver 50 kgs of Bakers flour. Wani found that only 30 kgs of Bakers flour was delivered to her. Another 20 kgs of flour delivered did not bear the same trade name. The seller in this case had breached an implied condition of a) b) c) d) fitness merchantable quality sale by sample description (5 marks) QUESTION 11 Which of the followings is NOT the exception to the Nemo Dat rule? a) b) c) d) Sale by joint owner Sale by mercantile agent Sale by a seller in possession after sale Sale by description (5 marks) QUESTION 12 Section a)
b)

of the Hire Purchase Act 1967 requires the agreement to be in writing 4A 4B 4C 4(a) (5 marks)

c) d)

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QUESTION 13 Section 5 of the Hire Purchase Act 1967 provides that owner shall serve on the hirer and his guarantor a copy of the hire purchase agreement within after it is made. a) b) c) d) 7 days 11 days 14 days 21 days (5 marks)

QUESTION 14 On 1 s t February 2008, Salmah entered into a hire purchase agreement in respect of a car with Mai Bank Finance Co. Until now, a copy of the agreement has not been given to him. What is the legal implication under the Hire Purchase Act 1967? a) b) c) d) The agreement is void The owner is guilty of an offence The agreement is unenforceable by the owner The agreement is voidable (5 marks) QUESTION 15 The law on cheques in Malaysia is covered by the a) b) c) d) Contracts Act 1950 Cheques Act 1949 Banking Act 1949 Bills of Exchange Act 1949 (5 marks) QUESTION 16 A bearer must be a person in possession of a bill which is a) b) c) d) payable to order payable to particular person payable to the order of particular person when the order is to pay 'cash' (5 marks)

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QUESTION 17 Which ONE (1) of the following characteristics not represent a bill of exchange? a) b) c) d) it is payable at a fixed or determinable future time it is conditional order in writing it must be addressed to another person the payment is in the sum of money (5 marks)

QUESTION 18 Which of the following is FALSE? a) b) c) d) A sole proprietor owns and manages the firm himself and can employ employees A sole proprietor cannot transfer his business to someone else A sole proprietor has unrestricted power of borrowing A sole proprietor cannot create floating charges but can mortgage the firm's assets (5 marks) QUESTION 19 Aida, Afrah and Ida have decided to set up a partnership business selling magazines and books. Among the agreed terms is one which excludes Afrah from sharing any profit. Choose the best answer to consider Afrah's position. a) b) c) d) Afrah is still a partner because it was her suggestion to set up the business Afrah is not a partner by virtue of Section 3(1) of Partnership Act 1961 Afrah is a partner because she is a friend of Aida and Ida Afrah is a partner though the terms exclude her from sharing the profits (5 marks) QUESTION 20 The maximum number for members in a private company is a) b) c) d) unlimited 2 20 50 (5 marks)

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PARTB QUESTION 1 a) Mr. Jack has entered into a contract to install air conditioning system in his office at Jalan Ampang. This installation will be done by Caparo Expert Ltd at a cost of RM10, 000. Consider the rights and liabilities of Mr. Jack and Caparo Expert Ltd in relation to this contract if Mr Jack's office accidentally catches fire, and is destroyed. (60 marks)

b)

Jay Lee has entered into contract to sing at KLCC Symphony Theatre for RM10,000. The recording company already paid RM5.000 in advance. Two days before the performance is to take place, she received and accepted a better offer from Matahari recording company. Discuss the rights and liabilities of the relevant parties. (40 marks)

QUESTION 2 A contract without consideration is void. Elaborate on the exceptions under section 26 of the Contracts Act 1950. (100 marks)

QUESTION 3 Agency may be terminated by way of act of parties or by operation of law. Discuss. (100 marks) QUESTION 4 Discuss the remedies available to the unpaid seller under the Sale of Goods Act 1957 for the breach of contract of sale of goods. (100 marks)

QUESTION 5 Lin Dan bought a new Proton Saga through a hire-purchase agreement with Tolong Finance. The agreement provided for 108 monthly instalments. However Lin Dan defaulted in his monthly instalments for the last three months. As a result, Tolong Finance wants to repossess the car. Discuss the legal position of all the parties concerned. (100 marks)
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QUESTION 6 Define a cheque and discuss the various types of cheque-crossings and their effects. (100 marks)

QUESTION 7 "It is the relation which subsists between persons carrying on business in common with a view of profit". Section 3(1) of Partnership Act 1961. In light of the above provision and decided cases, explain the elements of a partnership. (100 marks)

END OF QUESTION PAPER

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