CONFIDENTIAL LW/JAN 20121LAW166125112991379

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE

BUSINESS LAW
COURSE CODE

LAWI 66/251/299/379
EXAMINATION

JANUARY 2012
Ilk'l

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

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.
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 .
Zarina wanted to sell her 'Gucci' handbag to Krisya at the price of RM10,000 or
RM20,500. There is no valid offer in this situation. Why?
2
a)
the handbag is very expensive
b)
the offeror is not the true owner of the handbag
C)
the term of the offer is vague
d)
the term of the offer is uncertain

(1 mark)
Legal maxim "Delegatus Non Potest Delegare" means:
a)
principal may ratify the agent's act
b)
an agent cannot employ another person to do his duty
C)
an agent cannot become a party to the transaction with the principal
d)
the principal may refuse to pay the agent's commission

(1 mark)

3.
Amit offered to sell his computer to Kiran for RM1 ,000. Kiran, however, agreed to buy
the computer at RM900. Kiran is making
a) an invitation to treat
b) an acceptance
C)a cross-offer
d)a counter offer

(1 mark)

4.
What are the conditions for a valid ratification under the law of agency?
i) The principal must ratify the whole act or contract
ii) The ratification must be made within a reasonable time
iii)
The principal need not exist at the time the contract is made
iv) The act or contract must be authorized
a) i and ii
b) ii and iv
C)i and iv
d)i, ii and iv
(1 mark)
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5.Where there is an a sale of goods by description, there is an implied ......that the
goods shall correspond with the description.
a) guarantee
b) promise
C)condition
d)warranty
(1 mark)

6.Termination of agency can be done by the following circumstances EXCEPT:-

a) insanity of either principal or agent
b) bankruptcy or insolvency of the principal
C)events which render the agency unlawful
d)an agent acting in good faith
(1 mark)

7.A hire purchase agreement is

a) the letting of goods indefinitely
b) an agreement for the purchase of goods by credit
C)letting of goods with an option to purchase and an agreement for the
purchase of goods by installments
d)the purchase of goods
(1 mark)

8.A hire purchase agreement that is not in writing is

a) valid
b) voidable
C)validable
d)void
(1 mark)

9.Which of the following is NOT the exception to the Nemo Dat rule?
a) Sale by joint owner
b) Sale by mercantile agent
C)Sale by a seller in possession after sale
d)Sale by description
(1 mark)
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10.A principal is allowed not to pay an agent's commission when it is discovered that:
a) The agent is acting for another principal
b) The agent is taking secret commission
C)The third party has revoked the contract
d)The third party is in breach of contract
(1mark)

11.Which of the following statute deals with the law of agency?

a) Contracts Act 1950
b) Specific Relief Act 1950
C)Sale of Goods Act 1957
d)Hire Purchase Act 1967
(1mark)

12.The word "principal" can be defined as

a) a person who is employed by the principal
b) a person who authorizes the agent to act on behalf of him
C)a person who is appointed by a third party
d)a person who makes an offer to another
(1mark)

13.A cheque needs to be crossed because:

i)

otherwise it is not valid

to give better protection
to make it more valuable
iv)

so that payment can be made

a) i and iii
b) ii and iii
C)

i only
d)

ii only
(1mark)

14.Section 3 (1) of the Partnership Act 1961defines partnership as ...that subsists

between persons carrying on ...in common with a view of profit.
a) the combination of people ...trade
b) the linkage ...business activities
C)the understanding ...economic activities
d)the relation ...business
(1mark)
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15

A breach of 'warranty' gives rise to a claim of

a) damages
b) consideration
C)lien
d)estoppel
(1 mark)
16

What is the maximum number of members for a professional partnership firm

pursuant to the Companies Act 1965 ?
a) 10
b) 30
C)5 0
d)Unlimited
(1 mark)
17

What is the legal rule that the English court established in the case of Carlifi v
Carbolic Smoke Ball Co Ltd?
a) Only a certain person can make an offer
b) An offer made to the world at large is valid
C)A contract with no consideration is void
d)Advertisement to sell is only an invitation to treat
(1 mark)
18

The law on cheques in Malaysia is covered by the

a) Contracts Act 195 0
b) Cheques Act 1949
C)Banking Act 1949
d)Bills of Exchange Act 1949
(1 mark)
19.What is the meaning of 'separate legal entity'?
a) A company is treated as a separate person from those who participate in the
company
b) A company has several branches which possess separate businesses and
accounts
C)A company is managed by several managing directors who are not the
shareholders of the company
d)A holding and subsidiary companies are registered under a separate name
(1 mark)
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20.The following outlines the procedure when repossessing goods under a hire
purchase agreement EXCEPT:
a) a hirer fails to pay two successive payments
b) notice must be given to the hirer when goods are to be repossessed
C)after repossession, the owner must sell or dispose the goods
d)

the hirer can give notice to the owner in writing to redeliver the goods after the
goods are repossessed
(1 mark)
21. Section 31 of the Hire Purchase Act 196 7 provides that an owner must obtain from
his hirer a minimum payment of deposit to a value of......of the cash price of the
goods comprised in the agreement.
a) not less than one-fifth
b) not more than one-fifth
C)not less than one-tenth
d)not more than one-tenth
(1 mark)
22.An agency contract may be terminated by operation of law in the following manner
EXCEPT
a) death of a principal
b) insanity of an agent
C)principal has gone bankrupt
d)renunciation by agent
(1 mark)
23.Which of the following statements is FALSE?
a) A minor does not have the capacity to enter into any type of contract
b) An advertisement for a reward of RM800 for the return of a lost dog is a
proposal
C)There is a presumption that no intention to create a legal relation exists when
a husband and a wife deal with one another
d)A promise to compensate a past voluntary act is a valid contract
(1 mark)
24.The difference between a 'sale' and 'an agreement to sell' is
a) the price of the goods
b) the quantities of the goods to be supplied
C)the time when property in the goods is transferred to the buyer
d)the qualities of the goods to be supplied
(1 mark)
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25.Dissolution of partnership may be granted by the court in the following situation:
i) insanity of a partner
ii) permanent incapacity of a partner other than the applicant
iii) a conduct which prejudicially affects the carrying on of the partnership
business by any partner other than the applicant
iv) willful or persistent breach of the partnership agreement by any partner other
than the applicant
a) i and ii
b) i, ii and iii
C)i, ii and iv
d)All of the above
(1 mark)
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PART B
QUESTION I
a)
Aneesa went shopping at Mega Mall and saw a handbag displayed on a shelf. The
price tag was RM120. When Aneesa went to the payment counter to pay for the
handbag, she realised that she had left her purse at home. The manager of the shop
insisted that Aneesa pay for the handbag because a valid contract had already
existed between them.
Advise Aneesa
(15 marks)
b)
Amir sold his car which costs RM30,000 to Japman for only RM5,000. Now Amir
refuses to perform the contract as the contract price is way below the market value
of the car. Explain whether a contract exists between Amir and Japman.
(10 marks)
QUESTION 2
The effect of a contract entered into by a minor will render the contract void.
Explain the above statement.
(25 marks)
QUESTION 3
a)
Ahmad instructed Salim, who runs a transportation service, to deliver some
vegetables from Kuala Lumpur to Kedah. Transport charges and commission had
been agreed between them. In the agreement, there was a clause requiring the
agent to communicate with the principal in any event of adversity. When the lorry
arrived at Perak, there were landslides and also flood which caused the road to be
closed and not accessible to any transport. Salim, thinking that the weather would get
worse, decided to sell the vegetables at Pasar Malam Lambak before the condition of
the goods worsened. Ahmad is upset with the decision made by Salim and wants to
sue for his losses.
Advise Ahmad.
(15 marks)
b)
Discuss the duties of a principal towards his agent.
(10 marks)
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QUESTION 4
Ruhill bought a new Proton lswara car through a hire purchase agreement with Tolong
Finance. The agreement provided for 108 monthly. However, Ruhill defaulted in her monthly
instalments for the last three months. As a result, Tolong Finance wants to repossess the
car.
Discuss the procedure for repossession under the Hire Purchase Act 1967.
(25 marks)
QUESTION 5
a)Explain the maxim
'nemo dat quod non ha bet'
and discuss its exceptions.
(25 marks)
QUESTION 6
Define cheque and identify the characteristics and types of crossing of a cheque.
(25 marks)
QUESTION 7
Anuar and Alisha have been operating an event management business since 1990.
However, in 2011, they had an argument over the profit. They decided to terminate their
partnership. Advise them on how they can terminate their partnership as provided under the
Partnership Act 1961.
(25 marks)
END OF QUESTION PAPER
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