MAASAI MARA UNIVERSITY REGULAR UNIVERSITY EXAMINATIONS 2013/2014 ACADEMIC YEAR FIRST YEAR FIRST SEMESTER SCHOOL OF BUSINESS AND ECONOMICS BACHELOR OF SCIENCE HUMAN RESOURCE MANAGEMENT COURSE CODE: BHR 101 COURSE TITLE: BUSINESS LAW DATE:16TH APRIL 2014 TIME: 9.00AM – 12.00PM INSTRUCTIONS TO CANDIDATES Question ONE is compulsory Answer any THREE questions This paper consists of 2 printed pages. Please turn over. QUESTION ONE a) One legal characteristics of negotiable instruments is that it can be negotiated discuss ways in which a negotiable instrument can be negotiated. 15 marks b) An “actual” authority is a legal relationship between principal and agent created by a consensual agreement to which they alone are parties. Its scope is to be ascertained by applying ordinary principles of construction of contracts, including any proper implications from the express words used, the usages of the trade, or the course of business between the parties. To this agreement the contractor is a stranger; he may be totally ignorant of the existence of any authority on the part of the agent. Nevertheless, if the agent does enter into a contract pursuant to the “actual” authority, it does create contractual rights and liabilities between the principal and the contractor. It may be that this rule relating to “undisclosed principals,” which is peculiar to English law, can be rationalized as avoiding circuity of action, for the principal could in equity compel the agent to lend his name in an action to enforce the contract against the contractor, and would at common law be liable to indemnify the agent in respect of the performance of the obligations assumed by the agent under the contract Diplock LJ in Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 In the light of the foregoing statement discuss the authority of an agent and of the liability parties in an agency relationship 10 marks QUESTION TWO ‘Where one party has, by his word or conduct, made to the other a promise or assurance which was intended to affect the legal relation between them and to be acted on it accordingly, then, the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relation as if no such promise or assurance had been made by him. He must accept their legal relations subject to the qualification which he himself has so introduced, even though it is not supported by any consideration but only his word’ Lord Denning in the case of combe vs. combe (1951)2 KB 215 In the light of the above statement, discuss the rule in the Pinnel’s case and its exceptions 15marks QUESTION THREE State and explain the seven stages of bankruptcy petition. 15 marks QUESTIONFOUR “The occupier of premises cannot escape liability for any injuries that are sustained by his visitors.” Anonymous In the light of the foregoing statement discuss the liability of an occupier and its exceptions. 15 marks QUESTION FIVE ‘I think Harris v. Watson was rightly decided; but I doubt whether the ground of public policy, upon which Lord Kenyon is stated to have proceeded, be the true principle on which the decision is to be supported. Here, I say, the agreement is void for want of consideration. There was no consideration for the ulterior pay promised to the mariners who remained with the ship. Before they sailed from London they had undertaken to do all that they could under all the emergencies of the voyage. They had sold all their services till the voyage should be completed. If they had been at liberty to quit the vessel at Cronstadt, the case would have been quite different; or if the captain had capriciously discharged the two men who were wanting, the others might not have been compellable to take the whole duty upon themselves, and their agreeing to do so might have been a sufficient consideration for the promise of an advance of wages. But the desertion of a part of the crew is to be considered an emergency of the voyage as much as their death; and those who remain are bound by the terms of their original contract to exert themselves to the utmost to bring the ship in safety to her destined port. ………….’ Lord Ellenborough: stilk vs. myricks (1809) In the light of the foregoing statement, discuss the rule that gave rise to the above verdict and other related rules 15 marks QUESTION SIX “The person who for his own purpose, brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it at his own peril, and if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape” the rule in Ryland vs. Fletcher. Citing relevant cases, explain the above rule and the conditions to be fulfilled before rule is applicable. 15 marks
