CSS Mercantile Law Past Paper 2007
PART-II (Subjective) 80 Marks
Attempt ONLY FOUR questions from PART-II. (20×4)
PART-II
Q.2. Aftab, Bashir, and Chinar are partners in a computer business. The terms of the partnership agreement provided that the business of the firm is to buy and sell used computers. At the beginning of December 2006, Chinar retired from the firm. Notice was placed in the newspapers and existing clients were informed of the retirement. In the middle of December 2006, Dilawar joined the firm. In early January 2007, the partners were surprised to receive delivery of an invoice for some very expensive computers, which had been purchased in the firm’s name by Chinar, shortly before his retirement. At the end of January 2007, Aftab departed from the firm without notice, taking with him Rs. 4000,000 which had been left with the firm by a client who wished the partnership to obtain some computers for him. How far can the firm and/or the individual partners be made liable for:
(a) Payment for the computers
(b) The missing Rs. 4000,000
Q.3. Adnan has entered into a partnership with Basharat and Chohan to operate a motor parts manufacturing company. While Basharat and Chohan are out of town, Adnan signs the following contracts, on behalf of the partnership:
(a) Contract for a Rs. 1000,000 loan from Bank of the West
(b) A contract to purchase an adjoining piece of real estate to build a new parking lot for the company employees.
Furthermore, Adnan opens a new bank account for the business at the Utility Bank Limited. Assuming that Adnan and the partnership breach their obligations under the two contracts and Adnan makes some unauthorized withdrawals from the new bank account, please discuss whether or not the partners (Basharat and Chohan) and the partnership are likely to be liable to the third party and the bank.
Q.4. Hashim is a promoter in the process of forming a private limited company. He seeks your advice on the following matters.
(a) Hashim has bought a piece of land which he wishes to sell to the company once it is formed. He paid Rs. 4000,000 for the land but expects the company to pay him Rs. 5000,000 for it. He wishes to know if he can do this and what, if any, duties he owes to the company in respect of the sale.
(b) Before he registers the company, Hashim wishes to know what restrictions there might be on freedom to choose the company’s name.
Q.5. Aslam’s mate from the housing scheme he lives in, Bilal, has told Aslam that he should never do business as a company, because “in this country if you form a company, you gain no advantages and spend the rest of your life dealing with red tape, worthless meetings, and the like.” Would you share Delawar’s sentiments? Discuss.
Q.6. On January 10, 2007, A, a manufacturer of plastic products, sent a purchase order to B, A’s regular supplier of raw plastic. The purchase order included a provision requiring that B shall deliver the plastic on February 15, 2007. The B’s acknowledgment provided that delivery would occur on March 1, 2007. When does the contract require seller to deliver the goods? Discuss.
Q.7. Javed advertises a kitchen table and chairs for sale in the newspaper classified. Aslam answers the ad, and comes over to pick up the furniture and pay for it. After Aslam has paid Javed, he realizes that none of the furniture will fit in the back of his car. So Aslam leaves the furniture in place and decides to quickly go borrow a truck from a friend and return. However, during the interim, the furniture is destroyed when Javed’s house burns down. Aslam demands a refund of his payment which Javed straightaway refuses. What would you advise Aslam to file a suit in a court or a reference with an arbitrator? Which of these two modes would be suitable i.e. swifter and less expensive for Aslam to adopt in this situation?
Q.8. One day this spring A awoke in the morning and looked out his window while B, his neighbor who was a painter, painting outer walls of A’s house. “Isn’t that nice”, A thought as he rolled over and went back to sleep, “B wants to make a good impression as a helpful neighbor.”
Later that day, B knocked at A’s door and asked for Rs. 2000 for the painting work. A told him, “Go away. I always paint my house. I never asked you to paint for me.” The going rate for the painting done by B is Rs. 1500. Is there any contract between A and B? If so, is A contractually obligated to pay B Rs. 2000 or Rs. 1500? Discuss.