CSS Mercantile Law Past Paper 2006
PART-II (Subjective) 80 Marks
Attempt ONLY FOUR questions from PART-II. (20×4)
PART-II
Q.2. On 1st September, Mr. Green emails Mr. Brown to see whether he would like to buy his collection of antique paintings. Mr. Brown has admired the collection for many years. Mr. Green says that the collection is very valuable and should fetch about Rs. 200,000 at auction, but if Mr. Brown is interested in taking the whole lot, he can have them all for Rs. 150,000. Mr. Green tells Mr. Brown he can think about it for 7 days, but after that, Mr. Green will have to consider alternative offers.
Mr. Brown is very excited about the possibility of acquiring the paintings, so on 3rd September, Mr. Brown phones Mr. Green to see whether he will send him an authentication certificate for the genuineness of the paintings along with the paintings. Mr. Green says he will consider Mr. Brown’s request.
On 4th September after consulting with the relevant experts, Mr. Green sends a fax to Mr. Brown saying that he will provide the authentication certificate, but that the price must go up to Rs. 250,000, as this reflects the cost of getting the certificate. Mr. Brown decides that he will have the paintings anyway, so on 5th September he writes a letter to Mr. Green saying he will take the entire antique paintings. He admires the collection and offers Mr. Green Rs. 300,000 for it. As Mr. Green has not heard from Mr. Brown, he sells the collection to Mr. White.
The letter from Mr. Brown arrives on 7th September. Is there any binding contract between Mr. Green and Mr. Brown? Why or why not?
Q.3. Sajid instructs his agent Majid to purchase a house for no more than Rs. 90,00,000 and as he wishes to remain anonymous, Sajid requests Majid not to disclose his identity. The vendor, Zahid, refuses to sell for less than Rs. 95,00,000 believing that Sajid will consent on learning of circumstances. Hence Majid signs all documentation in his own name and pays the deposit. Sajid refuses to accept the contract on learning of the circumstances.
Explain, with reasons, whether Zahid can enforce the contract against:
(a) Sajid
(b) Majid
(c) Is Majid liable to Sajid for exceeding his authority?
Q.4. On 12-01-2006, A contracted for the purchase of 50 computers from B. The contract stated that the computers were to be delivered on 12-02-2006. Despite the fact that A persistently pressed B for delivery, the computers had still not been delivered by 28-02-2006. (B had repeatedly assured A that computers would be delivered by 01-03-2006). A then told B that if the computers were not delivered by 05-03-2006, the contract would be terminated. B did not attempt to deliver until 10-03-2006. Having bought computers from another dealer on 06-03-2006, A refused to take delivery.
Advise A as to whether he was entitled to refuse delivery.
Q.5. A testator, who carried on business alone, by his will appointed three persons to carry on his business for the benefit of his wife for her life. After his death, his executors carried on the business under the same name for eight years.
Are the executors partners? Why or why not?
Q.6. A client has in his possession the following instruments:
ABC (Pvt) Limited
“I, “A” son of “B”, hereby promise to pay to the order of C Rs. 50,000 upon the receipt of the final distribution from the estate of my deceased uncle “D”. This promissory note is given by me as the down payment of a Toyota 2.0 D 2006 model to be delivered in two weeks.”
“A” son of “B”
NIC No. 111-111-111111
The instrument is:
(a) A valid Promissory Note
(b) An invalid Promissory Note because it is undated.
(c) An invalid Promissory Note because it is not payable at a definite time.
(d) An invalid Promissory Note because it is subject to two weeks delivery time.
Choose the correct statement from amongst the above and argue plus state the relevant principle of law in support of your choice.
Q.7. Choose one issue in Company Law which seems to you to require reform. Explain why the law is unsatisfactory and how you would improve it.
Q.8. Under what circumstances can a party to an arbitration contract remove his arbitrator?