CSS Mercantile Law Past Paper 2002
PART-II (Subjective) 80 Marks
Attempt ONLY FOUR questions from PART-II. (20×4)
PART-II
Q.2. Jamal Khan and Kamal Khan have planned to start a business of groceries in partnership. They have agreed that in case of any future dispute between them they will never go to a court of law for decision instead they will do their utmost to get their disputes settled by some means outside the court. What do you think how can they seek their purpose? How would you advise them?
Q.3. Gama, Maja and Billoo were in partnership as hairdressers. On 8th April, 2002, Billoo retired from the partnership. A few days later, Gama and Maja bought in the firm’s name an expensive laser hairdressing machine to replace their traditional machines. On 17th April, a van arrived with a delivery of seven hairdressing chairs. The van driver showed them a purchase order in the firm’s name, dated 3rd April and signed Billoo. Gama and Maja are refusing to pay for the chairs. They have also failed to pay for the laser hairdressing machines and the firm is in severe financial difficulties. Both suppliers are threatening. Are they bound to pay for both of the transactions? Discuss.
Q.4. Jamal steals a bill of exchange and forges the signature of the payee on the reverse of the bill. He then transfers it for value to Bilal who takes it in good faith without being aware of the forgery. Bilal transfers the bill to Kamal. The payee discovers that Kamal is in possession of the bill and he demands that Kamal return it to him. Who is legally entitled to the bill and why? Would it make any difference to your answer if the payee had been aware that Jamal had taken the bill but had done nothing about it until he heard that Kamal was in possession of it?
Q.5. Dilawar Khan and Badam Gul are in partnership running an extremely successful computer software business. Sanobar Khan has decided to join the business and is able to invest a substantial amount of capital. They have decided that the business should be incorporated as a private limited company. Dilawar Khan, Badam Gul, and Sanobar Khan will each hold one third of the shares and they will be the directors of the company. Please advise them on the advantages of a limited company as compared with a partnership:
(A) With regard to obtaining finance for further business expansion
(B) With regard to the liability of shareholders in the event of the winding up of the company.
Q.6. The National Association of Photo Exporters (NAPE) requires additional storage space. It advertises for tenders to erect new storage facilities. It receives eight tenders and the Board decides to accept the tender of Imam Bakhsh & CO. The Chief Executive, Mr. Shahbaz Chattha is required to accept and to notify the others that they were unsuccessful. Mr. Chatha asked his secretary to type up the letters. A mistake is made in the typing and the name of another tenderer, Badam Gul & CO. is replaced for Imam Bakhsh & CO. The letter is signed and delivered to Badam Gul & CO. The next day when the M.D. of Badam Gul & CO. phoned Mr. Chatha to discuss some details of the work to be done, Mr. Chatha realized that there had been a mistake. Is there a binding contract between NAPE and Badam Gul & CO.?
Q.7. On 1 September Baber contracted for the purchase of 50 computers from Sardar. The contract stated that the computers were to be delivered on 5 September. Despite the fact that Baber persistently pressed Sardar for delivery, the computers had still not been delivered by the end of the month while Sardar had repeatedly assured Baber that the computers would be delivered by the first of October at the latest. Baber then told Sardar that if the computers were not delivered by the 5 October, the contract would be terminated. Sardar did not attempt to deliver until 10 October. Having bought other computers on the 6 October, Baber refused to take delivery. Was he justified in refusing the delivery? Discuss.
Q.8. Mr. Brown agreed to sell his computer of a specified mark and model to Mr. Green for Rs. 30,000. When Mr. Green went to him to pay him the price and pick up the computer he found that Brown had already sold such a computer to someone else. He threatened to sue Brown for the breach of contract but later on the same day he bought a computer of the same mark, model, and specification for Rs. 20,000. Should he sue Brown for the breach of contract? Is there any benefit for him in bringing such an action against Brown?