CSS Mercantile Law Past Paper 2005
PART-II (Subjective) 80 Marks
Attempt ONLY FOUR questions from PART-II. (20×4)
PART-II
Q.2. Tariq works for a book publisher, taking orders for books and delivering books to the bookshops throughout North West Frontier Province. The customers pay for the books by sending payment direct to the publisher and Tariq has no authority to accept any payments. However, Hamid, the owner of the City Book Mart, has given payment for books to Tariq on a number of occasions and the publisher has not objected. A few weeks ago Hamid bought large quantity of books and gave Tariq cash. Tariq has disappeared with the money. The publisher is threatening to sue Hamid for the price of the books. Advise Hamid.
Q.3. Javed, Murad and Danish carry on business in partnership as painters and decorators. The business was started with a loan from Javed’s father Bashir, which the partners are still re-paying. The firm has two employees, Raheel and Mubashir, who, although not partners, are treated as trusted members of the firm and have their names alongside those of the partners on all of the firm’s stationery. Recently the firm has had some difficulties. Javed was working at a customer’s house using a blow-lamp to strip paint from the window frames, when he accidentally set fire to the wood and the house was badly damaged. Meanwhile, Murad was holding a ladder for Danish but accidentally let it slip, so that Danish fell and was injured. It has also come to light that Danish had taken money from a customer in order to buy paint and wallpaper, but instead he kept the money for himself. The tow customers and Danish are threatening to sue the firm, the partners, Raheel, Mubashir and Bashir, for the loss and injury they have suffered. Advise the parties as to their potential liability.
Q.4. Sardar, the owner of a small computer shop, bought a consignment of computers from Shahbaz. The computers turned out to be defective and did not conform to the specification that Sardar had been led to expect. Sardar had assumed he was dealing directly with Shahbaz, who had not indicated that anyone else was involved in the transaction. However, when Sardar confronted Shahbaz about the defects in the computers, Shahbaz told Sardar that he had been selling the machines on behalf of Chips & Bytes (Private) Limited and added that any defects were not his responsibility as he was only an agent. Sardar has made inquiries and discovered that Chips & Bytes (Private) Limited have now gone into liquidation. Advise Sardar.
Q.5. A and B agree to run a tuition centre on the partnership basis. In one of the clauses of their adjudication. In a dispute which was being settled by two arbitrators appointed by them, A noticed that his arbitrator appointed is unjustifiably favouring B. A doubts that his arbitrator might have been bribed by B, therefore, he does not expect any justice from him. How can he get rid of his arbitrator? What would you advise him in these circumstances?
Q.6. Hightech (Private) Limited manufactures and sells computer modems. Goonline (Private) Limited is an internet service provider that requires a large and complex modem to serve its customers. Due to high demand, Goonline (Private) Limited is planning to expand its customer base from 10,000 subscribers to 15,000 subscribers. 10,000 of the subscribers can be handled by the existing modems that Goonline (Private) Limited already has. However, in order to accommodate the additional 5000 subscribers, Goonline (Private) Limited contracts with Hightech (Private) Limited to purchase 5 additional modems at a cost of Rs. 2000 each. The contract specifies a delivery date of 1 March. Goonline (Private) Limited spends Rs. 1000 in advertising during the month of February announcing the planned service, and is confident that it will be able to sign up an additional 1000 subscribers in the month of March after installation of the new modems. On 1 February, Hightech (Private) Limited calls and repudiates stating that it is unable to meet the 1 March delivery due to backlog of orders, but would be able to deliver by 1 April. Goonline (Private) Limited chooses to wait for the delivery by 1 April. After the modems are delivered and installed, Goonline (Private) Limited brings an action for the lost revenues from an anticipated 1000 subscribers over the month of March (Rs. 20,000), the cost of advertising during the month of February (Rs. 1000), and the cost of advertising during the month of March (Rs. 1000). Which, if any, of these costs is recoverable?
Q.7. Hassan Seeds(Private) Limited is a supplier of Soya Beans seeds. Fahad contracted with Hassan Seeds(Private) Limited for the delivery of one ton of Soya Bean seeds, for delivery at Fahad’s plant. After delivery, Fahad began the process of inspecting the Soya Beans seeds for quality. The inspection testing procedure is involved, and usually takes several weeks to complete because it involves growing at least some of the seeds. After one month, Fahad noticed several defects in the seedlings that were growing. Fahad immediately notified Hassan Seeds (Private) Limited of the defects, and rejected the entire lot. Hassan Seeds(Private) Limited come to you for advice concerning a possible action of breach against Fahad. Specifically, Hassan asks you whether Fahad has accepted the seeds, or properly rejected the seeds. How do you advise Hassan Seeds(Private) Limited?
Q.8. Tanweer, who owns a shop selling electrical goods, received an offer from Lowprice Electrical Wholesalers to sell him 50 washing machines at a discount price of Rs. 700 each. The following morning, Tanweer posted a letter to Lowprice Electrical Wholesalers accepting their offer, unaware that, at the same time, Lowprice Electrical Wholesalers had sent him a letter withdrawing the offer. Low Price Electrical Wholesalers is now refusing to deliver the washing machines. Tanweer also received a letter from Salam’s Discount Warehouse, offering to supply him with 20 freezers at Rs. 1200 each. The letter stated that Salam’s would assume their offer had been accepted if they did not hear to the contrary from Tanweer within 5 days. Tanweer, who did not want the freezers, ignored the letter but Salam’s Discount Warehouse have now delivered the freezers to his shop. Advise Tanweer of his legal position in respect of both Low Price Electrical Wholesalers and Salam’s Discount Warehouse.