THE KENYA NATIONAL EXAMINATIONS COUNCIL
DIPLOMA IN BUSINESS MANAGEMENT
MODULE II
COMMERCIAL AND ADMINISTRATIVE LAW
3 hours
1.(a) A dispute arose amongst three neighbours:-
John, Njenga and Mambo, regarding the distribution of utility bill arrears. John and Njenga have referred the dispute to Ngoma, a retired judge, for arbitration. Mambo is opposed to the arbitration arrangement. The arbitrator has fixed the liability in the ratios of 3:2:2 as to the John, Njenga and Mambo, respectively.
(i)Comment on the award by the arbitration. (2 marks)
(ii)Outline five advantages of the method in (i) above in settling of disputes. (10 marks)
(b) Explain five grounds which necessitate compulsory winding-up of a public limited company. (8 marks)
2.(a) Distinguish between a sale and an agreement to sell. (12 marks)
b) Explain four shortcomings of judicial precedents in the administration of justice. (8 marks)
3.a) Explain five reasons for the establishment of tribunals in Kenya. (10 marks)
b) Highlight five rights of a limited partner in a partnership business. (10 marks)
4.a) Explain the powers of an administrator, appointed by a court of law, in the event of insolvency of a company. (10 marks)
(b) Describe five principles of a contract of insurance.
5.(a) Outline six differences between a bill of exchange and a cheque.
(b) Explain four reasons why parliament delegates its legislative powers to other government agencies. (8 marks)
6.(a) Explain five rights of a common carrier in a contract of carriage of goods. (10 marks)
(b) Boyi and Bena have visited a shop in their neighbourhood. Boyi has seen a new design of a pair of jeans trouser. However, Boyi does not have money to buy it.
Bena pursuades the shopkeeper on behalf of Boyi with the following two different statements:
- Let Boyi have the pair of trouser, I will see that you are paid.
- Let Boyi have the pair of trouser, if he doesn’t pay, I will.
(i)Differentiate between the two statements. (4 marks)
(ii)Outline three ways by which Bena can be discharged from the liability on the contract. (6 marks)
7.(a) Yona left a bag containing a laptop with the security personnel at the entrance of a supermarket. After shopping, he returned to find the bag missing. He wants to sue the supermarket management for compensation.
(i)Highlight the contract created in the case that may justify Yona’s intended action. (2 marks)
(ii)Highlight four duties of the supermarket under the contract identified in (i) above. (8 marks)
(b) Explain five rights to natural justice which accord an accused person a fair hearing. (10 marks)