FEDERAL PUBLIC SERVICE COMMISSION
COMPETITIVE EXAMINATION FOR RECRUITMENT TO POSTS
IN BPS – 17 UNDER THE FEDERAL GOVERNMENT, 2006.
MERCANTILE LAW
TIME ALLOWED: THREE HOURS
MAXIMUM MARKS:100
Note: (i) Attempt ONLY FIVE questions in all, including Question No. 8, which is Compulsory. All question carry equal marks. In each of the following cases give your decision and state the legal principle that applies. Your answer must correctly identify the relevant areas of law, accurately discover and apply the appropriate principle, case-law and statue law, and should be well structured and argued. Please refrain from: (1) Reproducing the facts of the cases (2) Unnecessary and irrelevant details (3) Unreadable handwriting.
(ii) Extra attempt of any question or any part of the attempted question will not be considered.
1. 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 painting, so on the 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 with Mr. Brown’s fax machine so the fax was not received there.
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 its. As Mr. Green has not heard from Mr. Brown, he sells the collection to Mr. White.
The Letter from Mr. Brown arrives on the 7th September. Is there any binding contract between Mr. Green and Mr. Brown? Why or why not?
2. 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. Hence Majid signs all documentation in his own name and pays the deposit. Sajid refuses to accept the contract entered into by Majid.
Explain, with reasons, whether Zahid can enforce the contract against:
(a) Sajid
(b) Majid
(c) Is Majid liable to Sajid for exceeding his authority?
3. 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 the 12-02-2006. Despite the fact that A persistently pressed B for delivery, the computer had still not been delivered by 28=02=2006. (B had repeatedly assured A that computers were not delivered by 01-03-2006). A then told B that if the computer were not delivered by the 05-03-2006, the contract would be terminated. B did not attempt to deliver until the 10-03-2006. Having bought computers from another dealer on 06-03-2006, A refused to take deliver. Advise A as to whether he was entitled to refuse deliver.
4. 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?
5. 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 pronote 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 Promisory Note
(b) An invalid Promisory Note because it is undated.
(c) An invalid Promisory Note because it is not payable at a definite time
(d) An invalid Promisory Note becaue 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.
6. Choose one issue in the Company Law which seems to you to require reform. Explain why the law is unsatisfactory and how you would improve it.
7. Under what circumstances a party to an arbitration contract can remove his artitrator?
Compulsory Question
(1) When an offer can only be accepted by the performance of the person to whom the offer is made. Is characteristic of:
(a) bilateral contracts (b) unilateral contracts (c) implied contracts (d) None of these
(2) A tells B, “If you stood first in the class, I’ll pay you Rs. 5000.00. B stood first in class and A paide him Rs. 5000.00. Which of the following is correct?
(a) A and B had a unilateral contract (b) A and B had an executor contract (c) A and B had an executed contract (d) None of these
(3) A offers to sell B his motorcycle at some time in the future. B accepts. Is there a valid contract?
(a) Probably not, the terms are not definite (b) Probably yes (c) Definitely not because A failed to communicate the offer (d) None of these
(4) Which of the following is not an effective way to terminatean offer?
(a) By rejection (b) By acceptance (c) By counter offer (d) None of these
(5) A offers to sell B his collection of rare books for Rs. 5000. Before b even has a chance to accept, A says “Sorry, I changed my mind, no deal.” This is an example of:
(a) Revocation (b) Rejection (c) Counter offer (d) None of these
(6) A and B enter into a contract in which A agrees to deliver milk to a restaurant. They forget to include a price in the agreement. A court will:
(a) refuse to enforce the agreement (b) select the lowest quoted price for milk and insert it into contract (c) determine a reasonable price and insert it into the contract (d) None of these
(7) A agreed to supply food for Walima to b at 1 pm. However, he could hardly supply the food at 5 pm.
(a) B can reject the delivery (b) He cannot reject the delivery (c) B must accept the delivery (d) None of these
(8) Which of the following actions an unpaid seller cannot take against a buyer:
(a) Lien (b) Stoppage in transit (c) Sale (d) None of these
(9) When a partnership is found liable for a debt, which assets are first used to pay the debt?
(a) Individual assets of the partners (b) Personal property of the limited partners (c) Partnership Assests (d) None of these
(10) A partnership involves three essential elements. Which of the following is not one of those elements?
(a) An equal right in the management of the business (b) Limited liability for breach of contract (c) A joint ownership of the business (d) None of these
(11) Which of the following actions requires the unanimous consent of all partners before it may be undertaken?
(a) Hiring a new employee (b) Purchasing new office equipment (c) Admitting new partners (d) None of these
(12) An order Instrument is the one which is payable to:
(a) A named person (b) To a bearer (c) To both (d) None of these
(13) A bearer Instrument is the one which is payable to:
(a) A named person (b) To a bearer (c) To both (d) None of these
(14) A holder in due course is the one:
(a) who finds an instrument (b) who steals an instrument (c) who gets an instrument as a gift (d) None of these
(15) For the incorporation of a limited liability company filling of memorandum of association is essential:
(a) for a public limited company only (b) for a private limited company, a public limited company and an unlimited company (c) for a public limited company only (d) None of these
(16) A subsidiary company is the one:
(a) which holds the majority shares of another company (b) which deals in the trading of shares of other companies (c) in which the majority shares are held by another company (d) None of these
(17) A is considering different forms of business organization for his business. For the purposes of owning property and being a party to litigation, forms which are legal entities separate from their owners include:
(a) Limited Partnership only (b) Private Limited Companies only (c) Both Private and Public Limited Companies (d) None of these
(18) A decision made by arbitrators is called:
(a) Sentence (b) Award (c) Judgment (d) None of these
(19) An empire in an arbitration reference is appointed when the number of arbitrators is:
(a) Odd (b) Even (c) More than 10 (d) None of these
(20) The appointment of a person of the minor age as an agent is:
(a) Void (b) Valid (c) Voidable (d) None of these