Business Law July 2019 Diploma Past paper: 106

Business Law July 2019 KNEC Diploma Past paper

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THE KENYA NATIONAL EXAMINATIONS COUNCIL

DIPLOMA IN BUSINESS MANAGEMENT
DIPLOMA IN SUPPLY CHAIN MANAGEMENT
DIPLOMA IN CO-OPERATIVE MANAGEMENT
DIPLOMA IN ENTREPRENEURSHIP MANAGEMENT
DIPLOMA IN INVESTMENT MANAGEMENT
DIPLOMA IN HUMAN RESOURCES MANAGEMENT

MODULE I

BUSINESS LAW

3 hours

1. (a) Explain five advantages of statutes. (10 marks)

(b) Highlight five functions of the executive as one of the arms of governance. (10 marks)

2. (a) Explain five exceptions to the privity rule in the Law of Contract. (10 marks)

(b) Outline five circumstances under which an agent may incur personal liability. (10 marks)

3. (a) Explain five ways in which a lease may be terminated. (10 marks)



(b) Lenny agreed to sell goods worth Ksh 30,000 to Zidro. The goods were to be delivered to Zidro on 20th November 2016. It was a term of the contract that any party in breach pay to the other Ksh 5,000 as liquidated damages. Lenny delivered the goods to Zidro on the agreed date. However, Zidro refused to take delivery. Lenny sold the goods to another for Ksh 29,000. He intends to sue Zidro for the agreed sum of Ksh 5,000 for breach.

Explain the legal principles applicable in this case (10 marks)

4. (a) Explain five advantages of administrative tribunals over court litigation. (10 marks)

(b) Meshak, an employee of Mary, had no authority to receive money from customers. However, on many occassions, customers who had bought goods on credit would pay the money to Meshak, who would later pass it on to Mary. There was no one time that Mary warned those customers not to give the cash to her employee. One customer, Luke, gave Meshak Ksh 20,000. Meshak disappeared with the money. Mary insists that Luke’s debt of Ksh 20,000 has not been extinguished and is due. Luke on the other hand maintains that he does not owe Mary. Mary is aggrieved and intends to sue Luke for the sum. Explain the legal principles applicable in this case.           (10 marks)