COMMERCIAL AND ADMINISTRATIVE LAW July 2017
THE KENYA NATIONAL EXAMINATIONS COUNCIL
DIPLOMA IN BUSINESS MANAGEMENT
MODULE II
COMMERCIAL AND ADMINISTRATIVE LAW
1. (a) (i) Outline two reasons for the application of the principle of natural fairness in judiciary decisions. (4 marks)
(ii) Explain three principles of natural justice. (6 marks)
b) Describe five roles of the National Assembly, as outlined in the constitution of Kenya. (10 marks)
2. (a) (i) Explain the following terms as used in insurance contracts:
I. Premium;
II. Re-insurance;
III. Double insurance. (6 marks)
(ii) Outline three rules that apply in cases of double insurance. (6 marks)
(b) Explain four characteristics of negotiable installments (8 marks)
3. (a) (i) Explain the meaning of the following:
I. Direct legislation;
II. Indirect legislation. (4 marks)
(ii) Outline two forms of delegated legislation. (4 marks)
(b) Describe the procedure of a bankruptcy proceeding. (12 marks)
4. (a) Explain five conditions necessary for the stay of legal proceedings in the case of an arbitration agreement. (10 marks)
(b) (i) Distinguish between gratuitous bailment and non-gratuitous bailment. (2 marks)
(ii) Outline four duties of a bailor in a contract of bailment. (8 marks)
5. (a) (i) Explain two kinds of charter party in a contract of bailment, (4 marks)
(ii) Describe four implied conditions in a contract of carriage of goods by sea. (8 marks)
(b) Susan bought a sick cow from Peter, believing it was healthy. The cow had been infected with foot and mouth disease, a fact known to the seller. Subsequently, the cow died two weeks later and also left Susan’s other stock infected.
(i) State the action that Susan should take against Peter. (2 marks)
(ii) Explain three remedies available to Susan. (6 marks)
6. (a) Simba, Sibuse and Gatonye are the only shareholders of SS & G Limited. The three went on a business trip in Egypt, where they perished in a plane crush. Giving reasons, explain whether the company continues to exist. (10 marks)
Distinguish between a contract of guarantee and a contract of indemnity. (6 marks)
(ii) Outline two ways in which a guarantor will be discharged from a continuing guarantee. (4 marks)
7. (a) (i) Describe three types of goods which form the subject matter of a contract of sale. (6 marks)
(ii) Explain how price is fixed in a contract of sale (6 marks)
(b) Highlight the implied authority of a partner in a partnership business. (8 marks)
