INTRODUCTION TO LAW & GOVERNANCE MAY 2018 - CPA SOLUTION|REVISION KITS|KASNEB

QUESTION 1a(i)

Q Explain three advantages of unwritten constitution over a written one.

A

Solution

Advantages of unwritten constitution over written constitution.

1. There are no special procedures for making a constitutional law and it will not be inherently superior to other legislation.

2. It leaves space for parliament.

3. An unwritten constitution is less expensive to maintain since amendments can be made using simple parliamentary actions rather than expensive special procedures.

4. Government machinery becomes more effective as it becomes simpler for authorities to make decisions promptly and put them into action.

5. The capacity to remain relevant to public needs. The unwritten constitution is unlikely to become outdated if conventions are permitted to change over time.

6. It is relatively easy to change the constitution

7. Unwritten constitution is much flexible as compared to written constitution in terms of its application.

8. Allows for fast decisions making possible. This is crucial in times of crisis when prompt, decisive action is required.

9. Unwritten constitution is easily adaptable by the people as compared to written constitution .

10. Easy to Understand

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QUESTION 1a(ii)

Q Distinguish between "obiter dicta" and "ratio decidendi

A

Solution

Obiter dicta
➪ Latin for " something said in passing". An observation, suggestion, or comment made by a judge in an opinion that is not required to decide the case and, as such, is not legally binding on other courts. Nevertheless, it may still be used as persuasive evidence in the future.

Ratio decidendi
➪ Latin phrase meaning "the reason" or "the rationale for the decision" .
"The point in a case that determines the judgment" or "the principle that the case establishes" is known as the ratio decidendi.
➪ It is a legal principle formed from and consistent with the fundamentals of a judgment's legal reasoning that determine the case's outcome.

Differences between "Obiter dicta" and "ratio decidendi".

Obiter dicta	Ratio decidendi
It means by the way statements.	It means to give reasons for judgement.
It is normally not binding to the final decision/judgement.	It is normally binding to the final decision/ judgement.
Does not carry that much legal authority as its basis is persuasive effect.	lays down laws for the future and are of high importance

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QUESTION 1(b)

Q Highlight six differences between a "co-operative society" and a "partnership'

A

Solution

Differences between a co-operative society and "partnership"
	Co-operative Society	Partnership
Defination	An organization created by a group of persons with the primary goal of advancing the financial interests of its members.	An official agreement between two or more parties to run a business and split profits.
Members	Minimum ten persons and maximum no limit.	Minimum of two persons and a maximum of fifty persons.
Registration	Compulsory	Depends with the region laws and regulations
Liability	Members' liability is capped at the outstanding balance on the shares they own.	Partners are 'jointly and severally accountable' for the firm's debts. This implies that any partner is subject to legal action by the company's creditors.
Management	The society is managed in accordance with its bylaws by the managing committee.	All partners are involved in the management of the firm.
Transfer of shares	Shares may be surrendered by members to the society.	Without the approval of the other partners, partners cannot transfer the shares.
Going concern	Going concern is not affected by death, insolvency, or insanity of a member.	Going concern of a firm is affected by death, insolvency or lunacy of a partner.
Government Control	Alot of government supervision	Minimum government supervision
Dissolution	Dissolution of a cooperative requires elaborate legal procedures.	An act of the parties e.g agreement, notice etc renders partnership dissolved.
Objective	The objective is to give maximum services to the people.	The objective is to earn profits.
Act	Co-operative Societies have to follow co-operative sociesties act cap 490	Partnership are governed by thePartnership act cap 29

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QUESTION 1(c)

Q Highlight four consequences of incorporation of companies.

A

Solution

Consequences of incorporation of companies.

(i). It makes liability of a company to be limited.

(ii). It acquires a perpetual succession (the death of a member has no effect on its existence).

(iii). It acquires a common seal.

(iv). It can enter into contract under its own name.

(v). It can be sued or sue under its own name

(vi). It has a capacity to own property.

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QUESTION 2(a)

Q Highlight six functions of the judiciary in your country.

A

Solution

Functions of the judiciary.

➫ Imposes punishment on those who have been found guilty.

➫ To interpret the constitution and other laws.

➫ Make laws based on court precedent (case law).

➫ Administers the oath of office to those holding constitutional offices, such as the president.

➫ prescribes preventative measures against violations of individual human rights and freedoms

➫ Checks on the legislature and the executive functions under the system of checks and balances

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QUESTION 2(b)

Q With regard to the doctrine of separation of powers, state four functions of the executive.

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Solution

Functions of the executive

(1) Is responsible for the nation's administration.

(2) Implements the laws passed by the legislature and the policies of the government.

(3) Defence, War and Peace Functions

(4) Foreign Policy-making and the Conduct of Foreign Relations

(5) Custodian of all finances and financial functions

(6) Ensure independence of judiciary by appointment of judges

(7) Award people titles and honors in appreciation for their great national service.

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QUESTION 2(c)

Q One of the important legal maxims in the application of the law of agency is expressed as: "A delegate cannot further delegate"

In relation to the above statement, discuss five circumstances under which an agent might appoint a sub-agent.

A

Solution

Circumstances under which an agent might appoint a sub-agent.

(i) when the principle is aware that the agent will be using his authority.

(ii) when a sub-agent needs to be appointed due to an emergency.

(iii) A sub-agent may be appointed by the an agent if it is customary in the trade

(iv) where the task at hand is solely ministerial and does not require the agent's skills, knowledge, or experience.

(v) When the principal explicitly or implicitly permits the appointment of a sub-agent.

(vi) A sub-agent may also be appointed if the nature of the work necessitates it.

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QUESTION 3a(i)

Q Explain three categories of unascertained goods,

A

Solution

Categories of unascertained goods.

➫ Goods to be manufactured - In this scenario, they will typically be determined during the manufacturing process, though if the producer is producing similar goods for two or more clients, additional steps would be required to make it obvious which goods have been appropriated to which client.

➫ The goods may be part of an undivided bulk. - If the seller has 1,000 tons of rice in transit and sells 500 tons to buyer A and 500 tons to buyer B, the rice is an unascertained good, since it is not possible to identify which 500 tons have been sold to which purchaser.

➫ The goods are being sold by a generic description - In the above an instance, the seller could fulfil the contract by delivering any 500 tons of rice provided that it was of satisfactory quality and met all the requirements.

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QUESTION 3a(ii)

Q Explain the meaning of the term "resale"

A

Solution

Re-sale - sale of property previously purchased.
If the buyer breaches the resale contract, then,the seller may resell the goods to another buyer as a remedy.

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QUESTION 3a(iii)

Q State four circumstances when the unpaid seller might exercise the right of resale .

A

Solution

Circumstances when unpaid seller might exercise the right of re-sale.

➫ Where the contract expressly reserves the right to re-sale.

➫ When the products are perishable in nature.

➫ When the buyer is given notice by the seller that he intends to resell the items but fails to pay or tender the price within a reasonable amount of time.

➫ In an emergency to protect a life that is in danger

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QUESTION 3(b)

Q Discuss four areas of jurisdiction of the Environment and Land Court in your country.

A

Solution

Jurisdictions of the environment and land court.

➫ A claim to occupy or work on land.

➫ Division and determination of the boundaries to land including land held in common.

➫ Hear and determine cases relating to land trespass.

➫ It lacks jurisdiction over land ownership and registration.

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QUESTION 4(a)

Q Enumerate four rights of an indemnity holder in a contract of indemnity,

A

Solution

Rights of an indemnity holder in a contract of indemnity

(i) Right to recover damages

(ii) Right to recover the costs incurred

(iii) Right to recover sums paid during compromise

(iv) Right to act within the authority granted to him by the promisor and must not deviate from the promisor’s orders.

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QUESTION 4(b)

Q State six circumstances under which a contract of guarantee might be declared void.

A

Solution

circumstances under which a contract of guarantee might be declared void

(i) When the original contract is altered without a consent

(ii) Death of one of the involved party

(iii) Agreements entered into by minors, if the consent of a parent or guardian has been acquired then it may be enforceable.

(iv) Agreements concerning activities that are illegal in nature.

(v) When one of the involved parties is incapable of fully comprehending the implications of the agreement, i.e., mentally impaired individual.

(vi) A contract may also become void if, after an agreement has been concluded but before the contract is fulfilled, laws or regulations change that render the acts mentioned in the agreement that were previously permissible now illegal.

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QUESTION 4(c)

Q Advise Peter Potea.

A

Solution

The advert made by Ken Jembe amounted to an offer.
A party's intention to enter into a contract with another is clearly expressed through an offer.

However,Peter Potea needs to distinguish between an offer and the mere supply of information. e.g the statement by ken Jembe that, “I have not used the farm for sheep rearing but I think it could support 2000 sheep" was just a mere supply of an information which does not give rise to an offer.

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QUESTION 5a(i))

Q In relation to the law of property, distinguish between "joint tenancy" and "tenancy in common"

A

Solution

Distinguish between joint "tenancy" and "tenancy in common".

Joint tenancy - when one tenant dies, the whole land went to the survivors and at the death of the last survivors it went to his heirs or according to his will.

Tenancy in common - when one tenant died, his estate instead went to his heirs or under his will.

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QUESTION 5a(ii)

Q Enumerate six lawful ways through which a person might acquire property other than by purchase.

A

Solution

Ways in which a person might acquire property other than purchase.

➫ By operation of law - It occurs when ownership transfers as a result of a legal operation, such a prescription.

➫ By delivery - when someone acquires possession with the former owner's concept or cooperation.

➫ By taking - it is the acquisition without the consent of the previous owner.

➫ Finding lost or misplaced property

➫ Gift

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QUESTION 5(b)

Q (i) Identify two types of trespass to goods.(2 marks)

(ii) Discuss four defences available under the tort of trespass to goods.(8 marks)

A

Solution

Trespass to goods.

Is the intentional tampering with property that belongs to someone else.

(i) Types of trespass to goods.

➫ Trespass to goods
➫ Conversion
➫ Detinue

(ii) Defences available under the tort of trespass to goods.

Necessity
If the inference happened in conditions where the interference was required but consent could not reasonably be sought, the defendant may be able to establish a defense to trespass. The defendant must establish both that there was an apparent impending risk to person or property and that the defendant had a goaith belief that the act was required to protect the person or property.

Consent
If the plaintiff's consent was obtained, the defendant may be able to prove a defense to trespass. Consent must be sincere and voluntary and can either be expressed explicitly or indicated by behavior. The burden of proof rests with the defendant to show that the plaintiff gave their permission for any interference with the chattel.

Jus tertii(“the right of a third party”.)
If the defense can establish that a third party has superior rights to the chattel than the plaintiff, the trespass claim may be dismissed. In order for the defense to be successful, the defendant must show that a third party has a better right to possession.

Reasonable Mistake
In general, mistake is not a defense to deliberate torts. However, if the defendant can demonstrate that he or she acted on the basis of a mistaken belief and that the error was reasonable, mistake may be a defence to a cause of action in trespass.

Incapacity
If the defendant is a minor and can show that they were unable to comprehend the full nature of the offense committed, there may be a defense to trespass. This would seem to suggest that a defense based on incompetence would only apply to infants and children under the age of four.

Repossession of goods
If the defendant can demonstrate that reasonable force was used to recover goods from which the defendant has a better right of possession than the plaintiff or if the commodities were illegally acquired from the defendant by the plaintiff, the defendant may be able to establish a defense to trespass.

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QUESTION 6(a)

Q Summarise four conditions that must be met before a partner in a firm could bind other partners in transactions with third parties.

A

Solution

Conditions that must be met before a partner in a firm that could bind other partners in transactions with third parties

➫ The partner must have acted at the relevant time and within the parameters of his partnership.

➫ The act must have been performed with the utmost good faith.

➫ Since the Act relates to business and not personal affairs, it must have been carried out generally.

➫ The transactions must be legal.

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QUESTION 6(b)

Q Explain three obligations of a partner to his/her fellow partners.

A

Solution

Obligations of a partner to his/her partners.

➫ Duty not to make secret profits/dealings.
➫ Duty to act in good faith.
➫ Duty to inform other partners of any dealings with third party which can bind other partners
➫ Duty to take part in management of the business.

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QUESTION 6(c)

Q Under the Hire Purchase Act, certain provisions are deemed void if contained in the hire purchase agreement.
With reference to the above statement, explain three such provisions.

A

Solution

Provisions deemed void if contained in the hire purchase agreement.

(i). A provision that exempts the owner from responsibility for such entry.

(ii). A provision that places the hirer under more obligation for terminating the hire purchase agreement than is allowed by section 12 (1) of the Act.

(iii). A provision that limits or excludes the hirer's ability to terminate the hire purchase agreement.

(iv). A provision that gives the owner or anyone acting on his behalf permission to access any property for the purpose of removing goods leased under a hire purchase agreement.

(v). A provision that exempts the owner from responsibility for any actions or omissions made by anyone acting on his behalf during the negotiation or execution of a hire purchase agreement.

(vi). A provision stating that anyone representing the owner in connection with the creation or termination of the hire purchase agreement shall be regarded to be acting on behalf of the hirer.

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QUESTION 6(d)

Q Identify four branches of civil law.

A

Solution

(i) law of contract
(ii) law of tort
(iii) family law
(iv) law of succession
(v) company law
(vi) employment law

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QUESTION 7a(i)

Q Highlight five duties of an insurer in a contract of insurance.

A

Solution

Duties of an insurer in a contract of insurance.

➫ Duty to take reasonable steps and insure his property.
➫ Duty to pay the insurance premiums as required
➫ Duty to disclose any material information concerning the subject matter.
➫ Duty to report to the insurance company in case of a risk.

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QUESTION 7a(ii)

Q State five ways through which an insurance contract might be terminated.

A

Solution

Ways through which an insurance company contract might be terminated.

➫ Mutual agreement - The contract may be terminated at any time if both parties agree under the specific circumstances.
➫ indemnity or sum assured payment in the event of a total loss.
➫ Violation of a warrant or condition.
➫ Sale of the subject matter
➫ Time expiration: Property insurance or indemnification contracts expire after a year.

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QUESTION 7(b)

Q Explain two circumstances under which a party might challenge an arbitral award in the high Court

A

Solution

Circumstances under which a party might challenge an arbitral award in the high court.

➫ In the event that the arbitrator omitted a crucial legal matter, the court's judgment will be sought.
➫ In case the arbitrator has a hidden bias on the matter.
➫ When an arbitrator received a bribe and expressed prejudiced judgment as a result

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QUESTION 7(c)

Q Summarise three ways of terminating of a banker-customer relationship

A

Solution

Ways of terminating a banker-customer relationship.

➫ Fulfillment of the owed obligation
➫ Acting in a way that isn't in line with the contract.
➫ By mutual agreement between the parties.
➫ By way of a waiver.

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CPA
Foundation Leval
Introduction to Law and Governance May 2018
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Comments on CPA past papers with answers:

Financial Accounting

Quantitative Analysis

Economics

Comments on:

CPA
Foundation Leval
Introduction to Law and Governance May 2018
Suggested Solutions