Guaranteed

95.5% Pass Rate

CPA
Foundation Leval
Introduction to Law and Governance May 2021
Suggested Solutions

Introduction to Law and Governance
Revision Kit

QUESTION 1a

Q Explain four features of the civil law system.
A

Solution


Features of the Civil Law System


  • Written Codes: The civil law system is characterized by comprehensive written legal codes that serve as the primary source of law.
  • Inquisitorial System: The civil law system often employs an inquisitorial approach, where the judge takes an active role in investigating and determining the facts of the case.
  • Legal Principles: The system relies heavily on legal principles and statutes, with less emphasis on precedent or case law compared to common law systems.
  • Specialization of Judges: Judges in the civil law system are typically career legal professionals who specialize in interpreting and applying the law.
  • No Jury Trials: In many civil law jurisdictions, there are no jury trials; instead, a judge or panel of judges decides the verdict.
  • Emphasis on Codification: The law is often codified, meaning that laws are systematically organized and written down in a comprehensive legal code.
  • Legal Education: Legal education in civil law systems often follows a specialized and structured curriculum, preparing individuals for careers in the legal profession.
  • Contractual Nature: Civil law systems often place a strong emphasis on the principles of contract law to govern relationships and transactions.



QUESTION 1b

Q In the context of administrative law, highlight six rights that the administrator might accord any person against whom administrative action is to be taken.
A

Solution


Rights in Administrative Law


In the context of administrative law, individuals against whom administrative action is to be taken are typically accorded certain rights. These rights may include:

  • Right to Notice: The right to be informed in advance about the administrative action being considered, including the reasons for such action.
  • Right to a Hearing: The right to present one's case and be heard before an impartial decision-maker, especially in situations where significant adverse consequences may result.
  • Right to Legal Representation: The right to have legal representation during administrative proceedings to ensure a fair and just process.
  • Right to Present Evidence: The right to submit evidence, arguments, and witnesses to support one's case during administrative hearings.
  • Right to Cross-Examination: The right to question or cross-examine witnesses presented by the opposing party during administrative proceedings.
  • Right to Appeal: The right to appeal an adverse administrative decision to a higher authority or a judicial body, seeking a review of the decision.
  • Right to Timely Decision: The right to a timely and prompt decision following administrative proceedings to avoid prolonged uncertainty.
  • Right to Access Records: The right to access relevant documents and records that are considered during the administrative decision-making process.
  • Right to Non-Discrimination: The right to be treated fairly and without discrimination based on characteristics such as race, gender, or other protected categories.




QUESTION 1(c)

Q Explain six rules relating to presentation for acceptance of bills of exchange.
A

Solution


Rules Relating to Presentation for Acceptance of Bills of Exchange


  1. Definition of Presentation for Acceptance: Presentation for acceptance refers to the formal act of showing the bill of exchange to the drawee and requesting their acceptance.
  2. Time of Presentation: Bills of exchange should be presented for acceptance within a reasonable time after their creation. The specific time period may vary by jurisdiction.
  3. Reasonable Time: What constitutes a reasonable time depends on the circumstances of each case, including the nature of the transaction and the trade usage. Delay in presentation may discharge the drawer from liability.
  4. Place of Presentation: The bill is usually presented at the drawee's place of business or residence. If the drawee has multiple locations, the place mentioned in the bill is the usual location for presentation.
  5. Presenting to Drawee or Agent: The bill can be presented to the drawee directly or to an agent authorized to accept on behalf of the drawee.
  6. Consequences of Non-Acceptance: If the drawee refuses to accept the bill, the holder may have certain rights, including the right to treat the bill as dishonored and proceed with legal remedies.
  7. Noting and Protest: In some cases, especially for foreign bills, it may be necessary to have the bill noted and protested by a notary public in case of non-acceptance. This formalizes the dishonor of the bill.
  8. Communication of Acceptance: Once accepted, the drawee communicates their acceptance by writing "accepted" on the bill, along with their signature. This creates an obligation for the drawee to honor the bill upon maturity.



QUESTION 2(a)

Q Highlight six disputes which fall under the jurisdiction of the Employment and Labour Relations Court.
A

Solution


Disputes Under the Jurisdiction of the Employment and Labour Relations Court


The Employment and Labour Relations Court typically has jurisdiction over a range of employment-related disputes, including:

  1. Unfair Dismissal or Termination: Cases where an employee claims that their termination or dismissal from employment was unjust or in violation of employment laws or regulations.
  2. Discrimination and Harassment: Disputes involving allegations of discrimination or harassment in the workplace based on factors such as gender, race, age, or other protected characteristics.
  3. Collective Bargaining Disputes: Disputes arising from negotiations between employers and labor unions regarding terms and conditions of employment, including issues related to collective bargaining agreements.
  4. Wage and Overtime Disputes: Cases involving disputes over wages, overtime pay, or other compensation-related matters.
  5. Employee Benefits Disputes: Disputes related to employee benefits, such as health insurance, pensions, or other fringe benefits provided by employers.
  6. Workplace Safety and Health: Cases involving violations of workplace safety and health regulations or disputes related to unsafe working conditions.
  7. Employee Rights Violations: Disputes concerning violations of employees' rights, such as the right to privacy, freedom of association, or other statutory rights guaranteed by labor laws.
  8. Whistleblower Protection: Cases where employees claim retaliation for whistleblowing activities, such as reporting illegal or unethical behavior within the organization.




QUESTION 2(b)

Q Lilian Pendo walked into a pharmacy and asked Cassandra Kinga, the pharmacist, to supply her with medication that could cure her (Lilian's) sore threat.

Required:

(i) Describe five terms that are implied by law in the sale transaction above.

(ii) Summarise four exceptions to the doctrine of caveat emptor.
A

Solution


Sale Transaction and Caveat Emptor


Implied Terms in the Sale Transaction


In the sale transaction between Lilian Pendo and Cassandra Kinga, certain terms are implied by law. These include:

  • Quality and Fitness for Purpose: The medication supplied should be of satisfactory quality and fit for the purpose for which it is intended, i.e., curing Lilian Pendo's sore throat.
  • Merchantable Quality: The medication should be of merchantable quality, meaning it should meet the standard that is reasonable for goods of that type.
  • Information and Advice: Cassandra Kinga, as a pharmacist, is expected to provide accurate information and advice about the medication's use and potential side effects.
  • Compliance with Statutory Requirements: The medication should comply with any relevant statutory requirements and regulations governing the sale of pharmaceutical products.
  • Title and Right to Sell: The seller implicitly guarantees that they have the right to sell the medication and that the buyer will receive good title to the product.
  • Reasonable Durability: Unless the circumstances indicate otherwise, goods sold must be reasonably durable, considering their nature and the purpose for which they are intended.
  • Availability of Spare Parts and Service: In cases where the purchase involves products that may require servicing or spare parts, there is an implied term that such parts and services will be reasonably available for a reasonable time.

Exceptions to the Doctrine of Caveat Emptor


The doctrine of caveat emptor (buyer beware) is subject to exceptions. Some key exceptions include:


  • Fraudulent Misrepresentation: If the seller makes false statements or conceals important information with the intent to deceive the buyer, the buyer may have legal remedies for fraudulent misrepresentation.
  • Express Warranty: If the seller provides an express warranty or guarantee about the quality or performance of the product, the buyer can rely on those assurances.
  • Implied Warranty of Fitness for a Particular Purpose: When the buyer relies on the seller's expertise and advice, there may be an implied warranty that the goods are fit for the particular purpose mentioned.
  • Statutory Protections: Consumer protection laws may provide additional rights to buyers, ensuring that goods meet certain standards and are safe for use.




QUESTION 3(a)

Q In relation to the law of insurance:

(i) Highlight four essential requirements for the contract to exist.

(ii) List six principles of a contract of insurance, apart from the essentials of a valid contract.
A

Solution


Law of Insurance: Contract Essentials and Principles


Essential Requirements for the Existence of an Insurance Contract


For a contract of insurance to exist, certain essential requirements must be met. These include:

  1. Offer and Acceptance: There must be a valid offer by the insured and acceptance by the insurer to create a binding agreement.
  2. Intention to Create Legal Relations: Both parties must have a genuine intention to create legal relations and be bound by the terms of the insurance contract.
  3. Lawful Purpose: The purpose of the insurance contract must be lawful and not against public policy or legal provisions.
  4. Legal Capacity: Both the insured and the insurer must have legal capacity to enter into a contract. For example, parties must be of sound mind and not minors.
  5. Consideration: There must be a valuable consideration exchanged between the parties, typically involving the payment of premiums by the insured and the promise of coverage by the insurer.
  6. Certainty and Possibility of Performance: The terms of the insurance contract must be certain, and performance must be possible. Uncertainty in terms can render the contract void.
  7. Insurable Interest: The insured must have an insurable interest in the subject matter of the insurance, meaning they must stand to suffer a financial loss if the insured event occurs.
  8. Utmost Good Faith (Uberrimae Fidei): There is a duty of utmost good faith imposed on both parties, requiring full and honest disclosure of all material facts related to the insurance.

Principles of a Contract of Insurance


In addition to the essential requirements, several principles govern the operation of a contract of insurance. These include:


  • Indemnity: The principle of indemnity ensures that the insured is restored to the same financial position that existed before the insured event occurred. It aims to compensate, not profit.
  • Subrogation: Subrogation allows the insurer, after settling a claim, to step into the insured's shoes and pursue legal action against third parties responsible for the loss.
  • Contribution: In cases where multiple insurance policies cover the same risk, the principle of contribution ensures that each insurer contributes proportionally to the loss.
  • Proximate Cause: The proximate cause is the dominant and most effective cause of loss. Insurance coverage is determined based on the proximate cause of the loss.
  • Mitigation of Loss: The insured has a duty to take reasonable steps to minimize or mitigate the loss after an insured event occurs.
  • Reinstatement: The principle of reinstatement allows for the restoration of the sum insured after a loss, often applicable in property insurance.
  • Warranties and Conditions: The insurance contract may include warranties (specific promises) and conditions (stipulations that must be fulfilled) that affect coverage.
  • Exclusion Clauses: Insurance policies often include clauses specifying events or circumstances that are not covered by the policy.




QUESTION 3(b)

Q Identify four common characteristics of law
A

Solution


Common Characteristics of Law


Law, in its various forms, exhibits several common characteristics that define its nature and function. These include:

  • Authority: The existence of a recognized authority, such as a government or legal system, that creates and enforces laws.
  • Universality: Laws often apply universally within a jurisdiction, affecting all individuals and entities subject to that legal system.
  • Enforceability: Laws are typically backed by the power of enforcement, allowing authorities to compel compliance and punish violations.
  • Consistency: Laws aim to provide consistency and predictability in societal interactions by establishing clear rules and standards.
  • Flexibility: While laws seek to maintain stability, they also exhibit a degree of flexibility to adapt to changing social, economic, and cultural contexts.
  • Public Interest: Laws often serve the public interest by addressing collective needs, promoting order, and protecting fundamental rights.
  • Presumption of Innocence: Legal systems commonly presume individuals innocent until proven guilty, emphasizing the burden of proof on the prosecution.
  • Adjudication: Disputes arising from the application of laws are resolved through adjudication in courts or other legal forums.
  • Rule of Law: The principle that everyone, including individuals and government officials, is subject to the law and accountable under it.
  • Legal Sanctions: Violations of laws may result in legal sanctions, including fines, imprisonment, or other penalties, to deter unlawful behavior.
  • Codification: Many legal systems codify laws into written statutes or codes, providing a systematic and organized framework.
  • Justice and Fairness: Laws aspire to achieve justice and fairness by treating individuals equitably and protecting fundamental rights.
  • Social Control: Laws contribute to social control by establishing norms and regulating behavior to prevent disorder and protect public welfare.




QUESTION 3(c)

Q Explain three types of delegated legislation.
A

Solution


Types of Delegated Legislation


Delegated legislation refers to laws made by authorities other than the legislature, with the authority granted by an Act of Parliament. There are various types of delegated legislation, including:

  1. Statutory Instruments (SIs): These are the most common form of delegated legislation. Statutory Instruments are rules, regulations, or orders made by government ministers or other authorities to implement the provisions of an existing Act of Parliament. They cover a wide range of subjects and are often used for detailed and technical matters.
  2. Orders in Council: Orders in Council are a type of delegated legislation made by the Privy Council or Cabinet. They are often used for matters requiring a higher level of authority and are used in situations where the law explicitly grants such power.
  3. Bylaws: Local authorities, such as city councils, can make bylaws to address local issues. Bylaws are a form of delegated legislation that allows local authorities to create rules and regulations within their jurisdiction. They cover matters like zoning, parking, and public behavior.
  4. Rules and Regulations: Various regulatory bodies and agencies are empowered to create rules and regulations within their specific areas of expertise. For example, financial regulatory bodies can issue regulations governing financial institutions.
  5. Codes of Practice: Delegated legislation in the form of codes of practice provides guidance on how certain activities should be conducted. While not legally binding, these codes are often used to establish industry standards and best practices.
  6. Proclamations: Proclamations are formal announcements made by the head of state or government. While they are not always legislative in nature, they can have legal effects and are a form of delegated authority in some jurisdictions.
  7. EU Regulations and Directives: In regions like the European Union, regulations and directives issued by EU institutions are a form of delegated legislation. Regulations are directly applicable, while directives require implementation by member states.
  8. Customs and Excise Duties: Delegated legislation is often used in the context of customs and excise duties. Authorities can set rates, exemptions, and rules related to the imposition of such duties.
  9. Emergency Powers: In times of national emergency or crisis, governments may be granted powers to make delegated legislation quickly to address urgent situations.




QUESTION 4(a)

Q State five grounds for the dissolution of a partnership without the intervention of the court.
A

Solution


Grounds for Dissolution of a Partnership


The dissolution of a partnership without the intervention of the court can occur based on various grounds, as stipulated in the partnership agreement or governed by relevant partnership laws. Common grounds for dissolution include:

  1. Expiration of the Partnership Term: If the partnership agreement specifies a fixed term, the partnership may dissolve automatically upon the expiration of that term.
  2. Fulfillment of the Partnership Purpose: If the partnership was formed for a specific purpose, and that purpose has been achieved or becomes impossible to accomplish, the partnership may dissolve.
  3. Mutual Agreement: Partners can mutually agree to dissolve the partnership. This often requires the consent of all partners, as outlined in the partnership agreement.
  4. Withdrawal of a Partner: If a partner decides to withdraw from the partnership in accordance with the terms outlined in the partnership agreement, it may lead to the dissolution of the partnership.
  5. Death or Incapacity of a Partner: The death or incapacity of a partner, unless the partnership agreement provides otherwise, can lead to the automatic dissolution of the partnership.
  6. Bankruptcy of a Partner: If a partner declares bankruptcy, it may trigger dissolution unless the partnership agreement contains provisions for dealing with such situations.
  7. Illegality or Impossibility of Partnership Activities: If the partnership's activities become illegal or impossible to carry out, the partnership may dissolve as a result.
  8. Agreed-upon Events: The partnership agreement may specify certain events or triggers that result in automatic dissolution if they occur.
  9. Failure to Achieve Profitability: Some partnership agreements include clauses that allow for dissolution if the business fails to achieve specified levels of profitability.
  10. Major Disputes Among Partners: If there are irreconcilable disputes among partners that hinder the proper functioning of the partnership, it may lead to dissolution.




QUESTION 4(b)

Q With reference to negotiation as an alternative dispute resolution (ADR) mechanism

(i) Identify five qualities of a good negotiator.

(ii) Outline six objectives of the ADR system

(iii) Explain two types of conciliation.
A

Solution


Qualities of a Good Negotiator


  1. Communication Skills: A good negotiator must be an effective communicator, capable of clearly expressing ideas and actively listening to others.
  2. Patience: Patience is crucial in negotiation, especially when dealing with complex issues or in situations where emotions may run high.
  3. Problem-Solving Ability: Negotiators should possess strong problem-solving skills to find mutually beneficial solutions to disputes.
  4. Flexibility: Being adaptable and open to compromise is essential for successful negotiations, as rigid positions can impede progress.
  5. Empathy: Understanding the perspectives and concerns of the parties involved fosters trust and facilitates the negotiation process.
  6. Preparation: Good negotiators thoroughly prepare for negotiations, researching relevant information and anticipating potential issues.
  7. Ethical Conduct: Integrity and ethical behavior build credibility and contribute to the development of a positive negotiating environment.
  8. Assertiveness: Balancing assertiveness with respect is key; negotiators must advocate for their interests while maintaining a collaborative approach.
  9. Ability to Handle Pressure: Negotiation often involves high-pressure situations, and a good negotiator remains composed and focused under stress.
  10. Creativity: Thinking creatively allows negotiators to explore innovative solutions that meet the needs of all parties involved.

Objectives of the ADR System


  • Efficiency: ADR aims to resolve disputes quickly and efficiently, avoiding the time and expense associated with traditional litigation.
  • Cost-Effectiveness: ADR provides a more cost-effective means of resolving disputes compared to lengthy court proceedings.
  • Preservation of Relationships: ADR seeks to preserve relationships between parties by offering a less adversarial and confrontational process.
  • Flexibility: ADR methods are flexible and can be tailored to the specific needs and preferences of the parties involved.
  • Informality: ADR processes, such as negotiation and mediation, are typically less formal than court proceedings, promoting a more relaxed environment for resolution.
  • Confidentiality: ADR often allows for confidentiality, protecting sensitive information and discussions from becoming public knowledge.

Types of Conciliation


Conciliation is a form of ADR that involves a neutral third party assisting disputing parties in reaching a mutually acceptable resolution. Types of conciliation include:


  1. Facilitative Conciliation: The conciliator facilitates communication and assists parties in generating their solutions without providing recommendations.
  2. Evaluative Conciliation: The conciliator may evaluate the strengths and weaknesses of each party's case and provide recommendations for a settlement.
  3. Directive Conciliation: In directive conciliation, the conciliator takes a more active role, suggesting specific solutions and guiding the parties toward an agreement.
  4. Non-Directive Conciliation: Non-directive conciliation emphasizes the autonomy of the parties, with the conciliator acting as a neutral facilitator rather than offering specific suggestions.



QUESTION 5(a)

Q Explain three ways in which terms might be implied in a contract.
A

Solution


Ways in Which Terms Might be Implied in a Contract


Implied terms in a contract are terms that are not expressly stated by the parties but are still considered part of the agreement. There are several ways in which terms might be implied:

  1. Statute: Terms may be implied by statute, where legislation dictates certain terms that are automatically included in specific types of contracts. For example, consumer protection laws may imply terms regarding product quality and fitness for purpose.
  2. Common Law: Common law principles and judicial decisions can lead to the implication of terms based on established legal precedent. Courts may imply terms to give effect to the presumed intentions of the parties or to fill gaps in the contract.
  3. Custom and Usage: Implied terms may arise from the customary practices or usage of a particular trade or industry. If certain terms are well-known and expected within a specific business context, they may be implied into contracts within that industry.
  4. Previous Dealings: Terms may be implied based on the parties' previous dealings or course of conduct. If the parties have a consistent pattern of behavior in their transactions, a court may imply terms to reflect that historical practice.
  5. Business Efficacy: Terms necessary for the contract to achieve its commercial purpose may be implied for the sake of business efficacy. If a term is so vital that it is presumed both parties would have included it, a court may imply that term.
  6. Factual Matrix: Implied terms can arise from the factual matrix or surrounding circumstances at the time of contract formation. Courts may consider the background and context in which the contract was made to determine the reasonable expectations of the parties.
  7. Equity: Equitable considerations may lead to the implication of terms to prevent unfairness or to ensure justice. Courts may imply terms to avoid unconscionable conduct or to provide a remedy when strict adherence to the express terms would lead to injustice.




QUESTION 5(b)

Q On 20 January 2021, Joseph Mita entered into a written agreement with Zoa Juma in which Zoa Juma agreed to smuggle some goods into the country for Josheph Mita by the end of March 2021. Joseph Mita promptly paid Zoa Juma the agreed consideration of Sh.500,000 in full, but Zoa Juma has reneged on the deal. Joseph Mita feels aggrieved and intends to sue Zoa Juma.

Analyse the legal principles applicable in the above case and advise Joseph Mita accordingly.
A

Solution


Legal Analysis and Advice


Legal Principles Applicable:


Several legal principles are relevant to the given case:

  1. Illegality: The agreement between Joseph Mita and Zoa Juma involves smuggling goods into the country, which is likely illegal. Courts are generally unwilling to enforce agreements that involve illegal activities.
  2. Public Policy: Contracts that go against public policy, such as agreements involving illegal activities, may be considered void and unenforceable.
  3. Consideration: While Joseph Mita paid Zoa Juma Sh.500,000, the consideration for an illegal act may not be recoverable in court.
  4. Implied Terms: Depending on the nature of the agreement, certain terms may be implied by law, and the court may consider these when determining the rights and obligations of the parties.
  5. Breach of Contract: Zoa Juma's failure to fulfill the agreed-upon task constitutes a breach of contract, and Joseph Mita may have legal remedies available.
  6. Void Agreement: If the agreement is found to be void due to illegality or public policy considerations, Joseph Mita may have limited legal recourse.

Advice to Joseph Mita:


Considering the illegal nature of the agreement and the principles of public policy, Joseph Mita may face challenges in enforcing the contract.Courts typically do not enforce illegal contracts.Joseph Mita need to use the proper / legal channels of conducting transactions to avoid such losses.





QUESTION 5(c)

Q Summarise six circumstances under which the principal might unilaterally cancel an agency relationship without being liable to the agent for breach of contract.
A

Solution


Cancellation of Agency Relationship


There are circumstances under which a principal may unilaterally cancel an agency relationship without being liable to the agent for breach of contract. Some of these circumstances include:

  • Termination Clause: If the agency agreement includes a termination clause that allows the principal to cancel the relationship under certain specified conditions, the principal can do so without breaching the contract.
  • Expiration of Agreement: If the agency relationship has a fixed term, and the term has expired, the principal is generally free to end the relationship without liability.
  • Death or Incapacity: The death or incapacity of either the principal or the agent can automatically terminate the agency relationship.
  • Fulfillment of Purpose: If the purpose for which the agency was established has been fulfilled or becomes impossible to achieve, the principal may terminate the agency relationship.
  • Breach of Fiduciary Duty: If the agent breaches their fiduciary duties, engages in misconduct, or acts against the best interests of the principal, the principal may have the right to terminate the agency relationship without liability.
  • Bankruptcy or Insolvency: If either the principal or the agent becomes bankrupt or insolvent, it may provide grounds for the unilateral cancellation of the agency relationship.
  • Mutual Agreement: If both parties mutually agree to terminate the agency relationship, the principal can cancel the agreement without being held liable for breach of contract.
  • Impossibility of Performance: If external circumstances make it impossible for the agent to perform their duties, the principal may be entitled to terminate the agency relationship.
  • Change in Circumstances: Substantial changes in circumstances, such as a significant shift in business needs or a change in the principal's requirements, may justify the unilateral cancellation of the agency relationship.
  • Revocation of Authority: If the principal explicitly revokes the agent's authority, it terminates the agency relationship, provided it is done in accordance with the terms of the agreement.




QUESTION 6(a)

Q In the context of intellectual property (IP) law:

(i) Define the term "infringing copy"

(ii) Identify four works that are eligible for copyright
A

Solution


Intellectual Property Law


(i) Definition of "Infringing Copy"


Infringing Copy: In the context of intellectual property law, an infringing copy refers to a reproduction, distribution, or display of a protected work without the authorization or permission of the rights holder. It involves the unauthorized use of intellectual property, such as copyrighted material, trademarks, or patented inventions, in a manner that violates the rights of the intellectual property owner.

(ii) Works Eligible for Copyright


Various works are eligible for copyright protection. Copyright extends to original works of authorship fixed in a tangible medium of expression. Examples of works eligible for copyright include:


  • Literary Works: Novels, poems, essays, articles, and other written works.
  • Artistic Works: Paintings, drawings, sculptures, photographs, and other visual arts creations.
  • Musical Works: Compositions, songs, and musical arrangements.
  • Dramatic Works: Plays, scripts, screenplays, and other theatrical compositions.
  • Architectural Works: Architectural designs and drawings.
  • Computer Programs: Original software and source code.
  • Audiovisual Works: Films, videos, and multimedia presentations.
  • Sound Recordings: Recordings of musical performances and other sounds.
  • Compilations: Collections of data, directories, and other compiled works.
  • Derivative Works: Works based on pre-existing works, such as adaptations, translations, and remixes.




QUESTION 6(b)

Q Outline six advantages of a contract of guarantee
A

Solution


Advantages of a Contract of Guarantee


A contract of guarantee, often used in financial transactions and business arrangements, offers several advantages for the parties involved:

  1. Enhanced Creditworthiness: A guarantee can enhance the creditworthiness of the borrower, making it easier for them to secure loans or credit facilities. The presence of a guarantor provides additional assurance to the lender regarding repayment.
  2. Access to Financing: Individuals or businesses with a strong guarantor may have increased access to financing, even if their own credit history is less favorable. This can be especially beneficial for startups and entities with limited credit history.
  3. Lower Interest Rates: Lenders may offer lower interest rates when a guarantee is in place, as the additional security reduces the risk associated with the loan. This can result in cost savings for the borrower.
  4. Business Opportunities: A contract of guarantee can open up business opportunities by instilling confidence in business partners, suppliers, or clients. It serves as a commitment to meet financial obligations, fostering trust in commercial relationships.
  5. Contractual Flexibility: Guarantees provide a flexible way to structure financial arrangements. Parties can negotiate the terms and conditions of the guarantee to suit the specific needs of the transaction.
  6. Debt Recovery: In the event of default by the borrower, the lender can seek payment from the guarantor. This enhances the likelihood of debt recovery and provides an additional layer of security for the lender.
  7. Risk Mitigation: A contract of guarantee allows parties to distribute and mitigate financial risks. It provides a mechanism for sharing the burden of repayment, reducing the impact of financial challenges on any single party.
  8. Relationship Building: Guaranteeing a loan or obligation can strengthen relationships between individuals or businesses. It demonstrates a willingness to support each other's financial endeavors, fostering goodwill and cooperation.
  9. Contractual Clarity: The terms of the guarantee agreement clarify the roles and responsibilities of the parties involved. This clarity can help prevent misunderstandings and disputes, contributing to smoother transactions.
  10. Legal Enforceability: A contract of guarantee is legally enforceable, providing a structured framework for seeking remedies in the event of default. This legal backing adds a layer of security for both the lender and the guarantor.




QUESTION 6(c)

Q Explain four conditions which must be satisfied before a defendant can resort to private defence in tort cases
A

Solution


Private Defence in Tort Cases


Private defence is a legal concept that allows a defendant to justify their actions in causing harm to another party in certain situations. To resort to private defence in tort cases, the following conditions must generally be satisfied:

  1. Imminent Threat: The defendant must reasonably believe that there is an imminent threat of harm to themselves, their property, or another person. The threat must be immediate and not speculative.
  2. Proportionality: The use of force in self-defence must be proportionate to the threat faced. Excessive force that goes beyond what is reasonably necessary may not be justifiable as private defence.
  3. Reasonable Belief: The defendant must have a reasonable and honest belief that the use of force is necessary to protect themselves or others from harm. This is a subjective standard, but the belief must be objectively reasonable.
  4. No Safe Retreat: In some jurisdictions, the defendant may only resort to private defence if there is no safe retreat available. This means that if the defendant can avoid the threat or harm by retreating safely, they may be required to do so.
  5. Protection of Others: Private defence is not limited to self-defence. It can also apply when the defendant reasonably believes that force is necessary to protect another person from imminent harm.
  6. Protection of Property: Private defence can extend to the protection of property, but the force used must be reasonable and proportionate to the threat faced.
  7. Immediate Response: The response in private defence should be immediate and direct to the threat. Delayed or pre-emptive actions may not be justifiable as private defence.
  8. Absence of Aggressor's Consent: Private defence generally cannot be invoked if the aggressor has consented to the defendant's actions. If the aggressor consents, it may negate the claim of private defence.
  9. Use of Lethal Force (if permitted): In cases where the use of lethal force is involved, some jurisdictions may have specific requirements or limitations. The defendant must comply with any legal standards governing the use of lethal force.
  10. Immediate Reporting: In certain jurisdictions, the defendant may be required to report the incident to the authorities immediately after resorting to private defence. Failure to report could affect the legal justification for the actions taken.




QUESTION 7(a)

Q Outline five rules that govern the completion of a hire purchase agreement
A

Solution


Hire Purchase Agreement Rules


Hire purchase agreements involve the hiring of goods with an option to purchase. The completion of such agreements is governed by various rules to ensure clarity and fairness. Here are key rules to consider:

  1. Written Agreement: The hire purchase agreement must be in writing and signed by both parties (hirer and owner). This ensures a clear record of the terms and conditions.
  2. Full Disclosure: The owner must provide full and accurate disclosure of all terms, including the cash price of the goods, the hire-purchase price, the deposit required, and the interest rate (if applicable).
  3. Details of Goods: The agreement should specify the details of the goods being hired, including the make, model, condition, and any identification marks.
  4. Deposit: The agreement should outline the amount of any deposit required, the conditions under which it is refundable, and the consequences of non-payment.
  5. Instalment Payments: If the payment is to be made in instalments, the agreement should detail the amounts, due dates, and consequences of default.
  6. Transfer of Ownership: The agreement should specify when ownership of the goods will transfer from the owner to the hirer, typically after the final payment is made.
  7. Termination Clause: The agreement should include conditions under which either party can terminate the agreement, including defaults and breach of terms.
  8. Rights and Responsibilities: The rights and responsibilities of both parties should be clearly outlined, including maintenance responsibilities, insurance requirements, and any restrictions on use.
  9. Right to Terminate: The hirer may have the right to terminate the agreement at any time before taking possession of the goods or during the hiring period, subject to specified conditions.
  10. Notices and Communications: The agreement should specify how notices and communications between the parties will be handled, including the addresses for service of notices.
  11. Regulatory Compliance: The agreement must comply with any applicable laws and regulations governing hire purchase agreements in the jurisdiction.




QUESTION 7(b)

Q (i) Outline four essential ingredients of the concept of strict liability.

(ii) Highlight three exceptions to the rule of strict liability.
A

Solution


Strict Liability Concept


(i) Essential Ingredients of Strict Liability


Strict liability is a legal concept that holds a party responsible for certain harms or damages regardless of fault or negligence. The essential ingredients of strict liability include:

  1. Activity or Conduct: Strict liability typically applies to certain activities or conduct that are inherently dangerous or pose a high risk of harm to others.
  2. Non-Natural Use of Land: In some cases, strict liability may be associated with the non-natural use of land, especially when it involves activities that can cause harm even if conducted with reasonable care.
  3. Escape of a Dangerous Thing: Strict liability often arises when there is an escape of a dangerous substance or thing from the defendant's premises, leading to harm to others.
  4. No Requirement of Negligence: Unlike negligence, strict liability does not require proof of the defendant's negligence or intention to cause harm. The focus is on the nature of the activity or conduct.
  5. Causation: There must be a direct causal link between the defendant's activity or conduct and the harm suffered by the plaintiff. The harm must result from the specific risk associated with the activity.
  6. Ultrahazardous or Abnormally Dangerous Activities: Strict liability is often applied to activities that are ultrahazardous or abnormally dangerous, meaning they involve a high degree of risk even if conducted with utmost care.
  7. Public Policy Considerations: Strict liability is justified by public policy considerations, emphasizing the need to protect individuals and property from certain inherently risky activities.

(ii) Exceptions to the Rule of Strict Liability


While strict liability is a general principle, there are exceptions and situations where it may not apply. Common exceptions to the rule of strict liability include:


  • Consent or Assumption of Risk: If the plaintiff voluntarily consents to the risk associated with the activity or assumes the risk, strict liability may not apply.
  • Act of God: Events considered as acts of God, such as natural disasters, may exempt the defendant from strict liability if the harm resulted from forces beyond human control.
  • Governmental Authorization: If the defendant's activities are authorized or mandated by the government, there may be an exception to strict liability, as the government's approval may imply an acceptable level of risk.
  • Abnormally Sensitive Plaintiff: In cases where the plaintiff's property or circumstances are abnormally sensitive, and the harm is due to that sensitivity, the defendant may not be held strictly liable.
  • Contributory Negligence: If the plaintiff's own negligence contributes to the harm, some jurisdictions may consider contributory negligence as a defense against strict liability.
  • Statutory Exemptions: Certain statutes or regulations may provide exemptions to strict liability for specific activities or industries.




QUESTION 7(c)

Q In the context of the law of contract, explain the meaning of the following terms:

(i) Discharge.

(ii) Termination.

(iii) Puff.

(iv) Representation
A

Solution


Law of Contract Terms


(i) Discharge


Discharge: In the law of contract, discharge refers to the termination or release of the contractual obligations between the parties. A contract can be discharged in various ways, including performance, agreement, frustration, breach, or operation of law. Once a contract is discharged, the parties are relieved of their contractual duties and obligations.

(ii) Termination


Termination: Termination in the context of the law of contract signifies the ending or cessation of a contractual relationship. It can occur through various means, such as completion of performance, expiration of the contract term, mutual agreement, or the occurrence of a specified event. Termination may also result from a breach of contract, giving the innocent party the right to end the contractual relationship.


(iii) Puff


Puff: In contract law, the term "puff" refers to exaggerated or promotional statements made by one party to induce the other party to enter into a contract. Puffery involves statements that are not considered serious factual claims but are rather expressions of opinion or subjective judgment. Puffery is generally not considered a misrepresentation, and parties are expected to exercise their judgment regarding such statements.


(iv) Representation


Representation: A representation in contract law is a statement of fact made by one party to another during the negotiation or formation of a contract. Representations may be express or implied and can be oral or in writing. Unlike warranties, which are terms of a contract, representations are not considered binding terms, but they play a role in the formation of the contract. If a false representation induces the other party to enter into the contract, it may give rise to a claim for misrepresentation.





Comments on CPA past papers with answers:

New Unlock your potential with focused revision and soar towards success
Pass Kasneb Certification Exams Easily

Comments on:

CPA past papers with answers