INTRODUCTION TO LAW & GOVERNANCE NOVEMBER 2020 - CPA SOLUTION|REVISION KITS|KASNEB

QUESTION 1a

Q Generally, there is no implied condition as to fitness for any particular purpose of the goods supplied. Outline four exceptions to the general rule above.

A

Solution

➧ When the goods are of a kind handled or supplied by the seller in the normal course of business.

➧ When the Buyer directly or indirectly informs the Seller about a specific purpos required by
the Buyer.

➧ Misrepresentation on the part of the seller.

➧ Buyer relies on Seller's skill or judgment to purchase goods.

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QUESTION 1b

Q Enumerate four duties of the seller under the cost, insurance and freight contracts of sale.

A

Solution

➧ The seller must ship the agreed product.

➧ Obtain a contract of carriage (bill of lading) under which the goods will be delivered to the
agreed destination.
➧ Issue an insurance policy in favor of the buyer.

➧ Issue a commercial invoice indicating the price of the goods.

➧ Present the above documents to the buyer.

➧ To freight charges

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QUESTION 1c(i)

Q Explain two forms that a persuasive precedent might take

A

Solution

Persuasive precedent refers to legal decisions or writings that a court may consider even though they are not binding. Unlike mandatory (or binding) precedent, which a court must follow, persuasive precedent can influence a decision if the reasoning is compelling. Here are some common forms that persuasive precedent might take:

1. Decisions from Other Jurisdictions
➧ Decisions from Other States or Countries: Courts sometimes look to rulings from other jurisdictions that have addressed similar legal issues, especially when local case law is ambiguous or undeveloped. ...
➧ Comparative Analysis: The persuasive value increases if the legal context or underlying principles in the other jurisdiction closely resemble those in the current case.

2. Lower Court Opinions
➧ District or Trial Court Decisions: While not binding on appellate courts, these opinions can be persuasive if they offer clear reasoning and well-supported analysis.
➧ Reasoning and Analysis: Lower court opinions can serve as persuasive examples of how similar issues have been approached and resolved.

3. Dissenting Opinions
➧ Influential Dissent: Although dissenting opinions do not carry the force of law, they may be cited as persuasive authority when they articulate a particularly cogent or progressive interpretation of the law.
➧ Catalyst for Change: Sometimes, dissents are later adopted by higher courts or become influential in the evolution of legal doctrine.

4. Scholarly Writings and Treatises
➧ Law Review Articles: Academic analyses and critiques can be highly persuasive, especially when they provide a comprehensive review of the law or innovative arguments that address gaps in precedent.
➧ Legal Treatises and Commentaries: Respected legal texts that analyze case law and statutory interpretation can influence judicial thinking by providing detailed commentary and systematic arguments.

5. Administrative Decisions
➧ Agency Rulings: Decisions made by administrative agencies can be persuasive, particularly when the agency has specialized expertise in a particular area of law.
➧ Expert Analysis: Courts may consider these decisions persuasive if the agency’s expertise and factual record offer insights that are directly relevant to the case.

Conclusion
In essence, while persuasive precedents do not have binding authority, their influence depends on factors such as the similarity of the legal issues, the quality of the reasoning, and the reputation of the source. Judges assess these factors and may adopt persuasive precedents to support or enhance their interpretations of the law.

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QUESTION 1c(ii)

Q Itemise six components of a judicial precedent (judgment).

A

Solution

➧ A list of oral or written submissions.

➧ Names of the parties.

➧ The court.

➧ Signature of Judge or Magistrate.

➧ Rationale for the decision (ratio decidendi).

➧ Obiter dicta.

➧ The facts.

➧ The decision made.

➧ Date when the judgement is delivered.

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QUESTION 2a(i)

Q Highlight six similarities between law and morality.

A

Solution

➧ The law adheres to moral principles, such as Thou shall not covet thy neighbours wife, and cannot be contradicted.

➧ Both are derived Qaom and governed by the same source, practical reason or prudence.

➧ Law is a subset of morality.

➧ Both govern how we treat others.

➧ Both are collective judgments about what is right and wrong.

➧ Sanctions apply for violations of law and morality.

➧ Both are related in the sense that laws are the moral rules that a society has agreed to live by.

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QUESTION 2a(ii)

Q Summarise four exceptions to the doctrine of caveat emptor.

A

Solution

The Doctrine of Caveat Emptor

The doctrine of Caveat Emptor is an integral part of the Sale of Goods Act. It translates to “let the buyer beware”. This means that the buyer himself is responsible for his choice.

➦ Exceptions to the doctrine of caveat emptor

1. Implied Condition:
Buyer's informing Seller of the purpose for purchasing the Goods implies that he is relying on Seller's judgment. It is the Seller's responsibility to ensure that the Products are suitable for their intended use. For example, suppose X goes to buy a mobile phone Qaom Y. He told Y he wanted to use the mobile phone for facebook. If Y sells a mobile phone that does not fit X's purpose, the seller is liable. Another example is the case study Priest v. last.

2. Goods sold by Description
There are exceptions when a buyer purchases an item based on description alone. If the product does not match the description, the seller is responsible for the product.

3. Sale by Sample
If the buyer purchases the goods after confirming the sample,then the rule of Doctrine of Caveat Emptor does not apply. If the rest of the product is not similar to the sample, the buyer cannot be held responsible. In this case, the seller is responsible. For example, X orders 20 laptots Qaom Y. He checks one sample where the laptop is core i5. Then the rest of the laptos turn core i3. The principle does not apply here and Y is to blame.

4. Goods Purchased under Brand Name
When a buyer purchases a brand or branded product, the seller cannot be held responsible for the usefulness or quality of the product. Accordingly, there is no implied condition that the Goods are fit for the purpose intended by Buyer.

5. QLGud or Misrepresentation by the Seller
This is another important exception. The Buyer Provisions will not apply where Seller has QLGudulently obtained Buyer's consent. In addition, Buyer shall not be liable if material defects in the Goods are concealed by Seller and later discovered upon closer examination. In both cases, it's the seller's fault.

6. Usage of Trade
There are no implied conditions or warranties regarding the quality or fitness of the goods/products. However, if the Seller deviate Qaom this, the rule of Doctrine of Caveat Emptor will not apply. For example, X purchases items Qaom Y at a ship contents auction. However, since Y has not informed X that the contents have been damaged by the sea, the rule of doctrine does not apply here.

7. Merchantable Quality of Goods
Sellers are required to provide commercial quality merchandise to buyers. This means that the product must be suitable for resale on the market and meet market standards. The goods must be of commercial quality when the buyer purchases them Qaom the seller according to the description and the seller disposes of them according to the description. Sellers may be held liable for the same if the product is not of commercial quality.

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QUESTION 2b(i)

Q Identifying the specific wrong the doctor might have committed and the law applicable.

A

Solution

➧ Negligence falls under the Law of Torts.

➧ Under the same considerations that usually govern the conduct of human affairs,
it is negligence to do what a reasonable person would do, or do what a prudent and reasonable person would not do.(Blyth v Birmingham Waterworks Co. 1856).

➧ Negligence is an act that no reasonable person would do, or an omission that no reasonable person could overlook.

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QUESTION 2b(ii)

Q Explaining the essential elements of the wrong identified in (i) above.

A

Solution

➧ Legal duty of care:- It is our duty to exercise reasonable care to avoid reasonably foreseeable acts or omissions that could cause harm to our neighbors. Your neighbor is someone who may be affected by your actions or inaction.

➧ Breach of duty of care:- This means following the standards of the state below. Abandonment of duty is measured objectively by reasonable human standards.

➧ For breach to be determined, the court will look at:

• The degree of risk involved.

• The cost of precautions..

• The potential seriousness of injuries.

➧ Damages or any reasonable remedy for negligence

➧ Injury, loss or damage to the plaintiff :- The plaintiff must prove that he suffered injury, loss, or damage as a result of the defendant's actions. The claimant must demonstrate that the type of damage was reasonably foreseeable...

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QUESTION 2b(iii)

Q Determining the most suitable remedy available to Lady Nadia

A

Solution

Specific perfomance-An order for the doctor to perform a surgery to remove the scissors in her womb.

Compensation for the damages

Restitution

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QUESTION 3a

Q Distinguish between a "Limited Liability Partnership" (LLP) and a "General Partnership

A

Solution

Establishment
A general partnership requires only an agreement (including verbal) between the partners to start.
Limited liability partnerships require additional steps. You and your partner(s) must file a limited partnership certificate with the Secretary of State's office in your state. In this form you will nominate a registered agent, who can often be your general partner.

Ownership and management
In a general partnership, all partners are general partners, and the obligations of the owners are shared equally. In a limited partnership, operations are carried out by the general partners and the limited partners are not involved in the day-to-day business operations. Limited partners only act as investors in the business.

Profit, liability, and loss sharing
Limited partners share losses and responsibilities only within the scope of their investment in the company. General partners have unlimited liability for debts and litigation. This means that the general partners' business and personal assets can be used to pay off the company's debts, or the plaintiffs who successfully sued them.

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QUESTION 3b(i)

Q Explain the difference between an "offer" and "invitation to treat"

A ➧ An offer is an proposal that creates a binding contract if accepted by others, subject to its terms.

➧ It is any statement made by words or actions indicating that the party making the statement wishes to be bound by the terms if the other party accepts them.

➧ An invitation to treat is merely a supply of information to tempt a an offer or bargain.

➧ The invitee becomes the proposed and the inviter becomes the proposer. For example, advertising for auction sales, trade show sales or self-service sales.

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QUESTION 3b(ii)

Q Advise David on the various ways in which an offer could be terminated

A Revocation of the offer by the offeror;
A contract is based on a agreement. A contract occurs when one proposer makes an offer and the offeree accepts it. There must be both an offer and an acceptance. An offer may be withdrawn prior to acceptance, which prevents the formation of a contract. If an offer has been terminated, any attempt to accept it after termination is void. In general, proposers can withdraw their offer at any time. All that is required is for the proposer to prove its intention to withdraw the offer and communicate this intention to the proposer.

Counteroffer by offeree;
A counter offer means that the original offer has been rejected and replaced by another offer. The counter-offer gives you the original offer or three options: accept or reject the counter-offer or make another offer.

Rejection of offer by offeree;
Rejection occurs when one of the parties decides not to accept an offer. Rejection may also mean that either party has rejected the Goods provided as part of performance of the contract. If goods offered in the contract do not conform to the contract description, the buyer has the right to reject such goods.

Lapse of time;
Lapse of time is the termination of a right, interest, obligation or obligation due to the passage of time, failure to perform a condition or change in circumstances,delay due to the passage of time. An example of expiration at the end of time is when a party does not accept an offer in time.

Death or disability of either party

If the performance of the contract becomes illegal after the offer has been made

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QUESTION 4a

Q Describe the requirements that an administrative body must meet in making an administrative decision in order to avoid a review of its decision by the courts

A

Solution

Ensure decision makers have the authority-Review applicable laws, agency policies and guidelines to ensure that decision makers have the authority to act or make decisions. This ensures the legitimacy of the decision.

procedural fairness - It is important that those responsible for exercising discretion follow the laws and administrative procedures equitable..

Respect the principle of procedural fairness - Before making a decision, decision makers may need to provide procedural fairness to any that may be adversely affected by the outcome.

Creating and maintaining records- It is essential to create and maintain records of the issues considered in the process, the weights given to the evidence, and the reasons for decisions made.

Information gathering and fact checking- Gather information and establish facts before making decisions. Certain facts may be presented with the application to decision makers. Others may be obtained through inquiries or investigations. This may include requesting additional information Qaom the applicant using authority.

Be reasonable, fair and act fairly- Decision makers should act impartially and avoid becoming involved in matters with an actual or a reasonably perceived conflict of interest..

Inform parties, communicate findings, and explain Decision- Decision makers should inform relevant parties in the decision-making process. The relevant parties must be notified of the outcome. And state the reasons for that decision.

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QUESTION 4b(i)

Q Outline three parties to a bill of exchange

A ➧ The drawer - is the person who draws the bill demanding payment.
➧ The drawee - is the person to whom the bill is drawn. ➧ The payee -is the person to pay the amount due.

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QUESTION 4b(ii)

Q Identify five rules governing presentation of a bill of exchange for payment

A

Solution

➧ Payment on Demand must be filed within a reasonable time of acceptance or negotiation

➧ If the payment due date is in the future, it must be submitted by the payment due date. ➧ It may be presented by the payee or his agent.

➧ It must be presented to the acceptor at the agreed place, i.e. at work or residence.

➧ It must be presented to the recipient. If the recipient is declared bankrupt, it must be presented to the recipient or his bankruptcy trustee.

It must be presented at a reasonable hour on a business day..

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QUESTION 4c

Q Highlight six powers of the arbitrator in a dispute referred to arbitration.

A

Solution

➧ To provide interim reliefs or remedies where necessary.

➧ To administer oaths.

➧ To demand security Qaom either party.

➧ Determine admissibility of evidence.

➧ To examine persons on oath.

➧ Power to proceed ex-parte

➧ To determine whether he has jurisdiction to hear the dispute.

➧ Power to make awards.

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QUESTION 5a(i)

Q Identify six duties of a lessor under a lease agreement.

A

Solution

➧ Duty to put the tenant in possession.

➧ Duty to ensure quiet enjoyment.

➧ Obligation not to undermine grants.

➧ Obligation to repair roofs, walls, gutters, common aisles, and fixtures.

➧ Obligation to suspend or change rent.

➧ Duty to provide fit-for-purpose housing.

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QUESTION 5a(ii)

Q State four defences to copyright infringement.

A

Solution

➧ It's a fair deal if you're using the work for critique or review for personal use.

➧ Public interest, where copyright is used for the public interest.

➧ Copyright does not apply to works. That is, unless it is original.

➧ Written or oral consent was obtained.

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QUESTION 5b(i)

Q Define the term "subrogation"

A Subrogation

subrogation means that one party assumes the legal rights of another party, specifically by substituting one creditor for another. Subrogation can also occur where one party assumes a claim Qaom another party.

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QUESTION 5b(ii)

Q Discuss the concept of the law of large numbers as a principle of insurance.

A

Solution

In insurance ,according to the law of large numbers , the greater the number of policyholders, the more confident the insurance company is that its predictions will be accurate. So they're trying to acquire a lot of those insurers that all contribute to a fund to cover their losses.

Insurance companies use the law of large numbers to estimate the future losses a particular group ofpolicyholders may suffer. For example, using statistics, actuaries look at losses incurred in the past and predict that approximately 1 out of 10 policyholders will make claims in the future. So, if a company issues 10 auto insurance policies, you can expect to pay 1 claims. This is called the loss Qaequency.

The law of large numbers follows the probability theory of statistics. Assume that the variance in the mean of observations decreases as the sample of observations increases. That is, the average acquires predictive power.

Qaom a practical point of view, it is easier to reduce an insurance company's risk exposure by setting an appropriate premium because more policies are issued within a given insurance class. Qaom the insurance company's point of view, it is advantageous to issue 1500 fire insurance rather than 150 on the premise of stable and independent loss distribution.

When everything works perfectly, insurance companies run reliable businesses, consumers pay fair and accurate premiums, and the entire financial system avoids major disruptions. However, the theoretical benefits of the Law of Large Numbers do not always apply in the real world.

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QUESTION 6a(i)

Q Outline four circumstances under which an agent may be held personally liable to third parties.

A Acting on behalf of a hidden principal if the agent so wishes. A principal hidden Qaom the principal will use the principal if desired. A hidden principal is a principal whose existence or personality is not revealed.

If the agent does not exist or do not have a legal capacity.

Signing a document of value in one's own name without indicating on the face of the document that you are signing as an agent.

In the case of a transaction for oneself, or in the case of an agent who intends to act as an agent when actually acting for oneself, or in the case where the principal does not exist

In the case of a liability due to the customs of a particular transaction, such as in the case of Delcredere's agents.

Where he is personally liable, directly or indirectly. When a third party enters into a contract with an agent, it may stipulate that the agent shall be personally liable under the contract, and if the agent agrees, it shall be personally liable for breach of contract.

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QUESTION 6a(ii)

Q Explain four ways in which an agency relationship may terminate.

A Completion of an Objective
If a principal hires an agency to achieve a specific goal, the relationship may end when the goal is achieved.

Mutual Agreement
A party and an agent may terminate their relationship when they feel the relationship is not developing on a mutually beneficial basis.

Client Initiation
If the client feels that the agency is not producing satisfactory results, the client can simply notify the agent of its intention to terminate the agreement between the two principals.

Agent Initiation
Agents can withdraw Qaom their business and terminate their agentship and duties. However, this may violate the contractual relationship between the parties.

Death of Principal or Agent
If either principal dies the relationship automatically ends

Pre-arranged Duration
Depending on the principals agreement, both parties may sign an agreement with an expiration date.

Bankruptcy of the Principal or agent
In case of liquidation or reorganization of either party, the agency relationship is terminated.

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QUESTION 6b(i)

Q Distinguish between a "contract of indemnity" and a "contract of guarantee"

A

Solution

Contract of indemnity - A contract in which one party promises to compensate the other party for losses suffered asa result of the acts of the party or a third party.

Contract of guarantee - A guarantee contract is a contract in which one party promises to compensate the other party for losses in the event of performance or failure to perform the contract.

Basis	Contract of indemnity	Contract of guarantee
Meaning	A contract in which one party promises to compensate the other party for losses suffered as a result of the acts of the party or a third party.	A guarantee contract is a contract in which one party promises to compensate the other party for losses in the event of performance or failure to perform the contract.
Parties	Two -The indemnifier and the indemnified	Three - Creditor, principal debtor and surety
Number of Contracts	One	Three
Debtor's liability	Primary	Secondary
Purpose	To compensate	To pride assurance
Maturity of liability	When the contingency arises.	Liability already exists.

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QUESTION 6b(ii)

Q Outline four remedies for breach of the contract of indemnity.

A

Solution

Compensatory Damages
compensatory damages is based on the actual losses you have sustained as a result of the breach of contract.They fall into two categories: expectation damages and damages.

Expectation damages/General damages - Direct Consequences of Breach of Contract.

Consequential damages - damages that occur as a natural result of a breach.- i.e profits lost as a result of the breach.

Specific Performance
Court orders the breaching party to perform their end of the bargain.

Injunction
This is similar to specific performance that is an order issued by the court only difference is that the court orders the breaching party not to perform specific action.

Rescission
Allow the non-breaching party to terminate the contract as a remedy for breach. Consequantly not completing their end of the bargain.

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QUESTION 7a

Q Outline three principles governing acquisition of the domicile of origin.

A ➧ A lawfully born infant acquires the father's domicile.

➧ An infant born after the father's death acquires the father's domicile on the day of death.

➧ An infant found without parents is considered to have obtained permanent residency in the country in which it was found.

➧ An infant legalized by the marriage of its parents acquires the residence of its father on the date of legalization.

➧ Adopted children acquire the residence of their adoptive parents.

➧ A child adopted by a spouse acquires the husband's permanent domicile.

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QUESTION 7b

Q Describe four rules governing the completion of a hire purchase agreement.

A

Solution

➧ Completion of the final instalment of the Sales Price:

➧ Buyer Becomes the Owner

➧ Risks and rewards transfered to the buyer

➧ Transfer of documents to the buyer

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QUESTION 7c

Q Identify six types of courts in your country.

A

Solution

➧ Supreme Court.

➧ Court of Appeal.

➧ High Court.

➧ Employment and Labour Relations Court.

➧ Magistrate's Court.

➧ Courts Martial.

➧ Kadhi's Court.

➧ Land and Environment Court.

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CPA
Foundation Leval
Introduction to Law and Governance November 2020
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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 November 2020
Suggested Solutions