| SALE OF GOODS,AGENCY AND NEGOTIABLE INSTRUMENTS
|Course: Bachelor of Laws (LLB)
|Institution/Board: Kenyatta University
|Exam Year: 2011
|Answer question ONE and any other two questions.
1.a)With reference to decided cases,briefly examine the concept of an agent’s “actual”, “presumed” and “apparent” authority.(10 marks)
b)Malaika employs Angel as a worker to sell her goods which were lying in a warehouse in Mombasa.Angel sold the goods to Mama Safi who paid the price by means of a cheque and absconded with the money.Mama Safi had dealt with Malaika on two previous occasions on which she had allowed Angel to receive payment by cheque.However,before the transaction in question had taken place,Malaika had expressly forbidden Angel from receiving payment on her behalf and had put a notice to that effect in a local newspaper, “The People Star”.Mama Safi had not seen the notice as she only reads the “Times Nation” newspaper.Malaika has brought an action against Mama Safi for the price of goods.
Advise the parties as to their legal rights. (20 marks)
2.Felix employs Max Ltd to sell general produce on his behalf.Max Ltd sells four large consignments of potatoes to W,X,Y and Z respectively.Before the consignments are delivered,Max Ltd finds out that the market price of potatoes has risen considerably and it therefore refuses to honour the four contracts.
a.)Under the sale to W,Max Ltd contracts to sell “for the account of Max Ltd” Kshs 4,000/= per ton when it was authorized to sell at the price of Kshs 5,500/= per ton.
b.)Under the sale to X,Max Ltd contacted to sell “for the account of my principal”at the price of Kshs 3,000/= per ton when it was only authorized to sell at Kshs 4,500/= per ton. Y later discovers Felix ‘s existence.
Advise parties in (a) and (b) above as to their respective rights. (20 marks)
3. “In the development of our law,two principles have striven for mastery.The first is for protection of property;no one can give a better title than he himself possesses.The second is the protection of commercial transactions;the person who takes in good faith and for value without notice should get a better title.The first principle has held sway for a long time,but it has been modified by the Common Law itself and by statute so as to meet the needs of our time.”Per Denning L.J. in Bishops Gate Motor Finance v Transport Brakes Ltd (1949) 1 KB 332.
Discuss. (20 marks)
4.a)Discuss the passing of property in auction sales. (10 marks)
b)Avril,your long friend,passes by your house one afternoon and informs you that she has found a new way of making quick money.On enquiring,she informs you that an organization in Nairobi is willing to buy one of her kidneys for a handsome amount of money.She further informs you that she has made all the necessary arrangements with the coming week.
From a sale of goods perspective,what advice would you give Avril? (10 marks)
5.Discuss the statutory duties of a holder of a Bill of Exchange. (20 marks)