business law student workbook Chapter 4 AGENCY MULTIPLE CHOICE QUESTIONS. 19. "Secret profit stems from the use by the agent of the principal's property, which usage results in unauthorized and undisclosed gain accruing to the agent". From the above statement, identify the provision that stipulates the right of the principal when the profit is no longer a secret. A. Section 166 Contracts Act 1950 B. Section 174 Contracts Act 1950 C. Section 164 Contracts Act 1950 D. Section 169 Contracts Act 1950 20. In various businesses many principals sell goods via agents and this is common in the export trade. Identify the features of an agency. i. Service ii. Representation iii. Power over another principal. iv. Power to affect the legal position of the principal. A. i and ii only B. i and iv only C. i, ii and iii only D. i, ii and iv only 51
business law student workbook Chapter 4 Question 1 (a) Explain THREE (3) important duties of a principal to his agent under the Contracts Act 1950. Support your answer with relevant provisions. (b) Illustrate THREE (3) important conditions for the creation of an agency by way of ratification. Support your answer with relevant cases. STRUCTURED / ESSAY QUESTIONS. AGENCY Question 2 Section 154 to Section 163 of the Contracts Act 1950 stipulates the termination of an agency. Discuss THREE (3) ways an agency can be terminated. Question 3 Hasya was instructed by her principal, Bella to find a semi detached house within the vicinity area of Bangi for the price of not more than RM700,000. Hasya found a single storey bungalow for the price of RM850,000 in Bangi Heights. Without informing Bella, Hasya had made a deal with the seller, Mr. Ritz by paying a deposit of RM5,000 under her name although it was intended for Bella. Based on the above situation, you are required to: (a) Identify the issue that arises in the situation. (b) Briefly discuss the relevant provisions under Contracts Act 1950. (c) Identify ONE(1) relevant case to support your answer. (d) Interpret your conclusion of the above issue. 52
business law student workbook Chapter 4 STRUCTURED / ESSAY QUESTIONS. AGENCY Question 4 According to Section 138 of Contracts Act 1950, no consideration is necessary for the creation of an agency. Elaborate FIVE (5) ways to create an agency. Question 5 An agency is a relationship that exists between an agent and principal. Determine the definition of a principal and an agent. Question 6 Rajesh, a farmer in Cameron Highlands, hired Ah Cheng, who ran a logistic business to deliver some vegetables to Kulim, Kedah. When the lorry arrived at Simpang Pulai, there were landslides and also floods which caused the road to close and become inaccessible by any transport. Ah Cheng worries that the weather might worsen, so he decided to sell the vegetables at Kg Semangkuk night market before the vegetables rotten. Rajesh is upset with the decision made by Ah Cheng and wants to sue for his losses. Based on the above situation, answer the following : (a) Interpret the issue relevant to the situation. (b) Briefly discuss the relevant provisions. (c) Identify ONE(1) relevant case to support your answer. (d) Adapt the conclusion to the situation given. 53
business law student workbook Chapter 4 STRUCTURED / ESSAY QUESTIONS. AGENCY Question 7 Discuss FIVE (5) rights and duties of an agent towards his principal with reference to the relevant provisions in Contracts Act 1950 and law cases. Question 8 It is understood that when both parties desire and agree that the agency shall be terminated, the agency is terminated. Analyze FOUR (4) methods for termination of an agency relationship. Question 9 On 30 October 2020, Joe wrote to Alya that Adam was his agent and that Adam, would be acting on his behalf in purchasing some goods on 1 January 2021 at RM125,000. However, on 12 December 2020, Alya was informed by Millie that her husband Joe passed away on 9 December 2020. On 28 December 2020, Mr.Keith offers Alya RM230,000 for the same goods. Can Alya sell to Mr.Keith or is Alya bound to sell to Joe? Advise what are the legal implications that may arise from the above situation. Question 10 An agent’s acts are binding on the principal if they are done within the agent’s authority. Explain the differences between an actual authority and apparent authority. 54
business law student workbook SALE OF GOODS Chapter5:
business law student workbook Chapter 5 1. Based on "Nemo dat quod non habet" rule, which of the following is NOT an exemption to the rule? A. Sales by mercantile agent B. Sales by joint owner C. Direct sales D. Estoppel SALE OF GOODS MULTIPLE CHOICE QUESTIONS. 2. "Goods", under the Sale of Goods Act 1957 refers to A. Any kind of moveable property other than actionable claim and money. B. Things which have been identified and ascertain in a contract. C. Any tangible and intangible items. D. Specific or unascertained items. 3. Based on the following situations, identify the statement which best describe the contract of sales. A. Farid traded his newly bought shoes with Aidil's travel back pack. B. Eddy promise to give his daughter, Elaine a Mercedes Benz for her 18th birthday. C. Rubesh agreed to sell his laptop to Chun Hong for the price of RM3,300. D. Mrs.Thompson bought a single storey terrace at Rawang from Ms. Najiha. 4. Which of the following is TRUE about existing goods? A. Existing goods do not exist at the time the contract is made. B. Existing goods exist at the time the contract is made. C. Existing goods are not part of the specific goods. D. Existing goods are future goods. 56
business law student workbook Chapter 5 5. "Andrew Mark is a coin collector. He promises to sell his rare coins to Shafiqah. However, he then decided to cancel his offer." Based on the above situation, identify the appropriate remedy for Shafiqah if she decide to decline monetary damages. A. Estoppel B. Injunction C. Quantum Meruit D. Specific Performance SALE OF GOODS MULTIPLE CHOICE QUESTIONS. 6. Identify the example of "goods" in a contract for Sale of Goods. A. Land. B. House. C. Computer. D. Building. 7. Determine the statement that describes the difference between sale and an agreement to sell. A. The quantities of the goods to be supplied and the parties involve in the contract. B. The time when property in the goods is transferred to the buyer. C. The quantities of immovable goods to be supplied. D. The price of the goods and the goods itself. 8. Highlight the FALSE statement about Sale of Goods Act 1957. A. In situation where goods are sold by sample, the goods must correspond with the sample. B. The seller must have good title when selling goods. C. The goods must be of 'reasonable quality'. D. The goods must match with description. 57
business law student workbook Chapter 5 9. Based on Section 12(3) of the Sale of Goods Act 1957, identify what is known as stipulation collateral to the main purpose of the contract, the breach of which gives rise to claim for damages but not a right to reject the goods and treat the contract as repudiated. A. An innominate term. B. An implied term. C. Condition. D. Warranty. SALE OF GOODS MULTIPLE CHOICE QUESTIONS. 10. Describe the purpose of the maxim "Nemo dat quod non habet". A. The owner is stopped from denying the seller's authority. B. To protect the right of ownership so that the right of the original owner is retained. C. The buyer gets a good title whereas the original owner loses his right. D. The original buyer can sue the seller for remedy. 12. There are several types of "goods" under Sale of Goods Act 1957. Identify which of the following is TRUE about future goods. A. Future goods exist when the contract is made. B. Future goods are existing goods. C. Future goods are part of specific goods. D. Future goods do not exist when the contract is made.. 11. The following are the implied conditions stipulated under Sale of Goods Act 1957, EXCEPT : A. Implied condition as to title. B. Buyer shall have quiet possession of the goods. C. Goods must correspond with the description. D. Goods must be of merchantable quality. 58
business law student workbook Chapter 5 13. Exemptions on the transfer of ownership of goods based on "Nemo dat quod non habet" method are as follows, EXCEPT : A. Sale under a voidable title. B. Sale by a seller in possession after sale. C. Sale by way of door-to-door. D. Sale by one of joint owners. SALE OF GOODS MULTIPLE CHOICE QUESTIONS. 14. Determine which of the following is a remedy available to buyers under Sale of Goods Act 1957. A. Lien. B. Resale of the goods. C. Mutual benefits. D. Specific performance. 15. Identify which of the following is the implied warranty stipulated under Sale of Goods Act 1957. A. Implied condition as to title. B. Goods must be reasonably fit for purpose. C. Goods are unencumbered. D. Goods must be of merchantable quality. 16. A contract of sale is basically an offer to buy or sell goods for a price. Price may be fixed in the following manner, EXCEPT : A. It may be fixed by the seller. B. It may be fixed by the contract. C. It may be left to be fixed in a manner agreed in the contract. D. It may be determined b the course of dealing between the parties. 59
business law student workbook Chapter 5 SALE OF GOODS MULTIPLE CHOICE QUESTIONS. 17. 'Merchantable quality' has been taken to mean that they must be reasonable for the purpose described. Factors to be taken into account to determine 'merchantability' include : i. Price. ii. The description applied to the goods. iii. Whether the purpose for the goods had been made known to the seller. iv. Buyer has sensitive health issues. A. i and ii only B. i and iv only C. i, ii and iii only D. i, ii and iv only 18. In a contract for the sale of goods by sample, the implied conditions are as follows, EXCEPT : A. The bulk shall correspond with the sample in quality. B. The bulk shall be delivered the will of the seller. C. The buyer shall have a reasonable opportunity of comparing the bulk with the sample. D. If the differences are only of a minor nature and the quality of the goods is still the same, this condition will not be breached. 60
business law student workbook Chapter 5 SALE OF GOODS MULTIPLE CHOICE QUESTIONS. 19. Where goods are bought by the description from a seller who deals in goods of that description, there is an implied condition that the goods shall be of merchantable quality, provided that if the buyer has examined the goods, there shall be no implied condition as regards to defects which such examination ought to reveal. Identify the case that stipulates the above principle. A. David Jones Ltd v Willis [1934] 52 CLR 110 B. Rowland v Divall [1923] 2 KB 500 C. Public Bank Bhd v Ng Kang Siang & Anor [2011] MLJU 988 D. Newtons of Wembley Ltd v Williams [1965] 1 QB 560 20. Section 54(2) of the Sale of Goods Act 1957 provides that the seller has authority to resell in the following situations, EXCEPT : A. The goods are of perishable nature. B. Seller gives notice to the buyer of his intention to resell and the buyer does not within a reasonable time pay the price. C. The seller expressly reserves a right of resale in case the buyer should make default and the buyer makes such default. D. The seller decides to resell the goods for his own benefit. 61
business law student workbook Chapter 5 Question 1 (a) Elaborate the term Caveat Emptor (b) According to the general rule, when a person receives goods, he or she gets only the same rights to the goods as the person from whom he or she receives them. This rule is expressed in the Latin maxim Nemo Dat Quod Non Habet as set out in Sale of Goods Act 1957. Discuss FOUR (4) exceptions to this general rule. STRUCTURED / ESSAY QUESTIONS. SALE OF GOODS Question 2 Joana ordered 100 watches from a popular watch manufacturer, Rowling Time Sdn Bhd. The transaction for contract of sale has been done through sample. When Joana received the watches, she found out that all the watches were the same as the sample. After further inspection, Joana was satisfied with the condition of the watches. However, she then found out that there were a few damages that cannot be seen with a normal inspection that she has done. Based on the above situation, you are required to: (a) Interpret the issue that arises in the situation. (b) Illustrate the relevant provisions under Sale of Goods Act 1957. (c) Apply ONE(1) relevant case to support your answer. (d) Interpret your conclusion of the above issue. 62
business law student workbook Chapter 5 STRUCTURED / ESSAY QUESTIONS. SALE OF GOODS Question 3 Mr. Kuek buys a bag of charcoal from Mr.DoYourself Sdn Bhd for his family to use to light a fireplace in a chalet when they are on their holiday at Kundasang. Unknown to Mr. Kuek, unfortunately, the bag of charcoal contained an explosive device that exploded when he lit the fire. Mr. Kuek was badly injured due to the incident. Based on the above situation, you are required to: (a) Identify the issue that arises in the situation. (b) Briefly discuss the relevant provisions under Sale of Goods Act 1957. (c) Identify ONE(1) relevant case to support your answer. (d) Interpret your conclusion of the above issue. Question 4 Kelly and Kate bought a blouse from Beeyoutee Apparel Sdn Bhd to wear for Kelly's birthday celebration. When they were at the boutique, the salesperson asked if either of them have any skin sensitivity issues towards specific clothing materials. Both of them denied the matter. Unfortunately, Kate has skin rashes when she wore the blouse on the day of the event. Her skin becomes red and itchy. Kate had to seek medical treatment. Based on the above situation, you are required to: (a) Highlight the issue that arises in the situation. (b) Relate the relevant provisions under Sale of Goods Act 1957. (c) Explain ONE(1) relevant case to support your answer. (d) Adapt the conclusion to the situation. 63
business law student workbook Chapter 5 STRUCTURED / ESSAY QUESTIONS. SALE OF GOODS Question 5 Describe the implied terms for the contract of sale as below: (a) Section 14 of the Sale of Goods Act 1957 (b) Section 15 of the Sale of Goods Act 1957 Question 6 Where it is possible to discover, by inspection, the quality and condition of the goods and their fitness for a particular purpose, the buyer will generally lose any legal rights that may have existed against the seller if the goods are not satisfactory. Based on the above statement, discuss FIVE (5) implied terms pertaining to Sale of goods contract. Question 7 Briefly explain the following legal principles of Sale of Goods by referring to the Sale of Goods Act 1957 and provide appropriate examples. (a) Conditions (b) Warranty (c) Quite possession Question 8 (a) Explain FOUR (4) classification of 'goods' in the context of Sale of goods. (b) Discuss the remedies available for breach of contract in Sale of Goods. 64
business law student workbook Chapter 5 STRUCTURED / ESSAY QUESTIONS. SALE OF GOODS Question 9 Riana is interested to buy a pair of shoes at Lajjadaa.com as per description below : Type : Ladies shoes Material : Leather and rubber Size : 35 - 43 Color : Black Price : RM130.00 Delivery : FREE Shipping Upon receiving the item, Riana found that the pair of shoes does not match her order. Based on the situation above, you are required to : (a) Interpret the issue that arises in the situation. (b) Illustrate the relevant provisions under Sale of Goods Act 1957. (c) Examine ONE(1) relevant case to support your answer. (d) Interpret your conclusion of the above issue. Question 10 (a) Define the term 'price' under the Sale of Goods Act 1957. (b) Analyse the condition in a Sale of Goods by description. Support your answer with suitable provisions and cases. 65
business law student workbook REFERENCES Appendix :
business law student workbook APPENDICES 67 REFERENCE BOOK Lee, M. P., & Detta, I. J. (2017). Commercial Law (3rd ed.). Oxford Fajar. Lee, M. P., & Detta, I. J. (2014). Business Law (2nd ed.). Oxford University Press. Pheng, L. M., & Detta, I. J. (2011). Business Law. Oxford Fajar. OTHERS Previous years examination papers. Previous years assessment questions STATUTE Contracts Act 1950 Partnership Act 1961 Sale of Goods Act 1957
BUSINESS LAW S TUDENT WORKBOOK MAZRIANA ASHARI POLITEKNIK METrO KUALA LUMPUR, 2-14 JALAN SETIAWANGSA 10, TAMAN SETIAWANGSA, 54200 KUALA LUMPUR 03-42518000 | www.pmkl.mypolycc.edu.my e ISBN 978 - 967 - 2623 - 95 - 3