GULU UNIVERSITY

FACULTY OF BUSINESS AND DEVELOPMENT

BACHELOR OF BUSINESS ADMINISTRATION

YEAR I SEMESTER I 2019/2020 EXAMINATIONS

PAPER: BUSINESS LAW

CODE: BBA 1102

DATE: 12TH DECEMBER, 2019

TIME: 9:00 PM-12:00 NOON

INSTRUCTION:
  This is a CLOSED BOOK, CLOSED MOUTH but OPEN MIND Examination.
 Answer FOUR Questions INCLUDING QUESTION ONE.
 This examination shall be governed by Gulu University Examination Regulations.
 Students are reminded to make their answers legible, clear and required to use relevant
authorities/cases where applicable.

SECTION A (COMPLSORY)
QUESTION ONE
Consider whether a valid contract has been formed in the following circumstances.
a) Dankee sees the following advertisement in Rupiny newspaper: ‘For Sale:
Flowers for sale-Rose Bushes only UGX 100,000/= for five. Hurry stock lasts!
There is limited supplies. Send cheque to Beautiful Gardens Ltd., P.O Box 123,
Gulu’. Dankee sends a cheque but is told the Rose bushes are sold out.
b) Dave writes to Peter, ‘You mentioned that you would like to buy my yellow sports
car. You can have it for UGX 25,000,000/=. If you want it let me know by the end
of the week.’ The following day Dave sells his car to Jane. Peter learns of the
sale and immediately tells Dave he accepts his offer.
c) Mary sent out a circular to all interested businesses in her area offering for sale
her fleet of company cars for which tenders were invited. Jane’s tender turned
out to be the highest but Mary has refused to sell her the cars.
d) Queen writes to Peterson offering to buy his house for UGX 100Million and says
that if she has not heard from him within a week she will assume that he has
accepted. A week elapses and Queen has heard nothing from Peterson.
e) On Monday Teresa sends an e-mail to Ursula offering to sell her diamond
necklace at a knock down price of £10,000 for a quick sale. Ursula sends a letter
back the same day accepting the offer. On Tuesday, before Ursula’s letter
arrives, Teresa agrees to sell the necklace to another person.
f) James offers to sell his laptop to David for UGX750,000/=. David offers to pay
UGX500,000/=. James refuses to accept 500,000/=. David then agrees to pay
750,000/=.
g) Paul sees a lawn mower in a shop window with a price tag of UGX1,000,000/=.
He says that he will buy the lawn mower but the shop assistant says that the
price tag should read UGX 1,200,000/= and refuses to sell it to him for
1,000,000/=.
h) Creston Co. Ltd is a manufacturer of vitamin pills. In an advertisement, the
company states that the regular use of its ‘Vito’ pills will increase a user’s energy
levels in two weeks. Bestie bought the pills and took it every day for two weeks
but notices no improvement in his energy.
SECTION B
QUESTION TWO
ABC Ltd is one of the suppliers of computers and computers accessories to Gulu
University. On the 2nd of September, 2019, Gulu University contacted ABC Ltd to supply
200 desktop computers for the university at a total cost of 200M. In the letter, the
university indicated that the computers to be supplied must be HP brand, 160GB HDD,
4GB RAM, Windows 10 and all must be black in colour. The University stated in the
letter that all the computers must be delivered to the University Computer Laboratory by
the 28th September, 2019. That the 200M would be paid to ABC Ltd upon delivery of all
the computers as required.
On the 20th September, 2019, the Managing Director of ABC Ltd delivered to the
university 150 Computers and said the remaining 50 computers would be delivered
later. When checked by the staff of the ICT Lab, it was found that of the 150 Computers
delivered, 100 were Dell branded, 50 were HP but were grey and were of windows 7.
The Staff rejected the computers and said they should be taken back and the right ones
delivered. The MD just left the computers in the ICT Lab and went away. On 2 nd
October, 2019, he returned with the balance of 50computers. This time he brought HP
Laptops which he said were of a higher quality and better than the desktops. The staff
at the ICT Lab rejected the computers. Still the MD, left them there and went to claim for
his money. The university has however, refused to pay for the computers and Mr.
Kentee, the MD of ABC ltd is furious and has threatened to go to court to have the
matter resolved.
You are one of the employees of ABC Ltd and the MD has narrated to you the events
as they occurred; Advise the MD on all the possible legal issues regarding the above
supply. (25 Marks)

QUESTION THREE
a) Define law, its characteristics and explain the importance of law to society.
(15 Marks)
b) Discuss any FIVE sources of business law in Uganda. (10 Marks)
QUESTION FOUR
Write short notes on the following;
a) Nemo dat quod non habet (Nemo dat rule) (5 Marks)
b) Alternative dispute resolution mechanisms (5 Marks)
c) Distinction between a puff, a representation, and a term of contract. (5 Marks)
d) Functions of business law (5 Marks)
e) Past consideration. (5 Marks)

QUESTION FIVE
A contract must be pure from any factors that will interfere with its enforcement. In light
of the above statement, discuss the factors that are likely to vitiate a contract. (25
Marks)

QUESTION SIX
a) Explain the different methods by which an agency relationship may be
established.
(15
Marks)
b) Discuss the rights and duties of an agent towards the principal. (10
Marks)

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