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Answer scheme Law 3112 final exam Part A 1. F 2. T 3. T 4. F 5. T 6. T 7. F 8. F 9. T 10. F 11. F 12. .F 13. F 14. T 15.

Part B Problems

Question 1 Issue: Whether or not there is a contract between Annie & Andy. Law: Offer to the world at large is a good offer. (Carlill v Carbolic Smoke Ball). Acceptance to the offer must be communicated to the offeror. The offer, if revoked, must be revoked before acceptance (Byrne v Tienhoven). Section 30 Contracts Act 1950 provides that if there are no certainty in the contract the agreement is void. For a void agreement, it is agreement not

enforceable by law. Any person who had received any advantage is bound to restore or make compensation to the person from he received the advantage ( Sec 66 CA 1950).

Application Conclusion

Question 2 Sale of Good Act 1957(SOGA)

Issue: Whether or not there is an implied breached under Section 16(1) of Sale of Gods act 1957.(Merchantable quality and fitness for purpose). Law: Section 16(1) SOGA 1957 provides that goods supplied by seller must be of merchantable quality. Good must be for ordinary purpose. In Henry Kendall & Sons v William Lili Co, the Court held that the goods would be merchantable quality if the buyer had fully known of their condition could buy them without abatement of the price. In Grant v Austalian Knitting Mills(1936) it was held that the long wooden underpants were intended for immediate use and had to be merchantable at time of sale. Because the underpants bought contain a chemical they were not of merchantable quality. The buyer is entitled to return the goods for breach of warranty and sue for damages. Application Conclusion There is an implied breach of S 16 SOGA 1957 in that the goods were not of good merchantable quality and fit for purpose. Montel is entitled to reject the goods and sue for damages for breach of warranty.

Part C Question 1 Students should cover the differences in the followings: Structure/nature Registration Number of members Transferability of shares Constitution Dissolution Capital Security over assets

Question 2 General explanation of Hire Purchase Act 1967 Act only for goods in 1st Schedule does not cover all HP transactions but fall under general law of CA 1950 until hirer has paid the goods and fulfil all other obligations no property in the goods passed to him or her. Hirer a mere bailee with no title passed. Under period of hire title remained with owner. Hirer has possession but not ownership. If sold to 3rd part owner can sue 3rd party. Formation of HP agreement under s 4(1)(a),(b) of HP Act 1967-service of documents and information of owner to prospective hirer

HP agreement must be in written form s 4A HP act 1967 if unclear and not legible HP void.

Signature of parties s4B failure to comply HO void and owner or its agent guilty of an offence.

Contents s 4C -failure to comply HO void and owner or its agent guilty of an offence Deposit s 31(1) Repossession by owner if instalments not paid- s 16 to s 20 HP Act 1967

Part D Question 1 Definition of contract under Islamic Law the obligation which is the result of an offer given by one party and the acceptance given by the other party, in a way where its legal effect is expressed on the thing contracted upon. There are 2 major elements of Aqd/Contract under the Islamic Law: Ijab (Offer) Qabul (Acceptance) Nonetheless, contracting parties and subject matter of contract (mahal al-aqd) are important elements of contract apart from sighah (offer and acceptance Mutual consent is an important basis for the formation of contract. Mere intention (niyyah) by itself is not sufficient to conclude the contract. Therefore the emphasis was more on the objective of manifestation of consent and not on subjective mental fact.

Consent would not be inferred from a verbal offer and a verbal acceptance unless the words indicate a definite and present intention to contract.

Thus, according to Shafiee school, a contract must be concluded wholly or partly in writing. Other jurist on the other hand agreed that consent can be inferred from a written offer and acceptance, from conduct or even by signs (isyarah) in the case where the party is mute. Hambali and Malikis school agreed that a contract can be concluded in whatever is customarily regarded as indicative of mutual consent. Hambalis and Syafiees school opined that each party to the contract has option of repudiating it after it has been concluded but before meeting breaks up (option of meeting khiyar al- majlis) Offer can be revoked so long as acceptance is yet to be made although according to Maliki, there is no right to revoke offer Discussion of Offer, acceptance, revocation under contract law

Islamic( takaful) Principles of Takaful The principles of Takaful are as follows:

Policyholders cooperate among themselves for their common good. Every policyholder pays his subscription to help those that need assistance. Losses are divided and liabilities spread according to the community pooling system. Uncertainty is eliminated in respect of subscription and compensation. It does not derive advantage at the cost of others.

Theoretically, Takaful is perceived as cooperative or mutual insurance, where members contribute a certain sum of money to a common pool. The purpose of this system is not profits but to uphold the principle of "bear ye one another's burden." Commercial insurance is strictly not allowed for Muslims as agreed upon by most contemporary scholars because it contains the following elements: Al-Gharar (Uncertainty)

Al-Maisir (Gambling) Riba(Interest)

There are three (3) models and several variations on how takaful can be implemented. .Mudaharabah Model Wakalah model Combination of both

Conventional insurance Contracts of indemnity-in case of loss, insured are to be indemnified Insurable interest- not all risk are insured. Risk can be insured must be insurable interest. If no insurable interest policy is void except life policies.(s 4092) Insurance Act. Utmost good faith- insurance contract require contracting parties to disclose to each other all information which would influence either partys decision to enter into a contract. Contract of insurance is based on mutual trust and confidence- uberrimae fidei(utmost good faith) Material facts- insured must disclose material facts for insurer. Facts need for insurer to accept risk or set premium. Failure to give material facts may result in non payment of claim by insured at worst contract invalid. Insurer could repudiate liability if terms are deemed either as conditions and warranties are beng breached by insured. Exemption and limitation clauses could also apply