Arif Mohamed 4-1 POB

May/June 2012 Paper 2 Sect I QUES 2 - Legal Aspects

(a)

(i)

State FOUR reasons for documenting business transactions.

[4 mks]

Four reasons for documenting business transactions are to keep official

and unofficial records and legal papers used in a business, they are used
to keep official and unofficial records of all transactions in a business,
they make the communication process possible and are utilised for
reference purposes and documents also prevent confusion that would
result if a business person forgets important information.

(ii)

Identify THREE instruments of payment, other than a credit card.

[3

mks]

Three instruments of payment, other than a credit card are cheques,

money and debit cards.

(b)

(i)

Define the term contract.

[2 mks]

A contract may be defined as an agreement, enforceable by law, between

two or more persons to do or not to do an act or acts.

(ii)

Identify the type of contract entered into by Sun and

Sand Resort, and Mr. Jones.

[1 mk.]

The type of contract entered into by Sun and Sand Resort and Mr Jones
is a Simple contract.

(iii)

State FOUR ways in which the contract between Sun and

Sand Resort, and Mr. Jones may be terminated.

[4 mks]

Four ways in which the contract between Sun and Sand Resort and Mr
Jones may be terminated are Acceptance of Contract, if the scuba
instructions does not have the agreed time on it, if Mr Jones does a
counter offer and changes his mind and buys something else and if Mr
Jones does not pay for the scuba instructions the contract will also be
terminated.

(c)

With reference to the relationship between Mr. Jones, and Sun

and Sand Resort outlined above, explain the following legal concepts:
(i)

Offer and acceptance

[4 mks]

(ii)

Consideration

[2 mks]

(i)

Offer and acceptance is when Sun and Sand Resort offers the
scuba instructions at an agreed price and Mr Jones accepts
this offer.

(ii)

Consideration is an agreement to abide by the terms of an

acceptance. Mr Jones got the scuba instructions and Sun and
Sand Resort confirmed receipt of payment by email.

Total 20 marks