FRICA NAZARENE UNIVERSITY

SEPTEMBER 2020 TRIMESTER EXAMINATIONS

BLA 301: BUSINESS LAW CASE STUDY EXAMINATION PAPER.

MODE: ONLINE                                                LECTURER: MR. WILLIAM OKETCH.    

TIME: 4 HOURS                                           PERIOD: DEC 2020

INSTRUCTIONS- You are required to read the case study scenarios as presented and thereafter
develop solutions and responses as requested. 

1. This exam paper is administered through the Enaz portal. 

2. It contains four (4) Case study Questions. 

3. Question One is Compulsory. 

4.         Candidates to answer any other two (2) questions in addition to question One.

QUESTION ONE (5 Marks)

CASE STUDY: AGENCY

Okwonkwo is a jua-kali artisan and decides to sell 50 of his wheelbarrows. He asks an auctioneer
company – Hustler’s Inc – to value the wheelbarrow, which they do.

Later that day, Okwonkwo sells the sheep to his neighbour Sultan, for this same price. Hustler’s Inc claim
that they are acting on behalf of Okwonkwo, and that he must pay them the commission for the sale.
Okwonkwo argues that he made no agreement to sell the sheep through Hustler’s Inc, and that the sale
was conducted privately between neighbours.

Paul wants to know what his rights are.

QUESTION TWO (10 Marks) 

CASE STUDY: FORMATION OF A CONTRACT.

On June 1st, Corona Supermarkets advertise the opening of their new Mtaani branch in the local
newspaper, as follows: ‘Grand opening – 8 a.m. July 1st Ksh 10,000 cash reward to our first customer’.

Atoti arrives outside the main entrance to the store at 6 a.m. on July 1st and is the first in the queue. She
sees a notice on the entrance door, which states: ‘The management regrets that the offer of Ksh 10,000
cash to the first customer has been withdrawn, but will be replaced by a Ksh 10,000 voucher to spend in
the store today’.

When Atoti enters the store at 8 a.m. she asks for her Ksh 10,000 cash, but the manager says she can
only have the Ksh 10000 voucher. Atoti is very cross, and leaves the store without buying anything.

Atoti claims she is entitled to Kshs 10,000 cash, but Corona Supermarkets contend there is no obligation
to pay her. 
Using your knowledge of contract law outline their relative legal positions.

QUESTION THREE (10 Marks)

CASE STUDY: NEGLIGENCE.

Jack is employed as a builder by Mjengo plc who recently constructed six detached luxury homes in
Ocha Road. Mjengo plc specified the materials to be used and had the plans drawn up by an architect
but left it to Jack to supervise the purchase of the materials. The houses were sold by Mjengo plc.

To keep costs down Jack used sub-standard timbers for the roof. He also failed to ensure the
foundations were as deep as normally considered necessary, telling his wife, ‘Mjengo make a lot of fuss
about these things my houses have never fallen down’.

Eighteen months after completion of the houses, there was a severe gale. A tree blew onto the roof of 4
Ocha Road, causing the timbers to buckle and the roof to collapse.  As a result the water tank in the roof
was dislodged and the house was flooded.  Permanent damage was caused to some unique wall
hangings estimated to be worth Kshs 200,000 each. The owners, Mr. and Mrs. Wadosi, have had to
move into temporary accommodation for 6 months while repairs are carried out. On examination by an
expert assessor, it becomes clear that, had the specified timber been used, the roof would probably not
have collapsed.

Discuss the potential liability of Mjengo plc and Jack.

QUESTION FOUR (10 MARKS) 

CASE STUDY: VICARIOUS AND EMPLOYERS’ LIABILITY.

Ajoji, a paint sprayer at Lollipop Paint Work Ltd is a heavy smoker.  All the paint sprayers were issued
with face masks and Ajoji was given instructions on how to wear the masks by her foreman Ochia.  After
a few days’ trial, Ajoji decided not to wear the mask because it made her feel hot and sticky, and it was a
source of distraction as it constantly slipped under her chin.  Bob told Peter, the manager, that very few
of the sprayers were wearing the masks.  Peter announced that he would make an inspection on Friday
to check that the masks were being worn.  Ajoji acted as a lookout, and as Peter entered the paint shop,
all the employees had their masks in position.  As soon as he left the workers removed their masks. 
Twelve months later, during a routine medical inspection, it was discovered that Ajoji had contracted a
lung disease.

George, another paint sprayer, thought it highly amusing to hang from the rafters and spray the hair of
fellow workers with paint as they went to the store to collect materials.  Peter, the manager, warned
George about this practice on a number of occasions.  One day as Henry was coming out of the store
room he was sprayed by George, and some of the paint ran into Henry’s eyes causing a severe injury. A
number of George’s workmates who were tired of his practical jokes, had reported his conduct to
management on several occasions. No disciplinary action had been taken.

Advise Ajoji and Henry.