CAF-04 Business Law Date: 22nd Feb 2022

Instructor: SIR ATIF ABIDI Total Marks: 100 Marks

Final Mock
INSTRUCTIONS
 Each new question shall be started from a new page. Otherwise Question will not be
checked.
 Using any pen other than black shall result in cancellation of paper.
 Writing page number on top of the page is compulsory for the facilitation of marking.
Section A – Multiple Choice Questions

Q # 1:
Select the most appropriate answer from the options available for each of the following Multiple-Choice Questions
(MCQs). Each MCQ carries ONE (01) mark.

1. Ali was abroad for the last 5 years. He come back to his hometown, recently. Aqib, his buddy and good
friend of Ali. Aqib invited him on a tea for gossip and meet-up after a long time. On the invited day, Ali
didn’t come due to a family function. In this case
a) Aqib has no remedy against Ali
b) Aqib has to wait for another invitation from Ali
c) Aqib has the right to sue Ali for not honoring his words
d) Ali has to invite Ali again, to perform the promise

2. Ayyan wants to buy a specific laptop (Delta 598) for his study. The Market price of that laptop he wanted
to buy is Rs. 35,000 at every shop. Due to a shortage of funds, he can’t pay this amount at a time and also
can’t wait more due to final exams. He find-out a friend in his hostel whose brother has a shop at Hafeez
center offering same laptop at same non negotiable price. He requested for installment in payment. On a
Special request, 5 installments would be granted to him. In this case, installments would be treated as:
a) Contingent contract
b) According to norms of the business
c) Counter offer, adding conditions while accepting
d) It is an invitation to offer

3. Mr. Mughal is a reputable teacher in the CSS field and also teaches in the different institutes of Lahore.
The government of Punjab wants to conduct a seminar in Pearl Continental Hall and also wants to invite
Mr. Mughal to this event. On a Special request of a family member, Mr. Mughal accept this offer and
agreed on a fee of Rs. 10,000 for an hour. This amount was transferred to him after 2 months of this
event. it is a
a) Present consideration
b) Past consideration
c) Future consideration
d) Not a consideration at all

4. Ala-Din is a landlord and also a major investor in Foreign companies. He has purchased 5 private
companies in Pakistan due to economic conditions in Pakistan and lack of law & order. Ala-din wants to
dispose of all investments in Pakistan and shift himself abroad. Ala-Din intending to deceive Baba, falsely
represents that the total earning from 5 factories is Rs.10 Billion, annually and induces Baba to buy these
factories.
a) The contract is voidable on the part of Ala-Din
b) The contract is voidable on the part of Baba
c) The contract is voidable on both Ala-Din and Baba part
d) None of above

5. A B and C agree to share the money obtained by fraud. This agreement is

a) Valid
b) Wagering
c) Void
d) Voidable

6. Rizwan was challenged for the next t20 for bowlding him within the first 10 balls, by Shamsi. Rizwan
challenged him to hit 2 six in an over. These challenges are valid because they are:
a) games of skill
b) just games
c) games of luck
d) all of the above

7. A, a businessman leaves his goods at B’s place by mistake. B treats the same as his own and uses it. B is
bound to compensate A for it, under the principle of
a) Specific Performance
b) Remission
c) Special damages
d) Quasi-contract

8. Which of the following is correct?

a) Novation means making a new contract in place of an old contract
b) Alteration means making a new contract in place of an existing one
c) Performance of the contract is not a method of discharge of contract
d) All of the above

9. H’s mill stopped due to the breakdown of a shaft, which was delivered to B, a common carrier to be taken
to the manufacturer for repairs. H did not communicate to B, that delay in delivery would cause a loss of
profits. For some reason, the delivery was delayed by B beyond a reasonable time. Here
a) H can rescind the contract
b) H cannot claim loss of profits from B
c) H can claim loss of profits from B
d) H can claim loss of profits from the manufacturer

10. Out of the following, who can appoint an Agent?

a) Minor
b) Person of sound mind
c) Person of unsound mind
d) All of these

11. The partnership agreement must be…………

a) A valid agreement
b) For a lawful object
c) Between the persons competent to contract
d) All of above
 12. Endorsement means signing on ____________ for the purpose of negotiating such negotiable instrument.
a) The face of the negotiable instrument
b) The back of the negotiable instrument
c) A slip of paper annexed to the negotiable instrument
d) Any of these

13. A negotiable instrument shall be payable to ____________ is an order instrument

a) A particular person
b) A particular person or his order
c) The order of a particular person
d) All of these

14. The constitute of the Islamic Republic of Pakistan was approved by Parliament on…………
a) 14th March 1974
b) 9th May 1984
c) 10th April 1973
d) 2nd July 1994

15. Go Petroleum limited and Vital petroleum limited made a contract in which both parties decided that they
will not sell the petrol per Liter at Rs 150. At that time, only these two companies have petrol in Pakistan
due to the strike of Arabian countries.
This contract is not approved by the Competition Commission of Pakistan CCP. Decided the status of this
agreement.
a) Void
b) Valid
c) Voidable
d) Legal

Section B – Sujective Type Questions

Q # 2:

a) Danish owes a sum of Rs. 2.3 million to Mr.Zillay against three different agreements. In March 2022,
Danish sent a cheque of Rs. 2,000,000. The detail of loans taken from Mr.Zillay is as follows:
Year Amount Rupees
2018 500,000
2019 700,000
2020 250,000
2021 850,000

 Rs. 700,000 is the amount of loan which was taken in August 2019 and guaranteed by MR. Khayal. Mr.
Khayal instructed Mr.Zillay to adjust the full amount against the loan amount.
 Rs.500, 000 has become the time-barred debt and Mr. Zillay wants to adjust this amount.
 Rs.850, 000 is a recent loan, which is taken with a mortgage of a commercial shop. The market worth of
Shop is 950,000.

Requirement:
Under the Provision of Contract Act 1872, guide Mr. Zillay about apportionment of payment concerning
the above issues. (06 Marks)
 b) Shakaar limited (SL) took a loan from MCB of Rs. 50 million for the construction of a building. The total
projected cost for this building is Rs. 20 billion and the rest of the investment is taken from the public, by
issuing the prospectus of SL.

This land was purchased from one of the director of SL and director assured this land can be contructed
till 10th floors. After investigations, it was indetified that building can only be constructed upto 3 floors.

Under the provision of Contract Act 1872, evaluate the statement of director and status of contract
between director and SL (04 Marks)

Q # 3:

a)
- If President returns a bill passed by both the houses for reconsideration, how such a bill can become
an Act/Law? Discuss briefly.
- Briefly differentiate between ‘Statute’ and an ‘Ordinance’. (04 Marks)

b) Quetta gladiators made a contract with Shahid Afridi for PSL 7. As agreed, Shahid Afridi will be
representing Quetta gladiators as an opener. After Match 5, shahid Afridi caused serious injury and was
unable to play the remaining matches of this tournament.

Under the provision of contract Act 1872, can Quetta gladiators demand performance from Shahid Afridi?
(03 Marks)

Q # 4:

Sharaqpur and Ahmadpur Sharqia lent Rs 2.0 million to Muridkey, Lahore, and Faisalabad jointly. On due date
Lahore became insolvent. As per the requirements of the Contract Act 1872 explain:
(i) Without informing Sharaqpur, whether Muridkey can be compelled to pay the full amount to
Ahmadpur Sharqia
(ii) What rights are available to Muridkey, if he repays the full amount. (04 Marks)

Q # 5:

i. Aine, Bazaar, and Charaagh were partners in a firm. Aine died in a road accident. However, Bazaar and
Charaagh continued the business without settling the accounts of the deceased partner. Aine’s share on
the date of his death amounted to Rs. 25 million. After two years, the accounts were settled and the
amount of Rs. 25 million was paid to the legal heirs (Minors). The legal heirs have now filed a suit claiming
Aine’s share of profit for the two years amounting to Rs. 1,800,000. Bazaar and Charaagh deny such share
as Aine had ceased to be a partner, from the date of her death.

Give your views on the above situation and also calculate the share of return which has to be paid for 2
years, based on the Partnership Act, 1932. (03 Marks)

ii. Briefly explain the rules regarding performance of reciprocal promise. (07 Marks)

iii. Rashid and Khan agreed to deliver Antibiotic medicine during the next 5 months. As per the term of the
contract, performance will be made on-demand, at any time when the medicine would be required and
total payment is made in advance.
After 3 days of the contract, Local authorities declare all anti-biotic medicines as toxic. No delivery takes
place during these 3 days.

Under the provision of contract Act 1872, explain the treatment of advance payment and legal status of
contract. (03 Marks)

iv. What is attempted Performance. (02 Marks)

Q # 6:

a) State with brief reasons whether the following are promissory notes or not?
(i) “I am bound to pay Rs.1,000 which I have taken from you.”
(ii) “I promise to pay B Rs.1,000 when he delivers the goods.”
(iii) “I promise to pay B Rs.1,000 after deducting therefrom any money which he may owe me.”
(iv) “I promise to pay B 100 shares and 500 debentures of ABC Ltd.” (04 Marks)

b) Discuss with reasons, whether the following persons can be called as a ‘holder in due course’ under the
Negotiable Instruments Act, 1881:
(i) X obtains a cheque drawn by Y by way of a gift.
(ii) A the payee of the cheque, who is prohibited by a court order from receiving the amount of the
cheque.
(iii) M, who finds a cheque payable to the bearer, on the road and retains it.
(iv) B the agent of C is entrusted with an instrument without endorsement by C, who is the payee.
(v) B, who steals a blank cheque of A and forges A’s signature. (05 Marks)

Q # 7:

a) Mr. Asim is an engineer at ABC Telecom Limited. His monthly salary is Rs. 50,000 which is directly credited
into his account with Good Bank limited. On 4th December 2020, a deposit of Rs 1,5000,000 is made via
wire transfer from an offshore account of UAE relationship manager Good Bank limited. Mr. Khalid
noticed the huge deposit and requested justification from Mr. Aslam, who ignored the same. Mr.Khalid
did not report to anyone in the bank considering the huge amount and relationship with MR.Aslam.

After a week on 11th December 2020, Good Bank limited received different cheques for clearing issued by
Mr.Aslam of smaller amounts to various individuals and business owners totaling Rs. 15,000,000. Being
suspicious he injured the same from cheques Good Bank would have no amount in his account that could
be questioned.

You are the AML and Compliance officer of the Bank and have been intimated By MR.Khalid of the above
situation for further advice and action.

Requirement:
 Under the Provision of Anti-money Laundering Act 2010, how we will predict the offense of
Money laundering.
 Punishment for Good Bank limited and Mr.Asim if anyone will involve in money laundering Act
2010 (06 Marks)
b) Enlist the power of Arbitrators as expounded in Arbitration Act 1940 (03 Marks)

Q # 8:

a) Aine entered into a contract with Parizaad, the manager of a radio program, to conduct a show, twice
a week, during the next three months. Aine did not appear for the 6th show. She conducted the next
show but soon thereafter Parizaad rescinded the contract and informed her that her services were no
longer required as she failed to conduct the sixth show. Narrate the rights of Parizaad and Aine in the
above situation. (03 Marks)

b) State whether the following are contingent contracts or otherwise, giving brief reasons for your answer.
Please also explain that in the case of contingent contract when it will be enforceable by law.
(i) A agrees to pay B Rs. 50,000 if he proves that the airplane will arrive in UAE in 2 hours.
(ii) A agrees to manufacture a jet for B for Rs. 10,000,0000 on the condition that the payment will
be made on completion of Jet.
(iii) A agrees to sell his house to B for Rs. 1,000,000 if he will receive a lifetime visa for the USA as he
has applied.
 (iv) A agrees to pay Rs. 2,000 to B, on 1st Ramzan. (04 Marks)

c) Define misrepresentation. (04 Marks)

Q # 9:

a) Gum Limited and Pen limited are manufacturing brands of Piano Ballpen. Both are supplying this product
in overall Pakistan. Both companies agreed, to not supply this product in the region of DG khan due to
illiteracy and a lower supply chain.

Under the Competition Act 2010, elaborate the validity of the agreement. (03 Marks)

b)
 Define the role of the Competition Commission of Pakistan (CCP) (02 Marks)
 Enlist the rights of individuals according to Personal Data Protection Bill, 2020(03 Marks)
 What is Designation of Payment System? (02 Marks)

Q # 10:

a) Jazz, Zong, Telenor, and Warid are partners and involve in the business of manufacturing teacups. Jazz is a
social person and is also responsible for online orders for the firm. He received an order, to deliver 750
pieces of the tea cup, in Malaysia.

For this transaction, jazz opens a separate bank account for making Latter of Credit (Mandatory for the
foreign transaction). Jazz didn’t consult with other partners and also didn’t disclose this transaction in the
books of a firm.

Under the provision of Partnership Act 1932, comment on the above situation. (04 marks)

b) Zakoori Brothers, a firm, is involved in the business of construction. ZB received an order to construct model
houses in the Punjab Housing Society, Lahore. Six brothers, a firm, is involved in the business of tile and
marble trading, and its head office is located in Punjab Housing Society.

Small brother, a partner of Six brothers, made an agreement with Zakoori brothers that all constructions
cost, for model houses, would be provided by Six brothers in return for 8% profits from this project.

Under the provision of Partnership Act 1932, analysis this contract. (03 Marks)

c) Enlist the general duties of partners, under the Partnership Act 1932. (03 Marks)