BUSINESS LAW MODEL PPR 18.

1
Structure of the paper
• Section 1
• MCQs
• Short answer questions
• 40%
• Section 2
• Essay type questions, Case studies
• 3 out of 6 Questions
• 60%
MCQs
1. Which of the following is the residual law of Sri Lanka
a) English law
b) Kandyan Law
c) Roman Dutch Law
d) Thesawalami Law
2. Fundamental Rights cases are heard in
a) Supreme Court
b) Appeal Court
c) Magistrate Court
d) High Court
3. Maximum number of partners in a partnership is
a) 10
b) 20
c) 5
d) 2
4. Which document plays a role of constitution in a company
a) Certificate of Incorporation
 b) Articles of Association
c) Directors consent letter
d) Company Deed
5. According to shop and office act for the third child employee will get _____ days of
maternity leave
a) 42 days
b) 6 weeks
c) 84 days
d) 12 weeks
6. Consideration is related to Contracts under
a) English law
b) Roman Dutch Law
c) International Law
d) Spanish Law
7. People in Jaffna Peninsula are covered under
a) Thesawalami Law
b) Muslim Law
c) Kandyan Law
d) Jaffna Tamil law
Short answer questions
1. Saman Ltd Pays salaries in monthly basis. What is the maximum date that they can pay
March 2018 Salary
2. State main elements of a legal contract
3. State four ways that offers are terminated
4. List five statutory holidays under shop and office act
5. State the employer and employee contribution under EPF act
6. State the annual holiday guidelines according to the shop and office act
7. Name 3 wage boards operating in Sri Lanka.
8. State 4 duties of an Agent
 9. State three implied conditions under sales of goods ordinance.
10. Name four types of shares that could be issued by a limited company.
11. List three types of partners
12. List three type of alternative dispute settlement strategies
Essay Type Questions
1. Explain the characteristics of Civil Law
2. Explain what is meant by invitation to treat with suitable examples
3. Explain duties of a partner in a partnership
4. Explain the concept of legal personality
5. Explain the advantages and disadvantages of a limited company
6. Explain the term implied conditions with examples
7. “In all domestic and social agreements, there is a presumption that the parties do not
intend to create legal relations”. Explain with relevant case law
Case studies
Question 01
“Maria” offered her land in Seeduwa to “Nimali” for Rs. 3 million, to be paid in full
onacceptance.
“Nimali” replied, accepting this offer and enclosing a cheque for Rs. 2 million togetherwith a
promissory note to pay the balance by five (5) monthly installments of Rs. 200,000 each.
Explain with reference to the applicable rules, as to whether a legal contract has been formed in
the above scenario
Question 02
Charith showed a sample of tea to Harith, describing the tea as “Low grown refined tea”. Based
on the sample and the description, Harith accepted to buy the tea from Charith.
Thereafter, Charith delivered to Harith, tea which was equal to the quality of the sample, but
which was not “Low grown refined tea”.
Advise Harith, as to whether he could refuse to accept the goods.
Question 03
Makes-u-sick (Pvt) Ltd placed an advertisement in the newspapers, stating that they have found a
cure for baldness. The advertisement stated that their brand new shampoo, “More Hair”, if used
as prescribed can cure baldness within six months. The advertisement also went on to offer a
reward of Rs. 10,000 to anyone who after using their new shampoo as prescribed, did not get
cured from baldness within six months.
To prove their genuineness, the company claimed in this advertisement, that they have deposited
Rs. 200,000 in a bank, to meet this challenge. Mr. Gullible, after seeing this advertisement, used
the shampoo “More Hair” for six months as prescribed, but unfortunately his bald patch got
worse.
Thereafter, Mr. Gullible claimed the reward of Rs. 10,000, which the company refused today,
stating that the advertisement amounted to an invitation to treat and not an offer. Advise Mr.
Gullible, as to whether he can claim this reward. Support your answer with reference to a
decided case.
Question 04
Herman sent some vegetables from Jaffna, on a lorry belonging to a private transport company,
to be delivered to his mother’s vegetable shop in Colombo. However, due to floods in Colombo,
these vegetables could not be delivered to the shop, and were temporarily unloaded at the
transport company’s premises. Subsequently these vegetables were found to be rotting, and the
transport company decided to sell them as animal food.
No communication of this decision was made to Herman by the transport company, even though
Herman had indicated his contact telephone number to the transport manager of the company.
Explain the legal Consequences
Question 05
Suvi and Movi entered into a contract for the hire of computers, where Suvi was to supply
computers to Movi for a period of 3 years. The terms of this contract contained both conditions
and warranties. The payments for the computers supplied under the contract were to be made by
Movi in monthly installments.
These monthly installments were to be made before the 25th of each month. A clause in the
contract document stated that prompt payment of all monthly installment sunder the contract was
“of the essence”.Movi delayed the payment of one such monthly installment by 10 days.
Explain the legal consequenses
Question 06
Jane took her new dress to Mr. Clean‟s company to be dry cleaned. At the time of handing over
the dress, Jane was asked to sign a receipt which contained a clause which stated that, “this
article is accepted on condition that the company is not liable for any kind of damage that may
arise out of the cleaning”.
When Jane asked for an explanation of this clause, Mr. Clean said that the company would not
accept any liability for damages to the beads and sequins in the dress. Thereafter Jane signed the
receipt.
When the job was completed and Jane came to collect the dress, she found that there were stains
on it.
Can Mr. Clean‟s company rely on the Exemption Clause? Give reasons for your answer.
Question 07
Stanley appointed Lal as his agent, to sell an antique table belonging to Stanley.
Stanley has instructed Lal, that under no circumstance should Lal sell the antique table for less
than Rs. 20,000.Explain the legal position of the parties in each of the following situations:
(a) If Lal sold the antique table for Rs. 15,000.(You may assume that there were no exceptional
circumstances present, which justified this transaction). (5 marks)
(b) If Lal sold the antique table to Bernad for Rs. 20,000 and received a commission of Rs. 1,500
from Bernad. ( 5 marks)