Work Out

Choose the best answer from the given alternatives and write your answer in the space provided
under answer sheet attached herewith
______ 1. Which of the following conditions are grounds for termination of agency contract.
a.Revocation of the agency by the principal
b.Renunciation of agency by the agent
c.Lapse of agency contract
d.Bankruptcy of either of the parties
e.All of the above
______ 2. Which one of the following is the advantage of a sole proprietorship?
f.Limited liability
g.Perpetual existence
h.Distribution of risks
i. Capacity to pull resources
j. None of the above
______ 8. Three friends ‘D’, ‘E’ and ‘F’ agree to go into business installing home sewerage
system. They agree to make D, E are Limited Partners whereas F to continue as a
General Partner as D & E Sanitary Solution Limited Partnership. Based on the above
mentioned fact which of the following is true?
a. All partners have limited liability
b. Only ‘D’ & E’ can participate in all managerial affairs of the partnership
c. All three partners D, E and F, act of any one partner binds the partnership and all
partners share jointly and severally in partnership liability.
d. Only ‘D’ & ‘E’ can be jointly and severally liable for the whole debt of the Partnership.
e. None.
______ 10. The following statements holds false except;
 
a. In principle, viability to live is among the legal requirements for
commencement of personality.
b. According to Ethiopian law of person, birth is the sole means of attaining
personality
c. All business entities should be mandatorily registered and publicized so
as to achieve personality
d. A child merely conceived shall be considered born whenever his interest
demands, he is born viable and alive.
e. None
______11. All can characterize Natural Law School, except;
a. laws do not have the status law unless it is passed by correct authority

b. The correct authority should follow all established law making procedures.

c. Laws are what the court rule when resolving dispute.

d. Law and morality are inseparable.

e. All of the above

_____12. Which of the following is false regarding Companies?

f. Is less risky than a proprietorship or partnership
g. Exists as a legal entity independent of its owners
h. Provides liability insurance for shareholders
i. Can never go bankrupt
j. Can issue stocks
_____ 5. Which of the following describes Limited Partnership?
A. The liabilities of all partners are limited
B. It is always a commercial business organization
C. Limited partners are responsible for managing firm’s activities in the Ethiopian Context.
D. The minimum and maximum amount of capital of the firm is limited by law.
E. None of the above
_____13. A corporate owner’s or shareholder’s liability is limited to the value of his or her
shares because a corporation
 
F. Can never go bankrupt
G.Is less risky than a proprietorship or partnership
H.Can issue stocks
I. Exists as a legal entity independent of its owners
J. Provides liability insurance for shareholders
______ 3. Which of the following is not an essential prerequisites for all contracts?
a. the parties must have capacity to contract
b. the parties must consent to contract
c. the object of the contract must be possible
d.the contract must be in written form

e.All of the Above

_____ 4. Which one of the following is true about business?
f. It could be a profession or an occupation.
g. It could be commercial or non-commercial activity.
h. It could be economic or non-economic activity.
i. All of the above
j. None of the above.
______ 5. The following are obligations of the Seller in sales contract; except?
a. Transfer of ownership.
b. Transfer of shares to the buyer
c. Delivery of the subject of sale
d. Warranty against dispossession
e. Warranty against defects
______ 6. Which one of the following is false about an insurance policy?
f. It is an adhesive contract
g. It requires a written formality
h. In the Ethiopian context the insurer is always a juridical person
i. Insurance is a mechanism to distribute financial risks to among the club who are vulnerable to the
same risk.
j. Insurance is a business for the insured.
_____ 7. Why time and place of formation of contracts so relevant?
a. To ascertain the proper laws.
b. To determine the transfer of risk
c. To calculate the costs expenses and interests against the defaulted party.
d. All of the above
e. None of the above
______ 8. Which of the following is a corollary of indemnity principle under insurance policy?
f. The principle of compensation
g. The doctrine of subrogation
h. The principle of contribution
i. All of the above
j. None of the above
•  
______ 9. Which of the following is incorrect about the obligation of the principal?
a. The duty to reimburse outlays and costs
b. The duty to act within the scope of power.
c. The duty to pay remuneration for the activities undertaken.
d. The duty to advance funds for duties to be carried out by the agent.
e. The duty to collect documents evidencing power of attorney when agency relationship comes to an
end.

_____ 10. Which condition does not require acceptance of offer to form a valid contract?
f. The duty to accept.
g. Preexisting business relationship
h. General terms of business.
i. All of the above
j. None of the above
 11. Which one of the following principle is a major principle applicable to all types of
______

insurance policies?
a.Doctrine of Substitution
b.Doctrine of Contribution
c.Principle of Compensation
d.Realization of Risk
e.All of the above
_____ 12.Which of the following describes Limited Partnership?
f.The liabilities of all partners are limited
g.It is always a commercial business organization
h.Limited partners are responsible for managing firm’s activities in the Ethiopian Context.
i.The minimum and maximum amount of capital of the firm is limited by law.
j.None of the above
_____ 13. Which one of the following does not constitute ‘void’ contract?
a. Where parties failed to observe a form prescribed by laws
b. Illegal purpose of the contract
c. Misrepresentation of facts and circumstances
d. An act against public policy
e. Non – specific and undefined object
________14. Which one of the following is the common features of partnership firms and private limited
companies?
f. Both are commercial businesses organizations.
g. In both entities personal intimacy of members is fundamental for their normal operation.

h. free transfer of membership interest to the third parties depends on unanimous decisions

i. B & C
j. All of the above
_____ 17. Which one of the following deserves to be warrantied against defect in sales contract?
a. A good that does not possess the quality required for its normal use or commercial exploitations
b. A thing which belongs to third party subject to be dispossessed.
c. A good which is not existed at the time of formation of contract of sale.
d. Things which are assumed to delivered on contingent conditions.
e. All of the above.
_____ 18. All are grounds of general incapacity to form a valid contract; except?
f. Age of the contracting parties.
g. Nationality of the contracting parties
h. Judicial Interdiction of the contracting parties.
i. Legal Interdiction of contracting parties
j. None of the above
_____ 19. Which of the following are common characteristics of Partnership; except?
a. All are commercial business entities
b. All are required to fulfill the written formality that must be registered in the relevant public body.
c. All partners of the Partnership are held personally, severally, jointly and fully liable for the whole
debt of the partnership.
d. Free transfer of membership interest is always possible.
e. None of the above
_____ 20. Which of the following is true about contract of sale?
f. A sale may relate to an existing thing belonging to the seller
g. A sale may relate to a future thing which the seller undertakes to make for delivery to the buyer.
h. It may also relate to a thing belongs to third party
i. All of the above
j. None of the above
Question No 1. (10%)
What are the major obligations of the buyer towards the seller under the Ethiopian
Civil Code? Explain.

Question No 2. (15%)
Discuss any three major points of difference between a share company and a
private limited company under the Commercial Code of Ethiopia.

Question No 3. (5%)
Generally speaking, form is optional in the formation of Contracts.
However, it may become mandatory. Explain.
Question No 5. (10%)

Ato X a rich merchant, here in Addis Ababa, has conferred upon his friend W/ro B a written power of
general agency five days before he left for Dubai for a business tour. However, after staying for about a
month abroad, when returned back to Addis Ababa, he learned that his friend has sold out his
personal BMW Car for birr 2,000,000.00 (two million birr) which normally does not worth more than
birr 1,500,000.00 (one million five hundred thousand birr); leased out one of his living quarters, a
beautiful villa, situated there at CMC for a period of five years; she has concluded a Contract of Loan
with her previous friend Ato D by which she gave him out a loan service of 200,000.00 (two hundred
thousand birr); she also made a donation of birr 50,000.00 (fifty thousand birr) to the Gefersa Center
of Lunatic Asylum in the name and on behalf of her principal; paid birr 100,000.00 (one hundred
thousand birr) to a certain Ato Z in the settlement of her principal’s debt; she sold a commodity for
birr 70,000.00 (Seventy Thousand birr) which fairly worth birr 120,000.00 (one hundred thousand
twenty thousand birr)). She has also sold 100 quintals of grain, and she took part of the price birr
50,000 (fifty thousand birr) which she expended it for the maintenance of her own personal car.
Now Ato X wants to invalidate all the acts performed by his agent W/ro B. Based on the Ethiopian Civil
Code, can he invalidate the acts or he cannot? Why? Explain.
Question No 7. (10%)

Read the following case and answer the question that follow!
One evening, Dawit, a boy of 15 years of age, walked into a shop that usually is open until
Mid-night, and asked the price of a nicely made Leather jacket displayed. The shopkeeper,
being very serious, told Dawit the price of the jacket for Birr 750.00. Dawit felt that the price
was too high and started to walk out of the shop, but he was stopped by the shopkeeper
who held a knife on his right hand and shouted at him; “You better take the jacket for Birr
750.00 or I will stab you to death”. Highly terrified, Dawit paid the price and hurried out of
the shop.
Now Dawit doesn’t want to be bound by the Contract. He, therefore, wants to be released.
From among the following remedies which one can Dawit invoke (avail himself of) in the
court of law and why? Give adequate reasons.

A, Termination B. Invalidation C. Cancelation

_____10.___________is a mode of delivery whereby the third party keeps goods sold for buyer’s
account.
A. Constructive delivery
B. Symbolic delivery
C. Constructive bravi manu
D. delivery at short hand
E. Delivery at whar finger
______11. Which of the following pedigrees of law are determining factor for positive law school.
A. the law should be enacted by the so called ‘correct authority’
B. the correct authority should follow all
established procedures when making law.
C. A &B
D. it incorporate moral ingredient
E. All of the above
_______12. Which one of the following statement is true about Limited Partnership?
• 

A. All partners’ liabilities are limited to their contribution.

B. There must be at least one general partner.
C. Perpetual succession
D. partners are jointly and severally liable for the whole
debt of the partnership E. All except C
______ 15.The following statements holds false except;
A. Viability to live is the only legal requirements for commencement of personality.
B. According to Ethiopian law of person, birth is the sole means of attaining personality
C. Both juridical and physical persons may establish business through sole proprietorship.
D. A child merely conceived shall be considered born whenever his biological interest so demands, he
is born viable and alive.
E. None
______11. Which of the following pedigrees of law are determining factor for positive law school.
A. the law should be enacted by the so called ‘correct authority’
B. the correct authority should follow all
established procedures when making law.
C. A &B
D. it incorporate moral ingredient
E. All of the above
________3. ________ are goods indicated by description and not separately identified.
A. Sale by description.
B. Manufactured goods.
C. Individualized goods
D. Unascertained.
E. Anticipated goods
______ 1.Which one of the following could validly establish distinction between sale and agreement to
sale.
A. Transfer of ownership.
B. Shifting risk
C. Remedial measures.
D. The nature of the contract.
E. C & D None
F. All of the above
1. Basically, delivery of goods results three important consequences. Discuss and
elaborate them.
2. N agreed to supply to G 100 SONY Televisions specified as 42’ Inch screen width, with
LED type and integrated decoder with 8GB memory. For the purpose of delivery, the
parties agreed to pack those televisions with double layered carton protection. On the
agreed day of delivery, N delivered 50 LG and 50 SONY branded of same specifications
without carton cover.
a.Can Mr. G bound to take delivery? Why? Why not?
b.Explain if there is defect.