Rise School of Accountancy

20 August 2024
3 hours – 100 marks
Additional reading time –15 minutes

BUSINESS LAW
Instructions to examinees:
(i) Answer all questions.
(ii) Answer in black pen only.
(iii) Multiple Choice Questions must be answered in answer script only.
Final Mock
NAME: RISE ID:
1) Select the most appropriate answer from the options available for each of the following Multiple-Choice
Questions.
(i) What is discussed in fifth schedule
a) Election of president
b) Oath of office
c) Law exempted from operations of articles
d) Remuneration terms and conditions of services of judges (01)
(ii) Hamza made a contract with Ali that he (Ali) would not trade in textile business. The contract is:
a) Valid
b) Void
c) Voidable
d) Illegal (01)
(iii) When undue influence is used in a contract by one party against the other, the burden of proof is on
a) The party who wants to set aside the contract
b) The party who did not wants to set aside the contract
c) The party who applies the undue influence
d) The party on whom undue influence is applied (1.5)
(iv) Imran sent a proposal to Bilal by post for the sale of his house. Bilal accepted the offer by post. Imran may
revoke his proposal at any time before:
a) Bilal receives the letter of proposal
b) Bilal posts the letter of acceptance
c) Imran receives the letter of acceptance
d) None of these (01)
(v) Haider and Basit enter into a contract in which Haider agrees to deliver milk to a restaurant. They forget to
include a price in the agreement. Court will:
a) Refuse to enforce the agreement
b) Select the lowest quoted price for milk and insert it into the contract
c) Determine a reasonable price and insert it into the contract
d) None of these (01)
(vi) Minor can be appointed as an agent, because
a) Creation of agency does not require any consideration
b) Agent makes agreement on behalf of principal
c) The minor has not attained the age of majority
d) Agreement made by minor is void, therefore principal is on safe side (01)
(vii) Which of the following language on an order will create a bill of exchange?
a) “Pay X if you can”
b) “I wish you would pay X”
c) “Please pay X”
d) None of these (01)
(viii) What will be the effect on contract when it depends on happening of uncertain event and tine is not fixed
a) Enforceable when event does not happen
b) Enforceable when event becomes impossible
c) Void when event becomes impossible
d) Void when event happen (1.5)
(ix) In absence of contrary intention expressed in arbitration agreement, If the arbitrators have allowed their time
to expire without making an award:
a) The matter shall be taken to the Court.
b) The parties shall appoint other persons as arbitrators.
c) The umpire shall forthwith enter on the reference in lieu of the arbitrators.
d) None of above. (01)
(x) On 14 august Ali offers to pay 50,000 rupees against delivered goods bur Noman refuse to accept the amount,
now
a) Ali is discharged from the contract
b) Ali is not discharged from the contract
c) Ali is no need to perform performance again
d) Noman is entitled to receive interest from 14 August (1.5)
(xi) Which of the following statements are incorrect
a) General duties of partner can be change with the consent of all partners
b) General duties of partner cannot be change with the consent of all partners
c) Qualified duties of partner can be change with the consent of all partners
d) Qualified duties of partner cannot be change with the consent of all partners (02)
(xii) Which of the following agreement is not prohibited under competition act 2010
a) Bid rigging
b) Price discrimination
c) Tying
d) Betting (1.5)
2)
a) List the parties who are competent to contract. (02)
b) Discuss the limitations on authority of agent in case of emergency. (02)
c) What are the essentials and rights while paying on behalf of another person under constructive contracts.
(04)
3) Modern Manufacturing (MM) is a partnership firm in Pakistan involved in the production and distribution of
industrial machinery. The firm is managed by three partners: Arif, Sana, and Bilal, who share profits equally.
The following situations have arisen involving MM and its partners:
Contract Act, 1872
a) On 15th November 2024, MM entered into a contract with a supplier, SteelCo, to purchase raw materials
worth Rs. 10 million. The contract included a clause stating that if SteelCo failed to deliver the materials by 1st
December 2024, MM would be entitled to cancel the contract and claim damages. Due to unforeseen labor
strikes, SteelCo was unable to deliver the materials on time. SteelCo argues that the delay was beyond their
control and seeks to avoid liability. Discuss the validity of SteelCo’s claim under the Contract Act, 1872.
(04)
b) MM signed a joint agreement with two other companies, Precision Tools and Heavy Machinery Ltd., to supply
a large order of custom-built machinery to a foreign client. The contract was not performed at the agreed
time, and the foreign client filed a case for damages against Precision Tools and Heavy Machinery Ltd. MM,
however, was released from the contract by the foreign client before the case was filed. Discuss MM’s liability
towards the foreign client and the remaining partners under the Contract Act, 1872. (04)
c) Sana, one of the partners, discovered that Arif has been diverting business opportunities meant for MM to his
own newly established private company. Sana is concerned that this behavior is damaging the partnership's
interests. Discuss Arif's actions under the Partnership Act, 1932, with reference to the duty of loyalty and the
prohibition against competing with the partnership. (03)
d) The partners of MM are considering dissolving the partnership after five years but want to ensure that during
this period, no partner is allowed to engage in any other business without the consent of all partners. What
type of partnership would be most appropriate for MM, and what provisions should be included in the
partnership agreement under the Partnership Act, 1932, to meet these goals? (03)
e) MM received a cheque for Rs. 2 million from a client. The cheque was crossed "not negotiable," and MM
deposited it in their account with UBL. Later, it was discovered that the cheque had been stolen from the
client and endorsed fraudulently. Discuss MM's position under the Negotiable Instruments Act, 1881 (03)
f) Sana on behalf of MM drew a cheque in favor of Ali Khan on National Bank of Pakistan (NBP). She crossed the
cheque specially to be paid into United Bank Limited (UBL). The cheque was stolen from Ali’s wallet, and
before the theft was discovered, it was deposited into the account of another person with the same name,
"Ali Khan," at Standard Chartered Bank. Under the Negotiable Instruments Act, 1881, discuss whether NBP
would be liable to the true owner if the cheque was cleared and funds were transferred to Standard Chartered
Bank. (03)
g) Assume that in (f) above, the stolen cheque was deposited into the account of another person having the
same account title " Ali Khan " at United Bank Limited (UBL). Under the Negotiable Instruments Act, 1881,
discuss the implications for UBL if the cheque is cleared and funds are received in UBL (03)
4)
a) Write down the persons who can perform the contract. (05)
b) Describe the Characteristics of collateral events. (06)
5) Ithad Forward (IF) is a partnership firm in Pakistan engaged in the import and distribution of high-end
electronics. The firm is managed by three partners: Hamza, Fatima, and Ali, who share profits equally. The
 following situations have arisen involving IF and its partners:
a) On 1st June 2024, IF entered into a contract with a local supplier, TechLink, to purchase 1,000 units of a specific
model of laptops. The contract specified that IF must make an advance payment of Rs. 5 million by 15th June
2024, after which TechLink would deliver the laptops. The acceptance of the contract by TechLink was
conditional upon receiving this payment. IF failed to make the payment on time due to a delay in funds
transfer. TechLink canceled the contract and sold the laptops to another buyer. Evaluate TechLink’s right to
cancel the contract under the Contract Act, 1872. (04)
b) On 10th July 2024, IF entered into an agreement with Global Electronics to import a new range of mobile
phones. However, before the shipment was dispatched, the Government of Pakistan imposed a ban on the
import of certain electronics, including the mobile phones IF had ordered. Discuss the implications of this
situation under the Contract Act, 1872. (04)
c) Ali, without informing Hamza and Fatima, used Rs. 2 million from IF’s account to invest in a personal real
estate project. When Hamza and Fatima discovered this, they were concerned about the legality of Ali’s
actions. Discuss Ali’s obligations under the Partnership Act, 1932 (03)
d) Hamza and Fatima decided to expand IF’s operations by opening a new branch in Lahore. However, Ali
disagreed with the decision, citing potential financial risks. Despite Ali’s objections, Hamza and Fatima
proceeded with the expansion using partnership funds. Analyze the situation under the Partnership Act, 1932
(03)
6)
(i) What is the difference between restrictive and not negotiable crossing. (03)
(ii) Define the Partnership property. (05)
(iii) Describe how an Ordinance is promulgated in Pakistan and explain the effect of such Ordinance. (04)
7) Briefly explain when a person may be considered as an offender by virtue of which such person may be
punished under the provisions of the Prevention of Electronic Crimes Act, 2016. (05)
8) identify the practices that are considered as deceptive marketing practices. (04)
9) NextGen Technologies (NT) is a partnership firm in Pakistan involved in developing and distributing software
solutions. The firm is managed by three partners: Omar, Fatima, and Hammad, who share profits equally. The
following situations have arisen involving NT and its partners:
a) On 1st October 2024, NT entered into a contract with a freelance software developer, Saad, to develop a new
software application. Unknown to NT, Saad has a history of mental illness, and he was only temporarily sane
at the time of signing the contract. After the contract was signed, Saad’s mental health deteriorated, rendering
him incapable of fulfilling his obligations. Evaluate the validity of the contract under the Contract Act, 1872,
(04)
b) NT and two other companies, Alpha Innovations and Beta Systems, jointly promised to deliver a
comprehensive IT solution to a major client. Before the delivery, NT sought a release from the contract, which
the client granted. However, Alpha Innovations and Beta Systems are concerned about their remaining
liabilities. Discuss the implications under the Contract Act, 1872 (04)

(THE END)