MIDDLESEX UNIVERSITY

MOCK EXAMINATION PAPER

Academic Year 2022 – 2023
MODULE NUMBER: LAW 2130
MODULE TITLE: BUSINESS LAW
MODULE LEADER: Dr Hamiisi Junior Nsubuga
____________________________________________________________________

Time allowed: 3 hours

Total number of questions: 25 Multiple Choice in Section One and ANY 3 essay questions
out of 6 in Section 2

Instructions to candidates:
Answer ALL questions from SECTION ONE
AND any 3 questions from SECTION TWO
Each question in section one account for 1 mark.
Each question in section B is worth a maximum of 25 marks.

Materials provided: Answer Booklets

Equipment permitted: None

Total number of pages: 6 (including front cover)

_____________________________________________________________________________________________________________________________ _________________________________________________________________________________

Candidates are warned that credit cannot be given for work that is illegible.

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 SECTION ONE

MULTIPLE CHOICE QUESTIONS – PLEASE ANSWER ALL QUESTIONS

CIRCLING THE CORRECT ANSWER .
Each question carries 1 mark [Total 25%]

1) Which of the following torts was introduced by case of Donoghue v Stevenson [1932]:
a) Tort of Recklessness.
b) Tort of Negligence.
c) Tort of Damages.
d) Tort of Deceit.
2) Before a Bill is passed into a Statute by Parliament, it must receive:
a) Royal Dissent
b) Royal Debate
c) Royal Assent
d) Royal Approval
3) In England and Wales, the legal system is based on:
a) Civil Code
b) Common Code
c) Common Law
d) Royal Code
4) The case of Watteau v Fenwick [1893] 1 QB 346 concerned:
a) The Law of Contract
b) The Law of civil obligations
c) The Law of Tort
d) The Law of Agency
5) Breach of Health and Safety legislation at work by the company causing death may lead
to a crime of:

a) Corporate Murder
b) Corporate Mismanagement.
c) Corporate Manslaughter.
d) Corporate Misfortune.

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6) The Partnerships Act 1890 concerns:

a) Limited Liability Partnerships.

b) General Partnerships.
c) Liability Partnerships
d) Silent Limited Partnerships
7) For a successful claim under the tort of negligence, a claimant must prove:

a) Duty of care, foreseeability and fairness

b) Duty of care, causation and damages.
c) Duty of care, proximity and proof.
d) Duty of care, Brach of duty of care, and Causation.

8) Management of the business in a private limited company is usually undertaken by:

a) Secured creditors.
b) Shareholders.
c) Directors
d) Debenture holders.

9) The Court in Yewen v Noakes [1880] relied on which of the following tests for
establishing an employment relationship?
a) The Economic Reality Test
b) The Control Test
c) The Integration Test
d) The Mutuality Test.
10) The doctrine of “Judicial Precedent” is used by the judge to:

a) Execute the case

b) Extinguish the case
c) Follow previous similar decisions
d) Explicate the case

11) Which of the following can be used by the court as a test for employment:

a) Managerial test.
b) Engagement test.
c) Economic reality test.
d) Evaluation test.

12) According to the Contra Proferentum Rule in the use of exclusion clauses, ambiguities
in the clauses are interpreted against:

a) Claimant
b) Defendant

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 c) Court
d) Judge

13) Which of the cases below concerned a warranty in a contract?

a) L'Estrange v F Graucob Ltd [1934] 2 KB 394

b) Poussard v Spiers [1876] 1 QBD 410
c) Bettini v Gye [1876] 1 QBD 183
d) Hollier v Rambler Motors (AMC) Ltd [1971] EWCA Civ 12.

14) Parties to a contract can incorporate an Exclusion Clause into a contract through:

a) Misrepresentation
b) Mistake.
c) Previous Dealing.
d) Proximity.

15) The doctrine of Judicial Review is used to legally challenge a decision made by:

a) Court
b) Public body
c) Tribunal
d) Parliament

16) The Judge may use the Golden Rule of statutory interpretation where the ordinary
meaning of the words may lead to:

a) Admissibility.
b) Scrutiny.
c) Absurdity.
d) Illegality.

17) The highest ranked court in England and Wales is:

a) The Court of Appeal

b) The Crown Court
c) The Supreme Court
d) The County Court

18) The key legal issue in the case of Hyde v Wrench [1840] concerned:

a) An Offer
b) An Invitation to Treat
c) A Counter Offer
d) An Acceptance

19) The postal rule of communication of an acceptance of an offer in England and Wales
was established in the case of?
a) Poussard v Spiers [1876] 1 QBD 410
b) Adams v Lindsell [1818] 1 B & Ald 681.

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 c) Dickinson v Dodds 2 Ch D 463
d) Holwell Securities Ltd v Hughes [1974] 1 WLR 155

20) The Companies Act 2006 s.175 concerns:

a) The duty to exercise reasonable care, skill and diligence.

b) The duty to exercise independent judgement.
c) The duty to promote the success of the company.
d) The duty to avoid conflicts of interest.

21) A company experiencing financial difficulties can be placed into:

a) Economic Recession.
b) Administration.
c) Financial Restoration.
d) Financial Recomposition.

22) Under the law of agency, the legal relationship is made up of:

a) Principal, Agent, and Third party.

b) Principal, Director, and Shareholder.
c) Principal, Agent, and Shareholder.
d) Principal, Director, and Third party.

23) Company directors may be disqualified for breaching their duties to the company
through:

a) Insolvency Act 1986.

b) Directors Act 2006
c) Company Directors Disqualification Act 1986.
d) Banking Act 2000

24) The Insolvency Act s.213 concerns:

a) Wrongful trading.
b) Wilful trading.
c) Fraudulent trading.
d) Fanciful trading.

25) The Employment Rights Act 1996, s.94 deals with:

a) Summary dismissal
b) Unfair dismissal
c) Presumptive dismissal
d) Constructive dismissal

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 Section 2
[Answer any THREE Questions]

1) When an agent acts without authority from the principal, contracts entered into by the
third party may be deemed binding on the principal. Explain under what circumstances
an agent may have ostensible/apparent authority to enter into a contract with a third
party.
[25 marks]

2) Compare and contrast the advantages and disadvantages of setting up a business as a

general partnership as opposed to a private limited company.
[25 marks]

3) In Caparo Industries PLC v Dickman [1990], the House of Lords established a three-
part test consisting of three elements that a claimant must prove for a successful claim
under the tort of negligence. Discuss these three elements and refer to relevant case law
in your answer.
[25 marks]

4) A director may be disqualified for breaching his/her duties while in office as set out in
the Companies Act 2006, s.171 – 177. Referring to relevant case law and statutes,
explain these duties.
[25 marks]

5) Exclusion clauses can be incorporated into a business contract in many ways. Referring
to both common law and statutes, explain how these clauses may be incorporated and
controlled.
[25 marks]

6) There are two types of charges a company may grant to raise capital. Describe these
charges, the stages taken to register them and their ranking when a company goes into
insolvent liquidation.
[25 marks]

END OF PAPER