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LAW 240: I NTRODUCTION TOCOMMERCIAL LAW – A HANDYCOLLECTION O F P ASTSEMESTER’S QUESTIONS &ANSWERSFARIHANA BINTI ABDUL RAZAKDEDICATIONI hereďy deĐlare that this projeĐt eŶtitled ͞LAW 240: INTRODUCTION TO COMMERCIAL LAW – A HANDY COLLECTION OF PA“T “EME“TER’“ QUE“TION“ & AN“WER“͟ is a...

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LAW 240: INTRODUCTION TO COMMERCIAL LAW – A HANDY COLLECTION OF PAST SEMESTER’S QUESTIONS & ANSWERS FARIHANA BINTI ABDUL RAZAK

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DEDICATION

I hereby declare that this project entitled “LAW 240: INTRODUCTION TO COMMERCIAL LAW – A HANDY COLLECTION OF PAST SEMESTER’S QUESTIONS & ANSWERS” is a bonafide and genuine compilation of assignments carried out by all my students 201904 – A4AC1103J, A4AC1103K, A4AC1103L and A4AC1103M under my supervision. On my students’ behalf, we dedicate this project to all students of LAW 240 subject. And most of all to our great Creator, Almighty Allah SWT, the Author of knowledge and wisdom who made this project possible.

Madam Farihana Binti Abdul Razak Department of Law, UiTM Perak Branch, Tapah Campus November, 1 2019

-Study the past if you want to define the future-

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TABLE OF CONTENTS No

Final Question (Sem/Year)

Prepared by

1. April 2010

Ammar Haziq Bin Zulkifli, Danial Haris Bin Muhd Izam, Muhammad Aiman Bin Hairuddin & Muhammad Daniel Marican Bin Kamaruddin

2. October 2010

Muhammad Ariffudddin Bin Ruslan, Akif Bin Romzi, Ahmad Adib Afdhal Bin Yusdin, Muhammad Danial Fiqri Bin Mohd Nadzri & Ahmad Izzul Raziq Bin Nadzri

3. April 2011

Najwa Binti Hamid, Nur In Nani Binti Abu Bakar, Natrah Ilyani Binti Abdullrahman, Nur Najiha Sabila Binti Khairul Naser & Nur Zahirah Safiah Binti Mohamad Khairul

4. September 2011

5. October 2012

6. September 2013

Anis Amyza binti Zainal, Noor Shahirah Suhaila binti Kamal Suhaili, Nur Fatheeha binti Zainal Abidin, Nur Azlin Sofia binti Mohd Noordin, Nur Farhanah binti Azmi & Nur Iffah Syazwani binti Mohd Nizar Nur Atikah bt Zulkipali, Sarah Irdina Binti Ridzwan, Nur’Natasha bt Abdul Aziz, Nur Fatin Adilah bt Salleh, Nurul Huda Annisa Binti Supian Zori & Siti Nurarifah Syahirah Binti Sheikh Anwar Nurin Nashruna Binti Mazlan, Nor Harissa Binti Husni, Nur Amirah Adlina Binti Che Othmanimo, Nurin Izzati Binti Mohamad Rohalim, Nur Fatin Amira Binti Hamiza & Dinie Najwa Binti Zaher Muhammad Iqmal Bin Aminuddin, Nurul Najihah Binti Jazlan, Farah Yasmin Binti Mohd Asri, Nur Aina Najwa Binti Mohamad Yasir, Nur Adlyn Sofia Binti Rasid & Muhammad Al-Khawarizmi Bin Mira Maiddin

7. March 2014

8. September 2014

9. March 2015

Nur Eriena Natasya binti Salim, Puteri Norelina binti Megat Abd Halil, Aufa Hani binti Mohd Shahrin, Muhamad Nasuha bin Mohd Akhbar, Nurul Adibah Syafiqah binti Kamal Azam & Nurul Alya Izzati binti Muhamad Tajul Azhar Faqihah Aniqah Binti Mohd Fadhli, Nurul Natasha Binti Jallal, Khadijah Nabilah Binti Baharum, Farisah Atiqah Binti Razali & Misha Nadira Binti Mohd Sofian Muhammad Afiq Bin Nor Azme, Afiq Danial Bin Sazali, Mohammad Syafiq Bin Ramli, Arfa Mirza Bin Mohd Salim, Muhammad Daniel Areef Bin Noh & Muhamad Faris Bin Rossman

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10. September 2015

Intan Zulaikha binti Mohd Zaidi, Nurul Atiqah binti Burhanudin Shah, Fatin Nadia binti Ruslin, Nur AIna Adlina binti Faizul, Nurul Izani binti Abdullah Sani & Nur Qhistini binti Dahalan

11. March 2016

Muhammad Al Faisal Bin Ismail, Muhammad Aiman Syahmi Bin Suhaimi, Muhammad Hafiz Bin Mohd Rizal, Muhammad Syamir Tarmimi BIn Shapeei, Muhammad Alif Ammar Bin Zafri & Muhammad Akmal Bin Nor Azam

12. October 2016

Nur Hanis Maisarah binti Mohd Shazalli, Adriana Nur Syuhada binti Shaiful Anuar, Nurin Humaira binti D Mohd Hapizi, Fitriah Sabriah binti Side, Nur Ashikin binti Basiron & Muhammad Akhmal Siddiq Bin Hasnan Muhammad Aminuddin bin Syamsul Azhar, Muhammad Najmuddin bin Abdullah, Muhammad Nazzarul Amin bin Zulkifli, Muhammad Zulhakimi bin Mohd Jefri & Muhammad Fakhri bin Roslan

13. March 2017

Nur Qamarina bt Hassim, Norain Suhaila bt Zamri, Siti Fatimah bt Ismail, Nuraniyah Huda bt Zulkefly, Nur Ezzah Hidayah bt Ehwan Zaini & Nurin Irdina bt Khairuzi

14. January 2018

Khairunnisa Binti Abdul Manaf, Azimah Binti Abdul Samad, Nurul Ashikin Binti Mohmmad Radzi, Nur Aina Syafiqa Binti Ahmad Tarmizi, Noor Atiqah Binti Ahmad Shukri & Shazarina Natasha Binti Shaffie

15. June 2018

Alya Farzana Binti Muhammad, Mohammad Farid Bin Khairudin, Muhammad Danial Azman Bin Nor Azman, Muhammad Irsyad Ihsan Bin Shahdan, Nur Aishah Binti Zulkifli & Nur Farah Dina Binti Roslan

16. December 2018

Aisya Naziera Binti Badrul Hisham, Nur Afiqah Binti Yudkha, Nur Misha Farhana Binti Jamaludin, Nurizza Farisya Binti Mohd Tajul Ros, Nurul Nasuha Binti Mazlan & Sharifah Shahirah Binti Syed Jaaffar Muhammad Azri Imran Bin Arbain, Muhammad Ikmal Hakim Bin Sobri, Muhammad Haiqhal Bin. Mohd Noor Azman & Amar Farhan Bin Abdul Jalil

17. June 2019

Nurfatihah Binti Che Rani, Siti Sarah Binti Ahmad Tarmizi, Nur Ain Nabilah Binti Mohd Sabri, Nur Shahida Binti Kamarulzaman & Farahanim Binti Yusuf Nur Ezzah Ayunee Binti Hamdan, Nur Hannani Binti Zolhi, Khairun Nabilah Binti Mohd Satar, Nur Amirah Hani Binti

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Mohd Izuddin, Nur Hannah Amirah Binti Ariffin & Nurathirah Asyikin Binti Mahzan

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LW/APRIL 2010/LAW240/231 Ammar Haziq Bin Zulkifli, Danial Haris Bin Muhd Izam, Muhammad Aiman Bin Hairuddin & Muhammad Daniel Marican Bin Kamaruddin

PART A 1. The Special Court which was established pursuant to Article 182 of the Federal Constitution has an exclusive jurisdiction to try all offences committed in the Federation by a) Public Servants working with the Federal Government and the State Government. b) Professionals under category A. c) The officers of the Armed Forces. d) The Yang di-Pertuan Agong or any of the nine Malay Rulers. 2. Sources of Islamic law comprised of the following: i. Al-Quran ii. Sunnah iii. Ijma' iv. Qiyas v. Native law a) b) c) d)

i,ii,iii i, ii, iv i,ii,iii,iv iii,iv,v

3. Which of the following is NOT an element of contract? a) Capacity b) Intention to create legal relation c) Performance d) Consideration 4. Pak Ali transfers a piece of land to his son without consideration. This is a valid contract between them because a) the consideration is adequate. b) the term of offer is clear. c) Pak Abu is not a minor. d) the agreement was made on account of natural love and affection. 5. Islamic Contract Law is distinct from other legal systems in that it insists on the _________ in the sense that both the offer and acceptance are to be jointly connected in one single session without any gap in time or place. a) Majlis Al-'aqd b) Majlis Walimatul Urus c) Majlis Syura d) Majlis Taa'ruf 6. The following are advantages of Al - Wakalah EXCEPT: a) Rentals are treated as payment of operating expenses and fully tax-deductible. far@2019 5

b) Not required to be disclosed as a liability in the Balance Sheet and therefore borrowing capacity not impaired. c) Equipment lease automatically belong to the lessee. d) Arrangements are flexible to suit the needs of the lessee. 7. Which of the following is NOT duty of the principal to his agent? a) To pay the agent commission and renumeration. b) Not to prevent or hinder the agent from earning his commission. c) To indemnify and reimburse the agent d) To entertain the agent. 8. En. Ali, the credit officer of Wang Bank, is terminated from his services. Wang Bank fails to inform the client of this situation and Ali continues collecting debts on behalf of the bank and he later absconds with the money. The bank's clients insist bank be responsible because Ali is . a) an agent by ratification. b) an agent by necessity. c) an agent by estoppel. d) an agent by express appointment. 9. What is meant by caveat emptor? a) Let the buyer beware b) Let the seller beware c) Let the consumer benefit d) Let the client be known 10. The following are the remedies of the buyer EXCEPT: a) Damages for non-delivery of goods b) Specific performance c) Action in tort d) Breach of guarantee 11. The notice specify in Section 16(1) of the Hire Purchase Act (known as Fourth Schedule Form) will only be valid if the hirer has defaulted in months successive instalments. a) 2 b) 3 c) 4 d) 5 12. Which of the following is the statutory right of the owner under a hire-purchase agreement? a) Right to terminate the agreement b) Right to remove goods c) Right of repossession d) Right to appropriate payment 13. What is the meaning of Ijarah? a) Lease, rent or wage b) Borrow, credit or lend c) Charge, transfer or lease d) Cash, installment or credit far@2019 6

14. Who is considered as an employee under the Employment Act 1955? a) A worker earning less than RM 1,000 per month. b) A worker earning Not more than RM 2,000 per month. c) A worker earning less than RM 1,500 per month. d) A worker earning more than RM 3,000 per month. 15. What is an overdue or stale cheque? a) bears a date earlier that the date of actual issue. b) bears a date in the future c) bears no date d) has been in circulation for an unreasonable length of time 16. Below are the main characteristics of a bill of exchange EXCEPT: a) It is a conditional order in writing b) It must be paid within a fixed or determinable future date c) It must be addressed to another person d) The payment is in the form of money 17. Section 27 of the Bills of Exchange Act 1949 defines a holder for value as: a) Holder of a bill who gave value to the bill himself b) Holder of a bill for which value has been given previously c) Holder of a bill who takes the bill on the face of it d) Holder of a bill who takes the bill in due course 18. What is the function of the Syariah Advisory Council? a) To provide advice on all syariah matters pertaining to Islamic banking and takaful in Malaysia b) To facilitate lending and borrowing procedure. c) To appoint and select the bank staff. d) To consider which bank is to practice the Islamic Banking System. 19. When a wakalah is being created only for a certain known transaction, it is known as a) Particular wakalah or special wakalah b) General wakalah c) Restricted wakalah d) Absolute wakalah 20. One of the concepts used in Takaful is Tabarru'. What is Tabarru'? a) Agreement by a participant to relinquish as donation a certain proportion of the takaful contribution. b) Agreement by a participant to take part in the business activities of the Takaful operator. c) Agreement by a participant to share profits and losses. d) Agreement by a participant to guarantee each other against a defined loss or damage.

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PART B QUESTION 1 Briefly explain the jurisdiction the Subordinate Court in Malaysia. Answer A subordinate court is any one of those courts established under section 3(2) of the Subordinate Courts Act 1948 (Revised 1972). The Subordinate Courts Rules 1980 were repealed by the Rules of Court 2012. In Malaysian’s legal system hierarchy, in Peninsular Malaysia, consist of Sessions Court and Magistrate’s court. The Magistrate’s Court -

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The Magistrates’ Courts hear all the civil issues in which the claim is not more than RM 100,000-00. The Small Claim Court was set up in order to decide on claims for recovery of debts or liquidated demands in money, with or without interest, and not exceeding RM 500000 at the date of filling. The Court for Children is for the issues related to the minors who are below the age of eighteen years. Previously known as the Juvenile Court, hear all cases involving minors except cases carrying the death penalty, which are heard in High Court instead.

Sessions Court -

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The Sessions Courts hear all the issues of a civil nature in which the amount in dispute or value of a subject matter does not exceed RM 1 Million. However, matters relating to land, specific performance or rescission of contracts, injunction, probate and administration of estate, divorce, bankruptcy, trusts and accounts are excluded from its jurisdiction. Native Court in western part of Malaysia (Sabah & Sarawak). This court exercises jurisdiction over matters affecting ‘native customs’ where the parties are natives. In a native court, it’s empowered to try civil and criminal matters including the following: o Cases arising from breach of native law or customs o Cases involving land where there are no titled issues by the Land Office and in which all the parties are subject to the same native system of personal law o Civil cases (excluding land) where the value of the subject matter does not exceed RM 50-00 and all parties are subject to the same native system of personal law.

QUESTION 2 A container of Cosway products was on its way to Ah Wai, a buyer in Sabah when the manager of Cosway Sdn Bhd saw a notice of bankruptcy filed against Ah Wai. Advise Cosway Sdn Bhd with regard to their rights as an unpaid seller against the goods. Answer Section 46(1)(b) of the SOGA 1957 explains in the event of insolvency of the buyer, a right of stopping the goods in transit after he has parted with the possession of them. When far@2019 8

the buyer of goods becomes insolvent and the unpaid seller has parted with the possession of the goods, the seller has the right of stopping them in transit so long as the goods are while transit. Goods are still in transit unless the buyer or his agent or bailee takes or obtains delivery of goods. Stoppage in transit is affected by the unpaid seller by taking actual possession of the goods; or by giving notice of the seller's claim to the carrier or bailee in whose possession the goods are. When the seller gives notice of stoppage in transit to the carrier or to the bailee who is in possession of the goods, the carrier or bailee shall redeliver the goods to or according to the directions of the seller at the seller's expense. In Booth SS Co. v Cargo Fleet Iron Co, the seller's right of stoppage in transit is subject to the lien of the carrier for any unpaid freight, and this lien has priority over the seller's right of stoppage. All in all, Cosway Sdn Bhd has rights to stoppage in transit the goods. QUESTION 3 What are the characteristics of Al-ljarah Thumma Al-Bay? Answer Al ijarah Thumma al Bay (Hire Purchase) There are two contracts involved in this concept and both these contracts are undertaken one after another. The first contract is leasing or renting contract or (Ijarah), and the second is purchasing contract (bay). Ijarah Thumma Bay is normally used in financing consumer goods especially motor vehicles. A customer enters in the first contract and leases the car from the owner (bank) at agreed rental over a specified period. At the end of the leasing period, the second contract comes into effect when the bank sells the car to the customer at the agreed sale price. In this situation the customer has the option to purchase the goods from the owner (financial institution). QUESTION 4 An agency by ratification can only be done if certain conditions were fulfilled. What are these conditions? Answer Agency by ratification can arise in any one of the following situations: a) An agent who was duly appointed has exceeded his authority b) A person who has no authority to act for the principal has acted as if he has the authority Ratification may be expressed or implied under Section 150 of the Contracts Act 1950. A contract can only be ratified under the following circumstances: a) The act or contract done by the agent was unauthorized i.e without authority given or exceed given authority b) The unauthorized act done by the agent must be one which recognized by, not illegal c) The agent must be at the time of contract, expressly act as agent for the principal far@2019 9

d) The agent must have a principal who is in actual existence or capable of being ascertained, when the contract is made. e) The principal must have conceptual capacity at the time when the contract is being made at the time of ratification f) The principal must, at the time of ratification, have full knowledge of all material facts, unless it can be shown that he intends to ratify the contracts whatever the fact may be and assume responsibility for them g) The principal must ratify the whole act or contract. He cannot accept only part of the contract h) Ratification must be made within reasonable time i) The ratification must not injure a third party, i.e it must not subject the third party to damages or terminate his right or interest under Section 155 of the CA 1950 QUESTION 5 Explain the differences between a contract of service and a contract for service. Answer Contract of Service

Contract for service

1. The contract of employment is a person who puts his work at disposal of another so that the relationship is established between the employer and the employee.

Includes when people who contract to provide services for another otherwise than under a contract of employment are known as independent contractors.

2. Employee benefits shall be granted by the employer

Independent contractor required to grant his worker compensation through private insurance.

3

Any agreement, whether express or implied and if expenses whether formal or informal where the employer agrees to be employed. For example, office clerk and farm workers.

Independent contractor is a person is “in business of their account” such as garage proprietors, tailor, house builder.

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Employees are :

Usually, the duty to take reasonable precautions does not extend to independent contractors.

a) Entitled to protection under statuses: b) Employers owe duty of care; and c) Entitled to a set number of leaves and medical leaves.

An independent contractor’s own a set of annual and medical leaves. An independent contractor will be their own personally liable.

QUESTION 6 Briefly explain the characteristic of negotiable instruments. Answer

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A negotiable instrument has the following characteristics: a) Property The possessor of the negotiable instrument is presumed to be the owner of the property contained therein. A negotiable instrument does not merely give possession of the instrument but right to property also. The property in a negotiable instrument can be transferred without any formality. In the case of a bearer instrument, the property passed by mere delivery to the transferee. In the case of an order instrument, endorsement and delivery are required for the transfer of property. b) Title The transferee of a negotiable instrument is known as holder in due course.’ A bona fide transferee for value is not affected by any defect of title on the part of the transferor or of any of the previous holders of the instrument. This is the main distinction between a negotiable instrument and other subjects of ordinary transfer. The general rule of nemo dat quod non habet does not apply to negotiable instruments. c) Rights The transferee of the negotiable instrument can sue in his own name, in case of dishonour. A negotiable instrument can be transferred any number of times till it is at maturity. The holder of the instrument need not give notice of transfer to the party liable on the instrument to pay. d) Presumptions Certain presumptions apply to all negotiable instruments e.g. a presumption that consideration has been paid under it. e) Prompt Payment A negotiable instrument enables the holder to expect prompt payment because a dishonour means the ruin of the credit of all persons who are parties to the instrument. QUESTION 7 Explain the cooperative concept of Islamic Takaful scheme in Malaysia. Answer Takaful is defined as a scheme based on brotherhood, solidarity and mutual assistance which provides for mutual financial aid and assistance to the participants in case of need whereby the participants mutually agree to contribute for that purpose as stated under Section 2 of the Takaful Act 1984. Takaful is a Shari’ah which is complaint version of financial protection and other ...