BASIC PRINCIPLES OF LAW: CERTIFICATE MAY 2013 SOLUTIONS
1. In Statute Interpretation, the Rule that looks at natural and ordinary
meaning of the words as used in the statute is:
(a) Mischief rule
(b) Golden rule
(c) Literal rule
(d) Purpose rule
2. In Malawi Legal System, one of the subordinate courts is:
(a) Commercial court
(b) High Court
(c) Industrial Relations court
(d) Office of the ombudsman
3. Zangaphe and Zidzepano have entered into a contract where Zangaphe
has to construct a house for a price of MK2, 000, 000. After commencement
of the construction, when the house was window level, an earthquake came
and destroyed the house. Subsequently, the meteorological Office has
declared the site not fit for human occupation. Zidzepano wants to sue
Zangaphe for breach of contract. Which of the following defences will be
available to Zangaphe?
(a) Frustration
(b) Inevitable accident
(c) An Act of God
(d) Non fit injuria
4. Mr. Phiri wants to pay school fees for his son at one of the schools in town.
He does not want to give his son the money for fear that he might use the
money on trivial matters. He wants to issue the cheque to the school meant
for school fees of his son. What kind of indorsement should he use when
issuing the said cheque so that the money is used solely for payment of
school fees.
(a) Restrictive indorsement
(b) Special indorsement
(b) Blank indorsement
(d) Conditional indorsement
5. In company formation, the Constitution of the Company is:
(a) Memorandum of association
(b) Articles of association
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(c) Share certificate
(d) Corporate Governance
6. Jones has stolen 10 Million Kwacha at his work place. He deposited the
money in one of his accounts at PL Bank. Later, after one week, he has
instructed the bank to pay one of the Local Car Dealers 9 Million Kwacha for
a 3 tonne vehicle he has bought meant for his transport business so as to
make the stolen money clean. Jones is liable in:
(a) Corruption
(b) Theft by servant
(c) Fraud
(d) Money laundering
7. Two parties have entered into a contract involving the supply of used tyres.
In their formal agreement, they have stipulated that in case of disputes, no
court in Malawi shall have jurisdiction to settle the disputes. On what basis is
this provision illegal?
(a) That the provision is too tough to the parties
(b) That the provision is in breach of their own agreement
(c) That the provision is against public policy as it ousts jurisdiction of courts.
(d) That it infringes on individual freedom of choice
8. Banda was employed by one of the brewery companies as a cashier.
While on duty, it was discovered that Banda failed to account for MK1, 000,
000 he received from clients. The brewery company through the personnel
officer invited Banda and dismissed him outright for theft that was a serious
breach of his contract of employment. This dismissal is termed as:
(a) Constructive dismissal
(b) Wrongful dismissal
(c) Summary dismissal
(d) Unfair dismissal
9. In agency relationship, the agent has duties towards the principal. Which
of the following is not a duty towards a principal?
(a) Duty to receive remuneration
(b) To use proper care and skill
(c) To obey legal instructions
(d) To be loyal
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10. Phiri entered into a contract with Zulu for the supply of a wedding cake
for his son’s wedding, to take place next week. What category of goods will
the wedding cake herein fall into?
(a) Future goods
(b) Specific goods
(c) Merchantable goods
(d) Perishable goods
11. Which of the following is not an example of negotiable instruments?
(a) Bill of lading
(b) Treasury Bills
(c) Share warrants
(d) Cheques
12. The duty and authority of a banker to pay a cheque drawn on him by his
customer may be terminated in many ways. Which one of the following is
amongst those ways?
(a) By calling the bank
(b) By placing a notice in a newspaper
(c) By countermand of payment
(d) By closing the account
13. The only unity required in tenancy in common is:
(a) Unity of interest
(b) Unity of title
(c) Unity of time
(d) Unity of possession
14. Zakaria entered into a lease agreement with Nandi as a tenant for a
period of one year. After one year and without renewing the lease
agreement, Zakaria is clinging to the house despite several reminders to
vacate the premises. What kind of tenancy is being depicted here after the
expiry of one year?
(a) Tenancy at will
(b) Tenancy for years
(c) Periodic Tenancy
(d) Tenancy at sufferance.
15. Jane was involved in a road accident involving a minibus owned by
James. As a result of the accident, Jane has sustained a fracture of the left
thigh. She has visited on several occasions, one of the expensive private
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hospitals in town for treatment. She now claims refund of the money she paid
to the hospital from James or his Insurers. What kind of damages is Jane
seeking in this case?
(a) General damages
(b) Liquidated damages
(c) Special damages
(d) Unliquidated damages
16. Tinyade is intending to venture into business. She wants the business to be
fully controlled by her and that the business should not be a person in law.
What kind of business venture is she supposed to venture into?
(a) A corporative society
(b) A limited company
(c) Unlimited company
(d) Sole proprietorship
17. A private company is one that restricts its membership to:
(a) Twenty members
(b) Fifty members
(c) Two members
(d) Ten members
18. What does the word ‘ultra-vires’ mean in company law?
(a) Legal
(b) Latin Maxim
(c) Illegal
(d) Authority
19. Which of the following is not an example of an agent?
(a) Estate agents
(b) Auctioneers
(c) Couriers
(d) Bankers
20. John was employed by Zani as a Driver to transport its merchandise, with
specific instructions not to take passengers, though the notice was placed
behind the body of the vehicle. John breached this instruction and took
passengers. The vehicle was later involved in a road accident, and the
passengers have filed a suit in a court of law seeking damages. Under what
principle will the company be liable?
(a) Law of Negligence
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(b) Under principle of personal injuries
(c) Under principle of contract of employment
(d) Under the principle of vicarious liability.
SECTION B:
QUESTION ONE:
(a) Zelezi and Sofinala have entered into a contract for the supply of local
produce, 100 bags of maize. They did not however agree time as when these
bags of maize are to transfer from Zelezi to Sofinala. Mention three rules that
will apply to decide when the maize will be transferred between them? ( 6
marks)
ANSWER:
These are:
(i) Where there is an unconditional contract for the sale of specific goods in a
deliverable state, the property passes when the contract is made, and it is
immaterial whether the time of payment or delivery or both are postponed.
(ii) Where the contract is for specific goods and the seller is bound to do
something to the goods to put them into a deliverable state, the property
does not pass until this has been done and the buyer has notice thereof.
(iii) Where goods are delivered on approval or on sale or return basis, the
property passes when the buyer signifies his approval or acceptance to the
seller, or when he does any other act adopting the transaction.
(b) Atusaye has been retained by Zawo Manufacturing Company as an
agent to transport its merchandise to remote areas of the country. The
commodities to be transferred included tomatoes (perishables). On his way
to deliver, the vehicle without his fault developed a mechanical problem,
which prevented him from delivering the tomatoes. He made a decision to
sell the tomatoes to people around the area where the vehicle had a fault.
This was done after failing to contact the company since all phones were
switched off. Atusaye sold the tomatoes at a loss. The company now wants
to claim the lost money from Atusaye. Advise, using legal principles, the
chances of the company being successful in this suit. (10 marks).
ANSWER:
It has been submitted that Atusaye was appointed agent of the
manufacturing company. One of the types of agency relationship is that of
necessity. The law presumes that an agent has a certain amount of authority
to handle an emergency for the principal. For this kind of agency relationship
to exist, the following must be present: The agent must have been placed in
control of the principal’s property, a genuine emergency must have arisen,
which threatens the property, it must be impossible for the agent to contact
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the agent to seek his instructions and that the agent must have acted in
good faith.
In the case of GREAT NORTHERN RAILWAY CO. V. SWAFFIELD (1874), the
railway company, through no fault of its own, was unable to deliver a horse
consigned by rail. Unable to contact the owner, the company paid to put
the horse in livery stable, and was held entitled to recover the cost from the
owner.
Reverting to the present case, we note that all the elements for the existence
of agency of necessity were present, as outlined above. Atusaye acted in
good faith since in making sure that tomatoes were sold though at a loss, as
compared to have them all destroyed. Moreover, he did everything to
contact the company but no avail. This was an emergency that required him
to act very prudently.
We are therefore of the view that the company cannot succeed suing
Atusaye since all he was to the benefit of the company. The suit will therefore
fail.
(c) Mention four characteristics of a registered company under company
law? (4 marks)
ANSWER:
(i) Corporate personality distinct from its owners
(ii) Perpetual succession
(iii) Ownership of property
(iv) Limitation of liability
QUESTION TWO
A customer walks into a banking hall and decides to jump queues. Other customers react
and a row ensues between the other customers and the queue-jumping customer. The bank
teller near to the incident calls security to help but before security comes, the queue-jumping
customer turns to the bank teller, immediately and in rage he pulls out a handgun and points
it to the bank teller. The queue-jumping customer then utters the following words to the bank
teller “You will be dead by the time security guys will be here.” People around manage
to overpower the queue-jumping customer confiscate the handgun and immediately
everyone in the bank realizes that the handgun was actually unloaded. You are a senior
prosecutor and you have been approached by your juniors to advise whether there is a
criminal case that can be commenced against queue-jumping customer as regards what he
did to the bank teller. Back your discussion with the law. - (20 marks)1
The answer is yes. A criminal case called “common assault” can be commenced against the queue-jumping
customer. Assault is the any act which intentionally or recklessly causes another person to apprehend immediate
and unlawful personal violence. Assault is covered in the syllabus and in the module it is under chapter 2.1.2
Offences against persons. Students will get a combined mark of 15 for identifying from the facts and arguing that
indeed there is an offence of assault mentioning that there was immediate apprehend physical violence by the
bank teller who had no knowledge that the gun was unloaded he expected to be shot immediately. They will get 3
marks for justifying their analysis with the law generally and an extra 2 marks for citing the relevant legal
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QUESTION THREE
Mr Chandiona, a Malawi renowned investment banker works locally for Investment
Corporate Bank International (hereinafter referred to as the ‘Bank’), a Malawian bank with
branches all over the world including in a country called Republic of Sovereignty. His
contract with bank as well the terms and conditions of service clearly stipulate that his place
of work will be Blantyre, Malawi but that the bank shall at all times reserve the right to
transfer him to any of its braches here in Malawi or abroad. The Bank has now decided to
assign Mr Chandiona to head its branch in the Republic of Sovereignty. Mr Chandiona who
only joined the Bank last year when he returned from the same country i.e. the Republic of
Sovereignty where had worked for another bank for 20 years is refusing giving the following
reasons:
(a) That he left Republic of Sovereignty not of his free will but because people of that
country are very intolerant to other religious views and they had petrol bombed
his house on two occasions; and
(b) That on a separate occasion they also nearly kidnapped his children aright at
their school yard.
The Bank on the other hand is not backing down on the posting of Mr Chandiona saying that
it is only doing what the contract as well the terms and conditions of service allow it to do i.e.
to have the right to transfer Mr Chandiona to any of its braches here in Malawi or abroad.
The Bank has now decided to dismiss Mr Chambonda on account of his refusal to go to the
Republic of Sovereignty but before effecting its decisions the Bank wants your legal advice
as to whether firing Mr Champonda has a good legal standing based on the facts given
above. Briefly advise the Bank backing your advice with the relevant law. - (20 marks)2
authorities that of an assault consists of causing the victim to apprehend immediate physical violence and if they
mention collect case like Logden v DPP (1976)
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The Bank is on the wrong side of the law. By just mentioning this even without any justification a candidate
should get (2 marks). They are allowed to be as brief as they possibly can in answering the entire question.
Candidates will get 4 marks for justifying their answer along these lines of “Indeed the contract and the terms
and conditions of service all allow it to transfer Mr Chandiona to any of its braches here in Malawi or abroad. And
apart from that, at law, it is an implied condition of employment for an employee to obey all lawful and reasonable
order made by his employers. If they mention a correct case authority like Cresswell v. Board of Inland
Revenue (1984) or any relevant case to support their justification they should 2 marks for the case.
Candidates should also mention that although an employee is legally supposed to obey his employer’s orders,
the orders must be lawful and reasonable. The implementation of terms and conditions of service can only be
effective it is both lawful and reasonable to do so. An employee is not required by any law in Malawi to obey
unreasonable orders for example an employee is entitled to refuse to obey his employers orders if the orders
expose himself to personal danger. A candidate who mentions this (employees right not to obey unreasonable
order should get 4 marks and that candidate should also get another 2 marks if he mentions a correct case
authority like Ottoman Bank v Chakarian (1930) or any relevant case to support their justification.
The candidate should get 4 marks for interpreting the facts in the problem question and pointing out that the
Bank’s orders of sending Mr Chandiona to a country where he and his family were in danger only last year
subjects him to immediate personal danger and the law does not allow that.
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QUESTION FOUR
Write brief notes on the following legal principles and cases.
(a) Case Law as a source of law
(b) Nuisance
(c) Byrne –V- Van Tienhoven (1880)
(d) Lee V Lee’s Air Farming (1960)
(20 marks)
ANSWER:
Case law is one of the sources of law in Malawi and in almost all jurisdictions.
Case law is also known as Judge Made law. What it means is that when the
Judges are interpreting the law made by the Legislature, they are themselves
involved in law making. The decisions they pass in various cases on different
legal points later become guiding principles. Remember, decisions passed by
the Superior Courts are binding on the courts below.
Nuisance is a substantial interference with an occupier’s enjoyment of land or
an interference with his or her rights over land, or indirectly causing some
physical damage to land. Nuisance can be caused by many factors such as
vibrations, fumes, smells or noise. Possible defences to nuisance include
necessity, consent or prescription. Prescription is where the conduct
complained of has gone on continuously for more than twenty years, and
therefore the owner cannot complain after the twenty years of the nuisance.
Byrne –V- Van Tienhoven (1880): In this case Van Tienhoven in Cardiff posted
a letter offering to sell goods to Byrne, a New York customer, on 1st October.
On 8th October, Van Tienhoven posted a letter withdrawing the offer. On
October 11th, Byrne telegraphed acceptance and this was confirmed with a
letter on 15th October. By 20th October, the letter of revocation reached
Byrne. It was held that the revocation was ineffective since acceptance took
place before Byrne received the revocation.
Lee –V- Lee’s Air Farming: Mr. Lee was the sole proprietor and majority
shareholder in an aerial crop spraying business. He was also the working
director of the company. He was killed while piloting an aircraft. It was held
that although he was the majority shareholder and sole working director of
the company, he and the company were separate legal persons and
therefore he could be an employee of it with rights against it when he was
killed in an accident in the course of his employment. The case illustrates the
effect of incorporation in company law.
QUESTION FIVE:
(a) What do you understand by the word ‘crossing on a cheque’? (3 marks)
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ANSWER:
Where a cheque is crossed on its face, it means that it must be paid by the
paying bank to another bank, called collecting bank. It may not be paid as
cash passed over the counter.
(b) What is difference between general and special crossing of cheques? (4
marks)
ANSWER:
General crossing simply means that the cheque can be paid to another
bank, while special crossing simply means that the cheque must be paid to
the bank whose name has been specifically written across the cheque.
(c) Ulemu has entered into a contract with Nyoni for the purchase of a motor
vehicle. Ulemu has accepted the motor vehicle at his home. He took the car
for re-painting at one of the local garages. He has used the car for three
months and it has covered 800 KM. One morning, Ulemu discovered that the
engine is not working at all. He called Nyoni informing him of his intention to
repudiate the contract. Advise them. (7 marks)
ANSWER:
Section 36 of the Sale of Goods Act stipulates that a buyer accept the goods
when he/she intimates to the seller that he has accepted the goods.
Secondly, if the buyer does any act to the goods that is inconsistent with the
ownership of the seller, such as sub selling, and lastly retaining the goods,
after lapse of a reasonable time without intimating to the seller that he has
rejected them.
In the case of BERNSTEIN –V-PAMSONS MOTORS (1986), P bought a new car
from D. A defect caused the engine to seize up three weeks after purchase,
the car having covered only 140 miles. P sought recession. It was held that
the car neither was of merchantable quality nor reasonably fit for its purpose.
However, P lost his claim because he was deemed to have accepted the
car under Section 36.
Reverting to the present case, Ulemu accepted the motor vehicle. He started
using it and took it for re-painting. It is no doubt that by re-painting the motor
vehicle, Ulemu did something inconsistent with ownership of Nyoni. Moreover,
three months expired without indicating that he wanted to rescind the
contract. Three months is more than a reasonable time. Hence, Ulemu
cannot rescind the contract, as per Section 36 of Sale of Goods Act.
(d) What is negotiation of a bill and mention two ways how a bill is
negotiated? (6 marks)
ANSWER:
Negotiation of a bill is a when a bill is transferable from one person to another
in such a manner as to constitute the transferee the holder of the bill. A bill
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can be negotiated either if it is payable to the bearer by delivery or if it
payable to order, by indorsement of the holder completed by delivery.
-THE END-
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