UNIVERSITY OF GHANA
(All rights reserved)
BSC. ADMINISTRATION SECOND SEMESTER EXAMINATIONS: 2017/2018
UNIVERSITY OF GHANA BUSINESS SCHOOL
COURSE CODE: UGBS 206 COURSE TITLE: COMMERCIAL LAW II (3
CREDITS)
INSTRUCTIONS:
ANSWER ALL QUESTIONS IN SECTION A, ALL QUESTIONS IN SECTION B
AND ANY ONE QUESTION FROM SECTION C (I.E. A TOTAL OF 38
QUESTIONS)
ANSWER ALL QUESTIONS IN THE ANSWER BOOKLET
TIME ALLOWED: TWO (2) HOURS
SECTION A
ANSWER ALL QUESTIONS IN THIS SECTION (30 MARKS)
1.
A central bank’s main function is to undertake monetary control operations and thus
to administer the amount of money in the economy.
A. True
B.
False
2.
When a banker makes payment of a cheque after banking hours he would be held ___
A.
Liable
B.
Reasonable
C.
Acceptable
D.
Confirmable
3.
One of the conditions to honour the cheque by the paying banker is that amount in
words and figures should_______________
A.
Differ
B.
Tally
C.
Be clear
1
Examiner(s): Dr. O. Anku-Tsede, R. Atta-Kesson, J. Selorm Tsorhe, L. Ohene Obeng &
D. Ohemeng-Mensah
D.
Be enough
4.
Where a customer has issued a cheque date of which is yet to come, such a cheque is
called______________
A.
Stale cheque
B.
Post-dated cheque
C.
Crossed cheque
D.
Stolen cheque
E.
Decent cheque
5.
Payment of a cheque must be made by the banker within banking hours
A.
True
6.
A bearer’s cheque is always payable to bearer
A.
True
7.
Stopped payment cheques should be paid by the banker
A.
True
8.
When a bank pays a cheque according to the instructions, in good faith and without
having reason to doubt the bonafide of the presenter, such a payment is__________
A.
Wrong payment
B.
Late payment
C.
Future payment
D.
Payment in due course
9.
Crossing of a cheque can be done by the drawer only
A.
True
10.
A banker who collects a cheque for and on behalf of his customer is ____________
A.
Collecting Banker
B.
Paying Banker
C.
Advising Banker
D.
Confirming Banker
11.
A banker on whom a cheque is drawn by the customer is __________________
B.
B.
B.
B.
False
False
False
False
2
Examiner(s): Dr. O. Anku-Tsede, R. Atta-Kesson, J. Selorm Tsorhe, L. Ohene Obeng &
D. Ohemeng-Mensah
A.
Collecting Bank
B.
Paying Bank
C.
Advising Bank
D.
Confirming Bank
12.
Private insurance products in Ghana does not include
A.
Fire Insurance
B.
Workmen’s Compensation Insurance
C.
Social Security
D.
Term Assurance
E.
Commercial Liability Insurance
13.
The insurance industry in Ghana is composed of all the following except
A.
Insurance Companies
B.
National Insurance Commission
C.
Prudential Insurance
D.
Insurance Intermediaries
E.
Re-Insurance Companies
14.
The Negotiable instruments are substitutes for money.
A.
True
15.
The transferee of a negotiable instrument takes the instrument subject to the defects in
the transferor’s title.
A.
True
16.
Negotiation of bills of exchange operates as an exception to the doctrine of privity of
contract.
A.
True
17.
Under Ghanaian law, a cheque is an example of...
B.
B.
B.
False
False
False
i) Bill of Exchange
ii) Negotiable Instrument
iii) Financial Instrument
A.
I only
B.
I and II only
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Examiner(s): Dr. O. Anku-Tsede, R. Atta-Kesson, J. Selorm Tsorhe, L. Ohene Obeng &
D. Ohemeng-Mensah
18.
C.
I and III only
D.
All of the above
Which of these is the least likely duty required of a customer of a Bank?
i) Duty to deposit money in your account
ii) Duty to issue cheques in a manner as to prevent fraud and or forgery
iii) Duty to communicate any unusual occurrences regarding your account with the
bank
iv) Duty to manage the transactions on your account by periodic reconciliations
A.
IV only
B.
II only
C.
III only
D.
I only
E.
All of the above
Use this premise to answer questions 19 to 22
Akosua Mansa is a graduate of UGBS and is 22 years. Her father recently bought her a brand
new Toyota Avalon car for graduating with a First Class Honours in Accounting. Akosua's
father has indicated that Akosua is responsible for insuring the car since she studied
insurance law in school. Akosua therefore visited Donewell Insurance Group Limited to find
out about the various policies they have. At the end of her visit she bought two policies:
Policy A - on the car and payment is made one time only annually
Policy B - on her person, where her father and sister will be paid some money should Akosua
dies; payments are made monthly by Akosua until her death.
19.
What is the name of the payments being made by Akosua under the policies?
…………………………………….
20.
What is the broad type of insurance Akosua bought with respect to Policy A?
…………………………………….
21.
What is the broad type of insurance Akosua bought with respect to Policy B?
……………………………………
22.
Should Akosua die 10 years after contributing to Policy B, which of the following
persons will receive the sum assured?
I.
Father
II.
Akosua
III.
Sister
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Examiner(s): Dr. O. Anku-Tsede, R. Atta-Kesson, J. Selorm Tsorhe, L. Ohene Obeng &
D. Ohemeng-Mensah
IV.
Mother
A.
All of the above
B.
Father and Mother only
C.
Father and Sister only
D.
Akosua only
E.
Father only
Use the premise below to answer questions 23 to 26
Sherry is a business woman who has been doing business with Ming, a manufacturer. In
Sherry's line of business, she offers credit to some of her loyal customers in order to boost
sales and increase revenue. On occasion, Sherry ordered products from Ming valued at
GHS100, 000.00 but was unable to pay cash for them because her customers had not paid
even though the amounts were due. She was also traveling out of the country for three
months to visit her kids abroad. In her dilemma, she remembered her commercial law lessons
from decades ago. She quickly wrote the same words on two different than sheets of paper
and signed them. The papers read: "Pay Ming a sum of GHS50, 000.00 on the presentment of
this document." She addressed one of the documents to Vicky and the other to Ramon, who
are both here customers and handed them to Ming as her payment.
23.
What is the name of the document written or issued by Sherry?
…………………………………
24.
In the context of the document above, who is/ are the Drawer(s)?
25.
In the context of the document above, who is/ are the Payee(s)
26.
In the context of the document above, who is/ are the Drawee(s)
27.
Two parallel transverse lines drawn across the cheque is called____________
28.
A.
Endorsement
B.
Transfer
C.
Assignment
D.
Crossing
E.
Negotiation
When a cheque is drawn on a bank, the bank is called the______________
A.
Drawer
B.
Endorser
C.
Acceptor
D.
Drawee
E.
Endorsee
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Examiner(s): Dr. O. Anku-Tsede, R. Atta-Kesson, J. Selorm Tsorhe, L. Ohene Obeng &
D. Ohemeng-Mensah
29.
30.
The crossing in a crossed cheque can be cancelled by _____________
A.
Drawer
B.
Endorser
C.
Acceptor
D.
Drawee
E.
endorsee
Mere signature of the payee on the reverse of the instrument is called__________
A.
Full
B.
Blank
C.
Conditional
D.
Restrictive
E.
Permissive
SECTION B (20 Marks) Write short notes on the following:
31.
Aleatory Contracts (3 Marks)
32.
Who is a customer of a bank? (2 Marks)
33.
Subrogation in insurance contracts (3 Marks)
34.
Indemnification (2 Marks)
35.
Holder in due course (3 Marks)
36.
General Endorsement (2 Marks)
37.
Distinguish between the primary market and the secondary market of the capital
market (5 Marks)
Section C (20 Marks) Answer any one question from this section
38.
In a level 200 class of 325 students, Agyeiwaa, Seyram, Naa Lamley, Fati and Afiba
begin a debate during a commercial law lecture. Yaw Konko screams from the back
claiming there are no differences between a cheque and a bill of exchange. This claim
6
Examiner(s): Dr. O. Anku-Tsede, R. Atta-Kesson, J. Selorm Tsorhe, L. Ohene Obeng &
D. Ohemeng-Mensah
by Yaw Konko throws the class into feuding zone made up of small pockets of
debating teams and groups. It becomes rather heated and noisier as well as emotional
with everyone claiming to be right. At the same time Jackson claiming to be the Lord
Denning of the class and his friend Patrick claiming to be the Justice Cardozo of the
class are almost involved in the exchange of blows over the same issue. Your
Commercial Law lecturer has just walked in and has promised a reward of GHs
500.00 to the best student who can define and differentiate between a cheque and a
bill of exchange. As a student in this class, define and differentiate the differences if
any between a cheque and a bill of exchange (20 Marks).
39.
Kporha, Okyere, Adumasa, Kyinto and Djibril have recently graduated from College
with honours. They have been very good friends from their basic school days till now.
As friends, they have been involved in different entrepreneurial activities including
setting up different media businesses and also going into oil and gas ventures
together. Recently, whiles on a trip to Belgium, they discovered that the financial
sector holds the key to securing and guaranteeing their fortune. One of their course
mates at the University unsuccessfully set up a savings and loans business which
collapsed only after three months due to different reasons and mismanagement. They
have come to you as a student of Commercial Law ii to explain to them the type of
financial institutions that exists under Act 930 and the procedure as well as
requirement that one must comply with in setting up a bank in Ghana (20 Marks).
7
Examiner(s): Dr. O. Anku-Tsede, R. Atta-Kesson, J. Selorm Tsorhe, L. Ohene Obeng &
D. Ohemeng-Mensah