ACCA F4 -- MOCK EXAMS DECEMBER ALL TEN questions are compulsory and MUST be attempted

2010

1. Giving suitable examples, explain the difference between and obiter dictum of a court judgment.

the ratio decidendi (10 marks)

2. (a) Developer A has contracted with Landowner B, under which A would build a house on Bs land at a cost of $1 million, completion to be on 1st April 2009. There is a clause in their contract which states as follows:- If the Developer is late in completion, then he shall pay liquidated damages of $1,000 per day for each day of delay to the Landowner. Developer A has delayed in the completion by 10 days. Advise Landowner B. (7 marks) (b) What is mitigation of losses in the law of contract? (3 marks) (10 marks)

3. Explain what is meant by the Indoor Management Rule in Company Law. Please also state one exception to the operation of this Rule. (10 marks)

4. In relation to company law, explain the following:(a) annual general meeting (b) extraordinary general meeting (c) class meeting

(4 marks) (2 marks) (4 marks) (10 marks)

5. What are the three elements of the tort of negligence which a plaintiff must prove, in order to be successful in his suit against the defendant? (10 marks)

6. Explain what is meant by the veil of incorporation in company law. Are there instances when a court would lift this veil? (10 marks)

7. To be valid, all acceptances must be actually communicated to the offeror. Is this statement true or not, in the law of contract? Please explain, with reasons. (10 marks)

8. Twenty men were engaged by the Stars Shipping Company to sail as crew members of the merchant ship Evergreen from Singapore to Hong Kong, then to Shanghai, and back to Singapore. While that ship was docked in Hong Kong, 5 members of the ships crew of 20 deserted the ship. Fearing that more crew members may desert the ship, the ship captain promised the remaining 15 members of the crew that he would pay each of them extra wages if they were not to desert the ship during the remainder of their trip. However, when the ship returned to Singapore, the captain broke this promise. Required:Analyse this scenario from the perspective of contract law, and discuss whether there is a binding contract between Stars Shipping Company and the 15 crew members. (10 marks)

9.

(a) John was managing director of a company which had recently failed to win a valuable contract. Pretending to have an uncommon disease, he persuaded his company to release him from his employment agreement with the company. Now that he is longer employed as a director by that company, he feels free to try to obtain the contract for himself, which he successfully does. Discuss whether there are any legal issues that arise out of his action. (5 marks)

(b) Michael is the Finance Director of a company. He did not examine carefully the financial statements relating to his companys investment in a project which it (the company) was losing money. The financial statements had been wrongly prepared and showed that the company was making a profit on that project when in fact it was making a loss. Therefore, the company continued to invest even more money into the project, and thus incurring even more losses, before the mistake was finally discovered. Is Michael liable in any way? (5 marks) (10 marks)

10. Massive Bank is considering whether to grant to Flimsy Enterprises Pte Ltd an unsecured loan of $300,000 for its operational needs. The Bank has heard some rather negative comments about the company. If, despite that, the Bank still proceeds to grant a bank loan to the Company, and assuming that the Company is subsequently wound up, then how would the Banks $300,000 loan rank as against the other creditors of the Company? (10 marks)