Certificate in Accounting and Finance Stage Examination

August 23, 2022

3 hours – 100marks
Additional reading time – 5 minutes

Business Laws – Final Mock

Instructions to examinees:
(i) Answer all questions.
(ii) Answer in black pen only.
(iii) Start new question on a new page
(iv) Write page number on top of your answer scripts.

Q.1 Answer the following Multiple Choice Questions (MCQs). You are required to choose only 1
answer to each of the following questions:

1. Ali was abroad for the last 5 years. He come back to his hometown, recently. Aqib, his
buddy and good friend of Ali. Aqib invited him on a tea for gossip and meet-up after a long
time. On the invited day, Ali didn’t come due to a family function. In this case
a) Aqib has no remedy against Ali
b) Aqib has to wait for another invitation from Ali
c) Aqib has the right to sue Ali for not honoring his words
d) Ali has to invite Ali again, to perform the promise

2. Ayyan wants to buy a specific laptop (Delta 598) for his study. The Market price of that
laptop he wanted to buy is Rs. 35,000 at every shop. Due to a shortage of funds, he can’t pay
this amount at a time and also can’t wait more due to final exams. He find-out a friend in his
hostel whose brother has a shop at Hafeez center offering same laptop at same non
negotiable price. He requested for installment in payment. On a Special request, 5
installments would be granted to him. In this case, installments would be treated as:
a) Contingent contract
b) According to norms of the business
c) Counter offer, adding conditions while accepting
d) It is an invitation to offer

3. Mr. Mughal is a reputable teacher in the CSS field and also teaches in the different institutes
of Lahore. The government of Punjab wants to conduct a seminar in Pearl Continental Hall
and also wants to invite Mr. Mughal to this event. On a Special request of a family member,
Mr. Mughal accept this offer and agreed on a fee of Rs. 10,000 for an hour. This amount
was transferred to him after 2 months of this event. it is a
a) Present consideration
b) Past consideration
c) Future consideration
d) Not a consideration at all
4. Ala-Din is a landlord and also a major investor in Foreign companies. He has purchased 5
private companies in Pakistan due to economic conditions in Pakistan and lack of law &
order. Ala-din wants to dispose of all investments in Pakistan and shift himself abroad. Ala-
 Din intending to deceive Baba, falsely represents that the total earning from 5 factories is
Rs.10 Billion, annually and induces Baba to buy these factories.
a) The contract is voidable on the part of Ala-Din
b) The contract is voidable on the part of Baba
c) The contract is voidable on both Ala-Din and Baba part
d) None of above

5. A B and C agree to share the money obtained by fraud. This agreement is

a) Valid
b) Wagering
c) Void
d) Voidable

6. Rizwan was challenged for the next t20 for bowlding him within the first 10 balls, by
Shamsi. Rizwan challenged him to hit 2 six in an over. These challenges are valid because
they are:
a) games of skill
b) just games
c) games of luck
d) all of the above

7. A, a businessman leaves his goods at B’s place by mistake. B treats the same as his own and
uses it. B is bound to compensate A for it, under the principle of
a) Specific Performance
b) Remission
c) Special damages
d) Quasi-contract

8. Which of the following is correct?

a) Novation means making a new contract in place of an old contract
b) Alteration means making a new contract in place of an existing one
c) Performance of the contract is not a method of discharge of contract
d) All of the above

9. H’s mill stopped due to the breakdown of a shaft, which was delivered to B, a common
carrier to be taken to the manufacturer for repairs. H did not communicate to B, that delay
in delivery would cause a loss of profits. For some reason, the delivery was delayed by B
beyond a reasonable time. Here
a) H can rescind the contract
b) H cannot claim loss of profits from B
c) H can claim loss of profits from B
d) H can claim loss of profits from the manufacturer

10. Out of the following, who can appoint an Agent?

a) Minor
b) Person of sound mind
c) Person of unsound mind
d) All of these

11. The partnership agreement must be…………

a) A valid agreement
 b) For a lawful object
c) Between the persons competent to contract
d) All of above

12. Endorsement means signing on ____________ for the purpose of negotiating such negotiable
instrument.
a) The face of the negotiable instrument
b) The back of the negotiable instrument
c) A slip of paper annexed to the negotiable instrument
d) Any of these

13. A negotiable instrument shall be payable to ____________ is an order instrument

a) A particular person
b) A particular person or his order
c) The order of a particular person
d) All of these

14. The constitute of the Islamic Republic of Pakistan was approved by Parliament on…………
a) 14th March 1974
b) 9th May 1984
c) 10th April 1973
d) 2nd July 1994

15. Go Petroleum limited and Vital petroleum limited made a contract in which both parties
decided that they will not sell the petrol per Liter at Rs 150. At that time, only these two
companies have petrol in Pakistan due to the strike of Arabian countries.
This contract is not approved by the Competition Commission of Pakistan CCP. Decided the
status of this agreement.
a) Void
b) Valid
c) Voidable
d) legal

Subjective Questions

Q.2 a) Danish owes a sum of Rs. 2.3 million to Mr.Zillay against three different agreements. In
March 2022, Danish sent a cheque of Rs. 2,000,000. The detail of loans taken from
Mr.Zillay is as follows:
Year Amount Rupees
2018 500,000
2019 700,000
2020 250,000
2021 850,000

 Rs. 700,000 is the amount of loan which was taken in August 2019 and guaranteed by MR.
Khayal. Mr. Khayal instructed Mr.Zillay to adjust the full amount against the loan amount.
 Rs.500, 000 has become the time-barred debt and Mr. Zillay wants to adjust this amount.
 Rs.850, 000 is a recent loan, which is taken with a mortgage of a commercial shop. The
market worth of Shop is 950,000.
Requirement:
Under the Provision of Contract Act 1872, guide Mr. Zillay about apportionment of payment
concerning the above issues. (06 Marks)
 b) Shakaar limited (SL) took a loan from MCB of Rs. 50 million for the construction of a
building. The total projected cost for this building is Rs. 20 billion and the rest of the
investment is taken from the public, by issuing the prospectus of SL.

This land was purchased from one of the director of SL and director assured this land can be
contructed till 10th floors. After investigations, it was indetified that building can only be
constructed upto 3 floors.

Under the provision of Contract Act 1872, evaluate the statement of director and status of
contract between director and SL (04 Marks)

Q.3
a)
- If President returns a bill passed by both the houses for reconsideration, how such a bill can
become an Act/Law? Discuss briefly.
- Briefly differentiate between ‘Statute’ and an ‘Ordinance’. (04 Marks)

b) Quetta gladiators made a contract with Shahid Afridi for PSL 7. As agreed, Shahid Afridi
will be representing Quetta gladiators as an opener. After Match 5, shahid Afridi caused
serious injury and was unable to play the remaining matches of this tournament.

Under the provision of contract Act 1872, can Quetta gladiators demand performance from
Shahid Afridi? (03 Marks)

Q.4 Sharaqpur and Ahmadpur Sharqia lent Rs 2.0 million to Muridkey, Lahore, and Faisalabad jointly.
On due date Lahore became insolvent. As per the requirements of the Contract Act 1872 explain:
(i) Without informing Sharaqpur, whether Muridkey can be compelled to pay the full amount
to Ahmadpur Sharqia
(ii) What rights are available to Muridkey, if he repays the full amount. (04 Marks)

Q.5 a)
i. Aine, Bazaar, and Charaagh were partners in a firm. Aine died in a road accident.
However, Bazaar and Charaagh continued the business without settling the accounts of the
deceased partner. Aine’s share on the date of his death amounted to Rs. 25 million. After
two years, the accounts were settled and the amount of Rs. 25 million was paid to the legal
heirs (Minors). The legal heirs have now filed a suit claiming Aine’s share of profit for the
two years amounting to Rs. 1,800,000. Bazaar and Charaagh deny such share as Aine had
ceased to be a partner, from the date of her death.

Give your views on the above situation and also calculate the share of return which has to be
paid for 2 years, based on the Partnership Act, 1932. (03 Marks)

ii. Briefly explain the rules regarding performance of reciprocal promise. (07 Marks)

iii. Rashid and Khan agreed to deliver Antibiotic medicine during the next 5 months. As per
the term of the contract, performance will be made on-demand, at any time when the
medicine would be required and total payment is made in advance.

After 3 days of the contract, Local authorities declare all anti-biotic medicines as toxic. No
delivery takes place during these 3 days.

Under the provision of contract Act 1872, explain the treatment of advance payment and legal
status of contract. (03 Marks)

b)
 What is attempted Performance. (02 Marks)

Q.6 a)
State with brief reasons whether the following are promissory notes or not?
(i) “I am bound to pay Rs.1,000 which I have taken from you.”
(ii) “I promise to pay B Rs.1,000 when he delivers the goods.”
(iii) “I promise to pay B Rs.1,000 after deducting therefrom any money which he may owe
me.”
(iv) “I promise to pay B 100 shares and 500 debentures of ABC Ltd.” (04 Marks)

b)
Discuss with reasons, whether the following persons can be called as a ‘holder in due course’
under the Negotiable Instruments Act, 1881:
(i) X obtains a cheque drawn by Y by way of a gift.
(ii) A the payee of the cheque, who is prohibited by a court order from receiving the amount
of the cheque.
(iii) M, who finds a cheque payable to the bearer, on the road and retains it.
(iv) B the agent of C is entrusted with an instrument without endorsement by C, who is the
payee.
(v) B, who steals a blank cheque of A and forges A’s signature. (05 Marks)

Q.7 a) Mr. Asim is an engineer at ABC Telecom Limited. His monthly salary is Rs. 50,000 which
is directly credited into his account with Good Bank limited. On 4th December 2020, a
deposit of Rs 1,5000,000 is made via wire transfer from an offshore account of UAE
relationship manager Good Bank limited. Mr. Khalid noticed the huge deposit and
requested justification from Mr. Aslam, who ignored the same. Mr.Khalid did not report to
anyone in the bank considering the huge amount and relationship with MR.Aslam.

After a week on 11th December 2020, Good Bank limited received different cheques for
clearing issued by Mr.Aslam of smaller amounts to various individuals and business owners
totaling Rs. 15,000,000. Being suspicious he injured the same from cheques Good Bank
would have no amount in his account that could be questioned.

You are the AML and Compliance officer of the Bank and have been intimated By
MR.Khalid of the above situation for further advice and action.

Requirement:
 Under the Provision of Anti-money Laundering Act 2010, how we will predict the offense of
Money laundering.
 Punishment for Good Bank limited and Mr.Asim if anyone will involve in money
laundering Act 2010 (06 Marks)

b) Enlist the power of Arbitrators as expounded in Arbitration Act 1940 (03 Marks)

Q.8 a)
Aine entered into a contract with Parizaad, the manager of a radio program, to conduct a
show, twice a week, during the next three months. Aine did not appear for the 6th show. She
conducted the next show but soon thereafter Parizaad rescinded the contract and informed her
that her services were no longer required as she failed to conduct the sixth show. Narrate the
rights of Parizaad and Aine in the above situation. (03 Marks)
 b)
State whether the following are contingent contracts or otherwise, giving brief reasons for your
answer. Please also explain that in the case of contingent contract when it will be enforceable by
law.
(i) A agrees to pay B Rs. 50,000 if he proves that the airplane will arrive in UAE in 2 hours.
(ii) A agrees to manufacture a jet for B for Rs. 10,000,0000 on the condition that the
payment will be made on completion of Jet.
(iii) A agrees to sell his house to B for Rs. 1,000,000 if he will receive a lifetime visa for the
USA as he has applied.
(iv) A agrees to pay Rs. 2,000 to B, on 1st Ramzan. (04 Marks)

c)
Define misrepresentation. (04 Marks)

Q.9 a)
Gum Limited and Pen limited are manufacturing brands of Piano Ballpen. Both are supplying
this product in overall Pakistan. Both companies agreed, to not supply this product in the region
of DG khan due to illiteracy and a lower supply chain.

Under the Competition Act 2010, elaborate the validity of the agreement. (03 Marks)

b)
 Define the role of the Competition Commission of Pakistan (CCP) (02 Marks)
 Enlist the rights of individuals according to Personal Data Protection Bill, 2020(03 Marks)
 What is Designation of Payment System? (02 Marks)
c)
Q.10 a)
Jazz, Zong, Telenor, and Warid are partners and involve in the business of manufacturing
teacups. Jazz is a social person and is also responsible for online orders for the firm. He received
an order, to deliver 750 pieces of the tea cup, in Malaysia.

For this transaction, jazz opens a separate bank account for making Latter of Credit (Mandatory
for the foreign transaction). Jazz didn’t consult with other partners and also didn’t disclose this
transaction in the books of a firm.

Under the provision of Partnership Act 1932, comment on the above situation. (04 marks)

b)
Zakoori Brothers, a firm, is involved in the business of construction. ZB received an order to
construct model houses in the Punjab Housing Society, Lahore. Six brothers, a firm, is involved
in the business of tile and marble trading, and its head office is located in Punjab Housing Society.

Small brother, a partner of Six brothers, made an agreement with Zakoori brothers that all
constructions cost, for model houses, would be provided by Six brothers in return for 8% profits
from this project.

Under the provision of Partnership Act 1932, analysis this contract. (03 Marks)

c)
Enlist the general duties of partners, under the Partnership Act 1932. (03 Marks)

(THE END)