Professional Documents
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CAF 4 Spring 2022
CAF 4 Spring 2022
CAF 4 Spring 2022
Suggested Answers
Certificate in Accounting and Finance – Spring 2022
The criminal laws in force in Pakistan include Pakistan Penal Code, Anti-Money
Laundering Act etc.
A.3 (a) Following are the possibilities of execution of the proposals presented by Salman:
Hence, proposal no. (i) can be executed if one more partner agrees to it besides
Akmal and Salman.
Since Nadir has already disagreed with the proposal no. (ii), it cannot be
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Certificate in Accounting and Finance – Spring 2022
Akmal’s agreement to proposal no. (ii) only, means that he is not in agreement
with proposal no. (i). Despite of Akmal’s and Nadir’s disagreement, proposal
no. (i) can still be executed if the other two partners of KTC agree to execute it.
(b) Zara may form a particular partnership for 5 years with Zaheer in respect of
Zareer Bridals (ZB). In this way, she will be able to take decision of extending
or ending the partnership after 5 years because partnership contract can only be
varied by consent of all the partners.
The statutory rights and duties of Zara and Zaheer which can be restricted or
extended in Zara’s favour by way of a partnership contract are as follows:
Zara may exclude the shop, if purchased for ZB, from being considered as ZB’s
property.
A.4 (a) If XBL cleared the cheque and funds were transferred to RDBL i.e. otherwise than
to the banker to whom it was specially crossed (RNBL), in that case, XBL shall be
liable to Ghalib Mehmood i.e. true owner of the cheque, for any loss he may sustain
owing to the wrong clearance of cheque because it will be considered to have been
paid out of due course.
However, XBL will not be liable to Ghalib Mehmood, if the cheque presented for
payment:
(i) did not at the time of presentment appear to be crossed; or
(ii) had a crossing which was altered otherwise than as authorized by the
Negotiable Instruments Act, 1881;
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Certificate in Accounting and Finance – Spring 2022
and XBL cleared the cheque and transferred the funds in good faith and without
negligence.
(b) If RNBL received funds from XBL against the crossed cheque in good faith and
without negligence, then RNBL shall not incur any liability by reason only of
having received such payment even if the customer had no title or defective title
thereto.
(c) Following are the circumstances in which a banker must refuse payment of a
cheque:
(i) where bank has received countermand of payment;
(ii) where bank has received notice of customer’s death;
(iii) where bank has received notice of adjudication of the customer as insolvent;
(iv) where cheque presented for payment has been crossed specially more than
once.
A.5 (i) BT will be held liable towards IL and will have to pay the damages because default
by AB being third party to the contract, on whose work the promisor was relying
does not render the contract void on account of supervening impossibility.
However, BT can recover ordinary damages from AB which occurred due to breach
of contract. BT can also recover special damages if it was known to AB at the time
of making the contract that ovens were to be delivered onwards to IL.
Amount of damages in both cases i.e. those claimable from AB and those payable
to IL would depend as to whether or not the ovens manufactured by AB could be
readily purchased from the market.
(ii) The contract between BT and FC is partly valid because in case of alternative
promises if one branch of contract is legal i.e. imported goods and the other branch
is illegal i.e. smuggled goods, then, only legal branch can be enforced as illegal
branch is void.
(iii) BT’s excuse is not valid as political unrest/civil disturbances do not render a
contract void on account of supervening impossibility. BT will be held liable to pay
damages suffered by OL due to breach of contract.
OL is not bound to accept the machines imported from Taiwan as it will result in
alteration of original contract.
(iv) Contract between BT and the customer was established under coercion as the
customer threatened to damage BT’s property. Here, manager’s consent to deliver
the latest model of air conditioner in replacement of earlier model was not obtained
freely due to which the contract is voidable at the option of BT.
(v) HL cannot hold BT liable for breach of contract because the agreement entered into
between them was void for uncertainty as the price of the television sets is not
capable of being made certain.
A.7 (a) In following situations, a person may be held accountable for a money laundering
offence if he:
(i) acquires, converts, possesses, uses or transfers property, knowing or having
reason to believe that such property is proceeds of crime;
(ii) conceals or disguises true nature, origin, location, disposition, movement or
ownership of property, knowing or having reason to believe that such
property is proceeds of crime;
(iii) holds or possesses on behalf of any other person any property knowing or
having reason to believe that such property is proceeds of crime;
(iv) participates in, associates, conspires to commit, attempts to commit, aids,
abets, facilitates, or counsels the commission of the acts specified above.
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Certificate in Accounting and Finance – Spring 2022
(c) Following are the practices that prevent, restrict, reduce, or distort competition in
the relevant market through abuse of dominant position:
(i) Unfair trading conditions: i.e. limiting production, sales and unreasonable
increases in price etc.;
(ii) Price discrimination: by charging different prices for same goods or services
from different customers in the absence of objective justifications that may
justify different prices;
(iii) Tie-ins: where the sale of goods or service is made conditional on the
purchase of other goods or services;
(iv) Making conclusion of contracts subject to acceptance by the other parties
of supplementary obligations which by their nature or according to
commercial usage, have no connection with the subject of the contracts;
(v) Applying dissimilar conditions to equivalent transactions on other parties,
placing them at a competitive disadvantage;
(vi) Predatory pricing: driving competitors out of a market, prevent new entry,
and monopolize the market;
(vii) Boycotting or excluding any other undertaking from the production,
distribution or sale of any goods or the provision of any service; or
(viii) Refusing to deal.
A.8 (a) Since Noman is one of the joint promisors, Danish can recover the loan of Rs.
600,000 from Noman only unless there exists between them an express agreement
restricting his right to do so.
(b) Since all joint promisors have died, Danish can recover the loan from the legal
representatives of Farhan, Noman and Salman jointly, who must fulfil the promise
and repay the loan unless a contrary intention appears by the contract.
(c) Release of Farhan will discharge him from his liability towards Danish and
subsequently Danish will not be able to hold Farhan liable against the loan.
However, he will still remain liable towards the other joint promisors i.e. Noman
and Salman.
A.9 (a) Under the given situation, since time was essence of the contract between PF and
NIL, where PF failed to deliver the strawberries to NIL, following remedies are
available to NIL:
Contract becomes voidable at the option of NIL.
NIL may insist that PF should deliver the strawberries and claim
compensation on account of the delayed supply if, at the time of acceptance,
NIL gives notice to PF of its intention to claim damages.
NIL may decide not to accept performance beyond the stipulated time and
claim compensation for any damages which it may have sustained due to
non-fulfillment of the contract by PF.
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Certificate in Accounting and Finance – Spring 2022
(b) If PF offers to deliver only 300 kg of strawberries on 15 February 2022, it will not
constitute a valid offer of performance. NIL will have all the remedies available in
(a) above.
However, NIL has the right to accept part performance of the promise made to him
by PF. In that case, if NIL accepts delivery of 300 kg on 15 February 2022 then it
cannot sue PF later as it will be considered as remission of the contract.
A.10 (a) Constructive contract may be described as a contract that should have been formed
even though in actuality it was not.
In the following circumstances, a constructive contract may be formed:
(i) Supply of necessaries: If a person, incapable of entering into a contract, or
any one whom he is legally bound to support, is supplied by another person
with necessaries suited to his condition in life, the person who has furnished
such supplies is entitled to be reimbursed from the property of such incapable
person.
(ii) Reimbursement of payment by interested person: A person who is interested
in the payment of money which another is bound by law to pay, and who
therefore pays it, is entitled to be reimbursed by the other.
(iii) Person enjoying benefit of non-gratuitous act: Where a person lawfully does
anything for another person, or delivers anything to him, not intending to do
so gratuitously, and such other person enjoys the benefit thereof, the latter is
bound to make compensation to the former in respect of, or to restore, the
thing so done or delivered.
(iv) Finder of goods: A person who finds goods belonging to another and takes
them into his custody, is subject to the same responsibilities as a bailee.
(THE END)
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