Corporate and
Business Law
Tuesday 2 June 2009

ALL 10 questions are compulsory and MUST be attempted
1 Explain and distinguish between the following terms in relation to the doctrine of precedent in the English legal
(a) ratio decidendi and obiter dictum; (4 marks)
(b) binding precedent and persuasive precedent. (6 marks)
(10 marks)
2 (a) In relation to the law of contract, define and explain consideration. (3 marks)
(b) Explain the following statements regarding consideration:
(i) consideration must be sufficient but does not have to be adequate; (3 marks)
(ii) past consideration is not good consideration. (4 marks)
(10 marks)
3 In relation to the law of contract, distinguish between and explain the effect of:
(a) a term and a mere representation; (3 marks)
(b) express and implied terms, paying particular regard to the circumstances under which terms may be implied
in contracts. (7 marks)
(10 marks)
4 In relation to company law, explain:

7 In relation to employment law, explain the meaning of redundancy and the rules that govern it.
(10 marks)
8 In January 2008 Arti entered in a contractual agreement with Bee Ltd to write a study manual for an international
accountancy body’s award. The manual was to cover the period from September 2008 till June 2009, and it was a
term of the contract that the text be supplied by 30 June 2008 so that it could be printed in time for September. By
30 May, Arti had not yet started on the text and indeed he had written to Bee Ltd stating that he was too busy to
write the text.
Bee Ltd was extremely perturbed by the news, especially as it had acquired the contract to supply all of the
accountancy body’s study manuals and had already incurred extensive preliminary expenses in relation to the
publication of the new manual.
In the context of the law of contract, advise Bee Ltd whether they can take any action against Arti.
(10 marks)
9 Clean Ltd was established some five years ago to manufacture industrial solvents and cleaning solutions, and Des
was appointed managing director.
The company’s main contract was with Dank plc a large industrial conglomerate.
In the course of its research activity, Clean Ltd’s scientists developed a new super glue. Des was very keen to pursue
the manufacture of the glue but the board of directors overruled him and decided that the company should stick to
its core business.
The managing director of Dank plc is a friend of Des’s and has told him that Dank plc will not be renewing its contract
with Clean Ltd as he is not happy with its performance. He also told Des that he would be happy to continue to deal
with him, if only he was not linked to Clean Ltd.
Following that discussion Des resigned from his position as managing director of Clean Ltd and set up his own
company, Flush Ltd which later entered into a contract with Dank plc to replace Clean Ltd. Flush Ltd also



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