- 20 Marks
Question
a. Certain rules determine whether a partnership exists or not. Required: State the elements of a valid partnership. b. “The Criminal Code … has not created a single general offence known as fraud but has created a number of offences that are fraud related”. Required: State FOUR fraud related offences. c. E-contract enhances the ease of doing business. Required: Explain the following: i. e-contract; ii. Digital signature. d. A seller of goods has rights not only against the buyer but the goods also. Required: Explain TWO rights of a seller against his goods.
Answer
(a). The elements for determining the existence of a partnership are as follows: i. There must be a business: The Partnership Act/Laws define ‘businesses to include “trade, vocation and profession”; ii. The business must be carried on by or on behalf of the partners; iii. There must be profit making and profit sharing; and iv. There must be a minimum of two members and not more than a maximum of twenty members of full contractual capacity, except otherwise required by law.
(b). The fraud related offences in the Criminal Code are i. False pretenses; ii. Cheating; iii. Obtaining credit by fraud; iv. Forgery; and v. Fraudulent false accounting.
(c). i. E-contract is a contract in which the parties employ electronic devices such as computers, telephones, and other digital devices in the course of its negotiation and execution. ii. A digital signature is an electronic authentication by the maker of an electronic document or creator of data.
(d). A seller has the following rights against his goods: i. Right of lien: A seller’s right of lien is a right in equity to withhold goods until the price is paid. This right only exists when the seller has actual possession of the goods either as principal or as agent. This right could be exercised when the goods are sold without any stipulation as to credit, the terms of credit have expired, or the buyer has become insolvent. This right is lost where the goods have been delivered to a carrier for onward transmission to the buyer. The same thing applies if the buyer or his lawful agent is in possession of the goods as well as when there is a waiver of the right by the seller; ii. Right of withholding delivery: A seller may withhold delivery of the goods where neither ownership nor possession has passed to the buyer; and iii. Stoppage of goods in transit: An unpaid seller has the right to stop goods in transit before they are received by the buyer. The seller may exercise this right where the consideration remains unpaid or the buyer is insolvent, and the goods are actually in the course of transit. This right is, however defeated if any person to whom a document of title to goods has been lawfully transferred, transfers the goods further to a third party.
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