Paper LAW (GLO)

MAY 2021 MOCK

Corporate and
Business Law
(Global)

Time allowed: 3 hours

This paper is divided into two sections:

ALL questions are compulsory and MUST be attempted

Do NOT open this paper until instructed by the supervisor.

You must NOT write in your answer booklet until instructed by the
supervisor.

This question paper must not be removed from the examination hall.

The Association of Chartered Certified Accountants

ALL questions are compulsory and MUST be attempted

1 Ki entered into a contract with Li for 1,000 tonnes of coal, but Li actually delivered 2,000 tonnes.

Which of the following correctly states Ki’s situation under the UN Convention on Contracts for the International Sale
of Goods?
A Ki can keep the excess and pay the agreed unit price
B Ki can keep the excess but must agree a new price with Li
C Ki must return the excess and claim any expense
D Ki must return the whole amount and claim damages

2 An agency relationship which is made retrospectively is referred to by which of the following terms?
A Agency by estoppel
B Agency by ratification
C Agency by necessity

3 Where one party writes a letter of offer to another party giving them three days to accept the offer, which of the
following states when the time period for accepting will start under the UN Convention on Contracts for the
International Sale of Goods?

A On the date the letter is posted

B On the date the letter is received
C On the date shown on the envelope
D On the date that the recipient reads the letter

4 In relation to a debenture, which of the following is NOT true?

A It may be issued at a discount
B Interest on it may be paid from capital
C It is paid after preference shares
D It is freely transferable

5 Which of the following ICC Incoterms would be used by a seller willing to clear goods for export but not to insure
them for the journey?
A FOB
B FAS
C CIF

6 Which of the following is the drawer of an international bill of exchange?

A The receiving bank
B The sender’s bank
C The buyer’s bank
D The buyer

7 Where directors make a false statement of solvency prior to a members’ voluntary liquidation, which of the
following have they committed under the relevant legislation?
A A breach of criminal law with criminal penalties
B A breach of civil law with criminal penalties
C A breach of civil law with civil liability
D A breach of both civil and criminal law with liabilities under both
 8 Under the UN Convention on Contracts for the International Sale of Goods, where only part of the goods delivered
conformed to the requirements of the contract, which of the following rights can the buyer NOT enforce?
A To give the seller additional time to correct the non-conformity
B To refuse delivery of the total consignment
C To reduce the price due under the contract

9 Which TWO of the following are examples of goods NOT covered by the UN Convention on Contracts for the
International Sale of Goods?
(1) Services
(2) Negotiable instruments
(3) Food
(4) Commodities not yet in existence
A (1) and (2)
B (2) and (3)
C (3) and (4)
D (1) and (4)

10 Which of the following applies to the concept of enlightened shareholder value?

A It is the price shares can be expected to raise if they were to be sold
B It is the yardstick for assessing the performance of directors’ duties
C It is the standard of behavior expected of shareholders in general meetings

11 In relation to international bills of exchange, which of the following may be an acceptor?

A The buyer
B The buyer’s bank
C The seller’s bank
D The recipient of an endorsed bill

12 What qualification is the company secretary of a private limited company required to have?
A An appropriate legal qualification
B An appropriate professional qualification such as ACCA
C No qualification

13 Under the UNCITRAL Model Law on International Credit Transfers, which of the following is NOT considered to be an
originator?
A The sender’s bank
B The sender
C Any intermediary bank between the sender’s bank and the beneficiary’s bank

14 In relation to wrongful trading, the standard against which the conduct of directors will be assessed is which of the
following?
A Purely subjective, depending on the actual skill of the director
B Purely objective, depending on what is expected of a director in that position
C A mixture of subjective and objective but only to increase potential liability
D A mixture of subjective and objective but only to reduce potential liability

15 In relation to the UN Convention on Contracts for the International Sale of Goods contract, the market rule arises in
relation to which of the following?
A Offer
B Consideration
C Remoteness
D Mitigation
16 Under the UN Convention on Contracts for the International Sale of Goods, which of the following is NOT a potential
outcome of a fundamental breach of contract?
A The aggrieved party can avoid the contract and claim damages
B The aggrieved party can avoid the contract but cannot claim damages
C The aggrieved party can require substitute goods

17 Which of the following are ordinary partnerships UNABLE to create in relation to their property?
A Mortgages
B Fixed charges
C Floating charges

18 Under the UNCITRAL Model Law on International Commercial Arbitration, which of the following will NOT allow a party
to apply to court to have the arbitral award set aside?
A Substantive injustice in relation to the decision of the panel
B Incapacity on the part of the claimant or respondent
C Lack of appropriate notice to either party
D Lack of validity of the claim in the state under which the action is heard

19 Which of the following ICC Incoterms places the GREATEST burden on the purchaser in respect of responsibility for
transport costs and risks incurred in transit?
A EXW
B DAP
C DAT
D FCA

20 Which of the following requires court approval before the appointment of an administrator?
A Creditors
B Holders of floating charges
C The directors of the company
D The company itself

21 In the United Kingdom a criminal case must be proved beyond reasonable doubt.
This concept relates to which of the following?
A The burden of proof
B The standard of proof
C The balance of probabilities
D The reverse burden of proof

22 Which of the following is NOT a source of English law?

A Custom
B Equity
C Public law
D European Union directives

23 Which of the following is NOT an automatic consequence of a compulsory winding up order against a public limited
company?
A Transfers of shareholdings are suspended
B Liquidation is deemed to start on the date of the issuing of the order
C Directors cease to exercise any management power
D Employees are immediately dismissed
 24 Which TWO of the following apply to shares of companies whose names end in ‘Ltd’?
(1) They may not be issued to non-members
(2) They may not be offered to the public
(3) They may not be transferred
(4) They may not be traded on the stock exchange
A (1) and (2)
B (2) and (3)
C (1) and (4)
D (2) and (4)

25 Which of the following statements regarding the age limits for serving as a director in a public limited company is
true?
A Minimum age 16 years and no maximum age
B Minimum age 21 years and no maximum age
C Minimum age 21 years and maximum age 75 years
D Minimum age 16 years and maximum age 75 years

26 In the event of the respondent failing to appear at an arbitration hearing, under the UNCITRAL Model Law on
International Commercial Arbitration which of the following consequences will follow?
A The hearing will be postponed until the respondent can ensure attendance
B The hearing will be cancelled and the decision will be declared in favour of the claimant
C The hearing will continue on the basis of the evidence supplied by the claimant
D The hearing will be cancelled and the respondent will have to pay all the costs relating to the arbitration

27 In which procedure does a liquidation committee operate?

(1) Compulsory liquidation
(2) A members’ voluntary liquidation
(3) A creditors’ voluntary liquidation
(4) Administration

A (1) and (2)

B (2) and (4)
C (1) and (3)
D (3) and (4)

28 The category of treasury shares comes into existence under which of the following circumstances?
A They are issued as such by a private company
B They are issued as such by a public company
C They are purchased as such by the exchequer
D They are purchased as such by a private or public company

29 Which of the following is NOT a source of Sharia law?

A Figh
B Hadith
C Riba
D Court judgements

30 In the context of the UN Convention on Contracts for the International Sale of Goods, which of the following is the
place of delivery in contracts involving carriage, if the contract is silent on the matter?
A The seller’s place of business
 B The place where the goods are handed to the first carrier for transmission to the buyer
C The purchaser’s place of business

31 Which of the following provides the greatest assurance of being paid?

A International bill of exchange
B International promissory note
C Letter of credit

32 Which party to an international bill of exchange instructs the payment to be made?

A The payee
B The drawer
C The drawee

33 Which of the following is non-negotiable?

A A bill of lading
B A bill of exchange
C A letter of credit
D A letter of comfort

34 Which TWO of the following are private law actions?

(1) Those between individuals
(2) Those between business organizations
(3) Those between individuals and the state
A (1) and (2)
B (1) and (3)
C (2) and (3)

35 Which of the following exists as a separate legal entity from its members?
A An ordinary partnership
B A limited partnership
C A limited liability partnership

36 Which of the following must a private company ALWAYS have?

A Shares
B Limited liability
C A company secretary
D A registration certificate

37 Judges have the greatest scope to create law in which of the following legal systems?
A Common law
B Sharia law
C Civil law

38 Which of the following statements in relation to an offer is correct under the UN Convention on Contracts for the
International Sale of Goods?
A It must be in writing
B It must refer to price and quantity
C It can be made to the world at large
 39 In relation to the UN Convention on Contracts for the International Sale of Goods requirements as to conformity of
goods, which of the following is INCORRECT?
A The seller must ensure the goods conform to all laws in force in the buyer’s state
B The goods must be fit for any purpose the buyer made known to the seller
C The goods must be fit for the purpose for which such goods are ordinarily used

40 An offer in a letter becomes effective at which of the following times under the UN Convention on Contracts for
the International Sale of Goods?
A When the letter is posted to the recipient
B When the letter is delivered to the recipient
C When the letter is read by the recipient
D When the offer is accepted by the recipient

41 Which of the following is an institution of the United Nations?

A UNCITRAL
B UNIDROIT
C WTO

42 Which of the following is a function of a non-negotiable bill of lading?

A Proof of ownership of the goods
B An indicator that risk may have passed from seller to buyer
C Confirmation of the right to take custody of the goods

43 In relation to agency law, ‘warranty of authority’ is provided by which of the following?

A The agent
B The principal
C The third party

44 Which of the following describes civil law?

(1) A legal system which relies heavily on statutory codes
(2) A classification of law which applies between private individuals
(3) A legal system which relies on law made by judges
(4) A classification of law which applies between private individuals and the State
A (1) and (2)
B (2) and (3)
C (1) and (4)
D (3) and (4)

45 Under UNCITRAL Model Law on International Commercial Arbitration, what is the default number of arbitrators?
A One
B Two
C Three

46 In the context of the English legal system, which of the following defines the ratio decidendi of a judgement?
A The decision in a previous case
B The facts of the case
C The legal reason for deciding the case
D The future application of the case

47 Chad has entered into a contract to supply Das with particular goods. They have agreed that the contract be on
the basis of ICC Incoterms and in particular the FOB term.
 In a FOB contract the SELLER is responsible for which of the following?
A Shipping of the merchandise
B Arranging insurance after loading to the carrier
C Arranging for an export licence if required
D Arranging for an import licence if required

48 Which of the following statements in relation to the issuing of bills of lading is true?
A Risk remains with the seller
B Risk passes to the shipper
C Risk passes to the carrier
D Risk passes to the buyer

49 Which of the following business forms does the use of the abbreviation ‘Ltd’ after the name of a business indicate?
A A limited partnership
B A limited liability partnership
C A private limited company

50 When must an international bill of exchange payable on demand be presented for payment?
A Within one year of its date of issue
B Within three years of issue
C At any time after issue

51 A written ordinary resolution requires the approval of which of the following?

A More than 50% of those actually voting
B More than 50% of those entitled to vote
C Unanimous approval of those entitled to vote

52 Which of the following is NOT a form of alternative dispute resolution?

A Conciliation
B Harmonization
C Mediation

53 Which TWO of the following are recognized mechanisms for international payment?
(1) A bill of lading
(2) A bill of exchange
(3) A letter of credit
(4) A letter of comfort
A 1 and 2
B 1 and 4
C 2 and 3
D 3 and 4

54 Which of the following does NOT necessarily lead to the termination of an offer under the UN Convention on
Contracts for the International Sale of Goods?
A Withdrawal
B Revocation
C Rejection
D Modification
55 It is not unusual for some company investments to carry cumulative dividend rights.

Which of the following statements about the declaration of cumulative dividends is correct?
 A They are not paid until profits reach a certain percentage
B They are paid in the form of a bonus issue
C They are paid out of capital
D They are paid when profits are available for that purpose

56 Under the UN Convention on Contracts for the International Sale of Goods, a written ACCEPTANCE of an offer takes
place under which of the following circumstances?
A When it is properly posted
B When it reaches the offeror within a reasonable time
C When the offeror acknowledges receipt of the written acceptance

57 Which of the following is the primary source of law in a civil law system?
A Courts
B Codes
C Customs

58 In the context of Sharia law, which of the following is the fundamental source of law?
A Quran
B Fiqh
C Court judgements
D Hadith

59 Ari was successful in an international arbitration against Bo. The action was heard in Bo’s country but Ari is
concerned that he will not be able to enforce the award in his domestic courts.

Which of the following does NOT provide a ground for a court to refuse to enforce an arbitration agreement under
Article 36 of the UNCITRAL Model Law on Arbitration?
A The arbitration agreement expressly provided that no appeal could be made to a court
B The arbitration agreement was not valid under the law of the country under which it was decided
C The dispute cannot be decided under the law of country required to enforce the award
D Enforcement would be contrary to public policy of the country required to enforce the award

60 ICC Incoterms establish risk and responsibilities in relation to international contracts.

Which of the following is the BUYER responsible for in a CIF contract?

A Arranging insurance after loading to the carrier
B Arranging for an export licence if required
C Arranging for an import licence if required
61 The term insider dealing relates to a number of potential criminal offences.

Which TWO of the following are crimes in relation to insider dealing?

(1) Encouraging someone to engage in insider dealing
(2) Failing to report insider dealing
(3) Concealing insider dealing
(4) Passing on inside information
A 1 and 2
B 1 and 4
C 2 and 3
D 2 and 4
 62 Which TWO statements are correct in relation to designated members in limited liability partnerships (LLPs)?
(1) They must not take part in the day-to-day operation of the business
(2) They are responsible for filing the LLP’s accounts
(3) They are fully liable for partnership debts
(4) They have limited liability
A 1 and 4
B 2 and 4
C 2 and 3
D 1 and 3

63 Mo has a significant holding in the shares of Nova Co. He wishes to use his shareholding to remove Owen from the
board of directors but is not sure how to do so.

Which of the following must be used to remove a director from office?

A An ordinary resolution
B An ordinary resolution with special notice
C A special resolution
D A written resolution

64 Which of the following can be accepted so as to form a binding contract?

A A statement of intent
B A quotation of price
C An agreement to enter into a future contract

65 Under the UN Convention on Contracts for the International Sale of Goods, some offers are held to be irrevocable.

Which TWO of the following statements apply to an irrevocable offer?

(1) They may be revoked as long as this is done at the same time as the offer reaches the offeree
(2) They may never be revoked
(3) They may be withdrawn as long as this is done at the same time as the offer reaches the offeree
(4) They may never be withdrawn
A 1 and 4
B 1 and 3
C 2 and 3
D 2 and 4

66 Which of the following is indicated by the abbreviation ‘Ltd’ at the end of a company’s name?
A The shares are not transferable
B The shares may not be offered to the public
C The shares are freely transferable on the stock exchange

67 Money laundering involves a number of phases in the overall procedure.

Which TWO of the following are recognized phases in money laundering?
(1) Relocation
(2) Layering
(3) Integration
(4) Distribution
A 1 and 2
B 1 and 4
C 2 and 3
D 3 and 4
 68 Under the UN Convention on Contracts for the International Sale of Goods, in relation to a contract involving the
carriage of specific goods, risk normally passes from the seller to the buyer at which of the following times?
A When the goods leave the seller’s premises
B When the goods are transferred to the first carrier
C When the goods arrive at their designated destination

69 Which of the following functions is NOT performed by the World Trade Organization?
A It settles disputes between individuals
B It settles disputes between member states
C It administers trade agreements
D It reviews national trade policies

70 Which of the following statements in relation to offers under the UN Convention on Contracts for the International
Sale of Goods is true?
A They may be made to the world at large
B They must be evidenced in writing
C They are effective when they reach the offeree

71 There are a number of ways in which investors can take an interest in a company and such different interests
have different rights attached to them.

Which of the following NORMALLY participate in surplus capital? A

Preference shares
B Ordinary shares
C Debentures secured by a fixed charge
D Debentures secured by a floating charge

72 Which of the following is NOT an actual type of letter of credit?

A Endorsed letter of credit
B Revocable letter of credit
C Standby letter of credit
D Revolving letter of credit

73 Which TWO of the following statements in relation to a written acceptance of an offer are true under the UN
Convention on Contracts for the International Sale of Goods?
(1) It may not normally be withdrawn once it is posted
(2) It may not normally be withdrawn after the offer reaches the offeree
(3) It may be withdrawn before the offer reaches the offeree
(4) It may be withdrawn at the same time as the offer reaches the offeree
A 1 and 4
B 2 and 3
C 2 and 4
D 3 and 4

74 Letters of credit are ways of transferring payment internationally through the banking system.
In this context of international payments, which of the following statements is correct?
A The issuing bank represents the seller
B The advising bank represents the seller
C The issuing bank represents the buyer
75 Section 122 UK Insolvency Act 1986 provides a number of distinct grounds for applying to have a company wound up
on a compulsory basis.

Which of the following is NOT a ground for the compulsory winding up of a company under that provision?
A The company has not received a trading certificate within its first 12 months
B The company has not started trading within the first 12 months
C The company has suspended its business for 12 months
D The company has altered its primary business within the first 12 months

76 Which of the following ensures that credit is always open between a buyer and a seller?
A Confirmed letter of credit
B Standby letter of credit
C Revolving letter of credit

77 Which of the following attributes is NOT central to a civil law system?

A Codification
B Creativity
C Certainty
D Comprehensibility

78 Under Article 35 of the UN Convention on Contracts for the International Sale of Goods the seller must supply goods
of a quality that is fit for purpose.

Which of the following is NOT included in Article 35 requirements as to quality?

A Fit for the purpose for which such goods are normally used
B Fit for unusual use not known by the seller
C Fit for unusual use as suggested by a sample of the product
D Packaged adequately so as to protect the goods

79 Ho subscribed for some partly paid-up shares in Io Co. The company has not been successful and Ho has been told
that when Io Co is liquidated, he will have to pay the amount remaining unpaid on his shares. However, he is not
sure to whom such payment should be made.
In limited liability companies, shareholders are liable to which party for any unpaid capital?

A Creditors
B The directors
C The company
D The liquidator

80 Which of the following parties normally issues a letter of comfort?

A A company in financial difficulty
B The parent company of company in financial difficulty
C The bank of a company in financial difficulty

81 Dan has been accused of a criminal offence and is due to be tried soon. He denies responsibility, claiming that the
prosecution has no evidence that he committed the offence in question.
In the context of the English legal system, which of the following describes the standard of proof in a criminal case?
A On the balance of probability
B On the balance of certainty
C Beyond reasonable doubt
D Beyond evident doubt
82 Which of the following statements relating to limited liability partnerships is correct?
A They are limited to a maximum of 20 members
B They must have a minimum of two members
C They must have at least one unlimited member

83 In the context of the law of agency, an agent will NOT be liable for a contract in which of the following instances?
A Where the agent fails to disclose that they are acting as such
B Where the agent intends to take the benefit of the contract and does not disclose they are acting as an agent
C Where the agent acts on their own behalf although claiming to be an agent

84 Mark has received the agenda for the annual general meeting of Nova Co, a company he has shares in. The agenda
contains a number of resolutions to be proposed at the meeting but being a new member Mark is not certain as
to what exactly is involved.

In the context of company meetings, which of the following requires a 75% majority to be passed? A
An ordinary resolution with special notice
B A special resolution
C A written resolution

85 Which of the following describes the result for any agreement subject to a fundamental breach of contract under the
UN Convention on Contracts for the International Sale of Goods?
A The agreement is void
B The agreement is avoidable
C The agreement is unenforceable

86 Section 122 UK Insolvency Act 1986 specifically provides a distinct ground for applying to have a company wound up
on the ground that it is just and equitable to do so.

Which of the following parties may petition to have a company compulsorily wound up on the basis that it is just
and equitable to do?
A Shareholders of the company
B Creditors of the company
C Debenture holders of the company
D The Secretary of State

87 In the context of Sharia law, Riba refers to which of the following?

A The prohibition of charging interest
B The name of a particular form of partnership
C The interpretation of the Koran
88 The UN Convention on Contracts for International Sale of Goods applies to contracts relating to which of the
following?
A Company shares
B Ships
C Aircraft
D Raw materials to be used in subsequent production
89 Which of the following refers to an arbitral institution?
A ICC
B ICI
C ICA
90 Which of the following CANNOT p e t i t i o n for t h e compulsory winding up of a company on the grounds of
INSOLVENCY under s.122 UK Insolvency Act 1986?
A The board of directors
B The members of the company
C The company’s creditors
D The Secretary of State