Q.1

a) Husayn who is the owner of a block of flats in Nairobi entered into a contract of lease with Antony. The only terms that were discussed and greed upon by the parties were that Anthony was to pay Ksh 15,000 monthly and that the contract was to be for a period of two years. Antony has defaulted in his monthly payment and claims that Husayn has gone against the agreement by failing to maintain the common lift. Advise the parties on their legal liabilities. [10 Marks]

b) Charles owns a house at Nyali in Mombasa valued at Sh. 20 million. He insured it against fire with Linda Mali Insurance Co. Ltd and Tunalipa Insurance Co. Ltd for Sh. 15 million and Sh. 10 million respectively. He also insured his household goods against burglary with Kinga Insurance Co. Ltd. for Sh. 5 million. One night while he was away, burglars broke into the house, stole all household goods and set the house on fire completely destroying it. Charles claims the sum assured from the three insurance companies. Advise them.

[10 Marks]

Q.2

a) Stephen signed a blank cheque and crossed it "not negotiable". He then left it on his desk before traveling to Uganda to attend a business meeting. Fridah, Stephen's secretary secretly took the cheque and filled in her name as the payee. She later endorsed the cheque to Shindwe Secondary School for payment of fees for her sister, Elizabeth. Shindwe Secondary School cashed the cheque in good faith. Geoffrey wants to know his rights if any against the school. Advise Stephen. [10 Marks]

b) Ian is a 24-year-old trainee accountant. He is doing well in his studies but is having debt problems brought about by trying to 'live up to an image'. He has entered into several phone contracts, buying mobile phones on credit and selling them to make some quick cash, leaving him with monthly contracts to pay. He has borrowed funds from a 'payday' loan company and now finds he cannot meet his financial obligations. Although he is good at doing business, he believes that he should go for bankruptcy and has asked for your advice. His debts total Ksh 520,000 between four companies. Submit your recommendations to Ian. [10 Marks]