Cautionary Obligation - Commercial Law - Past Exam, Exams of Law

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THE LAW SOCIETY OF SCOTLAND

EXAMINATIONS

SCOTS COMMERCIAL LAW

PAPER ONE

Friday 6 FEBRUARY 2009

(Two Hours)

Candidates should answer any THREE

questions

LAW SOCIETY OF SCOTLAND EXAMINATIONS

SCOTS COMMERCIAL LAW

PAPER ONE

Friday 6 February 2009 (Two Hours)

Candidates should answer any THREE questions.

1. “The contract of insurance is described as a contract uberrimae fidei , or involving the utmost good faith.” F Davidson and L Macgregor, Commercial Law in Scotland (2nd^ edn, 2008) Para 7.5.

Critically discuss the various ways in which the duty of good faith manifests itself in the law of insurance.

2. You are acting for Alf, a creditor of Joshua Merryweather. Which form or forms of diligence (if any) can be used against the following assets owned by Merryweather? And how would you go about doing diligence against the assets?

a. A farm (comprising a farm house and land) near Loch Lomond. b. The prize-winning cattle kept on the farm. c. Merryweather’s bank account with Lloyds TSB. d. The television and video recorder kept by Merryweather in the farm house. e. A tractor kept for Merryweather’s use on the farm land. f. Bales of hay kept for Merryweather by his neighbour, Godfrey Bowman, in Bowman’s barn. g. Baby Frodo Merryweather’s train set which is kept in the farm house. h. Merryweather’s shares in Des O’Connor’s Babywear Ltd which are held for Merryweather by a nominee company of his Joshua Merryweather (Holdings) Ltd (of which Merryweather is the sole shareholder).

3. Explain how a holder in due course (who is the third indorsee of a bill of exchange) would go about obtaining payment on a tenor bill, duly accepted by the drawee and payable ninety days after sight. Your answer should consider how the holder in due course would obtain payment if the acceptor refused to pay.