GLASGOW CALEDONIAN UNIVERSITY DIVISION OF SCHOOL OF LAW AND SOCIAL SCIENCES DIVISION OF LAW COMMERCIAL LAW 2 (LAWL208)

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1 GLASGOW CALEDONIAN UNIVERSITY DIVISION OF SCHOOL OF LAW AND SOCIAL SCIENCES DIVISION OF LAW COMMERCIAL LAW 2 (LAWL208) TUESDAY, 26 MAY Candidates must attempt ONE question from Section A, ONE question from Section B and TWO questions from Section C Candidates may refer to any published compendium of relevant statutes in this exam provided that it is UNANNOTATED. No other reference material of any nature is permissible. The word unannotated as used above does not prohibit the use of highlighter pens

2 SECTION A ANSWER EITHER QUESTION 1 OR QUESTION 2 Question 1. Personal Insolvency With reference to the Bankruptcy and Diligence etc. (Scotland) Act 2007 a. Discuss the various parties who may petition the court for sequestration and explain the conditions that apply to each party. (6 marks) b. What were the main reasons for reducing the period of sequestration from three years to one year? (4 marks) c. Explain clearly what is meant by a Bankruptcy Restrictions Order (BRO) and a Bankruptcy Restrictions Undertaking (BRU). Indicate in what circumstances these procedures may be used (i.e. who may apply for them, how long they may be enforced, why they were introduced etc). (10 marks) (Total 20 marks) QUESTION 2 OVERLEAF

3 Question 2. Corporate Insolvency Newbuild Ltd. was incorporated in March 2000 as a construction company specialising in up-market city apartments. After outstanding success in the early years the directors decided on expansion and borrowed 200,000 from the Colonial Bank to finance their schemes. A floating charge over the company s assets was registered on 5 th December 2002 as security for the loan. A negative pledge clause was inserted into the terms of the charge. The timing proved unfortunate and the expansion plans failed disastrously. The company went into insolvent liquidation and a receiver was appointed by the bank. a) Explain clearly the aims of the receiver and the powers available to him/her to achieve these aims. (6 marks) b) In distributing the assets of the company the receiver must follow the order prescribed by the Insolvency Act Discuss the priorities of the various creditors including the effect of an effectually executed diligence and a valid retention of title clause on these priorities. (6 marks) c) What is the significance of a negative pledge clause? (3 marks) d) What changes were made by the Enterprise Act 2002 to the rights of holders of a floating charge created after September 2003? (5 marks) (Total 20 marks) END OF SECTION A OVERLEAF

4 SECTION B ANSWER EITHER QUESTION 3 OR QUESTION 4 Question 3 ANSWER ONE OF THE FOLLOWING QUESTIONS: A. Write explanatory notes in relation to each of the following: (i) The FSA s statutory objectives; (6 marks) (ii) Authorisation of incidental business by the Law Society of Scotland; and (7 Marks) (ii) The structure of rules established by the Financial Services and Markets Act 2000 (7 Marks) (Total 20 Marks) OR B. Discuss the money laundering provisions of the Proceeds of Crime Act 2002 and the Money Laundering Regulations (20 Marks) QUESTION 4 OVERLEAF

5 Question 4 Consider and discuss how effective the provisions of The Sale and Supply of Goods to Consumers Regulations 2002 have been, in amending the Sale of Goods Act 1979 with regard to:- a) the enhancement of the buyer s remedies against the seller, in general, and b) the rules relating to the examination of goods at or about the time of purchase and c) the rules relating to the determination of transfer of property, in particular. (20 marks) END OF SECTION B OVERLEAF

6 SECTION C Write short notes on TWO of the following questions: Question 5 a. Discuss the various forms of delivery of moveable property in terms of rights in security over moveables. Explain the conditions necessary for delivery to be effective. (6 marks) b. State any exceptions to the rule of delivery and explain how they operate. (4 marks) (Total 10 marks) Question 6 a. Explain the nature of a cautionary obligation and indicate the risks for any cautioner who undertakes such an obligation. (3 marks) b. What precautions would you advise a potential cautioner to take to minimise risk? (3marks) c. With reference to appropriate case law discuss the circumstances in which a creditor must ensure that a cautioner is fully aware of his potential liability. (4 marks) (Total 10 marks) Question 7 Consider the extent to which it is possible to exclude liability for a breach of the implied terms set out in sections of the Sale of Goods Act (10 marks) END OF EXAMINATION PAPER