Reg. No.

________

Karunya University
(Declared as Deemed to be University under Sec.3 of the UGC Act, 1956)

Trimester Examination September / October 2009

Subject Title:
Subject Code:

BUSINESS LAW
MS390

Time : 3 hours
Maximum Marks: 100

Answer ALL questions (5 x 20 = 100 Marks)

1.

Case study:(Compulsory)
Carbolic Smoke Ball
A company called the Carbolic Smoke Ball Ltd. was the manufacturer and vendor of a
medical preparation called the 'Carbolic Smoke Ball". The contraption comprised of a hollow
ball of rubber, with a nozzle at the top. A certain medicinal powder had to be put inside the
ball. On compressing the ball, the powder was forced out in the form of a cloud of
infinitesimally small particles, resembling smoke. Thus, the name 'Smoke Ball'. The carbolic
smoke ball was to be used for the treatment of cold and influenza. In the years 1890 and 189192, influenza had spread like an epidemic in London. At the time, flu was not necessarily life
threatening, but it was debilitating. The cause of influenza was not known and quack cures
abounded. The Carbolic Smoke Ball Ltd. had inserted the following advertisement in the Pall
Mall Gazette of November 13, 1891, and in some other newspapers:
A 100 reward will be paid by the Carbolic Smoke Ball Company to any person who
contracts the increasing epidemic influenza, colds, or any disease caused by cold, after
having used the ball three times daily for two weeks, according to the printed directions
supplied with each ball. 1000 has been deposited with the Alliance Bank, Regent Street,
showing our sincerity in the matter.
During the last epidemic of influenza, many thousands of carbolic smoke balls had been sold
as preventives against this disease, and in no ascertained case was the disease contracted by
those using the carbolic smoke ball.
One carbolic smoke ball will last a family several months, making it the cheapest remedy in
the world at the price, 70s, post free. The ball can be refilled at a cost of 5s, Address,
Carbolic Smoke Ball Company, 27, Princes Street, Hanover Square, London.
A lady, Edina Carlill had never had influenza before, but she was anxious about preventing it
in the future as well. She bought one of the balls from a chemist, and used it as directed, three
times a day, from November 20, 1891 to January 17, 1892. Despite the proper use of the
smoke ball, not just for two weeks, but for two months, she contracted influenza. She wrote a
letter to the Carbolic Smoke Ball Ltd., setting out the details of her purchase and the event of
her contracting influenza and claimed 'the 100 pounds promised in your advertisement and in
accordance with the contract between us.' The company flatly refused to pay and Ms.Carlill
went to the court.
Questions for Exploration
a. Was the advertisement an offer?
[P.T.O]

b. To whom had the offer been made?

c. Could the offer have been accepted so as to convert it into an agreement?
d. Acceptance of an offer needs to be communicated to the person making the offer. Is the
acceptance being notified?
2.

a.
b.
c.

3.

a.
b.

4.

a.
b.
c.

5.

a.
b.
c.

6.
7.
8.
9.

According to Partnership act who are partners and who are not partners?
State the kinds of partners.
Explain in detail about the Rights and Duties of partners.
(OR)
Define Negotiable Instrument.
Explain the essential features of a negotiable instrument.
Write a short-note on Company Act 1956.
State the types of companies.
Distinguish between partnership and a company.
(OR)
State the meaning of Intellectual Property rights.
Write in brief about the Patent act., Copy right act, Designs act and Trade mark protection
act connected with Intellectual Property rights.
State rights of the Patentee.

Explain in detail about the Competition Law 2003.

(OR)
Explain in detail about the Foreign Exchange Management act 1999.
Critically evaluate the power of Central Government in relation to protection of Environment
and prevention of environment pollution.
(OR)
a. State the objectives and scope of consumer protection act 1986
b. Define the following terms used under the consumer protection act 1986:
Complaint
Goods
Services
Consumer Disputes
Restrictive trade practices
Unfair trade practices
Defect and
Deficiency
c. State the rights of consumers.