Search in the document preview
KENYATTA UNIVERSITY UNIVERSITY EXAMINATIONS 2008/2009 FIRST SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR OF COMMERCE BMS 308: INSURANCE LAW
DATE: Friday 5th December, 2008
TIME: 11.00 a.m. – 1.00 p.m.
INSTRUCTIONS ? Attempt question one (COMPULSORY) and any other TWO. ? Start each question on a new page. ? Marks are awarded for proper explanation and use of appropriate examples.
Question One ODOTIZZI V. BLOOMFIELD SCHOOL DISTRICT. District Court of Appeal, California 54 Ca. Rptr. 533 (1966) Odorizzi, an elementary school teacher, was charged with criminal homosexual activity. The next day he gave a signed resignation to his principal and the superintendent of schools. Odorizzi filed suit to set aside his resignation on the grounds that it had been obtained as a result of duress, fraud, mistake, undue influence, and lack of capacity. The trial court dismissed Odorizzi’s complaint and he appealed. Held, reversed and remanded. FLEMING, J. Odorizzi’s amended complaint asserts his resignation was invalid because it was obtained through duress, fraud, mistake and undue influence and given at a time when he lacked capacity to make a valid contract. Specifically, Odorizzi declares he was under such severe mental and emotional strain at the time he signed his resignation, having just completed the process of arrest, questioning by the police, booking and release on bail and having gone for forty hours without sleep, that he was incapable of rational thought or action. While he was in this condition and unable to think clearly, the superintendent of the District and the principal of his school came to his apartment. They said they were trying to help him and had his best interests at heart, that he should take their advice and immediately resign his position with the District, that there was no time to consult an attorney, that if he did not resign immediately the District would suspend and dismiss him from his position and publicize the proceedings, his “aforedescribed arrest” and cause him “to suffer extreme embarrassment and humiliation”; but that is he resigned at once the incident would not be publicized and would not jeopardize his chances of securing employment as a teacher elsewhere. Odorizzi pleads that because of his faith and confidence in their representations they were able to substitute their will and judgment in place of his own and thus obtain his signature to his purported resignation. By his complaint plaintiff in effect seeks to rescind his resignation pursuant to Civil Code, Section 1689, on the ground that his consent had not been real or free within the meaning of Civil Code, section 1567, but had been obtained through duress, menace, fraud, undue influence or mistake …………………
REQUIRED: a) Are the facts in the amended complaint sufficient to state a cause of action for the following:- i)
Duress [4 marks] ii) Menace [4 marks] iii) Fraud [4 marks] iv) Mistake [4 marks] v) Give your opinion on the case. [4 marks]
b) Risk is an objective concept. Exposure to risk is created wherever an act or circumstances gives rise to possible gain or loss that can not be predicted with certainty.
REQUIRED: Explain the Behavioral psychology reactions and human attitudes towards risk and uncertainty. [10 marks]
Question Two a) Discuss in details giving appropriate examples the elements of an enforceable insurance contract. [8 marks] b) In most stages of the contract of insurance from inception of the negotiations to the receipt of the payment of the loss, involves to a greater or lesser degree the services of agents. REQUIRED: Discuss the general principles of law applicable to agents in the levels. [12 marks]
Question Three a) Some insurers have joined a school of taught which does not see any value of the concept of utmost good faith. They urge that the concept is outdated and irrelevant in the modern insurance practice. REQUIRED: What is your position on the above argument? [10 marks] b) Discuss the workmen’s compensation Act in details. [10 marks]
Question Four Cap. 32 laws of Kenya deals with compensating families of persons killed in accidents. REQUIRED: i) How is the Act cited? [4 marks] ii) Define a child in the Act? [4 marks] iii) Define person in the Act. [4 marks] iv) Define “adopted person” in the Act. [4 marks] v) The Act became effective when? [4 marks]