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P R A C T I C PAPER F4 E CORPORATE AND BUSINESS LAW & (GLOBAL) R E V In this January 2010 edition I x We discuss the best strategies for revising and taking your ACCA exams S x We show you how to be wwell prepared for your exam x We give you lots of great guidance on tackling questions I x We show you how you can build your own exams O x We provide you with three mock exams including the DDecember 2009 exam N x We provide the AACCA examiner's answers as well as our own to the June and December 2009 exams as an additional revision aid Our i-Pass product also supports this paper. K I T FOR EXAMS IN 2010
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First edition 2007 Fourth edition January 2010 ISBN 9780 7517 8051 2 (previous ISBN 9780 7517 4681 5) British Library Cataloguing-in-Publication Data A catalogue record for this book All our rights reserved. No part of this publication may be is available from the British Library reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior Published by written permission of BPP Learning Media Ltd. BPP Learning Media Ltd BPP House, Aldine Place We are grateful to the Association of Chartered Certified London W12 8AA Accountants for permission to reproduce past examination questions. The suggested solutions in the www.bpp.com/learningmedia exam answer bank have been prepared by BPP Learning Media Ltd, except where otherwise stated. Printed in the United Kingdom Your learning materials, published by BPP Learning © Media Ltd, are printed on paper sourced from BPP Learning Media Ltd sustainable, managed forests. 2010 ii
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Contents Page Finding questions Question index ................................................................................................................................................................. iv Topic index ....................................................................................................................................................................... x Using your BPP Learning Media Practice and Revision Kit ........................................................ xii Revising F4 General exam support from BPP Learning Media........................................................................................................... xiii Topics to revise.............................................................................................................................................................. xiii Question practice ........................................................................................................................................................... xiii Passing the F4 exam ...................................................................................................................................................... xiv Exam information .......................................................................................................................................................... xvii Analysis of past papers .................................................................................................................................................. xxi Useful websites ............................................................................................................................................................ xxii Planning your question practice BPP Learning Media’s question plan............................................................................................................................ xxiii Build your own exams.................................................................................................................................................xxviii Questions and answers Questions..........................................................................................................................................................................3 Answers ..........................................................................................................................................................................37 Exam practice Mock exam 1 x Questions ............................................................................................................................................................213 x Plan of attack .......................................................................................................................................................217 x Answers...............................................................................................................................................................219 Mock exam 2 x Questions ............................................................................................................................................................233 x Plan of attack .......................................................................................................................................................237 x Answers...............................................................................................................................................................239 Mock exam 3 (December 2009) x Questions ............................................................................................................................................................253 x Plan of attack .......................................................................................................................................................259 x Answers...............................................................................................................................................................261 ACCA examiner's answers x June 2009............................................................................................................................................................279 x December 2009 ...................................................................................................................................................291 Review form & free prize draw iii
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Question index The headings in this checklist/index indicate the main topics of questions, but questions often cover several different topics. Questions set under the old syllabus Corporate and Business Law (2.2) paper are included because their style and content are similar to those which appear in the F4 exam. The questions have been amended to reflect the current exam format. Time Page number allocation Marks Mins Question Answer Part A: Essential elements of legal systems Separation of powers 1 Economic and political systems 10 18 3 37 2 Legislature, executive, judiciary (2.2 12/04) 10 18 3 38 Legal systems 3 Common law system 10 18 3 39 4 Civil law system 10 18 3 40 5 Sharia law system 10 18 3 41 6 Role of judges (2.2 12/05) 10 18 3 43 Sources of law 7 Sources of law (1) (2.2 6/04) 10 18 4 44 8 Precedent (6/09) 10 18 4 45 9 Sources of law (2) (12/08) 10 18 4 47 Courts and arbitration 10 International organisations (1) (Pilot Paper) 10 18 4 48 11 International organisations (2) (2.2 12/06) 10 18 4 49 12 International organisations (3) (6/08) 10 18 5 51 13 United Nations 10 18 5 53 14 International court system (2.2 6/06) 10 18 5 54 15 Criminal law, civil law and arbitration (12/07) 10 18 5 56 16 Arbitration (1) (6/09) 10 18 5 58 17 Court proceedings and arbitration (2.2 12/05) 10 18 5 60 18 Arbitration (2) 10 18 6 62 19 Tom (2.2 Pilot Paper amended) 10 18 6 63 20 Challenging an arbitration (1) (Pilot Paper) 10 18 6 64 21 Recourse against arbitration award (12/08) 10 18 6 65 22 Challenging an arbitration (2) 10 18 6 66 iv Finding questions
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Time Page number allocation Marks Mins Question Answer Part B: International business transactions 23 Application of the UN Convention (2.2 6/04 amended) 10 18 7 68 24 Incoterms (1) (2.2 6/04) 10 18 7 69 25 Incoterms (2) (2.2 6/06) 10 18 8 70 26 Incoterms (3) (6/08) 10 18 8 72 27 International offer, invitation to treat and counter-offer (6/08) 10 18 8 73 28 Withdrawal, revocation, rejection of offer (2.2 12/03, 6/06) 10 18 8 74 29 Acceptance (1) (Pilot Paper) 10 18 8 75 30 Acceptance (2) (2.2 6/04) 10 18 9 77 31 Formation of contract 10 18 9 78 32 Ax and Bo (12/07) 10 18 9 80 33 Ari (12/08) 10 18 10 82 34 Quality (1) (12/07) 10 18 10 83 35 Quality (2) 10 18 10 84 36 Quality (3) 10 18 11 85 37 Axel and Beni (6/08) 10 18 11 87 38 Buyer's remedies 10 18 11 88 39 Art (Pilot Paper) 10 18 12 90 40 Price (6/09) 10 18 12 91 41 Preservation of goods (1) (Pilot Paper) 10 18 12 92 42 Preservation of goods (2) 10 18 12 93 43 Impediment (2.2 6/05) 10 18 12 95 44 Breach and mitigation (2.2 Pilot paper, 6/06) 10 18 12 96 45 Passage of risk (6/08) 10 18 13 97 46 Anticipatory breach (12/08) 10 18 13 99 47 Breach (12/07) 10 18 13 100 48 Arti (6/09) 10 18 13 101 49 Avoidance (2.2 6/05 amended) 10 18 13 102 50 Risk (1) 10 18 14 104 51 Risk (2) (2.2 12/06 amended) 10 18 14 105 52 Bill of lading 10 18 14 106 53 Bill of lading: letter of credit (2.2 12/06) 10 18 15 107 54 Letters of credit (1) (2.2 6/05) 10 18 15 108 55 Letters of comfort and credit (12/08) 10 18 15 110 56 Bills of exchange (1) (2.2 12/05 amended) 10 18 15 111 57 Bills of exchange (2) (12/07) 10 18 15 112 58 Bills of exchange (3) (6/09) 10 18 15 113 59 Letters of credit (2) (2.2 12/05 amended) 10 18 16 115 Finding questions v
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Time Page number allocation Marks Mins Question Answer Part C: International Business forms Agency 60 Creating an agency relationship (2.2 12/04) 10 18 17 116 61 Authority of the agent (Pilot Paper) 10 18 17 117 Partnership 62 Types of partnership (2.2 6/05) 10 18 17 119 63 Traditional, limited and limited liability partnerships 10 18 17 120 64 Clare, Dan and Eve (6/08) 10 18 17 121 65 Ham, Sam and Tam (12/08) 10 18 18 122 Part D: Joint stock companies 66 Titles 10 18 19 123 67 Advantages of incorporation 10 18 19 124 68 Separate personality (6/08) 10 18 19 126 69 Public and private companies 10 18 19 128 70 Forms of business (2.2 12/04 amended) 10 18 19 129 71 Company formation 10 18 20 131 72 Statutory registers and records 10 18 20 132 73 Company names (6/09) 10 18 20 133 74 Promoters and pre-incorporation contracts (2.2 12/04) 10 18 20 134 75 Tom's company 10 18 20 135 76 Eden Plc (2.2 6/05 amended) 10 18 21 137 77 Objects clause (2.2 6/05 amended) 10 18 21 138 78 Articles (2.2 6/04 amended) 10 18 21 139 79 Fred (12/08) 10 18 21 141 Part E: Capital and financing of companies 80 Shares and debentures (6/08) 10 18 22 142 81 Capital terms (12/08) 10 18 22 144 82 Payment for shares (2.2 12/04) 10 18 22 145 83 Class rights (2.2 12/05) 10 18 22 147 84 Flop Ltd (Pilot Paper) 10 18 23 148 85 Potential liability 10 18 23 149 86 Registration of charges 10 18 23 150 87 Fixed and floating charges (2.2 6/06) 10 18 23 151 88 Payment of secured debts (2.2 12/06 amended) 10 18 24 153 89 Dividends (12/07) 10 18 24 154 90 Capital maintenance and reducing share capital (6/09) 10 18 24 156 vi Finding questions
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Time Page number allocation Marks Mins Question Answer Part F: Management, administration and regulation of companies 91 Directors (6/08) 10 18 25 158 92 Appointment and removal (2.2 6/06) 10 18 25 160 93 Statutory grounds for disqualifying directors (6/09) 10 18 25 161 94 Powers and duties of directors (2.2 6/03) 10 18 25 163 95 Directors binding company (1) (2.2 12/04 amended) 10 18 25 165 96 Directors binding company (2) (2.2 12/06) 10 18 26 166 97 Powers of chairman and MD, voting (2.2 Pilot Paper amended) 10 18 26 167 98 Clean Ltd (6/09) 10 18 26 168 99 Statutory duties 10 18 26 170 100 Promoting success (12/08) 10 18 27 171 101 Helen (2.2 12/03 amended) 10 18 27 172 102 Wrongful trading and disqualification 10 18 27 173 103 Attending board meetings 10 18 27 174 104 Company secretary (2.2 6/05) 10 18 27 175 105 Meetings (Pilot Paper amended) 10 18 28 176 106 Resolutions (12/08) 10 18 28 177 107 Auditors (1) (2.2 6/03) 10 18 28 178 108 Auditors (2) (12/07) 10 18 28 180 109 Fran, Gill and Harry (2.2 Pilot Paper amended) 10 18 28 182 110 Katch Co (12/07) 10 18 29 184 Part G: Legal implications of companies in difficulty or in crisis 111 Voluntary winding up 10 18 30 185 112 Winding up (2.2 6/06) 10 18 30 186 113 Cross-border insolvency 10 18 30 188 114 Chapter 11 10 18 30 189 115 Administration (1) 10 18 30 190 116 Administration (2) 10 18 30 190 117 Earl (12/07) 10 18 31 191 Finding questions vii
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Time Page number allocation Marks Mins Question Answer Part H: Corporate governance and ethical issues relating to business 118 Auditors and corporate governance 10 18 32 193 119 Directors and corporate governance (Pilot Paper) 10 18 32 193 120 Stakeholders 10 18 32 195 121 Insider dealing 10 18 32 196 122 Sid and Vic (6/08) 10 18 32 197 123 Money laundering (1) (2.2 12/05) 10 18 33 199 124 FATF recommendations 10 18 33 200 125 Greg (6/09) 10 18 33 201 126 Fraudulent trading (2.2 6/05 amended) 10 18 33 203 127 Huge plc (Pilot Paper) 10 18 34 204 128 Illegal activities 10 18 34 205 129 Criminal offence (2.2 6/06 amended) 10 18 34 206 130 Money laundering (2) (2.2 12/03 amended) 10 18 34 207 Mock exam 1 Questions 131 to 140 Mock exam 2 Questions 141 to 150 Mock exam 3 (December 2009) Questions 151 to 160 Planning your question practice Our guidance from page xxiii shows you how to organise your question practice, either by attempting questions from each syllabus area or by building your own exams – tackling questions as a series of practice exams. ACCA examiner's answers The ACCA examiner's answers to questions marked 'Pilot paper', '12/07', ‘6/08’ and ‘12/08’ can be found on the BPP website at the following link: www.bpp.com/acca/examiner-solutions Additional question guidance Additional guidance to certain questions can be found on the BPP website at the following link: www.bpp.com/acca/extra-question-guidance viii Finding questions
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Using your BPP Learning Media products This Kit gives you the question practice and guidance you need in the exam. Our other products can also help you pass: x Learning to Learn Accountancy gives further valuable advice on revision x Passcards provide you with clear topic summaries and exam tips x Success CDs help you revise on the move x i-Pass CDs offer tests of knowledge against the clock You can purchase these products by visiting www.bpp.com/mybpp. You can view demonstrations of i-Learn and i-Pass products by visiting www.bpp.com/acca/study- materials/#ilearn. Scroll down the page until you find the sections for i-Learn and i-Pass and click on the appropriate 'View demo' button. Finding questions ix
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Topic index Listed below are the key Paper F4 syllabus topics and the numbers of the questions in this Kit covering those topics. If you need to concentrate your practice and revision on certain topics or if you want to attempt all available questions that refer to a particular subject, you will find this index useful. Syllabus topic Question numbers Administration 115-116 Agency 60, 61, ME2:Q8 Alternative dispute resolution (arbitration) 15-22 Articles of Association 71, 78, 79, ME1:Q2 Auditors 107, 108, ME1:Q3 Avoidance in contract 49 Bill of lading 52, 53, ME3: Q7 Bills of exchange 56-58, ME3: Q7 Breach of contract 37, 38, 39, 44, 46-49 Capital 81 Capital maintenance 90 Chapter 11 114 Charges 86-88 Civil law system 4, 6, 7, 8, 9, ME1:Q1, ME3: Q1 Class rights 83 Common law system 3, 6, 7, 8, 9, ME1:Q1, ME3: Q1 Company constitution 78-79 Company formation 71, 75 Company meetings 105 Company names 66, 73 Company resolutions ME2:Q3 Compulsory liquidation 112, ME1:Q4 Conflict of laws 13 Corporate governance 118-120 Court based adjudication 14, 16 Company secretary 104 Criminal activity 121-130 Criminal law 15 Debenture 80 Directors 91-103, ME2:Q4, ME3: Q9 Dividends 89 Economic and political systems 1 Formation of contract 23, 27-33 Fraudulent trading 126, ME3: Q10 ICC Incoterms 24, 25, 26, ME1:Q6 Incorporation 67, 69, 70 Insider dealing 125, 127-130; ME1:Q10 Insolvency 111-117, ME3: Q6 International legal regulation 10-22 International organisations 10, 11, 12, 13, 14, ME2:Q1 Issuing shares 82 x Finding questions
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Syllabus topic Question numbers Legal personality 68 Letters of credit 53-55 Limited liability 70 Liquidation 111-117, ME2:Q9, ME3: Q6 Loan capital 80, ME1:Q8 Meetings 105 Money laundering 123-125, 130, ME2:Q5 Obligations in contract 34-36, 40-42 Off-the-shelf companies 75 Partnership 62-65 Passing off 73 Precedent 3, 6, 7, 8 Promoters 74, 76 Quality in contract 34-36 Risk in contract 45, 50, 51 Registering company 71 Resolutions ME2:Q3 Separation of powers 1, 2 Share capital 80-85, ME1:Q8, ME2:Q2 Sharia law system 5, 8, 9, ME3: Q1 Sources of law 3, 7, 8, 9 Statutory records and returns 72 Objects clause 77, ME1:Q9 Types of business 67, 69, 70, ME3: Q5 UNCITRAL Model Law on Cross-Border Insolvency 113 UNCITRAL Model Law on International Commercial 16-22, ME1:Q7, ME3: Q2 Arbitration United Nations Convention on Contracts for the 23, 27-52, ME1:Q5, ME2:Q6, ME2:Q7, ME2:Q10, International Sale of Goods ME3: Q3, ME3: Q4, ME3: Q8 United Nations Convention on International Bills of 57, 58 Exchange and International Promissory Notes Voluntary liquidation 111, 112 Wrongful trading ME3: Q10 WTO 10 Finding questions xi
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USING YOUR BPP LEARNING MEDIA PRACTICE AND REVISION KIT Using your BPP Learning Media Practice and Revision Kit Tackling revision and the exam You can significantly improve your chances of passing by tackling revision and the exam in the right ways. Our advice is based on feedback from ACCA examiners. x We look at the dos and don’ts of revising for, and taking, ACCA exams x We focus on Paper F4; we discuss revising the syllabus, what to do (and what not to do) in the exam, how to approach different types of question and ways of obtaining easy marks Selecting questions We provide signposts to help you plan your revision. x A full question index x A topic index listing all the questions that cover key topics, so that you can locate the questions that provide practice on these topics, and see the different ways in which they might be examined x BPP's question plan highlighting the most important questions and explaining why you should attempt them x Build your own exams, showing how you can practise questions in a series of exams Making the most of question practice At BPP Learning Media we realise that you need more than just questions and model answers to get the most from your question practice. x Our Top tips included for certain questions provide essential advice on tackling questions, presenting answers and the key points that answers need to include x We show you how you can pick up Easy marks on some questions, as we know that picking up all readily available marks often can make the difference between passing and failing x We include marking guides to show you what the examiner rewards x We include examiners’ comments to show you where students struggled or performed well in the actual exam x We refer to the 2009 BPP Study Text (for exams in 2010) for detailed coverage of the topics covered in questions x In a bank at the end of this Kit we include the examiner's answers to the June and December 2009 papers. Used in conjunction with our answers they provide an indication of all possible points that could be made, issues that could be covered and approaches to adopt. Attempting mock exams There are three mock exams that provide practice at coping with the pressures of the exam day. We strongly recommend that you attempt them under exam conditions. Mock exams 1 and 2 reflect the question styles and syllabus coverage of the exam; Mock exam 3 is the December 2009 paper. xii Using your BPP Learning Media Practice and Revision Kit
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Revising F4 General exam support from BPP Learning Media BPP Learning Media is committed to giving you the best possible support in your quest for exam success. With this in mind, we have produced guidance on how to revise and techniques you can apply to improve your chances of passing the exam. This guidance can be found on the BPP Learning Media web site at the following link: www.bpp.com/acca/examtips/Revising-for-ACCA-exams.doc A paper copy of this guidance is available by e-mailing learningmedia@bpp.com. Topics to revise Although the examiner, David Kelly, sets challenging questions, the style of question he uses are familiar because he has been the ACCA law examiner for many years. He has, under the old syllabus, provided very detailed suggested answers, which show all the detail required to score very highly indeed. As with most examiners, David Kelly (who is also the F4 UK examiner) has warned against question-spotting and trying to predict the topics that will be included in the exam. He has on occasions examined the same topic in two successive sittings. He regards few areas as off-limits, and all of the major areas of the syllabus can and have been tested. Paper F4 Global is a variant on the F4 Corporate and Business Law paper which is intended as a general law paper, effective in relation to a number of legal jurisdictions. Wherever possible the syllabus pays attention to international legal codes, which have direct application in different jurisdictions. Where there is no internationally recognised code or structure, UK law is taken as exemplar. The examiner expects you to show your basic knowledge in your knowledge-based answers, but you are also rewarded for showing that you have thought about the way the law operates. Marks can be given for critical insights into the way the law works in practice as opposed to regurgitating standard chunks of text. Scenario questions are generally an analysis of a legal problem and the application of law to it, to reach a conclusion. That said, there are certain topics that are examined particularly frequently and thoroughly: x Share capital x The duties, powers and role of Directors x Formation of CISG, obligations, breach, remedies x Incoterms x Insider dealing and money laundering. Question practice You should use the Passcards and any brief notes you have to revise the syllabus, but you mustn't spend all your revision time passively reading. Question practice is vital; doing as many questions as you can in full will help develop your ability to analyse scenarios and produce relevant discussion and advice. The question plan on page xx tells you what questions cover so that you can choose questions covering a variety of syllabus areas. Revising F4 xiii
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Passing the F4 exam Displaying the right qualities The examiner will expect you to display the following qualities. Qualities required Knowledge of the law If, for instance, the question asks you to set out the ways in which agency can be formed, do not waste time describing the different types of authority that an agent has, or the rights of the agent. You'll score nothing. In fact, as time goes on, ACCA law questions are becoming more and more focused – so watch out! 70% of the marks available in this paper are for showing that you have knowledge of the relevant law. All knowledge-based questions ask for basic knowledge of very specific topics Application of the law 30% of the marks are available in scenario questions. These require application of law to the analysis of scenarios. This sounds more complicated than it is. Usually the scenario relates directly to the law and is generally quite easy to answer. Sketching the relationships between parties in the scenario will help you understand it. Communication of knowledge There are few if any numbers in law exams, and this is a problem for some students. It shouldn't be. Being an accountant is as much about knowledge and the communication of knowledge as it is about numbers and what they represent. If you're nervous about not having the comfort blanket of numbers in the exam, it's particularly important that you practise: x Reading law questions so that you identify exactly what it is the examiner is seeking x Planning law answers so that you get all your points into them, in a logical order (this helps you to be accurate and comprehensive) x Writing law answers so that you feel confident that you can get your knowledge across effectively. Get someone else to read your answers and then give you feedback on whether the answers are communicating clearly. xiv Revising F4
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Avoiding weaknesses Our experience of, and examiner feedback from, other exams enables us to predict a number of weaknesses that are likely to occur in many students’ answers. You will enhance your chances significantly if you ensure you avoid these mistakes: x Failing to provide what the question verbs require (discussion, evaluation, recommendation) or to write about the topics specified in the question requirements x Repeating the same material in different parts of answers x Stating theories and concepts rather than applying them x Quoting chunks of detail from the question that don't add any value x Forcing irrelevancies into answers, for example irrelevant definitions or theories, or examples that don't relate to the scenario x Giving long lists or writing down all you know about a broad subject area, and not caring whether it's relevant or not x Focusing too narrowly on one area – for example only covering legislation when case law is also important x Letting your personal views prevent you from answering the question – the question may require you to construct an argument with which you personally don’t agree x Making unrealistic or impractical recommendations x Failing to plan and prepare your answer, properly taking into account the mark allocation between the various parts of a question. This failing reflects poor time management Using the reading time The ACCA allows you 15 minutes reading time in Fundamentals papers F4-F9 and all Professional level papers. How you use this time is up to you, but here are some possible options: x Speed read through the question paper, jotting down any ideas that come to you about any of the questions x Decide the order which you're likely to tackle questions (probably easiest questions first, most difficult questions last) x Spend the remainder of reading time reading the question(s) you'll do first in detail, analysing scenarios, jotting down plans (any plans written on the question paper should be reproduced in the answer booklet) x When you start writing, get straight on the questions you've planned in detail. Choosing which questions to answer first As all ten questions are compulsory, it is important for you to decide which order to attempt them. Since each question carries equal marks you may prefer to attempt the questions that you are more confident about first. This means you will build up marks early on giving you a solid base to tackle the harder questions later. However do not spend too long on the questions you are confident about as you need to spend an equal amount of time on them all. You cannot pass the exam answering three or four questions well and the rest poorly. An alternative strategy is to answer all questions in strict order. You could use the time saved choosing the order by starting to plan your answers. You may prefer to use this method if you find yourself spending too long on your favourite questions as it forces you to spend an equal time on each before moving on. Revising F4 xv
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Tackling questions Scenario questions You'll improve your chances by following a step-by-step approach to scenarios along the following lines. Step 1 Read the requirement Identify the knowledge areas being tested and see precisely what the examiner wants you to do. This will help you focus on what's important, especially if there is a scenario. Identify and make sure you understand the action verbs in the requirement. These are mostly 'explain', which may be defined as: 'make clear and intelligible' or 'state the meaning of'. In scenario questions you will often be asked to 'analyse' (which means examine in detail the structure of') and the 'advise' (which means to 'inform' or 'notify'). Step 2 Check the mark allocation This shows the depth of answer anticipated and you should use it to allocate time across parts of the question and decide where to slot in knowledge to avoid repeating yourself. Step 3 Read scenarios carefully Identify which information is relevant to each part. Read the scenario and jot down key points on the page: who's who, the key issues at stake, the alternatives open to the parties for resolving any dispute (eg damages, rectification etc), and conclusion. Step 4 Plan your answer Consider the number and priority of points you will make. Use the ISAC approach when answering scenario questions. x Identify the legal issues x State the relevant law x Apply the law x Conclude with justification Step 5 Write your answer Stick carefully to the time allocation for each question, and for each part of each question. Gaining the easy marks Most marks in this paper are available for setting out the legal rules that apply to each topic. These are 'easy marks' – if you know the rules! In the scenario questions, there are often easy marks available for identifying who is who, stating the key issues and reaching a reasoned conclusion. To get these 'easy' marks: x Read the question carefully and think about the most important points and issues are. x State the law clearly, in as simple language as you can (you're not a lawyer standing up in a courtroom: you need to impress the examiner with your knowledge of the law, not with fancy 'legalese'). Learn as many basic definitions as you can. xvi Revising F4
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Exam information The exam paper Number of marks 10 compulsory questions of 10 marks each 100 Three questions will involve a short scenario 100 Time allowed: 3 hours The examination will comprise of questions drawn across all syllabus areas. Knowledge-based questions will require definitions and explanations of specific areas of law. The scenario questions will normally require you to analyse a situation from a legal point of view and give advice. December 2009 1 Role of judges 2 Challenging an arbitrator’s appointment 3 Obligations of a buyer under contract law 4 Remedies for breach of contract 5 Companies and limited liability 6 Compulsory winding up and administration 7 Bills of lading and exchange 8 Passage of risk 9 Director liability 10 Fraudulent and wrongful trading This exam is included in this kit as Mock Exam 3. June 2009 Question in this kit 1 Precedent in legal systems 8 2 Arbitration 16 3 Contract obligations; price 40 4 Company names 73 5 Capital maintenance 90 6 Disqualifying directors 93 7 International bills of exchange 58 8 Breach of contract 48 9 Directors’ duties 98 10 Insider dealing and money laundering 125 Revising F4 xvii
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Examiner's comments As usual, this paper was made up of ten compulsory questions, each of ten marks, although many of them were subdivided into distinct parts. This format seems to have settled down and to meet with candidates’ approval from the way they tackle it. However, it is a matter of some concern that a significant number of candidates are not completing, or even attempting, all ten questions. This does not appear to be an issue of time-management but lack of knowledge, which might reflect a failed effort of candidates to question spot. This point has been made in the past, but it clearly has to be repeated for every session: if you do not do all the questions you greatly reduce your chances of passing the exam. The syllabus is wide, but you have to cover it all; question/area spotting is a dangerous game to play. All questions were done very well by a number of candidates across the board; although the reverse of that is equally true in that all questions were done very inadequately by a number of candidates across the board. December 2008 Question in this kit 1 Sources of law 9 2 Challenging an arbitration award 21 3 Anticipatory breach 46 4 Share capital 81 5 Ordinary, special and written resolutions 106 6 Duty to promote the success of the company 100 7 Letters of comfort and credit 55 8 Sellers' obligations 33 9 Amending articles of association 79 10 Partners' liability 65 Examiner's comments It is pleasing to report that the performance of candidates sitting the Global variant did not dip as much it did in relation to those doing the English paper. The single most damaging factor for the performance of the Global candidates, which they shared with those doing the English paper, was the almost total lack of awareness of the existence, let alone the detailed provisions, of the Companies Act 2006. Three of the questions, numbers four, five and six focused on the provisions of that Act in areas where the law had changed significantly. Very few candidates appeared to be aware of the provisions, but perhaps of more concern, a considerable number appeared not even to be aware of the existence of the 2006 Act, repeatedly referring to the provisions of the Companies Act 1985. The really surprising, not to say disappointing thing is that this was the second F4 Global in which the 2006 Act has been the basic legislation. xviii Revising F4
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June 2008 Question in this kit 1 UNCITRAL and UNIDROIT 12 2 Offer, invitation to treat and counter offer 27 3 Passage of risk 45 4 Separate legal personality 68 5 Shares and debentures 80 6 Types of director 91 7 Incoterms: CIF, CIP and FOB 26 8 Breach of contract 37 9 Partners’ liability 64 10 Insider dealing 122 Examiner's comments The standard of candidates’ performance was better than in previous sessions, reflecting greater familiarity with the new syllabus and possibly a more straightforward paper. From the evidence of the scripts it would appear that at least some providers are teaching certain key areas in a more focused manner. December 2007 Question in this kit 1 Criminal law, civil law and arbitration 15 2 Quality of goods under UN CISG 34 3 Damages for breach of contract under UN CISG 47 4 Memorandum of association – Not included in this Kit as not relevant under the Companies Act 2006 5 Dividend rules 89 6 International bill of exchange 57 7 Qualifications, powers and duties of company auditors 108 8 Offer and acceptance under UN CISG 32 9 Insolvency and amounts owed to creditors 117 10 Agency and director’s authority to bind a company 110 Examiner's comments This is the first report on an examination conducted under the new syllabus and format. The change in format seems to have been less problematic than the change in syllabus with most candidates answering all of the questions, although it has to be said with various degrees of success. Some candidates are treating the three problem/application questions at the end of the paper in the same way as they dealt with the previous 20 mark problem questions, with the effect that the candidates are spending too much time dealing with these questions to the detriment of their general performance. This appears to be a particular concern with candidates who start their papers with the problem questions. Candidates should be made aware that these questions are worth no more than the other questions and they should be encouraged to manage their time better in making sure they have sufficient time to deal with all the questions equally well. It is always surprising the extent to which students will pursue marginal marks at the end of an answer rather than turn their attention to the easier marks to be had be answering a new question. Unfortunately it still remains a fact that in spite of the syllabus change some candidates are still trying to answer the Global syllabus questions using English law as their paradigm and it does not work; the legal regulations are different. Revising F4 xix
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