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9 Shenhua Company Ltd (Shenhua) has been buying products from Kangyi Chemicals Company (Kangyi Chemicals) for more than one year. By the end of 2013, the two parties negotiated to settle the previous business transactions and confirmed that Shenhua owed an outstanding amount of RMB 800,000 yuan to Kangyi Chemicals.
Several days later, Shenhua entered into an agreement with its holding company, namely Shenhua Holdings, to transfer all its debts of RMB 800,000 yuan due. In doing so, Shenhua neither notified Kangyi Chemicals, nor got a consent from Kangyi Chemicals.
Having discovered this information, Kangyi Chemicals sent an email to Shenhua Holdings to inquire whether Shenhua’s debts had been transferred to Shenhua Holdings. Shenhua Holdings acknowledged the transfer but did not promise to settle the debts as a new debtor.
Kangyi Chemicals filed a lawsuit against Shenhua Holdings for the unsettled RMB 800,000 yuan. Shenhua Holdings submitted the following defences: First, the transfer agreement between Shenhua and Shenhua Holdings was an invalid one as Shenhua failed to get prior consent, as required by the law, from Kangyi Chemicals before the completion of transfer. Second, the goods delivered by Kangyi Chemicals in the last six months contained material defects which caused loss and damage to Shenhua as the original counterparty.
Required:
Answer the following questions in accordance with the Contract Law, and give your reasons for your answers:
(a) state whether the transfer agreement between Shenhua and Shenhua Holdings was a valid one;
(b) state whether Shenhua Holdings was entitled to submit its defence on the ground of the defects in the goods
delivered by Kangyi Chemicals to Shenhua.
答案:
9 This question requires candidates to deal with the legal issues in relation to the transfer of contractual obligations under the Contract Law.
(a) In accordance with Article 84 of the Contract Law, the creditor’s consent is required if the debtor transfers the contractual obligation in whole or in part to a third party. In this case Shenhua was a debtor who owed debts of RMB 800,000 yuan to Kangyi Chemicals. The transfer of debts would not be binding upon Kangyi Chemicals in general if Shenhua failed to notify the transfer and receive the consent from Kangyi Chemicals. However, Kangyi Chemicals has acknowledged the transfer and held Shenhua Holdings as its counterparty by filing a lawsuit against Shenhua Holdings, even though Shenhua failed to receive consent before the transfer. Therefore, the transfer agreement should be regarded as a valid one.
(b) In accordance with Article 85 of the Contract Law, if the debtor transfers the contractual obligations, the new debtor may raise the defence of the original debtor against the creditor. In this case Shenhua Holdings became a new debtor after the transfer.
Therefore, it should have the right to raise the defence against Kangyi Chemicals on the ground of the defects in the goods delivered by Kangyi Chemicals to the original debtor – Shenhua.
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