CMA Inter Paper 5: Business Laws and Ethics case studies
CMA Inter Paper 5: Business Laws and Ethics · Put your knowledge to work in context.
CMA Inter Paper 5, Business Laws and Ethics, is the law paper of the second level of the Cost and Management Accountancy course. It suits candidates who have cleared the CMA Foundation level or the equivalent entry route and now need the legal scaffolding behind business decisions: how contracts are formed and broken, how special contracts allocate risk, how goods and negotiable instruments move, how partnerships and LLPs are governed, how companies are incorporated and run, and how labour, consumer, competition and foreign-exchange law constrain the enterprise. The CMA Inter Paper 5: Business Laws and Ethics case studies are 5 cases and about 6,161 words.
1Battle of the Forms: Purchase Order Terms, Counter-Offer and Liquidated Damages
On 5 April 2025 Kaveri Retail Ltd issued Purchase Order KRL/224 to Deccan Cartons for 60,000 printed cartons at ₹41.50 each (order value ₹24.90 lakh), delivery by 31 May 2025. Clause 12 read: 'This order is governed by our standard purchase terms at Annexure A (liquidated damages of 2% of the value of delayed goods per day, capped at 15% of the order value).
1,171 words, about 6 min2Continuing Guarantee, Unilateral Enhancement of Limit and the Surety's Discharge
In March 2023 Anand, promoter of Sundar Textiles Pvt Ltd, executed a deed of guarantee in favour of Northstar Bank for a cash credit facility of ₹75 lakh sanctioned to the company. The deed guaranteed 'all amounts now due or hereafter to become due, together with interest, subject to a maximum of ₹75 lakh', and said it would 'remain in force until revoked by written notice'.
1,147 words, about 6 min3Dishonoured Post-Dated Cheques, Acceptance of Defective Machinery and Director Liability
Precision Tools Pvt Ltd sold a CNC machining centre to Fabritech Engineering Pvt Ltd for ₹28.40 lakh on a contract that specified positional accuracy of ±0.02 mm and provided for a trial run at Fabritech's works. The purchase order stated: 'Acceptance only after successful trial run.' The machine was installed on 12 January 2025; the trial showed a consistent error of 0.05 mm.
1,224 words, about 6 min4Designated Partner, Internal Borrowing Limits and the Sleeping Partner's Liability in an LLP
Aarambh Design LLP was registered in 2019 with three partners: Rhea (designated partner, 45% contribution), Kabir (35%) and Naveen (20%, a sleeping partner). Clause 11 of the LLP agreement says: 'No partner shall, without the prior written consent of all partners, borrow more than ₹15 lakh at a time or create any charge on LLP property.' Clause 18 says: 'Rhea is the designated partner authorised to manage the day-to-day affairs and operate bank accounts.' In November 2024 Rhea borrowed ₹48 lakh from Sahayak Finance for working capital, signed the loan documents as designated partner, created a charge over the LLP's receivables, and added her personal guarantee on the last page.
1,280 words, about 6 min5Dividend in a Loss Year, Short-Notice Board Meeting and an Interested Related-Party Contract
Vasudha Foods Ltd is an unlisted public company with paid-up equity of ₹8 crore (80 lakh shares of ₹10). Its balance sheet shows general reserve ₹3.20 crore, surplus in the profit and loss account ₹2.40 crore and a revaluation reserve ₹1.50 crore.
1,339 words, about 7 min