Commerce Lesson Note For SS2 Second Term

Commerce Enotes for Secondary School –


WEEKS           TOPICS

1.         Revision

            Credit – meaning, types.

2.         Credit (cont’d)

            –           Functions of credit. To retailer and wholesaler.

            –           Credit instrument.

3.         Trade Associations – Aims and Functions. Chamber of commerce – Aims and Functions.

4.         Other forms of trade Associations. Consortion, carte. Amalgamation. / merger, trust, holding, price, rings, syndicate.

            Their aims, functions and reasons for their formation.

5.         Insurance – definition, its importance to business and individual, history of insurance, insurable, non-insurable risks. Basic Principle.

6.         Types of Insurance.

            Underwriting, Re-insurance, Corporation of Nigeria.

            Types of Risk.

7.         Consumer protection.

            – Meaning, the need for consumer protection, government legislation in food and drug Act 1955, weight and measure Act of 1963, price, control decree of 1970, Trade description Act of 1968.

8.         Consumer protection control

            –           Instrument of protection, organ or agencies of consumer protection e.g.

            a.         Consumer association.

            b.         Manufacturer Association.

            c.         Rent Tribunal.

            d.         Price control board etc.

9.         Transportation

            –           Meaning and importance, forms of transport.

            –           Advantages and disadvantages of each choice of transportation.

10.       Documents involved in transportation, advice note, Bill of Loading, freight note etc.

            –           Terminological associated with transportation.

11.       Revision.

12&13.      Examination.


1.0.    TOPIC – CREDIT

1.1.    Meaning

1.       Credit can be defined as the promise by one party to pay another  money borrowed or goods received at a later date. It can be a “trade credit” or Loan credit.

2.       Credit occurs when a seller grants permission to a buyer to take possession and enjoy a commodity with a promise to pay in the future.

          It is the process by which goods and services are transferred to the buyer from the seller for his use and enjoyment without value being given immediately.


1.       Loan: This is a source of credit facility in which a banker agrees to lend out some amount of money to a customer at an agreed interest rate for a period of time.

2.       Overdraft: This is one of the methods of borrowing from a bank. The borrower will be given permission by his bank to withdraw more than what he has in his account. This will be subject to daily interest payment.

3.       Credit Card: Holders are allowed credit facilities for a specified period of time without any security.

4.       Debt Factoring: A situation where a firm will buy up its clients invoice and then claim payments of them. A company can engage the services of professional to assist in collection of debts.

5.       Leasing: Leasing is a source of credit that provides benefits to the lessee in allowing them the use of assets required without having to pay the full cost at the time of acquisition.

6.       Club trading: Some shops organize clubs, the members pay regular contributions on which interest maybe paid and which periodically can be withdrawn in order to make purchase at the shops.

7.       Budget account: This is an arrangement where some departmental stores and banks operate will open an account by which will enable the customer to meet his annual bills. Customers agree to pay a certain sum per month.

8.       Mortgage: This is a legal agreement in which building societies or banks lend money to somebody to buy a house. The money will be paid back over a particular number of years including the interest.

9.       Monthly Account: This is a method of paying monthly for goods and services instead of paying for each individual transaction as it arises.

10.    Book Me Down: This is a system whereby customers purchase good on credit with their names written down as references and payments will be made anytime they receive their salary.

11.    Credit Sales: This is a contract of sales whereby, the buyer takes possession and owner-ship with an agreement to pay the price of goods later or installmentally.

12.    Hire Purchase: This is a form of agreement in which the owner transfers possession of goods to the hirer after paying an initial deposit while he retains ownership until final payment is made.

Commerce Enotes for Secondary School –




1.       Increase in standard of living.

2.       Enjoyment of goods without payment.

3.       Meeting temporary needs for cash.

4.       Encourage bulk purchases.


1.       Increase in price.

2.       Lead to excess purchase.

3.       Seller has a right to repossess.

4.       Buyer may loose his right to make choice.

5.       Loss of deposit on default.


1.       Increase in sale.

2.       Increase in profit.

3.       Reduces risk of holding stock.

4.       Encourage sales of durable and expensive goods.

5.       Continuous patronage.


1.       Lead to business liquidation.

2.       Tying down of business capital.

3.       It can lead to court case.

4.       Risk of non-payment.

5.       Problem of bad debts.

6.       Increased book-keeping records.

Commerce Enotes for Secondary School –




          TRADE ASSOCIATION: This is a group of individual or firms in the same trade who have voluntarily agreed to come together with the major aim of promoting and safeguarding the interest of their members and trade.


1.       National Council of Farmers.

2.       Barbers Association.

3.       Fashion Designer Association.

4.       Pepper Sellers Association.


1.       Maintenance of professional ethics among members.

2.       Safeguarding the interesting of its members.

3.       Ensures uniformity in prices for its products.

4.       Creating uniformity in the method of dealing with the public.

5.       Protection of their trade or profession.

6.       Acting as pressure group to influence government policies.

7.       Rendering of quality services.

8.       Giving assistance of needy members.

9.       Exchanging of information among members.

10.    Regulation of members’ activities.


1.       Ensuring uniformity in mode of operation.

2.       Educating members.

3.       Protection of their trade.

4.       Influencing government policies.

5.       Provision of information.

6.       Settlement of dispute.

7.       Protection of members’ interest.

8.       Maintenance of professional standard.

9.       It represents members.

10.    Rendering of assistance to members.


          Chamber of commerce is an association of entrepreneur in one locality for the purpose of promoting and protecting trade in a particular area, which may be beneficial to all members.

The members are manufacturers and merchants.

Examples of chamber of commerce:

1.       Oyo chamber of commerce.

2.       Enugu chamber of commerce.

3.       Ibadan chamber of commerce.

4.       Lagos chamber of commerce.

5.       Port-Harcourt chamber of commerce.


1.       To represent and protect their members, interest.

2.       To educate members on development in their field.

3.       To influence government policies for the benefit of members.

4.       To promote internal and international trade.

5.       Promotion of business activity in a town.

6.       To settle dispute among members.


1.       Promotion of home and foreign trade.

2.       Ensures cooperation with other chambers of commerce.

3.       Provision of business information.

4.       Settlement of dispute among members.

5.       Development of commerce and trade.

6.       Organization of trade fairs.

7.       Acting as pressure group on government policy.

8.       Educating members on new techniques and technology.

9.       Provision of vital information to members.

10.    Act as watchdog on government policies.



          This is a group of firm working together on a project too large or too complex for a single firm to undertake. Consortium is a voluntary association of independent firms formed for the purpose of executing a large capital project. The firms will combine skill and resources to execute a project.


1.       It is formed by voluntary organizations.

2.       It undertakes joint projects.

3.       Consortium deals with large or complex projects.

4.       It is dissolved as soon as work ends.

5.       Requires large capital.


          This is a group of people or organization voluntarily working together for a particular purpose. It can also be referred to as a group of people or companies working together and help each other in order to achieve a particular business objectives e.g. Lioyd’s underwriters.


1.       It is a voluntary organization.

2.       Set-up for a particular business purpose.

3.       Members retain their independence.


          This is a group of firms in an industry loosely associated together to operate a common price policy. The major reason for operating this policy is to increase profit. It is formed when competitors come together to fix uniform price for their product.


1.       Members operate common price policy.

2.       Members are loosely associated.

3.       Allow competition on ground of efficiency.

4.4.    TRUST

          Trust is a team of American origin for a large amalgamation of firms more particularly a vertically integrated combination e.g. iron and steel trust. The major aim is to maximize profit and ensure efficiency in production.


1.       Trust has vertical structure.

2.       It has a complete amalgamation.

3.       Members do not retain their independence.

4.       Issuance of certificate to members.

4.5.    CARTELS

          A cartel can be defined as a group of firm or producers whose objectives is to limit competition by centrally fixing prices or quantities or both as a means of maximizing their profit. It is an association which has monopoly influence on the market by artificially restricting output competition and raising price. Examples are organization of petroleum exporting countries and international Air Trasport Association.


1.       Monopolistic organization.

2.       It fixes price by controlling supply.

3.       It is formed by independent organizations.

4.       All the members produce similar products.

5.       Competition is limited.

6.       Output is restricted through quotas.

7.       Members retain their identity.


1.       When members produce more than the allocated quotas.

2.       Group whose interest is widely affected by the cartel often work hard to undermine it e.g. USA stock pilling of oil.

3.       It lack legal sanction as it is based on a gentleman agreement.

4.       Lack of reliable data may undermine the cartel’s ability to fix prices.

5.       Emergence of new products competing with the cartel’s product.

4.7.    MERGER

          This is the term used to describe the coming together of two or more companies without any of them being superior in control or ownership, but rather they decide to come together to enjoy some benefits from each other. They combine both human and materials resources with a vision to increase their market share and capital base e.g. Exxon mobil (Exxon and Mobil)


1.       Horizontal Merger: This is the union of two or more firms within an industry. It occurs with fusion of firms, which directly compete for sale of products e.g. a merger between PAN and VIN Nigeria Ltd.

2.       Vertical Merger: This involves coming together of two or more firms at different production stages in the same industry. It could either be backward or forward.

3.       Conglomerate Merger: This involves the joining of firms producing unrelated products e.g. the merging of a construction company with a super-market.


a.       Amount of consideration.

b.       Organizational structure.

c.       Ownership structure.

d.       Goodwill

e.       Form of consideration e.g. cash or shares etc.

f.        New policies after merger.

g.       Technology.

h.       Statutory provision.

i.        Tax implications.

Commerce Enotes for Secondary School –



5.1.    Meaning:

1.       Insurance can be defined as an agreement whereby one party promises to indemnify or pay another  a sum of money in the event of his suffering a specified loss or damages.

2.       It can also be defined as a system for providing financial compensation for the effects of loss, the payment being made from the accumulated contributions of all parties participating in the fund or scheme.

3.       A contract of insurance is one whereby a person called the insurer, agrees in consideration of money paid to him called the premium, by another person called the assured, agrees to indemnify the latter against loss resulting to him in the happening of certain events.


1.       Life assurance policy can be used as collateral security to obtain loans from financial institutions.

2.       By making periodic and regular payment as, premium the insured is encouraged to save for the future day.

3.       Insurance serves as a means of protection against losses to property as risk can be spread.

4.       It gives a businessman the confidence to embark on any kind of risk.

5.       Insurance provides a ready means of indemnity in case of loss to property.

6.       Life assurance can provide for old age and disability.

7.       Insurance also ensures that fund mobilized from saving can be invested.

8.       Insurance also facilitates foreign trade more especially marine and exports credit insurance.

9.       Group insurance policy also serves as motivation to worker.

10.    Insurance as an aid to trade also contributes to economic development.

11.    It also encourages the growth of commercial activities in a country.


          INSURABLE RISKS: These are risks which can be insured against because the likelihood of occurrence can be forecast and calculated. These are risks, which are economically insurable because the risks involved can be easily estimated for the purpose of fixing the premium.


1.       Insurable risks can be calculated.

2.       It can be insured against.

3.       Likely future losses can be estimated.

4.       It can be measured.


          i.        Life

          ii.       Accident

          iii.      Marine

          iv.      Motor

          NON-INSURABLE RISK: These are risks which cannot be insured because it cannot be calculated due to insufficient information available to the insurer. The probability of insurable risk cannot be calculated so that it cannot be insured against.



1.       Loss due to change in fashion.

2.       Loss due to change in taste.

3.       Loss due to gambling.

4.       Loss due to mal-administration.

5.       Changes in demand.

6.       Speculation.

7.       Act of god e.g. earthquake.

8.       Marketing of new product.

9.       Obsolescence of product as a result of Technological advancement.

10.    Loss of profit through competition.

11.    Loss due to war.


1.       INSURABLE INTEREST: The general rule is that the insured must have an interest in the object or subject matter of his insurance otherwise; the contract of insurance is void. A person has interest in a thing if he will benefit from its existence and be prejudiced by its loss e.g. If Mr. Ayo insured Mr. Oloja’s house, the insurer may in the even to loss refuse to pay compensation.

                   Under the insurance law, a person is not permitted to insure something which belongs to another person. Insurable interest means, therefore, that only the person who will suffer financial loss, if the event to be insured against occurs will be allowed to take out insurance.


          It means that parties to an insurance contract must disclose to each other all material facts, which might influence any party’s willingness to make the contract or reject it. The duty is more on the insured that knows more about the risk to be insured. Failure to disclose all relevant materials facts will render the contract void.

3.       INDEMNITY: Indemnity means restoring the insured to the position he was just before the loss occurred. It is the compensation given to the insured by the insurer in the event of his suffering a specified loss. He will not be compensated for more than the amount insured.

4.       ABANDONMENT: This is the act of relinquishing ownership of property. It is a principle of insurance; which emphasizes the fact that, if the cost of repairing the property damaged is higher than the actual value then it has to be abandoned. Gods that have been insured may be abandoned in certain cases if:

          i.        The actual loss appears to be unavoidable.

          ii.       If the cost of repairs will be more than the value.

5.       SUBROGATION: The doctrine of subrogation literarily means the right to step into another person’s shoe. If the insurer pays the insured the whole of the loss sustained, he is entitle to enforce the rights which would have been available to the insured against the third party. This occurs when an insurance company indemnifies the insured and takes over his rights.


          This is a principle of insurance which implies that a proof is required that the direct and immediate cause of the loss suffered was by the occurrence of the risk insured against. If the object is destroyed by the occurrence not covered the insured will not be indemnified. For example, a house insured against damage by fire was destroyed by flood, the owner has no claim.


          This is applicable where two or more policies cover the same risk but one of the policies is adequate to give the claimant full indemnity. The insured cannot make profit in an insurance policy. One of the insurers can indemnify the insured in full after which he cannot again claim compensation from other insurers.


1.       Good in Transit

2.       Workman Compensation.

3.       Public liability Insurance.

4.       Group Insurance.

5.       Professional indemnity Insurance.

6.       Fidelity Guarantee Insurance.

7.       Consequential loss Insurance.

8.       Cash in Transit Insurance.

9.       Aviation Insurance.

10.    Burglary Theft and Robbery Insurance.

11.    Motor Vehicle Insurance

12.    Export Credit Guarantee.

13.    Plate Glass Insurance.

14.    Accident Insurance.

15.    Life Assurance.

16.    Fire Insurance.

17.    Agricultural Insurance.

18.    Bad debts Insurance.

19.    Marine Insurance.


          This is the process by which an insurer offers to cover or underwrite a proportion or part of a risk. The person whose business is to offer cover for a portion of a risk in connection with insurance is called an underwriter e.g. Lioyd’s underwriters main business is to cover a portion of a risk. It is common in marine insurance because the cost may be enormous that one insurer cannot bear it.


          It relates to an agreement made between an insurance company and another reinsurance company whereby the re-insurer agrees to assume responsibility for a certain fixed share of a risk depending on terms outlined in the agreement. By spreading risk, losses will be greatly reduced Re-Insurance is also the transfer of risk from one insurer to another. Example is Nigeria Re-Insurance Company.


1.       It prevents heavy burden on the insurer if the claim is huge.

2.       It facilitates the spreading of risk to reduce losses.

3.       Re-insurance will forestall a situation whereby a single insurer may not be able to bear the risk.

4.       it enables the insurance company to enjoy goodwill.

5.       the re-insurance company now accept bigger risk.


1.       DEVIATION: A marine insurance policy is normally valid only if the vessel follows the ordinary route to the port of destination any departure from this route is known as deviation.

2.       COVER NOTE: This is a temporary insurance cover to enable the insured to enjoy the benefits of policy while it is being prepared or processed.

3.       ACTUARIST: This is an officer of an insurance company whose duty among other is to calculate the premium to be paid by the insurer to the insured.

4.       JETTISON: This means the deliberate or intentional throwing overboard of part of a cargo to lighten the ship in the interest of the remainder of the cargo.

5.       BARRATRY: This is a wrongful act willfully committed by either the master or the prejudice of either the owner or crew to the chatterer of the ship.

6.       SURRENDER VALUE: This is the amount in cash an assurance company will pay to the assured if he wishes to discontinue the policy at a date prior to that on which it is due to mature.


6.1.    Financial and non-financial risks.

          Financial risks are those risks which are capable of financial measurement. They may have a financial aspect but it is incidental and the real risk arises from decisions and actions motivated by other considerations.


i.        Accidental damage to a motor car.

ii.       Theft of property.

iii.      Loss of business profits following a fire.

iv.      Legal liability to pay compensation for personal injury to others.

6.2.    Pure and Speculative risks

          Speculative risks: These are risks involving situations in life when we speculate with a view to making some kind of gain. E.g investing in the stock market or starting up a new business.

          Pure risks: These are those risks where there is the probability of a loss but not of gain and where the best that we can achieve is a break-even situation. Travelling home in a car is a good example. The best we can hope for is safe arrival.

          More examples

i.        The risk of fire.

ii.       The risk of machinery break down.

iii.      The risk of injury to employees at work.

iv.      Particular and fundamental risks.

          Fundamental risks: These are risks that occur on such a vast scale that they are uninsurable. E.g risk of earthquakes, famine, economic recesson etc.

          Particular risks: These are risks that are localized or even personal in then cause and effect. Sometimes the cause may be more widespread (a storm over a whole region), but the effect is localized or even related to an individual. Not all properties in the region will have been damaged e.g a factory, a car collision, theft of personal possession from a home.



7.1     Meaning: These are actions and efforts of governments and other organized bodies in response to users complaints about goods and services in order to ensure that they derive satisfaction. The consumer should be given protection in order to ensure that the standard and quality of goods purchased are high and that the goods are not harmful.


          This is an individual who purchases goods for his personal use. He buys goods and services and uses them for his satisfaction.

          Consumer is one who makes final use of goods and services provided by a firm.


  1. Safe and hygienic product.
  2. Right to be heard.
  3. Right to choose.
  4. Seeking redress.
  5. Healthy environment.
  6. Getting value for money.
  7. Right to good things of life.
  8. Right to be informed.


          The consumers should be protected because of the following reasons.

  1. Deceptive weights and measures.
  2. False and misleading advertisement.
  3. Elimination of consumers’ exploitation.
  4. Failure to honour guarantees and warranties.
  5. Unreasonably high price.
  6. To ensure adequate satisfaction.
  7. Prevention of substandard or inferior goods.
  8. Regular and uninterrupted supply.


          Consumers can be protected through the following legislations or laws.

  1. Sales of goods Act 1893

The act confirms many implied terms. These are mentioned and explained below.

  1. It is implied that the seller has a right to sell goods.
  2. When goods are sold by sample there is an implied condition that bulk shall correspond with the sample in quality and size.
  3. The goods must be fit for the purpose for which they are needed for.
  4. Where goods are sold in the course of business there is an implied condition that they are of merchantable quality.
  5. Where goods are sold by description, there is an implied condition that the bulk will also correspond with the description.
  6. The goods must be free from any encumbrance not known to the buyer.
  7. The buyer will enjoy quiet possession i.e. no disturbance.
  8. Foods and drugs Act 1955

The acts provided for the following.

  1. All goods both foods and drugs must be fit for human consumption
  2. Drugs should be tested before marketing.
  3. Foods and drugs should be stored under the best sanitary condition.
  4. They must be properly labeled.
  5. Foods and drugs should follow the standard of consumption.
  6. The drugs or foods should follow the regulations of hygiene.

3.       Trade Description Act 1968.

          The Act was introduced because of the following.

a.       To prevent misleading reduction in price.

b.       To prohibit misleading description of goods as to quality.

c.       To prevent false claims for a product.

4.       Weights and measure Act 1963.

          The provisions of the Acts are as follows.

a.       To ensure uniformity of weights and measures.

b.       Some products should be packed in prescribed quantities.

c.       Consumers should be protected from exploitation in weights and measures.

d.       Weights and measures should be stated on the products.

5.       Hire Purchase Act 1975.

The introduced minimum requirements into the contract of hire purchase. The various provisions are as follows.

a.       Declaration of cash price and hire purchase price and hire purchase price.

b.       The right of the hirer to terminate the agreement.

c.       Rights of repossession.

d.       The statutory obligations of the owner are covered by the hire purchase Act.

e.       The obligations of the owner.

f.        Where the hire purchaser defaults after he has paid at least. 1/3 of the hire purchase price, the seller cannot.reclaim the article except by court order

g.       The hirer’s right in determining the terms of agreement.

h.       How payments will be effected.

6.       Rent Edict: The rent edict was introduced to settle dispute between the Landlords and tenants. The provisions are stated below.

a.       To control the total amount of rent charge by the Landlords.

b.       Both the tenants and Landlords should comply with the provisions.

c.       The rights of the tenant in any tenancy agreement.

d.       Rents are fixed according to areas where properties are located.

e.       To state the duties and limits of estates agents.

f.        The penalties for non-compliance.

7.       Price Control Decree 1970.

          This was introduced in 1970 by the military government of Nigeria to regulate the price of goods and services. The provisions of the decree are as follows.

a.       Pegging of selling price of some selected goods.

b.       Goods are to be sold at government approved prices.

c.       Imposition of price control on some products.

d.       To stabilize the general price level.

e.       To protect consumers from paying high prices.

f.        To prevent hoarding of goods.

8.       Standard Organization decree 1971.

          The standard Organization of Nigeria was established in 1971 to ensure the following:

a.       To regulate standard of goods.

b.       To be in charge of quality control.

c.       To carry out test to ensure that manufacturers comply with the required standards.

d.       To ensure compliance with government specifications.

Commerce Enotes for Secondary School –



1.       Consumer Education and protection council of Nigeria.

2.       National Agency for Food and Drug Administration and Control (NAFDAC).

3.       Rent tribunals.

4.       Consumer Association.

5.       Manufacturers Association.

6.       Standard Organization of Nigeria.

7.       Environmental protection Agency.

8.       Professional bodies.

9.       Price Control Board.


State four functions each for the following agencies that educate and protect consumers.

i.        Consumer Association.

ii.       National Agency for Food and Drug Administration and Control.

iii.      Manufacturers Association.

iv.      Standard Organization of Nigeria.

v.       Environmental Protection Agency.

vi.      Price Control Board.



9.1.    Meaning: Transportation is the act of moving goods, services and people from one destination or place to another.


1.       Expansion of market.

2.       Ensures movement of goods and people.

3.       Development of industries.

4.       Employment opportunities.

5.       Enhances International Trade.

6.       Improvement in Standard of Living.

7.       Encourages Specialization.

8.       Ensures efficient distribution system.

9.       Influence the developmental rates of rural areas.4

10.    Influence the location of industry.

11.    Prevention of wastage of perishable goods.


          These are the factors that determine the choice of transport to be used in moving goods and services from one place to another.

1.       Nature of the goods.

2.       Urgency of needs.

3.       Distance to be covered.

4.       Customers’ preference.

5.       Cost.

6.       Available means of transport.

7.       Value of goods.

8.       Weight and size of the commodity.

9.       Convenience.

10.    Speed.


          The following are the major means of transportation.

1.       Road

2.       Rail

3.       Air

4.       Water

5.       Pipelines

Note: LAND TRANSPORT: This is the movement of goods and people from one destination to another using road and rail as means of transportation.

1.       Road Transportation: This is the most commonly and widely used means of transportation in Nigeria. It requires a good network of well-constructed and tarred roads for speed and smooth movement. Goods and passengers can be moved by the use of the following:

          i.        Bicycles.

          ii.       Lorries.

          iii.      Motorcycles.

          iv.      Carts.

          v.       Trucks.

          vi.      Buses.

          vii.      Trailers.

          viii.     Moto vans.


1.       Adaptability to any climatic condition.

2.       Low cost of maintenance.

3.       Quicker for short distance.

4.       Flexibility.

5.       No special route.

6.       Low cost of construction.

7.       No fixed timetable.

8.       Variety of vehicles.

9.       It is readily available.


i.        Slow for long distance.

ii.       Prone to accident.

iii.      Traffic congestion.

iv.      Breakdown of vehicles.

v.       Inability to carry heavy loads.

vi.      Fragile goods cannot be transported.

2.       RAIL TRANSPORT: This involves the conveyance of goods and passengers by train. The Train that carries goods and passengers moves on rail lines.
Rail Transport conveys bulky goods to far places and for longer duration than transport by road.


1.       Suitable for long distance.

2.       Very cheap.

3.       Ability to convey heavy luggage.

4.       Accident rarely occurs.

5.       Comfortability.

6.       Avoidance of indiscriminate changes.

7.       Travels at scheduled time.

8.       Reduces road congestion.


1.       High cost of rail construction.

2.       Inflexibility.

3.       No personal ownership.

4.       It can cause delay.

5.       Slow over short.

6.       Not suitable for perishable goods.

7.       Fixed time schedule.

8.       Depends on other means of transport.

9.       Limited in operation.

3.       AIR TRANSPORT: This involves travelling by aircrafts. It is used to carry mails, cargoes and passengers. Air transport has proved to be of great benefit because it is faster and more comfortable than other means of transportation. It  is now operated among all the important cities of the world and is popular among businessmen.


1.       Planes.

2.       Jets.

3.       Helicopters.

4.       Hovercrafts.


1.       Very fast.

2.       Suitable for long distance.

3.       Suitable for expensive goods.

4.       Suitable for fragile goods.

5.       Comfortability.

6.       No hold-up or congestion.

7.       Useful for modern warfare.


1.       Limited by weather conditions.

2.       Very expensive.

3.       High cost of purchase and maintenance.

4.       Prone to accident.

5.       Requires highly qualified people.

6.       Inflexibility.

7.       Depends on other means of transportation.

8.       Not suitable for heavy products.

4.       WATER TRANSPORT: Goods and passengers maybe conveyed by ferries and canoes along inland waterways and the seas and oceans by oceans liners and tramp liners.

a.       INLAND WATERWAYS: These are waterways within a country that are suitable for the movement of bulky and perishable items. It is associated with the following rivers, creeks, canal and lakes. People and goods are moved from one place to another by the use of boats and launches etc.


1.       Ferries: They are used to carry passengers and light goods from one terminal to another. e.g. Apapa wharf to broad street in Lagos. they are bigger than ordinary boats and very slow in movement.

2.       Canoes: Canoes are locally made and rely on human energy for operations. They are very slow because they do not have engines.

3.       Engine boats: They are faster than canoes because they have engines. Engine boats are used to carry goods and passengers.

4.       Launches: These are large powerful boats with engine. They are found in Lagos and Warri.


          This has to do with seas and ocean transport. It connect one port to another in different countries of the world.

1.       Tramp Liners: These are usually owned by individuals or private firms. They are cargo ships that do not operate on specific routes. Tramp liners are referred to as sea taxis. It can go wherever they want and have no fixed timetable.

2.       Coaster Liners: These are vessels which convey goods from one part to another. Coaster liners also carry goods from the coaster areas to onward delivery to the port.

3.       Ship Tankers: These are specially built ships for conveying particular cargoes. They are designed and constructed to carry items like petroleum and other petrochemical products in the seas.

4.       Ocean Liners: These are big vessels that operate on specific route on high seas and oceans and they have fixed time schedule to follow. They are faster than tramp liners. The two types of ocean liners are:

          a.       Passenger liners: They carry only passengers.

          b.       Cargo Liners: They carry only bulky goods.

          Ocean liners ply regular routes according to pre-arranged timetable.


1.       Very cheap.

2.       Convenient means of transportation.

3.       Safe means of transportation.

4.       Facilitates International trade.

5.       Provision of refrigeration for perishable goods.

6.       No hold-up or congestion.

7.       Ability to convey heavy goods.

8.       No cost of construction of routes.


1.       Expensive to maintain.

2.       Affected by climatic condition.

3.       Very slow.

4.       Prone to pilferage.

5.       Limited in operation.

6.       It requires other means of transport.

5.       PIPELINE TRANSPORTATION: This is a means of conveying water, gas and petroleum through pipeline laid under the ground or on the surface of land. Pipeline transportation is the fastest means of transporting liquid. They are used for conveying crude oil from the oil wells to the refineries where they are processed for exportation. E.g. crude oil is transported from Port-Harcourt to Kaduna refinery.


1.       Fastest and safest means of transporting liquids.

2.       Durability.

3.       Low operating and maintenance cost.

4.       Not affected by climatic changes.

5.       Economical in the use of space.

6.       Reduces road congestion.

7.       No delay in movement.


1.       Expensive to construct.

2.       Inflexibility.

3.       Limited to liquid product.

4.       Subject to vandalization.

5.       Easily damaged.

6.       Loss as a result of undetected leakages.



1.       Airway bill: It is a document that is used when goods are sent by air. It is given by  an airline operator to a consignor certifying that specified goods have been received for carriage to a named destination.

2.       Bill of lading: This is a document which enables the holder to claim ownership of the goods transported. The name of the ship is indicated on it.

3.       Delivery note: This is a document sent by the seller to the buyer for signature when goods are delivered to him and it will serve as an evidence that delivery has been made.

4.       Consignment note: It is made out by the sender of goods; handed to the carrier and countersigned by the consignee on delivery as proof that goods have been delivered.

5.       Manifest: This is a form to be completed by the captain of a ship showing the details of passengers and goods on board of ships.

6.       Certificate of Insurance: This document proves that the goods in transit have been insured by the parties to the transaction.

7.       Charter Party: This is a contract in which the owner of a ship agrees to let his ship or some part thereof, to a certain person known as the chatterer, for the purpose of carrying goods on a particular voyage or for a specified period in consideration of the chatterer agreeing to pay a certain sum to the owner as freight for the carriage of the goods.


1.       Voyage Charter: This is an agreement in which a shop is chartered for a particular voyage or journey. The chatterer hires a ship from the ship owner for carriage of goods from one port to another for a particular voyage.

2.       Time Charter: This agreement refers to a situation whereby a ship is chartered for a specified period of time. It is the hire of a ship for a definite period of time as an alternative to hiring for a particular voyage. It provides for the times the charterer shall re-deliver the ship after its use.

3.       Charter Parties by demise: There, the charterer is in possession of the ship and puts his own master and crew. It involves the virtual transfer of control entirely to the charterer for a period.



1.       Describe Nigerian Port Authority.

2.       List Seven (7) facilities provided at the ports, and give Four (4) examples of seaports in Nigeria.

3.       State Six (6) functions of port Authority.


1.       State four (4) problems facing the Nigerian ports Authority.

2.       Describe Customs Authority.


1.       State Six (6) functions of Customs Authority.

2.       Mention Seven (7) facilities provided at the Airports.


1.       List Five (5) examples of Airlines you know.

2.       Briefly explain the following terminologies.

          a.       Terminus:

          b.       Haulage:

          c.       Motor parks:

          d.       Consigner:

          e.       Dockyard:

          f.        Freight:

          g.       Demurrage:

          h.       Chatterer:

          i.        Lay days:


1.       Briefly explain these policies under Life Assurance.

          a.       Endowment policy.

          b.       Whole life policy.

          c.       Annuity.

          d.       Term policy.

2.       Briefly explain these policies under marine insurance.

          i.        Voyage policy

          ii.       Time policy

          iii.      Floating policy

          iv.      Valued policy

          v.       Unvalued policy

          vi.      Fleet policy.


1.       Briefly explain the following under marine insurance.

          a.       Total loss

          b.       Actual loss

          c.       Constructive total loss

          d.       Partial loss

          e.       Particular average loss

          f.        General average loss

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