Business and Commercial Law

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Business and Commercial Law Knowledge Level,Sl No Act Page. O1 The Contract and Agency Act 1872 3 24,02 The Sales of Goods Act 1930 25 31. 03 The Partnership Act 1932 32 41,04 The Negotiable Instrument Act 1881 42 48. 05 The Bankruptcy Act 1997 49 50,06 The Arbitration Act 2001 51 52. M Nannu Mian A Qasem Co Page 2,Business and Commercial Law Knowledge Level.
Contract Act 1872,1 What is contract, An agreement enforceable by law is a contract Therefore in a contract there must be. i an agreement,ii the agreement must be enforceable by law. There some agreements like an agreement to play cards or to go to a cinema which cannot be enforced through the. courts of law are not contract So an agreement which can be enforced through the courts of law is called a. 2 What are the elements of a contract, An agreement becomes enforceable by law when it fulfills certain conditions These conditions which may be. called the essential elements of a contract are explained hereunder. i Offer and acceptance,ii Intention to create legal relationship. iii Lawful consideration,iv Capacity of the parties.
v Free consent,vi Legality of the object,vii Certainty. viii Possibility of performance,ix Void agreement,x Writing registration and legal formalities. 3 Definition of acceptance proposal, Proposal When one person signifies to another his willingness to do or to abstain from doing anything with a view. to obtaining the assent of that other to such act or abstinence he is said to make a proposal. Offer A proposal is also called an offer The promisor or the person making the offer is called offeror The person. to whom the offer is made is called the offeree, 4 When is the communication of proposal and acceptance complete. Completion of proposal, The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.
5 How and when can be revoked a proposal and acceptance. Revocation Lapse of proposal, A proposal comes to an end and no longer opens to acceptance under the following circumstances. i By notice,ii By lapse of time,iii After expiry of reasonable time. iv By failure of reasonable time,v By failure of a condition precedent. vi By death of insanity,vii Counter offer,viii By refusal. Revocation of Acceptance, An acceptance can be revoked any time before the acceptance comes to the knowledge of the proposer but not.
afterwards,M Nannu Mian A Qasem Co Page 3,Business and Commercial Law Knowledge Level. 6 What do you mean by consideration, Consideration is an essential element in a contract Something which receives and gives by each party to an. agreement is called consideration,7 Types of consideration. Consideration may be classified into three types as follows. i Past consideration,ii Present consideration,iii Future consideration. 8 What is good consideration, The rules or necessary factors for consideration can be summed up as follows.
i There must be desire of the promisor,ii It must be real. iii Reasonable, iv Not illegal immoral or opposed to public policy. v Present past or future,vi From the promisee of promisor. 9 What are the Characteristics Rules Essential Factors of consideration. The following rules may be laid down regarding consideration. i Desire request,ii The consideration must be real. iii Public duty,iv Promise to a stranger,v Consideration need not be adequate.
vi The consideration must not be illegal immoral or opposed to public policy. vii The consideration may be present past or future. viii Consideration may move from promisee or from any other person. 10 In a formation of a contract consideration must be real but need not be adequate Explain. The consideration must have some value in the eye of law It must not be sham or illusory. The impossible acts and illusory or non existing goods cannot support a contract Therefore real consideration. comes from good consideration, A contribution to charity is without consideration Therefore it is not real consideration. An agreement to which the consent of the party is freely given is not void merely because the consideration is. not inadequate but the inadequacy of the consideration may be taken into account by the court in determining the. question whether the consent of the promisor was freely given. 11 No consideration no contract exceptions to the rule Or Can a contract be made without. consideration, Consideration is essential for validity of a contract A promise without consideration cannot create a legal. obligation So consideration is essential for a contract But there are exceptional cases where a contract is. enforceable even though there is no consideration They are as follows. i Natural love and affection,ii Voluntary compensation. iii Time bared debt,v Completed gift,12 Can silence be fraudulent. i Mere silence is not fraud,ii Silence can be fraudulent in circumstances.
iii Silence is fraud where silence is in itself equivalent to speech. M Nannu Mian A Qasem Co Page 4,Business and Commercial Law Knowledge Level. 13 Distinguish between void and voidable contract,SL Points Void contract Voidable contract. 1 Definition An agreement not enforceable by law An agreement which is enforceable. is said to be void by law at the opinion of one or more. of the parties thereto but not at all,the opinion of the other or others is a. voidable contract, 2 Right and obligation A void agreement confers no right on But in case of voidable agreement. any person and creates no obligations the rights and obligations of the. parties concerned are present unless,it becomes void.
3 Declaration for voiding As a void agreement is void from the But in case of voidable agreement. beginning it is not necessary for the the effected party needs to call the. effected party to declare the agreement void,agreement void. 4 Refund the benefit In case of void agreement the party is But in case of voidable agreement. not bound to refund the benefit the party may refund the benefit to. received to the other party the other party if the agreement. becomes void later on, 14 Distinguish between a contingent contract and wagering agreement. The distinctions between contingent contract and wagering agreement are given below. Subject Contingent contract Wagering agreement, 1 Validity 1 A Contingent contract is valid 1 A wagering agreement is void. 2 Dependency 2 It depends on the happening or 2 If is void. non happening of an event but the,contract is valid. 3 Reciprocal promises 3 It may not contain reciprocal 3 It consists of certain reciprocal. promises promises, 15 What do you understand by supervening impossibility.
When enter into contract it is good but subsequently impossible to perform That condition is called supervening. impossibility of contract, 16 What do you understand by frustration of contract by supervening impossibility. When the common object of a contract can no longer be carried out the court may declare the contract to be at an. end This is known as the doctrine of Frustration, 17 What are the breaches due to supervening impossibility. 18 What do you understand by counter offer Give an example. The acceptance shall be unconditional and absolute If the acceptance is given with any condition changing any. portion of the original offer then it is known as counter offer. Example A offer to B to buy his car for tk 100 000 but B agree to pay tk 90 000 the offer made by B is a counter. M Nannu Mian A Qasem Co Page 5,Business and Commercial Law Knowledge Level. 19 In which cases a contract can be void,OR When is an agreement said to be void. An agreement is said to be void because of mistake lack of consideration want of capacity etc A list of void. agreements is given below,1 Lack of capacity,2 Mutual mistake of fact.
3 Unlawful consideration or object,4 Consideration or object partly unlawful. 5 Agreements without consideration,6 Agreements in restraint of trade. 7 Agreements in restraint of legal proceedings,8 Uncertain Agreement. 9 Agreements by way of wager,10 Impossible acts,11 Agreements contingent on impossible event. 12 Reciprocal promises where there are void promises. 13 Agreement is restraint of trade, 20 What are the differences between Indemnity and Guarantee.
Subject Contract of indemnity Guarantee, 1 Defiation One party promises to save the other party from loss A contract of guarantee is a contract. caused to him by the conduct of the promisor himself to perform the promise or discharge. or by the conduct of any other person the liability of a third person in cage. of his default,2 Parties 1 Two parties 1 three parties. 3 Number of contract 2 In a contract of indemnity it is necessary to have 2 In a contract of guarantee it is. only one contract necessary to have three contracts. 4 Sue 5 In a contract of indemnity the indemnifier can sue 5 In a contract of guarantee the. only the indemnity holder for his loss surety can proceed against principal. 21 Distinguish between a contract and an agreement. Objective Contract Agreement, 1 Definition An agreement enforceable by law is Promise or every set of promises. contract forming the consideration for each,other is an agreement. 2 Similarity All contracts are agreements All agreements are not contact. 22 A offer a reward to whosoever shall return his lost briefcase B returns the lost briefcase not. knowing of the advertisement reward Is A bound to pay the reward to B. No A is not bound to pay reward to B As per contract act an offer must be communicated to the offeree If the. offeree does any act of acceptance without knowing it will not crate any legal acceptance or agreement. M Nannu Mian A Qasem Co Page 6,Business and Commercial Law Knowledge Level.
23 What are the remedies for breach of contract,1 Rescission of the contract. 2 Suit for damages,3 Suit upon Quantum Meruit,4 Specific performance of the contract. 5 Injunction, 24 What are the rights of a bailor and bailee under the contract act. The rights of Bailor,The rights of Bailor are enumerated hereunder. 1 Enforcement of rights,2 Act inconsistent with the terms.
3 Restoration of goods lent gratuitously,The rights of Bailee. The rights of Bailee are enumerated hereunder,1 Enforcement of rights. 2 Bailment by several joint owners, 3 Bailee not responsible on re delivery to bailor without title. 4 Bailee s particular lien,5 Bailee s general lien. 25 Ignorance of law is no excuse to avoid a contract Discuss. We all are working and exercising our right and obligation under the law These laws are unlikely to be known to. all of us So The ignorance of law is not a valid reason to avoid contract In this case contract should be performed. specifically,26 What is void or voidable agreement.
An agreement which does not satisfy the essential elements of a contract is void An agreement not enforceable by. law is said to be void A void agreement has no legal effect If confers no right on any person and creates no. obligations,27 What do you mean by consideration, Consideration is an essential element in a contract Something which receives and gives by each party to an. agreement is called consideration, When at the desire of the promissory the promisee or any other person has done or abstained from doing or does or. abstains from doing or promises to do or to abstain from doing something such act or abstinence or promise is. called a consideration for the promise,28 Can a minor make a contract. As per section 11 of contract act a minor is not competent to a contract So he she cannot make a contract If any. contract is made by the minor it will be a void agreement. 29 What do you mean by undue influence, A contract is said to be induced by undue influence where. i one of the parties is in position to dominate the will of the other. ii he uses the position to obtain an unfair advantage over the other. M Nannu Mian A Qasem Co Page 7,Business and Commercial Law Knowledge Level.
Other Important Questions,30 Short Notes,Express Contract. Implied Contract,Quasi Contract,Executed Contract,Executory Contract. Bilateral Contract,Unilateral Contract,31 Classification of Contract. Valid contract,Void contract,Voidable contract,Illegal contract. Unenforceable contract,32 Rules regarding an offer.
An offer may be express or may be implied from the circumstances. An offer may be made to a definite person to some definite class of persons or to the world at large. Legal relationship is required, The terms of the offer must be certain definite unambiguous and not vague. A mere statement of intension is not an offer,An offer must be communicated to the offeree. An offer may be conditional,Printed contracts,33 Who can accept an offer. An offer can be accepted only by the person or persons for whom the offer is intended which includes the following. An offer made to a particular person can only be accepted by him because he is the only person to accept. An offer made to a class of persons can be accepted by any member of the class. An offer made to the world at large can be accepted by any person whatsoever. 34 How an offer to be communicated, An offer may be communicated to the offeree or offerees by word of mouth by writing or by conduct. Business and Commercial L aw Knowledge Level 2010 M Nannu Mian A Qasem amp Co Page 4 6 What do you mean by consideration Consideration is an essential element in a contract Something which receives and gives by each party to an agreement is called consideration 7 Types of consideration

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