1.

Definition of law
Law is a term which does not have a universally accepted definitionbut one definition is that law is a system of rules and guidelines which are enforced through social institutions to govern behavior. Laws can be made by legislatures through legislation, the executive through decrees and regulations, or judges through binding precedents (normally in common law jurisdictions). Private individuals can create legally binding instruments, though not laws strictly speaking, through for example contractual arrangements, particularly arbitration agreements that exclude the normal court process. he formation of laws themselves may be influenced by a constitution (written or unwritten) and the rights encoded therein. he law shapes politics, economics and society in various ways and serves as a social mediator of relations betweenpeople. !ccording to "almond, #Law is the body of principles recogni$ed andapplied by the "tate in the administration of justice.# !ccording to %olland, Law is, &&a rule of external human action enforced by the sovereign political authority.&& he laws of a country relate to many subjects, e.g., inheritance and transfer of property, relationship between persons, crime and their punishments, as well as matter relating to industry trade and commerce. he term 'usiness law is used to include only the last of the aforesaid subjects, rules relating to industry trade and commerce.

1.1 Business Law

Business law (sometimes known as (ommercial law) is the set of law that administers business and commercial transactions. )t is often treated to be a branch of civil law and deals with issues of both private law and public law. 'usiness law consists of within its scope such sale of goods, condition * warranty, caveat emptor, titles as principal and agent+ carriage of goods, common carrier, carriage by land and sea, railways, post,office, ()-, -.'+ merchant shipping+ guarantee+ marine, fire, life, and accident insurance, voyage policy+ negotiable instruments, bills of exchange, promissory note, che/ue, master card, visa card, credit card, and partnership+ commercial arbitration, agreement, award, arbitrator. 0any countries have approved civil codes that including comprehensive statements of their business law.)n the 1nited "tates, business law 2 commercial law is the province of both the 1nited "tates (ongress, under its power to regulate interstate commerce, and the states, under their police power adopting generally the 1niform (ommercial (ode.)n 'angladesh, there is no uniform commercial code. 3arious laws have been passed during 456 years for regulating business.

2. Business law that affects in Bangladesh

)t is important for all business owners to know and understand the laws that affect their businesses. )t is e/ually important to comply with those laws. )gnorance of the laws has never been a valid excuse in any (ourt of Law, and it never will be. !s a business owner, it is owner7s responsibility to know what laws affect his business. 'usiness Law may be defined as that part of law which regulates the transactions of the mercantile community. he scope of commercial law is large. )t includes the laws relating to contract, partnership, negotiable instruments, sale of goods companies etc. )t is noted that there is no fixed line of division between commercial law and other branches of law, nor is there any conflict or contradiction between them. he law of contract, which is a very important part of commercial law, is applicable not only to merchants and bankers but also to other persons. (ommercial law deals with only those parts of law which are of special importance to the mercantile community. he same laws are applicable to other citi$ens under appropriate circumstances.

3. The Law of Torts ort is the area of law where in response to a private or civil wrong or injury the courts provide the remedy of allowing a lawsuit for (usually monetary) damages. hus, the goal is to restore the victim to his or her former condition. Tort a civil wrong that arises from neglect to perform or from omission to perform a legal duty. )t does not arise out of a breach of contract. 8egligence, nuisance, trespass, false imprisonment is instances of tortious acts. he earliest remedy for tortious acts is found in the judicial pronouncements of judges of 9ngland based on common law in the 45th century. :ith growing awareness of individual&s right, legislatures have enacted laws providing for remedial measures for tortious acts. o discourage a wrongdoer from committing an offence, and to compensate personal injury and damage caused to a property of a person, are the aims of tort law. his remedy does not lie only against an individual. )t e/ually lies against a juridical person, for instance, a 0unicipal (orporation or any other statutory authority. ! person sustaining physical injury may file a law suit for compensation. (ivil court also can pass a decree for payment of money for the damage or injury caused to a property or for interference with enjoyment of a property. "uch suit may lie for negligence, nuisance, willful fraudulent misrepresentation, trespass, false imprisonment, deceit, defamation etc. 8egligence to removal garbages and refuses from the city of ;haka, the legal duty of the 0unicipal (orporation of ;haka, is tortious act. "imilarly, negligent treatment of a patient by a doctor detriment to the health of the patient, and negligent handling of a case by a lawyer causing loss of property of his client are also tortious acts. hrowing of garbages and refuses in a public place thickly populated by the city dwellers or similar other places or throwing toxic industrial effluents from tanneries into the river are instances of nuisance. :illful fraudulent misrepresentation by either words or conduct with intent to induce a person to act and to cause harms is deceit and so tort. )llegal entry upon the land of another is trespass and is a tortious act. :hen a person plants a fruit,bearing tree upon his own land, but the branches overhang the airspace of another or discharges water on the land of others or even after determination of his tenancy remains in possession against the will of the landlord he commits offence of trespass. :here a person restrains another from his movement unlawfully either by force or threat he commits false imprisonment.

3.1 The Law of Torts in Bangladesh )n 'angladesh under the -atal !ccidents !ct, 4<55 for the death of a person caused by wrongful act, neglect or default, the party injured is entitled to maintain an action for tortious act, and compensation for such death can be recovered for the benefit of the wife, husband, parents and child of the deceased. 1nder the :orkmen (ompensation !ct, 4=>? suit lies for payment of compensation to the worker for the injury caused to him for negligence of the employer. ! suit for damage lies under the )rrigation !ct, 4<@A for damage done in respect of any right to a water,course or the use of any water to which any person is entitled under the law of limitation. "imilarly, for obstruction to a way or a water course remedy lies in a suit for compensation under the Limitation !ct. "uit for compensation also lies for any malfeasance, misfeasance or nonfeasance independent of contract. ! suit for compensation lies where any right to any land not ac/uired under !gricultural and "anitary )mprovement !ct, 4=>6 and right to fishery, drainage, use of water and other right of property is injuriously affected by any act or work done under the !ct. ! suit for compensation for special damage and injunction against a wrongdoer lies under "pecific Belief !ct, 4<@@.

4. The Law of Contract

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The Law of Contract deals with agreements which can be enforced through courts of law. he Law of (ontract is the most important part of commercial law because every commercial transaction starts from an agreement between two or more persons. !n agreement enforceable by law is a contract. herefore in a contract there must be (4) an agreement and (>) the agreement must be enforceable by law. he object of he Law of (ontract is to introduce definiteness in commercial and other transactions. %ow this is done can be illustrated by an example. C enters into a contract to deliver 46 tons of coal of D on a certain date. "ince such a contract is enforceable by the courts, D can plan his2her activities on the basis of getting the coal on the fixed date. )f the contract is broken, D will get damages from the court and will not suffer any loss.

4.1 The Essentials Elements of a Contract

!n agreement becomes enforceable by law when it fulfills certain conditions. hese conditions, which may be called the 9ssential 9lements of a (ontract, are explained below. 1. Offer and Acceptance: here must be a lawful offer by one party and a lawful acceptance of the offer by other party or parties. !n &&offer&& involves the making of a &&proposal&&. :hen the person to whom the proposal is made signifies is assent thereto, the proposal is said to be accepted. 2. Intention to create Legal Relationship: here must be an intention (among parties) that the agreement shall result in or create legal relations. !n agreement to dine at a friend&s house is not an agreement intended to create legal relations and is not a contract. 3. Lawful Consideration:"ubject to certain exceptions, an agreement is legally enforceable only when each of the parties to it gives something and gets something. !n agreement to do something for nothing is usually not enforceable by law. he something given or obtained is called consideration. 4. Capacity of parties: he parties to an agreement must be legally capable of entering into an agreement+ otherwise it cannot be enforced by a court of law. :ant of capacity arises from minority, lunacy, idiocy, drunkenness, and similar
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other factors. )f any of the parties to the agreement suffers from any such disability, the agreement is not enforceable by law, except in some special cases. . !ree Consent:)n order to be enforceable, an agreement must be based on the free consent of all parties. here is absence of genuine consent if the agreement is induced by coercion, undue influence, mistake, misrepresentation, and fraud. ! person guilty of coercion,undue influence etc. cannot enforce it, subject to rules laid down inthe !ct. ". Legality of the O#$ect: he object for which the agreement has been entered into must not be illegal, or immoral or opposed to public policy. %. Certainty: he agreement must not be vague. )t must be possible to ascertain the meaning of the agreement, for otherwise it cannot be enforced. &. 'ossi#ility of 'erfor(ance: he agreement must be capable of being performed. ! promise to do an impossible thing cannot be enforced. ). *oid Agree(ent:!n agreement so made must not have been expressly declared to be void. here are five categories of agreements which are expressly declared to be void. hey areE !greement in restraint to marriage !greement in restraint of trade !greements having uncertain meaning :agering agreement !greement in restraint of proceedings

he elements mentioned above must all be present. )f any one ofthem is absent, the agreement does not become a contract. !n agreement which fulfills all the essential elements is enforceable by law and is called a contract.

4.2 Law of Contract in Bangladesh

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(ontract !ct 4<@> (!ct 8o. )C of 4<@>) governs the law of contracts in 'angladesh. he !ct came into force in 'engal on 4 "eptember of 4<@>, and was adopted in 'angladesh without change. )t contains the common rules relating to contracts and differentiates them. he !ct has >?< sections under its 44 chapters. )t begins with the preliminary aspects, including a short preamble and title, extent and date of commencement and interpretation of words and expressions used in the act. he way of communication, acceptance, revocation, and conversion of proposal into promise is described in chapter one. (hapter two defines and interprets different types of contracts, voidable contracts, and void agreements. his chapter also defines essential terms such as consent, free consent, undue influence, fraud, and misrepresentation, and gives their legal interpretation. (ompetency of persons to be a party to contract and the conditions for void contracts are elaborated in this chapter. he definition of contingent contracts and inherent explanations on them and their enforceability are the concerns of chapter three. (hapter four explains the obligations of parties to contract, effects of complying to these obligations and of refusal to meet them, the time and place of performance of reciprocal promises, appropriation of payments including their legal position, and situations when and by whom contracts must be performed or need not be performed. 9ffects of novation, rescission, and alteration of contract, conse/uence of rescission of voidable contract, obligation of persons who have received advantages under void agreement or contract are also described in this chapter. (hapter five explains the claims for necessaries supplied to persons incapable of contracting and the reimbursement of claims of persons who pay money due by another in payment of which he is interested. .bligation of persons enjoying benefit of non,gratuitous act and responsibility of a bailee and repayment claim of persons paying a sum of money by mistake are also elaborated in this chapter. (hapter six narrates the conse/uence of breach of contract. (ompensation for loss or damage caused by breach of contract and failure to discharge obligation resembling those created by contract, and the entitlement of compensation are explained in this chapter.

(hapter "even is related to sale of goods repealed by the "ale of Foods !ct 4=?6 (!ct ))) of 4=?6). 1nder the broad area of indemnity and guarantee, chapter eight defines contract of indemnity, contract of guarantee, surety, and principal debtor and creditor. )nterpretation on consideration of guarantee, surety&s liability, continuing guarantee, revocation of continuing guarantee in different situations, rights and obligations of surety and co,sureties are detailed in this chapter. )t also explains surety&s right to benefit of creditor securities, implied promise to indemnify surety, and liability of co,sureties bound in different sums. (hapter nine is concerned with bailment. )t states the method of delivery to bailee, bailor&s duty to disclose faults in goods bailed, and the care to be taken by the bailee. Besponsibility of bailee for loss of things bailed, termination of bailment by bailee&s act inconsistent with conditions, and liability of bailee making unauthori$ed use of goods bailed are elaborated in different sections of this chapter. )mpact of mixture of goods with or without the consent of the bailor, repayment by bailor of necessary expenses, restoration of goods lent gratuitously, bailor&s responsibility to bailee, bailment by several joint owners, right of third parties claiming goods bailed, bailee&s particular lien, and the general lien of bankers, factors, wharfingers, attorneys and policy,brokers are also explained in detail in this chapter. ! section of the chapter under the sub,title 'ailment of Pledges defines pledge, pawnor and pawnee and explains their rights and responsibilities as well as provision for suits by balees or bailors against wrong, doers. (hapter ten states the legal aspects of and provision for appointment and authority of agents and sub,agents. ;etail provisions are made regarding the /ualification of agents to be appointed, their duties and responsibilities, appointment of sub,agents and their responsibility and accountability, relation between agents and sub,agents, and with the principal. Provisions have also been made for revocation of authority. he chapter explains the principal&s duty to agents and the effect of agency on contract with third persons. (hapter eleven is concerned with partnership, later repealed by the Partnership !ct 4=?> (!ct )C of 4=?>). -inally, there are some schedules at the end of the !ct, which have been repealed by the Bepealing and !mending !ct 4=4G (!ct C of 4=4G).

5. The Law of sales of goods

he law of sales of goods involves products sold for money or credit. he law relating to the sale of movable goods is contained in the sale of Foods !cts.

5.1 Definitions
)n this !ct, unless there is anything repugnant in the subject or context, , (4) Hbu er! means a person who buys or agrees to buy goods+ (>) "deli#er ! means voluntary transfer of possession from one person to another+ (?) Foods are said to be in a Hdeli#erable state! when they are in such state that the buyer would under the contract be bound to take delivery of them+ (G) "document of title to goods! includes a bill of lading, dock, warrant, warehouse keeper7s certificate, wharfingers7 certificate, railway receipt, warrant or order for the delivery of goods and any other document used in ordinary course of business as proof of the possession or control of goods, or authori$ing or purporting to authori$e, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented+ (5) "fault! means wrongful act or default+ (A) "future goods! means goods to be manufactured or produced or ac/uired by the seller after the making of the contract of sale+ (@) "goods! means every kind of movable property other than actionable claims and money+ and includes GIelectricity, water, gas,J stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale+ (<) a person is said to be "insol#ent! who has ceased to pay his debts in the ordinary course of business, or cannot pay his debts as they become due, whether he has committed and act of insolvency or not+
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(=) "mercantile agent! means a mercantile agent having in the customary course of business as such agent authority either to sell goods, or to consign goods for the purposes of sale, or to buy goods, or to raise money on the security of goods+ (46) "$rice! means the money consideration for a sale of goods+ (44) "$ro$ert ! means the general property in goods, and not merely a special property+ (4>) "%ualit of goods! includes their state or condition+ (4?) H&ellerK means a person who sells or agrees to sell goods+ (4G) Hs$ecific goodsK means goods identified and agreed upon at the time a contract of sale is made.

5.2 &ale and agreement to sell

(4) ! contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. here may be a contract of sale between one part,owner and another. (>) ! contract of sale may be absolute or conditional. (?) :here under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called in agreement to sell. (G) !n agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.

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5.3 The Essential Elements

he essential elements of a contract for the sale of goods are enumerated below, 1. +o,a#le goods: he sale of goods act deals only with the movable goods, excepting actionable claims and money. his !ct does not apply to immovable properties. 2. +o,a#le goods for (oney: here must be a contract for the exchange of movable goods for money. herefore in a sale there must be money,consideration. !n exchange of goods for goods is not a sale. 3. -wo 'arties:"ince a contract of sale involves a change of .wnership, it follows that the buyer and the seller must be different persons. ! sale is a bilateral contract. ! man cannot buy form or sell goods to himself. 4. !or(ation of the contract of sale:! contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer. he contract may provide for the immediate delivery of the goods or immediate payment of the price or both, or for the delivery and payment by installments, or that the delivery or payment or both shall be postponed. . +ethod of for(ing the contract: "ubject to the provision of any law for the time being in force, a contract of sale may be writing, or by word of mouth, or may be implied from the conduct of the parties. ". -he ter(s of contract: he parties may agree upon any term concerning the time, place, and mode of delivery. he terms may of two typesE essential and non, essential. 9ssential terms are called (onditions, non,essential term are called :arranties.

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'. The Law of (artnershi$

Partnership is the relation between who have agreed to share the profits of a business carried on by all or any of them acting for all. ! partnership, as defined in the !ct, must have three essential elements, 4. here must be an agreement entered into by two or more persons. >. he agreement must be to share the profits of a business. ?. he business must be carried on by all or any of them. !s to third parties the law presumes mutual agency unless these parties have notice of the terms of the contract providing for some other agency. :ithin the scope of the business of the partnership one partner may contract in the name of the firm and bind the firm by his contract, if the party with whom he deals has the right to assume that the contracting partner has the authority of the firm. hird parties are not interested in the division of the profits, but the law presumes an e/ual division unless the contract provides otherwise, notwithstanding shares of capital are une/ual. .n the dissolution of a solvent firm, partners are entitled by law, nothing in the contract to the contrary, to a division of the assets remaining after debts and profits are paid, in proportion to the capital advanced. )n this connection skill or experience, though considered as capital, has no return in such division. he idea being that it has not been diminished or impaired. )f there are no losses the full capital will be returned. )f there are losses, these are to be made good by charging them against each partner e/ually, if the profits were to be shared e/ually, or otherwise in proportion to share in profits, or according to the partnership contract. 9ach partner then would receive back his capital minus his share of the loss+ and the fact that one partner contributed his skill or experience as his advancement to the business and that there were more than sufficient assets to pay the debts would not relieve him from this obligation to share in the losses, the capital in money or property advanced being a liability to be met on dissolution by the firm members. )n other words, in the final accounting between partners, each partner is charged with his share of the losses and given credit for his capital advanced.

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.n firm contracts the firm only is liable to suit and not the individual members, that is, the members of the firm jointly and not severally+ but on a judgment against the firm the levy of execution may be against the individual property of one or more members or against the property of the firm at the option of the judgment creditor. !nd a judgment against all the members jointly as a firm is a lien upon the real estate of each individual member of the firm. .f course, if necessary to satisfaction, the execution could be against both the firm property and the individual property of each member. he doctrine of priority of individual and firm claims in bankruptcy will be treated hereafter. :hile no contract between the members can affect the rights of judgment creditors on execution, there may be provisions in a partnership contract for indemnity against losses binding upon the members themselves, and any member forced to pay a debt of the firm by process of law, of course, has his right of contribution against the other members of the firm. .ther presumptions and obligations of law will be treated hereafter, such as those in relation to the termination of the partnership relation+ but it is sufficient to say now that the powers, duties, liabilities, shares and profits of the members during the existence and at the dissolution of the partnership should be carefully stated in the articles of co,partnership, having in view the law of partnership.

1.*oluntary Agree(ent: he first element shows the voluntary contractual nature of partnership. ! partnership can only arise as a result of an agreement, express or implied, between two or more persons. 2. .haring of 'rofits of a /usiness: he second element states the motive underlying the information of a partnership. )t also lays down that the existence of a business is essential to a partnership. 'usiness includes any trade, occupation or profession. )f two or more persons join together to form a music club it is not a partnership because there is no business in this case. 'ut if two or more persons join together to give musical performance to the public with a view of earning profit, there is a business and partnership is formed. 3. +utual Agency: he third element is the most important feature of partnership. )t states that persons carrying on business in partnership are agents as well as principals. he business of a firm is carried on by all or by any one or more of them on behalf of all.
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'.1 Conditions to be a $artner

1. 'erson:! person may be partner if he has the capacity to enter into a contract. :ho is a Lperson7M -or the purposes of the Partnership !ct, the term Lperson7 does not include a partnership or a limited company. hus a (ompany P cannot form a partnership with a (ompany N. F. 0. "imilarly, a firm C cannot form a partnership with firm D. 'ut all the partners of firm C and all the partners of firm D can form a single partnership, subject to the rules regarding the number of partners. 2. +inor:! minor cannot be a partner. 'ut in an existing partnership, a minor can be admitted into a firm if all the partners of the firm agree. "uch a minor gets all the benefits of a partnership. 3. 'erson of an unsound (ind:! person who is of unsound mind cannot become a partner. 4. 0o(an:! woman can be a partner, married or unmarried. .f course a woman cannot be a partner if she is a minor or she is of unsound mind. . Co(pany:)n a (ompany the capacity to enter into contract is determined by the 0emorandum and !rticles of the !ssociation of the company. he liability of the members of a firm under the Partnership !ct, for the debts of the firm, is unlimited liability. herefore, a company cannot become a partner of a firm. ". An alien:!n alien enemy cannot enter into a contract of partnership with a citi$en of 'angladesh.

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). Law *elating to +egotiable ,nstruments

;ocuments of a certain type, used in commercial transactions and monetary dealings, are called 8egotiable )nstruments. H8egotiableK means transferable by delivery and HinstrumentKmeans a written document by which a right is created in favor of some persons. he term negotiable instrument literally means Ha document transferable by deliveryK. hree kinds of instruments are recogni$ed as negotiable instruments, promissory notes, bills of exchange and (he/ues.

).1 Definition of (romissor +ote

! promissory note is an instrument in writing (not being a bank note or a current note) containing an unconditional undertaking signed by the marker, to pay a certain sum of money only to, or to order of a certain person, or to the bearer of the instrument.

).2 Essential Elements of (romissor +ote

-rom the definition given in the !ct it is apparent that the following essential re/uirements must be fulfilled by an instrument intended to be a promissory noteE 4. he instrument must be in writing. >. he instrument must be signed by a marker of it. ! signature in pencil or by a rubber stamp of facsimile is good. !n illiterate person may use a mark or cross instead of writing out his name. hesignature or mark may be placed anywhere on the instrument, not necessarily at the bottom. ?. he instrument must contain a promise to pay. express. )t cannot be implied or inferred. he promise to pay must be

G. he promise to pay must be unconditional. )f the promise to pay is coupled with a condition it is not a promissory note. 5. he maker of the instrument must be certain and definite. A. ! promissory note must be stamped according to the 'angladeshi "tamp !ct. @. he sum of money to be paid must be certain.
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<. he payment must be in the legal tender money of 'angladesh. ! promise to pay certain /uantity of goods or a certain amount of foreign money is not a promissory note. =. he money must be payable to a definite person or according to his order. ! note is valid even if the payee is misnamed or it is indicated by his official designation only. 46. he promissory note may be payable on demand or after a certain definite period of time.

).3 Definition of Bill of E-change

! 'ill of 9xchange is an instrument in writing containing an unconditional order, signed by the marker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument.

).4 Essential Elements of a Bill of E-change

! 'ill of 9xchange to be valid must fulfill the following re/uirementsE 4. he instrument must be in writing. >. he instrument must be signed by a drawer ?. he instrument must be contained an order to pay, which is express and unconditional. G. he drawer, drawee and the payee must be certain and definite individuals. 5. he amount of money to be paid must be certain. A. he tender must be in the legal tender money of 'angladesh. @. he money must be payable to a definite person or according to his order. <. ! bill of exchange must be properly stamped. =. he bill may be made payable on demand or after a definite period of time.

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).5 Definition of Che%ue

! (he/ue is a bill of exchange drawn upon a specified banker and payable on demand.

).' Essential features of Che%ue

4. ! (he/ue must fulfill all the essential re/uirements of the bill of exchange. >. ! (he/ue may payable to bearer or to order but in either case it must be payable on demand. ?. he banker named must pay it when it is presented for payment to him at his office during the usual office hours, provided the (he/ue is validly drawn and the drawer has sufficient funds to his credit. G. 'ill and notes may be written entirely by hand. here is no legal bar to (he/ues being hand,written. 1sually however, banks provide their customers with printed (he/ue forms which are filled up and signed by the drawer. 5. he signature must tally with the specification signature of the drawer kept in the bank. A. ! (he/ue must be dated. ! banker is entitled to refuse to pay a (he/ue which is not dated. ! (he/ue becomes due for payment on the date specified on it. @. ! (he/ue drawn with a future date is valid but it is payable on and after the date specified. "uch (he/ues are called post,dated (he/ues. <. ! (he/ue must be presented for payment after the due date but if there is too much delay the bank is entitled to consider the circumstances suspicious and refuse to honor the (he/ue.

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).) Essential .eatures of +egotiable ,nstruments

1. 0riting and .ignature: 8egotiable )nstruments must be written and signed by the parties according to the rules relating to Promissory 8otes, 'ills of 9xchange and (he/ues. 2. +oney:8egotiable instruments are payable by legal tender money of 'angladesh. he liabilities of the parties of 8egotiable )nstruments are fixed and determined in terms of legal tender money. 3. 1egotia#ility:8egotiable )nstruments can be transferred from one person to another by a simple process. )n the case of bearer instruments, delivery to the transferee is sufficient. )n the case oforder instruments two things are re/uired for a valid transferE endorsement and delivery. 4. -itle: he transferee of a negotiable instrument, when he fulfills the certain conditions, is called the holder in due course. he holder in due course gets a good title to the instrument even in cases where the title of the transferor is defective. . 1otice:)t is not necessary to give notice of transfer of a negotiable instrument to the party liable to pay. he transferee can sue in his own name. ". 'resu(ptions:(ertain presumptions apply to all negotiable instruments. 9xampleE )t is presumed that there is consideration. )t is not necessary to write in a promissory note the words Hfor value receivedK or similar expressions because the payment of consideration is presumed. %. .pecial 'rocedure:! special procedure is provided for suits on promissory notes and bills of exchange. ( he procedure is prescribed in the (ivil Procedure (ode). ! decree can be obtained much more /uickly than it can be in ordinary suits. &. 'opularity:8egotiable instruments are popular in commercial transactions because of their easy negotiability and /uick remedies. ). 2,idence: ! document which fails to /ualify as a negotiable instrument may nevertheless be used as evidence of the fact of indebtedness.

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/. The Law of 0genc

0genc Law deals with the relationship between a person or agent acting on behalf of another person, company, or government. !n agency is formed when a principal asks an individual to make a delivery or names someone as an agent through a contract leading to the responsibility of the principal for actions made by the agent while the agent7s actions are akin to those of the principal. his form of partnership can be and is usually enforced by agreements made through a power of attorney. !n &!gent& is a person employed to do any act for another or to represent another in dealing with third persons. he person for whom such act is done, or who is so represented, is called the Principal. -or example P appoints C to buy 56 bales of cotton on his behalf. P is the principal and C is his !gent. he relationship between P and C is called !gency.

/.1 (ower of 0ttorne

!n !gent may be appointed by the Principal, executing a written and stamped document. "uch a document is called Power of !ttorney. here are two kinds of Power of !ttorneyE Feneral and "pecial. ! general power is one by which the agent is given an authority to do certain general objectives, e.g., managing an estate or a business. ! special or particular power may be appointed by which an agent is authori$ed to do a specific thing, e.g., selling some goods. ! man dealing with a particular agent is bound to find out the limits of the authority by which the authority of the agent can act accordingly.

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1. Bibliogra$h
Commercial Law including Company Law And Industrial Law Arun Kumar Sen & Jitendra Kumar Mitra www.google.com

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