Beruflich Dokumente
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Lecture- 01
Introduction to Legal
Environment of Bangladesh
Legislation
Legislature
Bangladesh
Law
Types of Legislation
Subordinate legislation
(eg: Contingent or
conditional legislation)
Debashis Saha, Lecturer,
Jahangirnagar University
Definition of Law
Ethics
Article- 152:
Law means any Act, ordinance, order, rule, regulation, bye-law,
notification or other legal environment, and any custom or usage, having the
force of law in Bangladesh
According to Domrdyhenes:
Law is something which man ought to obey for many reasons and
chiefly because every law is both a discovery and a gift of God, and
teaching of wise men and setting right or wrong intended and not
intended, but also common agreement of the state according which
every one in the state ought to live
Law is the rule of external human action enforced by the sovereign political
authority
Debashis Saha, Lecturer,
Jahangirnagar University
Characteristics of Law
Objectives of Law
Rule of Law
Rule of Law
It is more proper that law should govern than any one of the
citizens: upon the same principle, if it is advantageous to place
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the supreme power in some particular persons, they should be
appointed to be only guardians,
and
the
servants
of
the
laws.
Debashis Saha, Lecturer,
Jahangirnagar University
Rule of Law
Types of Law
Contract Law
Trust Law
Law
Constitutional
Law ( Provides a framework
for creating laws, protecting
peoples human rights and
electing political representatives)
Administrative
Law (relates to the activities
Jahangirnagar University
Classification of Law
Terms
National Law
Special executive
Law (president may enact
Law
International Law
(determine the conduct of the general
body of civilized state in their mutual
dealings)
Public Law
(implies the
body of rules which the states have
established in their mutual dealings
and relations)
Supreme Law
Subordinate Law
(enacted by the subordinate
authority under the power delegated
to it by the supreme legislative
authority)
Substantive Law(defines
rights or crimes) &
the outlines the procedures of
litigation
Property
Law (defines rights
and obligations related to
transfer and title of
personal and real property)
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Private Law
of administrative of government)
The phrase can be traced back to the 16th century England and it was
popularized in the 19th century
bySaha,
British
jurist A.V. Dicey
Debashis
Lecturer,
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(Bangladesh constitution is
the supreme law of the Land)
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Private Law
(discusses with the
relationship of the citizen of
one state with other)
Act
Ordinance
Order
Rule
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Regulation
Custom
Usage
Legal Systems
Civil Law
Common
Law
Precedent
Sources of Law
Custom
Describe as the twilight of law which resides in habitual practice and usage. (1)
antiquity (2) reasonableness (3) conformity with statutory law (4) observation as a
right (5) consistency with morality and public policy
Religion
According to jurists : every law is the gift of god and the decision of the sages
In Bangladesh the Hindus and Muslims personal affairs are regulated by their
religion e.g. marriage, dower, gift etc.
Equity
Precedent
Scientific
discussion of
the jurists
Legislation
Debashis
Parliament enacts
the Saha,
law Lecturer,
Jahangirnagar University
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Religious
Law
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What is Business?
A system through which a person can earn money, gain
profit or make losses by investing his capital
Types of Business
(1) Proprietorship business (licenses will be provided by the local
authorities e.g. Municipal corporation or Union Parishad)
(2) partnership business ( Partnership Act,1932)
(3) Company Business ( Company Act, 1994 or Bank Companys Act
1991)
(4) Cooperative Buisiness (Cooperative Societies Act,2001)
(5) Non-profitable Business ( Society Registration Act,1860 or NGOs
or trusts or Wakfs etc)
(6) State Owned business ( Various statutory Laws e.g. BTRC)
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Substantive Law
Transactional
Negotiation of contracts, purchases etc.
(these tend to occur in more informal settings)
Situational
Reactionary events such as claims made by someone else
against you or you against them.
(these tend to occur in more formal settings such as law suits,
criminal accusations, etc.)
Debashis Saha, Lecturer,
Jahangirnagar University
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vs
Procedural Law
Explains how to
make the law work
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Superior Judiciary
Appellate
Division
High Court
Division
Criminal
Jurisdiction
Civil
Jurisdiction
1.Court of District Judge
2.Court of Additional District
Judge
3.Court of Joint District Judge
4.Court of Senior Assistant
Judge
5.Court of Assistant Judge
The Court of
Session
1. Court of
Session
Judge
2. Court of
Additional
Session Judge
3. Court of
Assistant
Session Judge
Administrative
Jurisdiction
The
Magistracy
The
Judicial
Magistrate
The
Executi
ve
Magist
rate
1.Administrative Appellate
Tribunal.
2.Administrative Tribunal.
3.The Electricity court.
4.House Rent Controller.
5.The settlement Court.
6.The Land Appeal Board.
7 The Labour Court
The Third Law commission of British India formed in 1861 under the stewardship of
chairman Sir John Romilly, with initial members as Sir Edward Ryan, R. Lowe, J.M.
Macleod, Sir W. Erle (succeeded by Sir. W.M. James) and Justice Wills (succeeded by J.
Henderson), had presented the report on contract law for India as Draft Contract Law
(1866). The Draft Law was enacted as The Act 9 of 1872 on 25 April 1872 and the Indian
Contract Act, 1872 came into force with effect from 1 September 1872.
The Indian Contract Act,1872 was adopted in Bangladesh without change as a Contract Act,
1872
It has XI chapter
It was enacted mainly with a view to ensure reasonable fulfillment of expectation created
by the promises of the parties and also enforcement of obligations prescribed by an
agreement between the parties
Law of contract creates jus in personem(right against a person) and not in jus in rem(a real
right )
The Indian Contract Act consists of the following two parts:
(a) General principals of the Law of Contract
(b) Special kinds of contracts.
The general principals of the Law of Contract are contained in Sections 1 to 75 of the
Contract Act. These principles apply to all kinds of contracts irrespective of their nature.
Special contracts are contained in Sections 124 to 238 of the Contract Act. These special
contracts are Indemnity, Guarantee, Bailment, pledge and Agency.
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Lecture- 02
The Law of Contract
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Definition of Contract
A contract is an exchange of promises between two or more parties to
do or refrain from doing an act which is enforceable in a court of law
Contracts as Defined by Eminent Jurists
Every agreement and promise enforceable at law is a contract.
Pollock
A Contract is an agreement between two or more persons which is
intended to be enforceable at law and is contracted by the acceptance
by one party of an offer made to him by the other party to do or
abstain from doing some act. Halsbury
A contract is an agreement creating and defining obligation between
the parties Salmond
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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Price paid by the one party for the promise of the other Technical word
meaning QUID- PRO-QUO i.e. something in return.
Agreement 2(e) :- Every promise and set of promises forming the
consideration for each other. In short, agreement = offer +
acceptance.
Contract 2(h) :- An agreement enforceable by Law is a contract.
Void agreement 2(g):- An agreement not enforceable by law is void
Voidable contract 2(i):- An agreement is a voidable contract if it is
enforceable by Law at the option of one or more of the parties there to
(i.e. the aggrieved party), and it is not enforceable by Law at the
option of the other or others.
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Offer + acceptance =
Promise
+
consideration
=
Agreement
+
enforceability By Law
Contract
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Free consent: Consent of the parties must be genuine consent means agreed upon
something in the same sense i.e. there should be consensus ad idem(agreement
of the minds). A consent is said to be free when it is not caused by
coercion, undue influence, fraud, misrepresentation or mistake.
Legality of the Object: The object of agreement should be lawful and legal. Two
persons cannot enter into an agreement to do a criminal act. Consideration or
object of an agreement is unlawful if it
is forbidden by law; or
is of such nature that, if permitted, would defeat the provisions of any law; or
is fraudulent; or
Involves or implies, injury to person or property of another; or
Court regards it as immoral, or opposed to public policy.
Example : A agrees to B to discover treasure by magic. The agreement is void because the
act in itself is impossible to be performed from the very beginning.
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Certainty: The agreement must not be vague. It must be possible to ascertain the
meaning of the agreement otherwise it can not be enforced
Possibility of performance:
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Assignment 01
Agreement
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Contract
Types of Contract
Agreement
Section
Sec. 2(h)
Definition
Enforceability :
Interrelationship
Scope
Validity
Legal
:
Obligation
Sec. 2(e)
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c.Tacit contract: - A contract is said to be tacit when it has to be inferred from the conduct of
the parties. Example obtaining cash through automatic teller machine, sale by fall hammer of an
auction sale.
d.Quasi Contracts : are contracts which are created Neither by word spoken
Nor written
Nor by the conduct of the parties.
But these are created by the law.
Example:
If Mr. A leaves his goods at Mr. Bs shop by mistake, then it is for Mr. B to return the goods or to
compensate the price. In fact, these contracts depend on the principle that nobody will be allowed
to become rich at the expenses of the other.
(e).e Contract: An e contract is one, which is entered into between two parties via the internet.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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c. Voidable contract 2(i) :- an agreement which is enforceable by law at the option of one or more the parties but not
at the option of the other or others is a voidable contract.
Result of coercion, undue influence, fraud and misrepresentation.
d. Unenforceable contract: - where a contract is good in substance but because of some technical defect i.e.
absence in writing barred by imitation etc one or both the parties cannot sue upon but is described as
unenforceable contract.
Example: Writing registration or stamping.
Example: An agreement which is required to be stamped will be unenforceable if the same is not stamped
at all or is under stamped.
e.Illegal contract:- It is a contract which the law forbids to be made. All illegal agreements are void but all
void agreements or contracts are not necessary illegal. Contract that is immoral or opposed to public policy are illegal
in nature.
Unlike illegal agreements there is no punishment to the parties to a void agreement.
Illegal agreements are void from the very beginning agreements but sometimes valid contracts may subsequently
becomes void.
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Debashis Saha, Lecturer, F & B, Jahangirnagar University
Assignment 02
b.Executory contract:- A contract in which both the parties have still to fulfilled their obligations.
Example : D agrees to buy Vs cycle by promising to pay cash on 15th July. V agrees to deliver the cycle
on 20th July.
c.Partly executed and partly executory:- A contract in which one of the parties has fulfilled his
obligation but the other party is yet to fulfill his obligation.
Example : A sells his car to B and A has delivered the car but B is yet to pay the price. For A, it is excuted
contract whereas it is executory contract on the part of B since the price is yet to be paid.
(4)On the basis of liability for performance:a.Bilateral contract:- A contract in which both the parties commit to perform their respective promises is
called a bilateral contract.
Example : A offers to sell his fiat car to B for Rs.1,00,000 on acceptance of As offer by B, there is a
promise by A to Sell the car and there is a promise by B to purchase the car there are two promise.
b.Unilateral contract:- A unilateral contract is a one sided contract in which only one party has to
perform his promise or obligation party has to perform his promise or obligation to do or forbear.
Example :- A wants to get his room painted. He offers Rs.500 to B for this purpose B says to A if I have
spare time on next Sunday I will paint your room. There is a promise by A to pay Rs 500 to B. If B is able
to spare time to paint As room. However there is no promise by B to Paint the house. There is only one
promise.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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Offer
Offer(i.e. Proposal) [section 2(a)]:-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 person either to such act or abstinence, he is said to make a proposal.
To form an agreement, there must be at least two elements one offer and the other
acceptance. Thus offer is the foundation of any agreement.
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1.
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3. Legal relationship is required: The offer must be capable of creating legal relation. A
social invitation is not create legal relation. Eg. A invited B to a dinner and B accepted the
invitation. It is a mere social invitation. And A will not be liable if he fails to provide dinner
to B.
4. The terms of the offer must be certain, definite, unambiguous and not vague:
Eg: A offered to sell to B. a hundred tons of oil. The offer is uncertain as there is nothing
to show what kind of oil is intended to be sold.
6. An offer must be communicated to the offeree:: The offer is completed only when
it has been communicated to the offeree. Until the offer is communicated, it cannot be
accepted. Thus, an offer accepted without its knowledge, does not confer any legal rights on
the acceptor.
Example:
As nephew has absconded from his home. He sent his servant to trace his missing nephew.
When he servant had left, A then announced that anybody who discovered the missing boy,
would be given the reward of Rs.500. The servant discovered the missing boy without
knowing the reward. When the servant came to know about the reward, he brought an action
against A to recover the same. But his action failed. It was held that the servant was not
entitled to the reward because he did not know about the offer when the discovered the
missing boy.
[Lalman Shukla v. Gauri Datt (1913) All LJ 489]
8. Printed Contracts: Printed contracts often contain a large number of terms and
conditions which exclude liability under the contract. Eg. The Life Insurance Corporation,
Statutory Corporation and big companies issue printed forms of contract.
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Debashis Saha, Lecturer, F & B, Jahangirnagar University
Kinds of Offer
1. Express offer - When the offeror expressly communication the offer the offer is said to be
an express offer the express communication of the offer may be made by Spoken word or
Written word
2. Implied offer when the offer is not communicate expressly. An offer may be implied
from:- The conduct of the parties or The circumstances of the case
3. Specific:- It means an offer made in (a) a particular person or (b) a group of person: It
can be accepted only by that person to whom it is made communication of acceptance is
necessary in case of specific offer.
4. General offer: - It means on offer which is made to the public in general.
General offer can be accepted by anyone.
If offeree fulfill the term and condition which is given in offer then offer is accepted.
Communication of acceptance is not necessary is case of general offer
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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6. Cross offer:- When two parties exchange identical offers in ignorance at the time of
each others offer the offers are called cross offer.
Two cross offer does not conclude a contract. Two offer are said to be cross offer if
Revocation of an Offer
Example : A offers by a letter to sell 100 tons of steel at Rs.1,000 per ton. On the same day,
B also writes to A offering to buy 100 tons of steel at Rs.1,000 per ton.
7. Counter offer :- when the offeree give qualified acceptance of the offer subject to
modified and variations in the terms of original offer. Counter offer amounts to rejection of
the original offer.
Legal effect of counter offer: Rejection of original offer
The original offer is lapsed
A counter offer result is a new offer.
8. Standing, open and continuous offer:- An offer is allowed to remain open for
acceptance over a period of time is known as standing, open or continually offer. Tender for
supply of goods is a kind of standing offer.
Example:
When we ask the newspaper vendor to supply the newspaper daily. In such case, we do not
repeat our offer daily and the newspaper vendor supplies the newspaper to us daily. The
offers of such types are called Standing Offer.
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4.
5.
6.
7.
8.
By the death or insanity of the offeror: Where, the offeror dies or becomes, insane, the
offer comes to an end if the fact of his death or insanity comes to the knowledge of the
acceptor before he makes his acceptance. But if the offer is accepted in ignorance of the
fact of death or insanity of the offeror, the acceptance is valied. This will result in a valid
contract, and legal representatives of the deceased offeror shall be bound by the
contract. On the death of offeree before acceptance, the offer also comes to an end by
operation of law.
By counter offer by the offeree: Where, a counter offer is made by the offeree, and
then the original offer automatically comes to an end, as the counter offer amounts to
rejections of the original offer.
By not accepting the offer, according to the prescribed or usual mode: Where some
manner of acceptance is prescribed in the offer, the offeror can revoke the offer if it is not
accepted according to the prescribed manner.
By rejection of offer by the offeree: Where, the offeree rejects the offer, the offer
comes to an end. Once the offeree rejects the offer, he cannot revive the offer by
subsequently attempting to accept it. The rejection of offer may be express or implied.
By change in law: Sometimes, there is a change in law which makes the offer illegal
or incapable of performance. In such cases also, the offer comes to an end.
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An offer comes to an end and in no longer open to acceptance under the following
circumstance- Sec 6.
1. By communication of notice of revocation: An offer may come to an end by
communication of notice of revocation by the offeror. It may be noted that an offer can
be revoked only before its acceptance is complete for the offeror. In other words, an
offeror can revoke his offer at any time before he becomes before bound by it. Thus, the
communication of revocation of offer should reach the offeree before the acceptance is
communicated.
2. By lapse of time: Where time is fixed for the acceptance of the offer, and it is not
acceptance within the fixed time, the offer comes to an end automatically on the expiry of
fixed time. Where no time for acceptance is prescribed, the offer has to be accepted within
reasonable time. The offer lapses if it is not accepted within that time. The term
reasonable time will depend upon the facts and circumstances of each case.
3. By failure to accept condition precedent: Where, the offer requires that some condition
must, be fulfilled before the acceptance of the offer, the offer lapses, if it is accepted
without fulfilling the condition.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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ACCEPTANCE
Acceptance 2(b):- When the person to whom the proposal is made, signifies
his assent there to , the proposal is said to be accepted.
According to Prof. Anson: Acceptance is to offer what a lighted match is to
train of gun-powder. It produces something which cannot be recalled or
undone. But the powder may have lain till it has become damp or the man
who laid the train may remove it before the match is applied
Eg. X sold his business to Y without disclosing the fact to his customers. Z
sent an order for goods to X by name. Y received it and sent a letter of
acceptance. Held there was no contract between Y and Z because Z never
made any offer to Y.
Boulton vs Jones.
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5.
2.
3.
4.
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Assignment 3
5. The time of Contract
In case of acceptance by post, the time of posting the letter of acceptance to the
time of contract. But in case of acceptance by instantaneous means of
communication, the time of contract is the time when the offeror gets the
communication, the time of contract is the time when offeror gets the
communication of acceptance.
6. Communication of acceptance in case of an agent.
Where the offer has been made through an agent, the communication of
acceptance is completed when the acceptance is given either to the agent or to the
principal. In such a case, if the agent fails to convey the acceptance received from
offeree, still the principal is bound by the acceptance.
7. Acceptance on loudspeakers
Acceptance given on loudspeaker is not a valid a acceptance.
Distinguish between
Offer and Acceptance
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Consideration
Consideration is a quid pro quo i,e something in return it may be
I. some benefit right, interest, loss or profit that may accrue to one party or,
II. some forbearance, detriment, loss or responsibility suffered on undertaken by
the other party [currie V mussa]
According to Sir Frederick Pollock, consideration is the price for which the promise of
the other is bought and the promise thus given for value is enforceable.
Definition [Sec 2(d)]:- when at the desire of the Promisor, the promise or any other
person.
a) has done or abstained from doing , or [Past consideration]
b) does or abstains from doing, or [Present consideration]
c) promises to do or abstain from doing something [Future consideration ]such act
or abstinence or promise is called a consideration for the promise.
Example
Consideration
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P aggress to sell his car to Q for Rs.50,000 Here Qs Promise to pay Rs50,000 is the consideration for Ps
promise and Ps promise to sell the car is the consideration for Qs promise to pay Rs.50,000.
A promises his debtor B not to file a suit against him for one year on As agreeing to pay him Rs.10,000 more.
Here the abstinence of A is the consideration for Bs Promise to pay.
Debashis Saha, Lecturer, F & B,
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Jahangirnagar University
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Past Consideration: When the consideration of one party was given before the
date of the promise, it is said to be past. Suppose that X does not work for Y in
the month of Jan. In Feb Y promise to pay him some money. The consideration
of X is past consideration.
Present Consideration: Consideration which moves simultaneously with the
promise is called Present Consideration. B buys an article from a shop and
pays the price immediately. The consideration moving from B is present
consideration
Future Consideration: When the consideration is to move at a future date, it
is called Future Consideration. A promise may support a promise. Thus a
promise to pay money at a future date for goods to be delivered at a future
date is valid contract.
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Types of Consideration
fact that the consideration is inadequate. The law simply requires that contract should
be supported by consideration. So long as consideration exists and it is of some value,
courts are not required to consider its adequacy.
Example:
A agreed to sell a watch worth Rs.500 for Rs.20, As consent to the agreement was freely
given. The consideration, though inadequate. Will not affect the validity of the contract.
However, the inadequacy of the consideration can be considered in order to know whether
the consent of the promisor was free or not . [Section 25 Explanation II]
7.
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Example:- A finds Bs purse and give to him. B Promise to give A Rs.500. This is a
valid contract.
3) Promise to pay a time barred debt. [Sec 25(3)]
A debt barred by limitation con not recovered. Hence, a promise to pay a such a
debt is without any consideration.
Can be enforced only when in writing and sighed by Debtor or his authorized
agent.
Example : A owes B Rs.10,000 but the debt is barred by Limitation Act. A signs a written
promise to pay B Rs.8,000 on account of debt. This is a valid contract.
Assignment 4
4) Completed gift- gift do not require any consideration. Nothing in this section shall affect
the validity as between the donor and the donee, of any gift actually made Section 25
5) Agency (185) According to the Indian contract Act. No consideration is necessary to
create an agency.
6) Bailment (148)- consideration is not necessary to effect a valid bailment of goods. It is
Called Gratuitous Bailment.
Remission (63)- Promisee may dispense with or remit performance of promise.- Every
promisee may dispense with or remit, wholly or in part, the the performance of the promise
made to him, or may extend the time for such performance,1* or may accept instead of it any
satisfaction which he thinks fit.
4) Charity- If a person promises to contribute to charity and on this faith the promises
undertakes a liability to the extent not exceeding the promised subscription, the contract
shall be valid.
Debashis Saha, Lecturer, F & B,
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Jahangirnagar University
No Consideration
No Contract??
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Void Agreement
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Section 2(g)- Void agreement is an agreement which is not enforceable by Law void ab
inito.
Ex. A promised to marry else except Mr. B, and in default pay her a sum of Rs.1,00,000. A married
someone else and B sued A for recovery of the sum. Held, the contract was in restraint of
marriage, and as such void.
Agreement by or with persons incompetent to contract [10, 11]
Agreement entered into through a mutual mistake [20]
Object or consideration unlawful [23]
Consideration or object partially, unlawful [24]
Without consideration [25]
Restraint of marriage [26]
Restraint of trade [27]
Legal proceeding [28]
Consideration identified [29]
Wagering agreement [30]
Impossible agreement [56]
Agreement contingent on impossible event[36]
An agreement to enter into an agreement in the future.
Debashis Saha, Lecturer, F & B, Jahangirnagar University
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Jahangirnagar University
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Voidable Agreement
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Capacity
Section 11: Every person is competent to contract who is of age of
majority according to the Law to which he is subject, who is of sound
mind and not is disqualified from contracting by any Law to which he is
subject
Age of majority:- According to section 3 of Majority Act-1875 every
person domiciled attains majority on the completion of 18 years of age
Capacity Of Parties
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Minority
According to the Majority Act,1875, a minor is one who has not completed
his or her 18th year of age
Exception:21 years in the following cases
Where a guardian of a minors person or property is appointed by a court of
Law
Where minors property has passed under the superintendence of the court of
words
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Example: X, a minor borrows Rs. 4,000 from Y and executes a promissory note. After
attaining majority, he executes another promissory note in the settlement of the first
note. The second promissory note is void for want of consideration.
3. Minor can be a Promisee or a Beneficiary: Incapacity of a minor to enter into a
contract means incapacity to bind himself by a contract. There is nothing which debars
him from becoming a beneficiary.
4. No Estoppel against a Minor: Estoppel is a rule of evidence by which a person is not
allowed to go back upon his earlier representations.
A minor is not estopped from pleading his infancy for avoiding a contract. This,
however, does not mean that a minor can cheat men with impunity. If a minor has
obtained any property by cheating, he can be forced to return it.
In Stocks v. Wilson, a minor who overstated his age and took delivery of a motor car
after executing a promissory note in favour of the trader, was not estopped from
pleading minority, but the Court ordered restitution on equitable ground. A minor can
be forced to return a car he had bought on credit by overstating his age if it can be
traced. But if the car cannot be traced ,
can the trader request the Court to pass a decree against the minor for the price of the
car? The answer is not positive. The dictum is "restitution stops when repayment
begins".
5. Specific Performance: A minor's contract being absolutely void, there can be no
question of the specific performance of such a contract.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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Sound mind
Section 12: A person is said to be sound mind for the purpose of making a contract if, at
time when he makes it, he is capable of understanding it and forming a rational judgment as
to its effect upon his interests.
A person who is usually of unsound mind, but occasionally of sound mind may make a
contract when he is of sound mind.
A person who is usually of sound mind, but occasionally of unsound mind may make a
contract when he is of sound mind.
A person who is usually of sound mind, but occasionally of unsound mind, may not make a
contract when he is of unsound mind
Ex: A patient in lunatic asylum, who is at intervals of sound mind may make a contract
during these intervals
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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Free Consent
According to section 13: Two persons are said to have consented when
they agree upon same thing in the same sense.
In English law, this is called consensus ad idem
According to section 14."Free consent" defined.-Consent is said to be free
when it is not caused by(1) coercion, as defined in section 15, or
(2) undue influence, as defined in section 16, or
(3) fraud, as defined in section 17, or
(4) misrepresentation, as defined in section 18, or
(5) mistake, subject to the provisions of sections 20, 21 and 22.
Ex: X have two car one Maruti car and one Honda city car. Y does not know that X has
two cars Y offers to buy car at Rs.50,000. Here, there is no identity of mind in respect
of the subject matter. Hence there is no consent at all and the agreement is void ab
inito
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Coercion
Effect of Coercion
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According to section 19:Voidability of agreements without free consent.When consent to an agreement is caused by coercion, the agreement is a
contract voidable at the option of the party whose consent was so caused.
Effect of threat to file a suit:- A threat to file a suit (whether civil or
court) does not amount to coercion unless the suit is on false charge.
Threat to file a suit on false charge is an act forbidden by the IPC and
thus will amount to an act of coercion.
Effect of Threat to commit suicide:- Threat to commit suicide
amounted to coercion and the release deed was example discussed in
class. Therefore voidable.
Detaining property under mortgage: Detention of property by a
mortgage until the payment of loan does not amount to coercion.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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Ex: A having advanced money to his son, B, during his minority, upon B's
coming of age obtains, by misuse of parental influence, a bond from B for
a greater amount than the sum due in respect of the advance. A employs
undue influence.
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Assignment 2
Fraud
According to section 17."Fraud" defined.-"Fraud" means and includes any
of the following acts committed by a party to a contract, or with his connivance,
or by his agent, with intent to deceive another party thereto of his agent, or to
induce him to enter into the contract:(1) the suggestion, as a fact, of that which is not true, by one who does not
believe it to be true ;
(2) the active concealment of a fact by one having knowledge or belief of the
fact ;
(3) a promise made without any intention of performing it
(4) any other act fitted to deceive ;
(5) any such act or omission as the law specially declares to be fraudulent.
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Effect of Fraud:
Voidability of agreements without free consent.-When consent to an
agreement is caused by fraud, the agreement is a contract voidable at the
option of the party whose consent was so caused.
A party to a contract whose consent was caused by fraud, may, if he thinks
fit, insist that the contract shall be performed, and that he shall be put in
the position in which he would have been if the representations made had
been true.
Explanation.-A fraud which did not cause the consent to a contract of the
party on whom such fraud was practiced, or to whom such
misrepresentation was made, does not render a contract voidable.
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Misrepresentation
According to section 18."Misrepresentation" defined.-"Misrepresentation"
means and includes(1) the positive assertion, in a manner not warranted by the information of
the person making it, of that which is not true, though he believes it to be
true
(2) any breach, of duty which, without an intent to deceive, gains an
advantage to the person committing it, or any one claiming under him, by
misleading another to his prejudice or to the prejudice of any one
claiming under him;
(3) causing, however innocently, a party to an agreement to make a
mistake as to the substance of the thing which is the subject of the
agreement.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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Assignment 2
Effect of Fraud:
Voidability of agreements without free consent.-When consent to an
agreement is caused by misrepresentation, the agreement is a contract
voidable at the option of the party whose consent was so caused.
A party to a contract whose consent was caused by misrepresentation,
may, if he thinks fit, insist that the contract shall be performed, and that he
shall be put in the position in which he would have been if the
representations made had been true.
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Mistake
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Classification of Mistake
According to section 20: Agreement void where both parties are under
mistake as to matter of fact.Where both the parties to an agreement are
under a mistake as to a matter of fact essential to the agreement, the
agreement is void.
Explanation.-An erroneous opinion as to the value of the thing which
forms the subject-matter of the agreement is not to be deemed a mistake as
to a matter of fact.
Ex: A agrees to sell to B a specific cargo of goods supposed to be on its
way from England to Bombay. It turns out that, before the day of the
bargain, the ship conveying the cargo had been cast away and the goods
lost. Neither party was aware of the facts. The agreement is void.
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MISTAKE
It means an erroneous belief about some facts. A mistake can either be (a) mistake
of law and (b) mistake of fact.
Mistake of Law
A mistake of law does not mean mistake in provisions of any law but it means
there is mistake in understanding the provision of any law by the party to contract.
A mistake of law can be further classified either as mistake of Bangladesh law or
mistake of foreign law.
a) Mistake of Bangladesh Law: Everyone is supposed to know the law of land.
In the latin maxim, it is said that 'Ignoranlia juris non excusa Ignorance of law
is no excuse. Therefore, if there is a mistake of Bangladesh law, the contract is
not void or voidable.
Example
A, a widow, was entitled to certain occupancy rights on the land of B. She
remarried and believing that she has lost her occupancy rights by reason of her
second marriage, agreed to take the land on lease from B. on an increased rent.
Both A and B honestly believed that A had lost her occupancy rights. The contract
for higher rent is valid and not voidable although they made the contract in
ignorance of law.
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Jahangirnagar University
Mistake as to quantity
If both the parties are under a mistake as to the quantity of the subject matter of the
agreement, the agreement is void. Such a mistake may even be caused by the
negligence of a third party but the agreement would be void.
Example: A agreed to buy 100 sewing thread reels from B. Both believed that each
reel contains 500 metres of thread but, in
fact, the length of thread was only 300 metres. Held, the agreement was void as there
was a bilateral mistake as to
quantity of subject-matter.
Mistake as to price
If both the parties are working under a mistake as to the price, the agreement is void.
Example: A agreed with B to let out his house for a monthly rent of 520. However, in
the lease deed was written as 350.
Held, the agreement was void.
Mistake as to possibility of performance
Example: A agrees to sell 100 units of a particular product. Later, it is discovered
that there was a ban on sale of the product
even at the time of making the contract. The contract is void.
b) Unilateral Mistake A unilateral mistake means one party is at mistake. A contract
Debashis
Saha,
Lecturer,
F & B, as to the nature of the
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is neither void nor voidable
except
that
it is mistake
Jahangirnagar University
contract or a mistake with regard
to the identity of the person.
b) Mistake of Foreign Law Everyone can be supposed to know the law of the
foreign country. A mistake of foreign law is treated, as if it were a mistake of
facts, because person cannot be expected to know the law of the other country.
Mistake of Fact
A mistake of facts can be classified either as a bilateral mistake or a unilateral
mistake.
a) Bilateral Mistake It means both the parties are at mistake related to the
essential part of agreement. If an agreement is entered into on the ground of
bilateral mistake, the agreement is void. An erroneous opinion, as to the value
of the thing which fom1s the subject-matter of agreement, is not deemed to be
a mistake as to the matter of fact.
Example:
A buys a painting from B at a price of 20,000. Both A and B believed it to be the
work of a known artist by B did not make any representation or warranty about it.
Later A comes to know that it was a new one and worth only 1000. A is bound by
the contract.
a) The bilateral mistake can be further classified as:
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PERFORMANCE OF
CONTRACTS
OFFER TO PERFORM OR
TENDER OF PERFORMANCE
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(2) it must be made at a proper time and place, and under such
circumstances that the person to whom it is made may have a reasonable
opportunity of ascertaining that the person by whom it is made is able and
willing there and then to do the whole of what he is bound by his promise to
do
Ex: X offers by post to pay Y the amount he owes. This is not a valid tender,
as X is not able there and then to pay.
(3) if the offer is an offer to deliver anything to the promisee, the promisee
must have a reasonable opportunity of seeing that the thing offered is the
thing which the promisor is bound by his promise to deliver.
Ex: A contracts to deliver B at his warehouse, on 1st March 1989, 100 bales
of cotton of a particular quality. A must bring the cotton to Bs warehouse on
the appointed day, under such circumstances that B may have a reasonable
opportunity of satisfying himself that the thing offered is cotton of the quality
contracted for, and that there are 100 bales.
(4) An offer to one of several joint promisees has the same legal
consequences as an offer to all of them
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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Consequence of Refusal of
Tender
According to section 38: Where a promisor has made an offer of
performance to the promisee, and the offer has not been accepted, the
promisor is not responsible for nonperformance, nor does he thereby lose his
rights under the contract.
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RECIPROCAL PROMISE
Any promises death upon joint promise
According to section 45, When a person has made a promise to two or
more persons jointly, then, unless a contrary intention appears from the
contract, the right to claim performance rests, as between him and them,
with them during their joint lives, and, after the death of any of them, with
the representative of such deceased person. Jointly with the survivor or
survivors, and, after the death of the last survivor, with the representatives
of all jointly
Ex: A in consideration of Rs. 5,000 lent to him by B and C, promises B
and C jointly to repay them that sum with interest on a day specified. B
dies. The right to claim performance rests with Bs representative jointly
with C during Cs life, and after Cs death with the representatives of B,
and C jointly.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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Jahangirnagar University
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Rules
1. Liability for performance of reciprocal promise at a time: Sec(51)When
a contract consists of reciprocal promises to be simultaneously performed, no
promisor need perform his promise unless the promisee is ready and willing
to perform his reciprocal promise.
Ex: A and B contract that A shall deliver goods to B to be paid for by B on
delivery. A need not deliver the goods, unless B is ready and willing to pay for
the goods on delivery. B need not pay for the goods, unless A is ready and
willing to deliver them on payment.
2. Order of performance of reciprocal promises: Sec(52), Where the order in
which reciprocal promises are to be performed is expressly fixed by the
contract, they shall be performed in that order; and, where the order is not
expressly fixed by the contract, they shall be performed in that order which
the nature of the transaction requires.
Ex: A and B contract that A shall build a house for B at a fixed price. A's
promise to build the house Must be performed before B's promise to pay for it.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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115
1.
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ASSIGNMENT OF
CONTRACTS
4) Sec 67:If any promisee neglects or refuses to afford the promisor
reasonable facilities for the performance of his promise, the promisor
is excused by such neglect or refusal as to any non-performance
caused thereby.
Ex: A contracts with B to repair B's house. B neglects or refuses to point
out to A the places in which his house requires repair. A is excused for the
nonperformance of the contract if it is caused by such neglector refusal.
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When a party to a contract transfers his right, title and interest in the contract
to another person or other persons, he is said to assign the contract.
Assignment of a contract can take place by operation of law or by an act of
the parties.
1. Assignment by operation of law. The instances of assignment by
operation of law are the assignment of interest by insolvency or death of
the party to the contract. In the case of insolvency, the Official Receiver
or Assignee acquires the interest in the contract and in the case of death,
the legal representative.
2. Assignment by act of parties. In this case, the parties themselves make
the assignment. The rules regarding assignment of contracts are
summarized below:
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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APPROPRIATION OF
PAYMENT
When a debtor owes several debts in respect of which the payment must be made (to the
same creditor), the question may arise as to which of the debts, the payment is to be
appropriated. In Bangladesh, the rules regarding appropriation of payments are
contained in Sections 59 to 61 which in fact have adopted with certain modifications
the rules laid down in Claytons case. The provisions of these sections are summarised
below:
Rule No. 1. Appropriation by Debtor. Where a debtor owing several distinct debts to
one person, makes a payment to him, with express intimation that the payment is to be
applied to the discharge of some particular debt, the payment, if accepted, must be
applied to that debt. (Section 59).
Where, however, no express intimation is given but the payment is made under
circumstances implying that it should be appropriated to a particular debt, the
payment, if accepted, must be applied to that debt (Section 59).
Ex: A owes B, among other debts, Rs. 1,000 upon a promissory note which falls due on
the 1st June. He owes B no other debt of that amount. On the 1st June A pays B Rs.
1,000. the payment is to be applied to the discharge of the promissory note.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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Rule No. 3. Where neither party appropriates. Where neither party makes
any appropriation the payment is to be applied in discharge of the debts in
order of time, including time-barred debts. If the debts are of equal
standing, the payment is to be applied proportionately (Section 61).
Ex: A trustee deposits Rs. 10,000 being trust money with a bank and
subsequently deposits Rs. 50,000 of his own in the same account.
Thereafter, he withdraws Rs. 10,000 from the bank and misappropriates
it. The said withdrawal will not be appropriated against the Trust amount
of Rs. 10,000 but only against his own deposit, though this was made later
than the first deposit, thus leaving the Trust fund intact.
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Rules
QUASI CONTRACTS
Quasi Contracts are so-called because the obligations associated with
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125
Termination of contract
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127
Discharge by performance
fulfillment of obligations by a party to the contract within the time and in
the manner prescribed in the contract.
Actual performance no party remains liable under the contract. Both
the parties performed.
Attempted performance or tender.:- Promisor offers to perform his
obligation under the contract but the promise refuses to accept the
performance. It is called as attempted performance or tender of
performance
But the contract is not discharged.
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(a)
(b)
(c)
(d)
129
130
c)
132
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133
(b)
Effect of super vanity Impossibility:Where an act becomes impossible after the contract is made void
Becomes unlawful, beyond the control of promisor void
Promisor alone knows about the Impossibility compensate loss.
When an agreement is discovered to be void or where a contract
becomes void
134
Breach of contract
A breach of contract occurs if any party refuses or fails to perform his
part of the contract or by his act makes it impossible to perform his
obligation under the contract. Incase of breach of contract, the aggrieved
party is relieved from performing his obligation and gets a right to
proceed against the party at fault. A contract terminates by breach of
contract. Breach of contract may arise in two ways:
I. Anticipatory Breach of Contract:
It occurs when a party repudiates it before the time fixed for performance
has arrived or when a party by his own act disables himself from
performing the contract.
Ex: A, a singer, enters into a contract with B, the manager of a theatre to
sing at his theater two nights in every week during the next two months
and B engages to pay her 100 Taka for each nights performance. On the
sixth night A willfully absents himself from the theatre. B is at library to
put an end to the contract.Debashis Saha, Lecturer, F & B,
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Jahangirnagar University
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2) Damages
137
Ex: A, a builder, contracts to erect and finish a house by the first of January, in
order that B may give possession of it at that time to C, to whom B has
contracted to let it. A is informed of the contract between B and C. A builds the
house so badly that, before the first of January, it falls down and has to be
rebuilt by B, who, in consequence, loses the rent which he was to have received
from C, and is obliged to make compensation to C for the breach of his
contract. A must make compensation to B for the cost of rebuilding the house,
for the rent lost, and for the compensation made to C.
C. Vindictive Damages. Vindictive damages are awarded with a view to punish
the defendant, and not solely with the idea of awarding compensation to the
plaintiff. These have been awarded (a) for a breach of promise to marry; (b) for
wrongful dishonour of a cheque by a banker possessing adequate funds of the
customer. The measure of damages in case of (a) is dependent upon the severity
of the shock to the sentiments of the promisee. In case of (b) the rule is smaller
the amount of the cheque dishonoured, larger will be the amount of damages
awarded.
D. Nominal Damages. Nominal damages are awarded in cases of breach of
contract where there is only a technical violation of the legal right, but no
substantial loss is caused thereby. The damages granted in such cases are
called nominal because they are very small, for example, a rupee or a shilling.
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Debashis Saha, Lecturer, F & B, Jahangirnagar University
3. Specific Performance
Where damages are not an adequate remedy, the court may direct the
party in breach to carry out his promise according to the terms of the
contract. This is called specific performance of the contract. Some of the
instances where Court may direct specific performance are: a contract for
the sale of a particular house or some rate article or any other thing for
which monetary compensation is not enough because the injured party
will not be able to get an exact substitute in the market.
Specific performance will not be granted where:
(a) Monetary compensation is an adequate relief.
(b) The contract is of a personal nature, e.g., a contract to marry.
(c) Where it is not possible for the Court to supervise the performance of
the contract, e.g., a
building contract.
(d) The contract is made by a company beyond its objects as laid down in
its Memorandum of Association.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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4. Injunction
Injunction means an order of the Court. Where a party is in breach of a
negative term of contract (i.e. where he does something which he promised
not to do), the Court may, by issuing an order, prohibit him from doing so.
Examples : G agreed to buy the whole of the electric energy required for his
house from a certain company. He was, therefore, restrained by an
injunction from buying electricity from any other person.
5. Quantum Meruit
The phrase Quantum Meruit means as much as is merited (earned). The
normal rule of law is that unless a party has performed his promise in its
entirely, it cannot claim performance from the other. To this rule, however,
there are certain exceptions on the basis of Quantum Meruit. A right to sue
on a quantum meruit arises where a contract, partly performed by one
party, has become discharged by the breach of the other party.
Ex:A B 10000 to marry c (As daughter) C death of the time of
performance of contract B must repay A Rs 1000
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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The compensation for breach of contract falls into two broad categories namely
liquidated damage and penalty.
Liquidated damage is a genuine pre-estimate of compensation for damages for
certain anticipated breach of contract. This estimate is agreed to between parties
to avoid at a later date detailed calculations and the necessity to convince outside
parties.
Penalty on the other hand is an extravagant amount stipulated and is clearly
unconscionable and has no comparison to the loss suffered by the parties.
In terms of Section 74 of the Act where a contract has been broken, if a sum is
named in the contract as the amount to be paid in case of such breach, or if the
contract contains any other stipulation by way of penalty, the party complaining of
the breach, can claim whether or not actual damages or loss is proved to have
been caused thereby, from the other party, a
reasonable compensation not exceeding the amount so named, or as the case may
be the penalty stipulated for.
Any stipulation for payment of increased interest is a stipulation for payment of
penalty which has to be paid.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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Contract of Indemnity
Contract of Indemnity
&
Guarantee
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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144
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145
RIGHTS OF INDEMNITY
HOLDER
Right to recover damages
The indemnity holder has the right to recover all the damages which he is
compelled to pay in any suit in respect of any matter covered by the
contract of indemnity.
Right to recover costs
The indemnity holder has the right to recover all the costs which he is
compelled to pay in bringing or defending such suit.
Condition:
(a) The indemnifier authorised him to bring or defend the suit; or
(b) The indemnity holder did not contravene the orders of the indemnifier;
and The indemnity holder acted as it would have been prudent for him to
act in the absence of any contract of indemnity.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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Contract of Guarantee
Right to recover sums paid
The indemnity holder has the right to recover all the sums which he has
paid under the terms of a compromise of such suit.
(a) The indemnifier authorised him to compromise the suit; or
(b) The indemnifier holder did not contravene the orders of the
indemnifier; and the indemnity holder acted as it would have been prudent
for him to act in the absence of any contract of indemnity.
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149
150
RIGHTS OF SURETY
No misrepresentation
The creditor should disclose all the facts which are likely to affect the suretys
liability.
There must not be any concealment of facts.
Form of contract
A contract of guarantee may be either oral or written.
Joining of other co-sureties
The guarantee by a surety is not valid if
A condition is imposed by a surety that some other person must also join as a cosurety; but Such other person does not join as a co-surety.
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153
DISCHARGE OF SURETY
FROM LIABILITY
155
Assignment
DISTINCTION BETWEEN INDEMNITY
AND GUARANTEE
154
Variance in terms
If
Any variation is made subsequent to formation of contact of guarantee;
and
Such variation is made without the consent of surety;
Then
The surety shall be released for such transactions as take place after
such variation.
Release or discharge of principal debtor
If
The creditor makes a fresh contract with the principal debtor whereby the
principal debtor is relieved from his liability; or
The creditor does any act or omission resulting in discharge of the
principal debtor;
Then
The surety is discharged.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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Duties of Bailor
(i) the bailor must disclose all defects/faults in the goods bailed. If the bailor
does not disclose, he would be responsible for any loss or damage suffered by
the bailee while keeping the goods in his custody. The bailor is particularly
responsible for defects in goods hired to bailee whether bailor was aware of
such defects or not.
(ii) where the bailment is gratuitous, the bailor must reimburse the bailee for any
expenditure incurred in keeping the goods.
(iii) the bailor should reimburse any expense which the bailee may incur by way
of loss in the process of returning the goods or complying with other directions
for returning the goods.
(iv) the bailor must compensate the bailee for the loss or damage suffered by the
bailee that is in excess of the benefit received, where he had lent the goods
gratuitously and decides to terminate the bailment before the expiry of the period
of bailment.
(v) the bailor is bound to accept the goods after the purpose is accomplished. If
bailor fails, he is responsible for any loss or damage to ht e goods and has to
reimburse for expenses incurred by the bailee for keeping the goods safely.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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(1) Bailor has a right to enforce the duties of the bailee such as (a) right to claim damages for loss caused to the goods by the negligence
of bailee;
(b) right to claim compensation for loss caused by an unauthorized use of
the goods
bailed;
(c) right to claim damages arising out of mixing the goods of the bailor
with his own
goods.
(2) Bailor has a right to terminate the contract if the bailee does anything
which is
inconsistent with the conditions of bailment. For example A lets on hire
his horse to B
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Duties of a Bailee
Rights of bailee
Rights of Bailor
163
(i) to claim compensation for any loss arising from non-dislosure of known
defects in the goods
(ii) to claim indemnification for any loss or damage as a result of defective title.
(iii) to deliver back the goods to joint bailors according to the agreement or
directions
(iv) to deliver the goods back to the bailor whether or not the bailor has the
right to the goods
(v) to exercise his right of lien. This right of lien is a right to retain the goods
and is exercisable where charges due in respect of goods retained have not
been paid. The right of lien is a particular lien for the reason that the bailee
can retain only these goods for which the bailee has to receive his
fees/remuneration.
(vi) to take action against third parties if that party wrongfully denies the bailee
of his right to use the goods Suit by bailor & bail
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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TERMINATION OF BAILMENT
Assignment
DISTINCTION BETWEEN BAILEES
PARTICULAR AND GENERAL LIEN
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FINDER OF GOODS
PLEDGE
Pledge
The bailment of goods as security for payment of a debt or performance of
promise is called pledge.
Pawnor
The bailor in case of a pledge is called as pawnor.
Pawnee
The bailee in case of pledge is called as pawnee.
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(d) No Notice: Where the Pawnee does not give a reasonable notice to the
Pawnor, the sale is valid, but Pawnee is liable to pay damages to Pawnor.
v. Right against true owner of goods [Sec.178A]
(a)
(b)
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RIGHTS OF PAWNEE
i. Right of Retainer [Sec.173]
Pawnee may retain the goods pledged for
(a)
payment of the debt or the performance of promise,
(b)
any interest due on the debt; and
(c)
all necessary expenses incurred by him with respect to possession or for
preservation of goods pledged.
ii. Retainer for subsequent advances [Sec.174]
(a)
Where the Pawnee lends money to the Pawnor subsequently, after the
date of pledge, it shall be presumed that the he has a right of retainer over the
goods already pledged in respect of the subsequent lending also.
(b) This presumption can be made invalid only by an expenses provision to that
effect.
iii. Reimbursement of Expenses [Sec.175]
Where the Pawnee incurs extraordinary expenses to preserve the goods pledged
with him, he is entitled to receive such amount from the Pawnor.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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DUTIES OF A PAWNOR
Pay the debt
The pawnor is liable to pay the debt or perform his promise as the case may be.
Pay deficit on sale
If the pawnee sells the goods due to default by the pawnor, the pawnor must pay
the deficit.
Pay extra ordinary expenses
The pawnor is liable to pay to the pawnee any extraordinary expenses incurred
by the pawnee for preservation of goods.
Disclose faults in goods
(a) The pawnor is liable to disclose all the faults which are material for use of
the goods; or
(b) may put the pawnee to extraordinary risks.
Indemnify the pawnee
If loss is caused to the pawnee due to defect in pawnors title to the goods, the
pawnor must indemnify the pawnee.
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Jahangirnagar University
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DUTIES OF PAWNEE
Not to use the goods
RIGHTS OF A PAWNOR
Redeem the goods pledged
Meaning of redemption
Right to recover back the goods by making payment of the debt or performance of
promise.
Time for redemption
Where time of redemption is fixed, the pawnor may exercise redemption
(a)
within the time so fixed; or
(b)
even after expiry of time so fixed, provided
the pawnee pays the pawnee all expenses arising on account of his
default.
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Jahangirnagar University
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AGENCY
Enforce pawnees duties
The pawnor has the right to enforce the duties of pawnee, if the pawnee
fails to fulfill his duties.
Receive increase in goods
The pawnor has the right to recover from pawnee any increase in goods
pledged.
Right to receive notice of sale
In case of default by the pawnor to pay the debt or perform his promise,
the pawnee has the right to sell the goods, after giving a reasonable notice
to the pawnor. If the pawnee fails to give notice, the pawnor has the right
to recover the loss incurred by him.
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ESSENTIALS OF
RELATIONSHIP OF AGENCY
Agreement between principal & agent
Intention of agent to act on behalf of the
principal
Anyone can be an agent
Anyone can employ an agent
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1. Express agreement
A person may employ another person as his agent by entering into an express
agreement with him.
The agreement may be either oral or written.
2. Implied agreement
Agency by estoppel
If
a person makes a representation (by his words or conduct) to a third person that a
certain person is his agent; and
the third party believing such representation to be true, enters into a contract with the
pretended agent.
Then
the person making the representation is prevented from denying the truth of agency.
He may be held liable as a principal by such third party.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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6. Agency by ratification
Meaning
If
a person (viz., pretended agent) acts on behalf of another
person (viz, the principal)
the pretended agent acts without the knowledge or consent of
the principal; and
Afterwards, the principal accepts such act.
Then
Agency by ratification comes into existence.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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SUB-AGENT
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Duties
SUBSTITUTE
AGENT
1. He works under the
principal
2. There is a contract
between him & the
principal
3. Agent is in no way
responsible for the acts
of the substituted agent
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Rights
1. To conduct the business in accordance with the directions given by the principal
2. To work with reasonable diligence, care and skill.
3. To render proper accounts to the principal on demand.
4. To communicate with his principal in case of difficulty and seek his instructions.
5. Not to deal on his own account unless all the material facts have been disclosed to the
principal and consent of the principal has been obtained.
6. Not to make any secret profit out of the agency business other than the agreed
remuneration
7. To remit to the principal all the sums received in the principals accounts in
accordance with the terms and conditions of contract of agency.
8. Not to delegate authority or appoint sub agent.
9. To protect and preserve the interest on behalf of the principals representative in case
of his death or insolvency of the principal.
10. Not to use information obtained in the course of the agency against the principal.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
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186
DEFINATION
According to Section 4(1) of The Sales of
Goods Act,1930.
contract of sales of goods is a contract
whereby the seller transfer or agrees to
transfer the property in goods to the buyer
for a price
Contract of Sale is a generic term ,which
includes both sales and an agreement to sell
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ESSENTIAL
ELETMENTS
OF VALID
CONTRACT
PRICE
GOODS
TRANSFER OF
PROPERTY
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B. GOODS
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Cont.
ACTIONABLE CLAIM:- It means which can be
enforced through the courts of Law, e.g. debt due.
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C. TRANSFER OF PROPERTY
PROPERTY means the general property
in goods, and not merely a special
property.
General property in goods means
ownership of the goods
Special property on the goods means
possession of the goods
Cont.
Thus, there may be either a transfer of
ownership of goods or an agreement to
transfer the of the goods. The ownership
may transfer either immediately on
completion of sale or something in future in
agreement to sell.
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E. ESSENTIAL ELEMENTS OF
VALID CONTRACT
d. price
For every sale or purchase their must be a price of the
goods.
PRICE means the MONEY CONSIDERATION for the
sale of goods.
When there is no consideration,it amounts to gift and
not sale
ii. However , the consideration may be partly in money
and partly in goods because the law does not
prohibited as such.
i.
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CONTRACT OF SALE
S.No
BASIS
SALE
AGREEMENT TO SELL
1.
Transfer of
ownership
Transfer of ownership of
goods takes place
immediately.
Transfer of ownership of
goods takes place in future
times.
2.
Executed or
Executory
It is an executed contract.
It is an executory contract
because something remains
to happen.
3.
Conveyance of
Property
Under Section 4(3) the Contract of Sale Includes:1) SALE:- Sale means where the ownership in goods
is transferred.
2) AGREEMENT TO SELL :-Agreement to sell
includes where the transfer of ownership in goods
is to take place at a future time or subject to the
fulfillment of some condition.
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Cont.
4.
Transfer of Risk
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GOODS
Transfer of risk of loss
of goods does not
takes place because
the ownership is not
transferred. As a
result, in case of
destruction of goods
the loss shall be borne
by the seller.
(Risk*-Risk follows
ownership)
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TYPES OF GOODS
1.Existing goods
EXISTING GOODS
means the goods ,which are either owned or
possessed by the seller at the time of contract of
sale.
Existing goods are of 3 types:
a) Specific goods
b) Ascertained goods
c) Unascertained goods
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2.Future goods
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3.Contingent goods
FUTURE GOODS
means goods to be manufactured or produced or
acquired by the seller after the making of the
contract of sale. There is an agreement to sell
only.
For Example:-X will sell the goods to Y all the
crops to be grown at Haryana in his farm.
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CONTINGENT GOODS
means those goods,acquition of which by the
seller depends upon a contingency, which may
or may not happen.
For example:-X agrees to sell to y all the crops
to be grown at Zs farm in Haryana during the
year 2007 season for sum of 1 lakh rupees,if Z
sells the crops.
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2. As to breach:
The breach of a condition gives the aggrieved party the right
to repudiate the contract and also to claim damages.
3. As to treatment:
A breach of condition may be treated as a breach of
warranty. But a breach of warranty cannot be treated as a
breach of condition.
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Definition:
Section 13 of the Negotiable Instrument Act, 1881, defines a negotiable
instrument as: A negotiable instrument means a promissory note, bill of exchange
or cheque payable either to order or to bearer.
Meaning :
Negotiable means transferable. Instrument means document. Negotiable
instrument, therefore, means a transferable document. The law relating to
negotiable instruments is contained in the Negotiable Instruments Act, 1881
Explanation:
Writing & Signature (it must be written and signed by all the parties according to the
rules )
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Writing
Parties
Drawee and Acceptor
Order to Pay
An Unconditional Order to Pay
Signed by Drawer
Cheques (Section 6)
5 Types of Bills of Exchange
Definition:
The negotiable instrument act of 1881 defines cheque as, A cheque is a bill of
exchange, drawn on a specified banker and not expressed to be payable otherwise
than on demand.
Types of Cheque
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Introduction
Types of Partnership
Essentials of a Partnership
1. It is an association of two or more persons
2. It must be result of an agreement
3. The agreement must be to share profits of the
business
4. The agreement must be to carry on some
business
5. The business must be carried on by all or by any
of them acting for all
1.
2.
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minor
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By Expiry of Term
By Completion of adventure
By Death of a partner
By Insolvency of a partner
By Retirement of a partner
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Act of Insolvency
An act of insolvency is some act of the debtor which shows that he
is financially embarrassed.
Only those acts which are listed as such by the act are considered to
be acts of insolvency.
Each of the following acts committed by the debtor is an act of
insolvency:
(1). If he makes a transfer of all or substantially all his property to
a third person for the benefit of his creditors generally.
(2). If he makes a transfer of his property or any part thereof, with
the intend to defraud or to delay his creditors.
Debashis Saha, Lecturer, F & B,
Jahangirnagar University
241
Jahangirnagar University
(3). If he makes a transfer of his property or any part thereof it would under this
act or any other enactment for the time being in force, be void as a fraudulent
preference if he were adjudged as insolvent.
(4). If, with intent to defeat or delay his creditorsi) he departs from or remain out of Bangladesh
ii) he departs from his dwelling house or usual place of business or otherwise
absent himself
iii) he secluded (to keep oneself away from contract with other people) himself
so as to deprive his creditors of the means of communicating with him.
(5). If any of his property has been sold or attached for a period of not less than
21 days in execution of the decree of any court for the payment of money.
(6). If he petitions to be adjudged an insolvent
(7). If he gives notice to any of his creditors that he has suspended, or that he is
about to suspend, payment of his debt.
(8). If he is imprisoned in execution of the decree of any court for the payment of
money.
(9). If a creditor has served an insolvency notice in respect of any decree or
order for payment of money, and if the debtor has not paid the money within the
period specified in notice. Debashis Saha, Lecturer, F & B,
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