Commercial & Industrial Laws: Nobbodoy Publication

PAPER 203
COMMERCIAL & INDUSTRIAL LAWS
AS PER
ICMAB OLD SYLLABUS
EDITION 2018 BY SABOLIL
NOBBODOY PUBLICATION
DHAKA, BANGLADESH
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Edition: January 2018
Presented by: Nobbodoy Publication

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Designed by: Times Press

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Bangladesh.
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Commercial & Industrial Laws 1

PREFACE
With the growing demand of professional education, Cost and Management Accountant
has gained a huge popularity. A Cost and Management Accountant degree makes the
candidates suitable for lots of opportunities. As more and more multi-nationals are coming
into the world, demand for Cost and Management Accountant has further increased. The
employment periphery for Cost and Management Accountants are various and can range
from holding key positions in a company.
To become a Cost and Management Accountant a person needs to qualify the course
offered by the Institute of Cost and Management Accountants of Bangladesh (ICMAB).
The main objectives of this book is to meet the basic requirements of the CMA course but
it is also helpful for other professional students and the persons who are intended to get
admission into a professional institute. This book contains suggested questions and answer
along with CMA previous examination questions. It covers whole syllabus of ICMAB and
includes related topic so that students can be well prepared for the final examination by
studying this book.
We are grateful and deserve our thanks to the publishers, printers and designers of this
book.
Any criticism, favorable or unfavorable, and any constructive suggestion in regards of this
book will be gratefully received by us.
Nobbodoy
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DEDICATION
We would like to dedicate this publication to the honorable Cost

and Management Accountants for their incredible contribution in
the field of Accounting.

TABLE OF CONTENTS
Part Topic Page
A Commercial laws 06
B Industrial laws 59

ভর্তি চ঱ছে! ভর্তি চ঱ছে! ভর্তি চ঱ছে!
দস.এম.এ ছাত্র-ছাত্রীদের প্রস্তুদি ক্লাদস ভদিি চ঱দছ!
আমাদের ববদলষ্ট্যঃ
√ আমরা প্রছেলনা঱ োত্র–োত্রীছের (যযমনঃ আই.র্঴.এম.এ.র্ি) প্রস্তুর্ত ক্লা঴ য঴িা যেই;

√ আমাছের ঴ক঱ র্লক্ষক ও র্লক্ষার্থী প্রছেলনা঱ প্রর্তষ্ঠাছনর (যযমনঃ আই.র্঴.এম.এ.র্ি);
√ র্঴.এম.এ িযাছচর ঴ক঱ োত্র-োত্রী আই.র্঴.এম.এ.র্ি প্রর্তষ্ঠাছনর;
√ র্ি঳য় ও অধ্যায় র্ভর্িক য঱কচার র্লট প্রোন করা ঵য়;
√ র্঴.এম.এ ঴ম্পূর্ি র্঴ছ঱িাছ঴র পালাপার্ল র্িগত িের ঴মূছ঵র প্রশ্ন ঴মাধ্ান করা ঵য়;
√ একাউর্টিং র্ি঳ছয়র গার্র্র্তক ঴ম঴঴া ঴মূ঵ আই.এে.আর.এ঴ অনুযায়ী ঴মাধ্ান করা ঵য়;
√ গার্র্র্তক ঴ম঴঴া ঴মাধ্াছনর ঴঵জ যকৌল঱ যলখাছনা ঵য়;
√ র্঴.এম.এ পরীক্ষার অনুরূপ ক্লাল যটস্ট ও মছে঱ যটস্ট যনওয়া ঵য়।
চাকুদরজীবীদের জনয শুক্রবাদরর বযাচ রদেদছ!
ফযাগাদযাদগঃ
নিযেয়
ঢাকা, িািং঱াছেল।
যমািাই঱ঃ ০১৭১১১৩৭০৩৯
ফরগু঱ার বযাদচর সাদে ফ্রী যাচাই ক্লাল কদর ভদিির দসদ্ধান্ত দনন।

PART - A
COMMERCIAL LAWS
Q-1. What do you mean by “Contract”? Briefly explain the elements of a valid
contract giving relevant examples.
CMA Exam- June‘16
Answer.
Contract:
A contract is a voluntary arrangement between two or more parties that is enforceable at

law as a binding legal agreement.
A contract is like a promise between people. It is an understanding, a deal between two or

more people or organisations to do certain things.
The essential elements of a valid simple contract:
Offer and acceptance: There must be a lawful offer by one party and a lawful acceptance
of the offer by other party or parties.
Intention to create legal relationship: There must be an intention among the parties that
the agreement shall create legal relations.
Lawful consideration: An agreement comes into existence when one or more persons
promise to another or other persons to do or not to do something. Every promise forming
the consideration for each other leads to a contract. Only those considerations are valid
which are lawful.
Capacity of parties: The parties to an agreement must be legally capable of entering into
an agreement otherwise it can not be enforceable by law. The parties must not suffer from
minority, lunacy, idiocy, drunkenness and other similar factory.
Free consent: In order to be enforceable by law, an agreement must by based on the free
consent of all the parties. The consent is not free if the agreement is induced by coercion,
undue influence, mistake, misrepresentation and fraud.
Certainty: The agreement must not be vague. The meaning of the agreement must be
certain otherwise it can not be enforceable by law.
Writing: An oral contract is sometimes difficult to prove. Therefore important agreements

should be made in writing.

Q-2. “All contracts are agreements, but all agreements are not contracts” – Explain
the statement with examples.
CMA Exam- June‘16
Answer.
All agreements are not contracts but all contracts are agreements. A contract is an
agreement enforceable by law made between two or more persons.
An agreement enforceable by law is a contract. Therefore in a contract there must be

i) an agreement, and
ii) the agreement must be enforceable by law.
An agreement comes into existence when one or more persons promise to other (s), to do
or not to do something. Some agreements cannot be enforceable by law, such as an
agreement to go to a cinema. An agreement which can not be enforceable by law is not a
contract.
Q-3. “No consideration, no contract”– Explain the statement with examples.
CMA Exam- June‘16
Answer.
A contract without consideration is not a contract. Consideration is essential for the

validity of a contract. An agreement comes into existence when one or more persons
promise to other less, to do or not to do something. Every promise forming the
consideration for each other leads to a contract.
A promise without consideration can not create a legal obligation. A promise without
consideration is a gift. An agreement without consideration is not enforceable by law. And
an agreement which can not enforceable by law is not a contract. Contract must be
supported by consideration.
Q-4. Write and discuss the key features of “Sale of Goods Act 1930” with reference to
provision.
CMA Exam- June‘16
Answer.
The key features of ―Sale of Goods Act 1930‖:
1. Title or the seller‟s right to sell the goods:

Section 12(1) implies into contracts for the sale of goods an undertaking as to title,
confirming that the seller has a right to sell. Section 12(2) implies undertakings as to
freedom from other claims and quiet possession.

2. Description of the goods:
Section 13 applies to all sales. Section 13(1) and (2) provide that where there is a contract
for the sale of goods by description, there is an implied condition that the goods
corresponded with the description.
3. Quality of the goods:

There is an implied condition that goods supplied under a contract are of satisfactory
quality. The Act (section 14(2B)) identifies factors which may in appropriate cases be
aspects of the quality of goods:
- Fitness for all the purposes for which goods of the kind in question are commonly
supplied,
- Appearance and finish,
- Safety,
- Durability.
4. Fitness of the goods:

Section 14(3) implies a condition that the goods be fit for any particular purpose which the
buyer expressly or by implication makes known to the seller.
5. Sale by sample:
Under section 15 of the Act there are requirements in a sale by sample. In the case of a
contract for sale by sample there is an implied condition.
Q-5. What is misrepresentation in terms of Contract Act 1872? How can an

agreement be avoided due to misrepresentation?
CMA Exam- June‘16
Answer.
Misrepresentation:
A misrepresentation is a false statement of fact or law which induces the representee to

enter a contract. Where a statement made during the course of negotiations is classed as
a representation rather than a term an action for misrepresentation may be available where
the statement turns out to be untrue. There are three types of
misrepresentation: innocent misrepresentation, negligent misrepresentation and fraudulent
misrepresentation.
Avoiding agreement due to misrepresentation:
When a misrepresentation has been made and an agreement was (or at any rate appeared to
be) concluded, the misrepresentee does not have to bring a halt to the deal.
Misrepresentations generally do not render a contract void, as does the contractual
doctrine of common mistake or frustration; it makes a contract voidable at the option of
the misrepresentee. Not all contracts entered into on the strength of misrepresentations will
be bad for the misrepresentee, who may choose not to void the contract.

Q-6. Define the term “Contract of sale”. What are the essentials of Contract of sale?
CMA Exam- June‘16
Answer.
Contract of sale:
A contract of sale is a legal contract. It is a contract for the exchange of goods, services or
property that are the subject of exchange from seller (or vendor) to buyer (or purchaser)
for an agreed upon value in money (or money equivalent) paid or the promise to pay same.
It is a specific type of legal contract.
The essentials of contract of sale are as follows:
1. Movable goods: The sale of goods act deals only with movable goods. This act does
not applicable immovable goods.
2. Money consideration: In a sale there must be money consideration. There must be a

contract for the exchange of movable goods for money. An exchange of goods for goods is
not sale.
3. Two parties: Since a control of sale involves a change of ownership it follows that the
buyer and the seller must be different persons. A man cannot buy from or sell goods to
himself.
4. Offer and acceptance: A contract of sale is made by an offer of by or sells goods for a
price and the acceptance of such offer.
5. Method of forming the contract: A contract of sale may be in writing or by word of

mouth. But important contract should be made in writing.
6. Method of forming the contract: A control of sale may be in writing or by word of

mouth. But an important contract should be made in writing.
Q-7. What are the exceptions to the doctrine of Caveat Emptor?
CMA Exam- June‘16
Answer.
The exceptions to the doctrine of caveat emptor:
i. Purchase by samples and description:

When goods are bought with a sample and a description and the bulk of the goods do not
match the sample goods or the description of the goods given by the seller, then the buyer
can reject the goods as it is expected that the bulk of the goods will match the sample and
the description of the goods as given by the seller to the buyer.

ii. Fitness for purpose:
The buyer informs the seller the purpose for which he requires the goods and he then has
to rely completely on the skill and the judgement of the seller. In such cases, it is expected
that the goods so obtained by the buyer from the seller, serve the purpose and if it is not
so, then the buyer may reject the goods.
iii. Usage of trade:

Where the usage or trade annexes an implied condition or warranty as to quality or fitness
for a particular purpose and seller deviates from that, then the rule of caveat emptor does
not apply.
iv. Consent by fraud:

Where the seller makes a false statement intentionally to the buyer and the buyer relies on
it or where the seller knowingly conceals the defects in the good, the doctrine of caveat
emptor does not apply as the buyer did not give his consent freely. He was kept in the dark
regarding the contract that he entered into with the seller.
Q-8. Explain with example when risk of goods passes from the seller to the buyer?
CMA Exam- June‘16
Answer.
The general rule is that risk pass with the property. If the goods are lost or damaged by
accident or otherwise, the loss falls on the person who is the owner at the time when the
goods are lost or damaged.
The risks of goods remain to the seller until the ownership is transferred to the buyer.
After the ownership has passed to the buyer, the goods are at the buyer risk whether
delivery has been made or not.
For example, X delivered certain goods to Y. The risk passes to Y as soon as the goods
are handed over to Y.
Q-9. State with reason whether the following are negotiable Instruments:-
(i) Bill of Exchange (ii) Bill of Lading (iii) Hundis.
CMA Exam- June‘16
Answer.
From the definition we can find that a negotiable instrument means a promissory note, bill
of exchange or cheque payable either to order or to a bearer. Thus only three kinds of
instruments are regognised as negotiable instruments viz., promissory notes, bill of
exchange and cheques.

Q-10. Under what circumstances a suit may be brought against the issuance of a
cheque when the cheque has been dishonored by a bank for insufficiency of funds in
the respective account?
CMA Exam- June‘16
Answer.
Legally, under following circumstances a suit may be brought against the issuance of a
cheque when the cheque has been dishonored by a bank for insufficiency of funds in the
respective account.
The cheque should have been drawn by the drawer on an account maintained by him.
The cheque should have been returned or dishonoured because of insufficient funds in the
drawer's account.
The cheque is issued towards discharge of a debt or legal liability.
After receiving the notice, if the drawer doesn't make the payment within 15 days from the
day of receiving the notice, then he commits an offence punishable under Section 138 of
the Negotiable Instruments Act.
Q-11. Discuss the provision of law for crossing a cheque after issue.
CMA Exam- June‘16
Answer.
The provision of law for crossing a cheque after issue:

i) A cheque may be crossed generally or specially by the drawer.
ii) Where a cheque is uncrossed, the holder may cross it generally or specially.
iii) Where a cheque is crossed generally, the holder may cross it specially.
iv) Where a cheque is crossed generally or specially, the holder may add the words ―not
negotiable‖.
v) Where a cheque is crossed specially, the banker to whom it is crossed may again cross
it specially to another banker for collection.
vi) Where an uncrossed cheque, or a cheque crossed generally, is sent to a banker for
collection, he may cross it specially to himself.
Q-12. Define Trade Mark. State what are the marks or symbols that cannot be
registered as trade mark?
CMA Exam- June‘16
Answer.
একাউর্টিং র্ি঳য়গুছ঱া িুঝছত ঴ম঴যা ঵ছে?
প্রছেলনা঱ িযাছচ ভর্তি ঵ন-০১৭১১১৩৭০৩৯
Trade Mark:
A trade mark is a recognizable sign, design, or expression which identifies products or
services of a particular source from those of others, although trademarks used to identify
services are usually called service marks.
Following marks or symbols cannot be registered as trade mark:

One cannot register any sign as a trade mark if it consists of or contains an emblem that
has protection under an International agreement. The purpose of this agreement is
to protect, and prevent the registration and use of, trademarks that are identical with, or
very similar to,
- armorial bearings
- flags and other State emblems
- official signs
- hallmarks
- other emblems
- abbreviations and names of international inter-governmental organizations
Q-13. “Arbitration Agreement” – what does it mean? State the essentials of

Arbitration Agreement.
CMA Exam- June‘16
Answer.
Arbitration Agreement:
An arbitration agreement is simply to appoint an arbitrator in the event of a dispute to
resolve the issues by way of arbitration proceedings. An arbitration agreement can be
found as a clause in the parties' contract and can also be a stand alone agreement.
The essentials of arbitration agreement:
i) Valid and binding Agreement -

There should be a valid and binding agreement between the parties. Such agreement may
be in the form of an arbitration clause in a contract or in the form of a separate agreement.
ii) Written Agreement -

An arbitration agreement shall be in writing. An arbitration agreement is in writing if it is
contained in—
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of telecommunication which
provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the existence of the
agreement is alleged by one party and not denied by the other.
Q-14. Define award. What are the essentials of an arbitral award?
CMA Exam- June‘16

Answer.
Award:
An arbitral award refers to a decision made by an arbitration tribunal in an arbitration
proceeding. It is analogous to a judgment in a court of law. It can be of a non-monetary
nature where the entire claimant's claims fail and no money needs to be paid by either
party.
The essentials of an arbitral award:

i. An arbitral award must be in writing and signed.
ii. The parties must be competent to initiate arbitral proceedings.
iii. A sustainable arbitral award must be reasoned one – Section 31 (3) of the Arbitration
and Conciliation Act, 1996.4.
iv. There must be arbitration clause to assign disputes or differences before arbitral
tribunal.
v. The contents of an arbitral award must be connected with the subject-matter of the
dispute arbitrated.
vi. An arbitral award must be founded on the principle of mutuality
Q-15. What is a contract? Briefly describe the essential elements of a valid simple
contract. State valid reasons for non-performance of a contract.
CMA Exam- Dec‘15
Answer.
Contract:
A contract is a voluntary arrangement between two or more parties that is enforceable at

law as a binding legal agreement.
A contract is like a promise between people. It is an understanding, a deal between two or

more people or organisations to do certain things.
The essential elements of a valid simple contract:
1. Offer and acceptance: There must be a lawful offer by one party and a lawful
acceptance of the offer by other party or parties.
2. Intention to create legal relationship: There must be an intention among the parties
that the agreement shall create legal relations.
3. Lawful consideration: An agreement comes into existence when one or more persons
which are lawful.

4. Capacity of parties: The parties to an agreement must be legally capable of entering
into an agreement otherwise it can not be enforceable by law. The parties must not suffer
from minority, lunacy, idiocy, drunkenness and other similar factory.
5. Free consent: In order to be enforceable by law, an agreement must by based on the

free consent of all the parties. The consent is not free if the agreement is induced by
coercion, undue influence, mistake, misrepresentation and fraud.
6. Certainty: The agreement must not be vague. The meaning of the agreement must be
7. Writing: An oral contract is sometimes difficult to prove. Therefore important

agreements should be made in writing.
Reasons for non-performance of a contract:

Q-16. Mention the type of contract discharge. Describe the factors that need to be
considered when discharge issue arises.
CMA Exam- Dec‘ 15
Answer.
The type of contract discharge:
Contract creates relation between the parties and binds them over. Termination of such
contractual relations is called discharge of contract. The following are different types of
contract discharge.
Discharge by Performance.
Discharge by Breach of Contract.
Discharge by Impossibility.
Discharge by Operation of Law.
Discharge by Lapse of Time.
Discharge by Mutual understanding or by Agreement.

The factors that need to be considered when discharge issue arises:
Impossibility of Performance:
The company has the right to terminate the contract in the case of an impossibility of
performance.
Breach of Contract:
A material breach of contract allows the company to terminate the contract.
Prior Agreement:
A party may terminate a contract if he and the other party have a prior written agreement
that calls for a contract termination because of a specific reason.
Rescission:
A rescission of a contract is when a contract is terminated because an individual
misrepresented themselves, acted illegally or made a mistake.
Completion:
A contract is essentially terminated once the obligations outlined in the contract are
completed.
Q-17. Define „The Doctrine of Caveat Emptor‟.
CMA Exam- Dec‘15
Answer.
The Doctrine of Caveat Emptor:

Caveat emptor is a Lain word which means buyers beware. The doctrine of caveat emptor
means that, a buyer must buy goods after satisfying himself of their guilty and fitness. If
he makes a bad choice he cannot balance the seller or cannot recover damages from the
seller.
Example: Mr. Karim went to market and purchased a bike to take a part in Bike race
competition. But he did not tell the seller that for which purpose he is buying. When he
reached home, he came to know that this bike is not suitable for bike race competition.
Due to the principal of Caveat Emptor Mr. Karim can neither reject the bike nor can claim
for compensation.
Q-18. What are the rights of unpaid seller under the Sale of goods Act?
CMA Exam- Dec‘15
Answer.
The rights of an unpaid seller against his goods are explained below:

1. Sellers (or vendor‟s) lien:
The unpaid seller of goods is entitled to retain the possession of goods until received the
whole payment in the following cases:
a) Where the goods have been sold on credit but the terms of credit has been expired.
b) Where the buyer becomes insolvent
c) The sellers Lien is not applicable in the following cases:
i) Lien can be exercise for non-payment of the price, not for any other charges. For
example, the seller cannot claim lien for go down charges which he had to incur for
storing the goods
ii) The seller can waive the lien if he is desired
2. The right of stoppage in transit:

When the buyer of goods becomes insolvent and the goods are in transit to the buyer, the
seller has the right to stoppage in transit.
The following point is to be noted when applying the right of stoppage in transit:
i) The goods are considered as is in transit form the time these are delivered to the carrier
to the time these are delivered to the buyer or his agent.
ii) The right of stoppage in transit comes to an end when the goods are delivered to the
buyer or his agent.
iii) When a part delivery has been made, the remainder of the goods can be stopped in
transit.
3. The right of resale:

When the buyer of goods becomes insolvent and the goods are not in transit, the unpaid
seller who has retained the possession of goods can resale the goods as following
conditions:
i) If the goods are perishable in nature, the seller can regale the goods without any notice
to the buyer
ii) In other cases the sellers send a notice to the buyer before resale the goods calling him
to pay the price within a reasonable time. And if the buyer fails to pay within that time, the
unpaid seller can resale the goods.
The rights of an unpaid seller against the buyer personally are explained below:
1. Claim for the price:

When under a contract of sale, the goods has been passed to the buyer and the buyer
refuses to pay for the goods according to the terms of the contract, the unpaid seller can
claim for the price of the goods.
2. Claim for non-acceptance:

When the buyer wrongfully refuses to accept and pay for the goods and pay, the seller can
claim for non-acceptance.
3. Claim for special damages:

The seller can claim for any special damage which can be recoverable according to the
law.

Q-19. Distinguish between condition and warranty.
CMA Exam- Dec‘15
Answer.
The distinction between condition and warranty:

Condition Warranty
i. A condition is stipulation essential to the i. A warranty is a stipulation collateral to
main purpose of the contract. the main purpose of the contract.
ii. The breach of a condition gives the ii. The breach of a warranty gives the
aggrieved party a right to reject the aggrieved party a right to claim for
contract. damages but not gives a right to reject
the contract.
iii. Under certain circumstances a breach of iii. A breach of warranty cannot be
condition is to be treated as a breach of treated as a breach of condition.
warranty.
Q-20. “Holder in due course gets a better title than that of the transferor” – Explain.
CMA Exam- Dec‘15
Answer.
The holder in due course gets a better title than that of the transferor even though the
instrument was originally an inchoate stamped instrument and the transferor completed the
instrument for a sum greater than what was intended by the maker.
Q-21. Distinguish between open cheque and a crossed cheque. What do you mean by
restrictive crossing?
CMA Exam- Dec‘15
Answer.
Distinction between open cheque and a crossed cheque:

Open cheque is a cheque that is not crossed on the left corner and payable at the counter of
the drawee bank on presentation of the cheque. Crossed is a cheque that has been marked
to specify an instruction about the way it is to be redeemed. A common instruction is to
specify that it must be deposited directly into an account with a bank and not immediately
cashed by a bank over the counter.
Restrictive crossing:
Where some customary instruction is written between the two parallel transverse lines
(constituting crossing of cheque) that may result in imposing certain restrictions on the
collecting or paying banker, it is called restrictive crossing. The example is "A/c Payee
only".

Q-22. Find the faults with the following negotiable instrument:
Promissory note:
US $ 6000
Date: 10-12-12
I am liable to pay to Rahim or order the sum of US $ 6,000 only with all the interest
according to the rules as soon as possible.
CMA Exam- Dec‘15
Answer.
The promissory note does not containing a promise to pay. But to be valid, the negotiable
instrument must contain a promise to pay. The promise to pay must be express. A mere
acknowledgement of indebtedness is not enough. The instrument must be signed by the
maker of it.
Q-23. Short Notes:

(i) Common Carrier;
(ii) Clean Bill of Lading;
(iii) Difference between a general crossing & special crossing;
(iv) Negotiable instrument;
(v) Holder in due course;
(vi) Arbitration.
CMA Exam- Dec‘15
Answer.
(i) Common Carrier:

A common carrier is one who carries goods for business and money. One who carries
goods occasionally is not a common carrier. Also one who carries goods of free in not a
common carrier.
The Common Carrier Act defines a common carrier as any individual, firm or company
who transport goods as a business for money over land or inland waterways without
discrimination between different parties.
(ii) Clean Bill of Lading:

A clean bill of lading a bill of lading that is free from any adverse remarks or notations.
The shipping company indicates in the bill of lading that the goods have been received by
the ship in the expected condition, packaging and quality. A bill of lading is not
considered to be clean if there are any notations on the bill of lading with regard to the
poor or flawed condition of any of the cargo. Importers and their banks usually insist on a
clean bill of lading for payment under a letter of credit.

(iii) Difference between a general crossing & special crossing:
The differences between a general crossing and a special crossing:

General crossing Special crossing
i. The simplest way of crossing a chaeque i. When the name of balk is written
is to put two parallel lines across the face between the parallel lines of the cheque, it
of the cheque. This is called general is called special crossing.
crossing.
ii. A cheque crossed generally can be ii. A cheque crossed specially can be paid
paid by any bank to which it is presented. by the bank named between the parallel
lines.
iii. This type of cheque is less protective iii. This type of cheque is highly protective
against loss. against loss.
(iv) Negotiable instrument:

Negotiable means transferrable by delivery and instrument means a written document. The
term negotiable instrument means a document transferable by delivery. A negotiable
instrument is a document guaranteeing the payment of a specific amount of money either
on demand or at an agreed time.
(v) Holder in due course:

Holder in due course is a person who has taken a bill of exchange in
good faith and for value before itwas overdue and without notice of previous dishonour or
of any defect in the title of the person who negotiated or transferredthe bill. A holder in
due course can negotiate the bill further and stands to be recompensed if it is dishonoured
by the drawer,acceptor or other endorsee. Theoriginal payee ofa cheque is not a holder in
due course.
(vi) Arbitration:
Arbitration means the settlement of a dispute by referring the dispute to a third party and
abiding by his decision. All matters which can be decided by a civil court can also be
decided by arbitration. Arbitration is often used to resolve conflict diplomatically to
prevent a more serious confrontation. Examples include disputes about property or money.
Q-24. Distinguish between a contract of sale and Agreement to sell.
CMA Exam- Aug‘ 15
Answer.
Distinction between sale and agreement to sale:
Contract of sale Agreement to sale

i. Where under a contract of sale if the i. Under an agreement of sale if the
ownership of the goods is transferred from ownership of the goods is transferred from
the seller to the buyer, at the time of sale the seller to the buyer at a future time, the
the contract is called a sale. contract is called an agreement to sale.

ii. In case of contact of sale, the unpaid ii. In case of agreement to sell, the seller
can resale the goods or stoppage in transit. can claim for damages for the breach of
contract.
iii. Sale is an executed contract. iii. Agreement to sell in an executor
contract.
iv. Generally a sale is done for present iv. Generally an agreement to sell is done
goods for future goods.
Q-25. Define the term negotiable instrument. Explain the distinguishing features of
promissory notes, bill of exchange and Cheques.
CMA Exam- Aug‘15
Answer.
Negotiable instrument:
Negotiable means transferrable by delivery and instrument means a written document. The
term negotiable instrument means a document transferable by delivery. A negotiable
instrument is a document guaranteeing the payment of a specific amount of money either
on demand or at an agreed time.
The distinguishing features of promissory notes:

i. The instrument must be in writing
ii. The instrument must be signed by the maker of it.
iii. The instrument must contain a promise to pay
iv. The amount of money of be paid must be certain
v. The amount be payable either on demand or at an agreed time.
vi. The promise to pay must be unconditional
The distinguishing features of bill of exchange:

ii. The instrument must be signed by the drawer.
iii. The instrument must contain an order to pay
iv. The amount of money to be paid must be certain
v. The amount may be payable either on demand or at an agreed time.
vi. The order to pay must be unconditional
The distinguishing features of Cheque.

i. A Cheque must be in writing
ii. A Cheque must be dated
iii. A Cheque must contain an order to pay
v. The order to pay must be unconditional.
vi. A Cheque must be signed by the drawer, The signature must be specimen signature of
drawer kept in the band.

Q-26. In what different ways may an instrument be dishonored?
CMA Exam- Aug‘15
Answer.
An instrument may be dishonored in two ways: (i) by non-acceptance and (ii) non-
payment
(i) Dishonor by non-acceptance:
An instrument is dishonored by non-acceptance in the following cases:

a) When there are several drawers refusal by any one of them will leads to dishonor.
b) Where the drawer is not able to contract, the instrument may be treated as dishonored.
c) In case where presentation for acceptance is not needed, the bill is treated as dishonored
if it is not presented without presentation.
(ii) Dishonor by non- payment:
An instrument is dishonored by non-payment when the maker or the acceptor of the

instrument makes default of pay the same.
Q-27. Difference between Holder and Holder in Due- Course.
CMA Exam-Aug‘15
Answer.
The differences between holder and holder in due course:
Holder:
The holder of a negotiable instrument means any person entitled his own name of the
possession and to receive the amount due from the parties.
The person legal entitled to receive the money due on the instrument, is called the holder.
A person who obtains possession of the instrument by illegal means, (such as theft) is not
a holder.
Holder in due- course:

Holder in due course is a person who has taken a bill of exchange in
good faith and for value before itwas overdue and without notice of previous dishonour or
of any defect in the title of the person who negotiated or transferredthe bill. A holder in du
e course can negotiate the bill further and stands to be recompensed if it is dishonoured by
the drawer,acceptor or other endorsee. Theoriginal payee ofa cheque is not a holder in due
course.

Q-28. What are the differences between character party and bill of lading?
CMA Exam- Aug‘15
Answer.
The differences between character party and bill of lading:
Bill of lading Charter party

i. A bill of lading is a receipt for goods i. A charter party is a contract between the
delivered to a ship for carriage shipper and the carrier for carriage of goods
stating there in the terms and conditions of
carriage.
ii. It is not a formal document ii. It is a formal document
iii. It may or may not contain any terms iii. It contains all the terms and conditions of
of the contract. the contract.
iv. It bears some of the features of a iv. It does not bear any of the characteristics
negotiable instrument of a negotiable instrument.
Q-29. What is contingent contract?
CMA Exam-Apr‘15
Answer.
A contingent contact is a contract to do or not to do something. This is a valid contract. In

this contract either party or both party may have an interest is the subject matter of the
contract.
For example, A agrees to pay Tk. 20 lac to B, if B‘s house is burnt. This is a contingent
contract.
Q-30. Discuss the essential elements or features of contract.
CMA Exam-Apr‘ 15
Answer.
The basic elements of a valid contract are described below:
1. Offer and acceptance: There must be a lawful offer by one party and a lawful
acceptance of the offer by other party or parties.
2. Intention to create legal relationship: There must be an intention among the parties
that the agreement shall create legal relations.
3. Lawful consideration: An agreement comes into existence when one or more persons
which are lawful.
4. Capacity of parties: The parties to an agreement must be legally capable of entering

into an agreement otherwise it can not be enforceable by law. The parties must not suffer
from minority, lunacy, idiocy, drunkenness and other similar factory.
5. Free consent: In order to be enforceable by law, an agreement must by based on the

free consent of all the parties. The consent is not free if the agreement is induced by
coercion, undue influence, mistake, misrepresentation and fraud.
6. Certainty: The agreement must not be vague. The meaning of the agreement must be
7. Writing: An oral contract is sometimes difficult to prove. Therefore important

agreements should be made in writing.
Q-31. What do you mean by „caveat Emptor‟? Discuss the exceptions of this
principal
CMA Exam- Apr‘15
Answer.
Caveat emptor:
Caveat emptor is a Lain word which means buyers beware. The doctrine of caveat emptor
means that, a buyer must buy goods after satisfying himself of their guilty and fitness. If
he makes a bad choice he cannot balance the seller or cannot recover damages from the
seller.
The exceptions of caveat emptor:
The principle of caveat emptor is not applicable under the following exceptional cases:
i. Where the buyer depends on the judgment of the seller
ii. When the goods are sold with description the goods are fit for sale
iii. When the goods are sold by fraudulent act
Q-32. What are the essential elements of contract for sale of goods.
CMA Exam- Apr‘ 15
Answer.
The essential elements of contract of sale are as follows:
i. Movable goods: The sale of goods act deals only with movable goods. This act does not
applicable immovable goods.

ii. Money consideration: In a sale there must be money consideration . there must be a
contract for the exchange of movable goods for money . An exchange of goods for goods
is not sale.
iii. Two parties: Since a control of sale involves a change of ownership it follows that the
buyer and the seller must be different persons. A man cannot buy from or sell goods to
himself.
iv. Offer and acceptance: A contract of sale is made by an offer of by or sells goods for a
price and the acceptance of such offer.
v. Method of forming the contract: A contract of sale may be in writing or by word of

mouth. But important contract should be made in writing.
vi. Method of forming the contract: A control of sale may be in writing or by word of
mouth. But an important contract should be made in writing.
Q-33. “No seller can give the buyer a better title of good, than he himself has”.-
Explain. Write the exceptions of this rule.
CMA Exam- Apr‘ 15
Answer.
No seller can give the buyer a better title of goods than he himself has. The general rule in
that only the owner of goods can sell the goods. If a person transfer goods who is not
owner of that goods, the transferee gets no title. This gets no title. This rule is applicable to
both movable and immovable goods.
In case of movable goods. They suffer from certain exceptions. In following cases a
person who is not owner of the goods, can give the buyer a better title of goods:
i. Sale by one of several joint owners:

If one of several joint owners has the sole possession of goods, by permission of the co-
owners, the goods can be transferred to the buyer from such joint owner with a better title
ii. Sale of goods under a voidable agreement:

Where the seller of goods has obtained a possession of those goods under a voidable
agreement and the agreement has not been terminated at the time of sale, the buyer gets a
good title of the goods.
For example, X buys a ring from Y at a lower price by undue influence and sells it to Z
without notice of X‘s defective title. Here, Z gets a good title and Y cannot recover the
ring.
iii. An unpaid seller:

An unpaid seller of goods under certain circumstances can re-sell the goods. The
purchaser of such goods gets a valid title.

iv. Sale under the contract act:
The pledge may sell the goods of pledge or if the pledge or makes a default of his dues.
The purchaser under such a sale gets a goods title.
v. Sale by an agent:
Sale of goods by an agent gives the buyer a better title if it satisfied the following
conditions.
- The agent has the possession of goods
- Such possession is agreed by the owner
- The purchase has no notice that the agent had no authority to sell
Q-34. What is Promissory Note? What are the features of it?
CMA Exam- Apr‘15
Answer.
Promissory Note:
A promissory note is an instrument in writing ( note being a bank note or current note)
containing an unconditional undertaking signed by the maker to pay a certain sum of
money to order of a certain person or to the bearer of the instrument.
The features of promissory note:

ii. It must be signed by the maker of it
iii. It must contain a promise to pay
v. The amount may be payable either on demand or at a agreed time
vi. The promise to pay must be unconditional
Q-35. “A contract without consideration is void”-Discuss.
CMA Exam-Dec‘14
Answer.
A contract without consideration is void. Consideration is essential for the validity of a

contract. An agreement comes into existence when one or more persons promise to other
(s), to do or not to do something. Every promise forming the consideration for each other
leads to a contract.
an agreement which can not been forceable by law is not a contract. Contract must be

Q-36. Who are common carriers? Discuss in briefs the rights. What are the
characteristics that must be present to render a person liable as a common carrier?
CMA Exam- Dec‘14
Answer.
Common carrier:
A common carrier is one who carries goods for business and money. One who carries
goods occasionally is not a common carrier. Also one who carries goods of free in not a
common carrier.
The Common Carrier Act defines a common carrier as any individual, firm or company
who transport goods as a business for money over land or inland waterways without
discrimination between different parties.
The rights of a common carrier:
a) Not bound to carry goods:

A common carrier is not bound to carry goods under certain circumstances, i.c, when the
goods are dangerous
b) Entitled to reasonable charges:

He in entitled to reasonable charges for his work. He can demand a reasonable rate but
cannot demand unreasonably high payments from anybody. What is reasonable rate
depends on the circumstances of the case.
c) Steps for refusal of delivery:

If the consignee refuses to accept delivery of the goods, a common carrier has the right to
recover all reasonable expenses incurred by him.
d) Recover for damages:

The common carrier is entitled to recover damages from the consignor if the goods given
for carriage are dangerous and the carrier suffers from injury.
e) Refusal of delivery:
A common carrier has the right to refuse the delivery of goods is bound to indemnify the
owner in full for any loss or damage to the goods in course of carriage. The carrier is not
liable in the following cases:
When damage is caused by a natural calamity like storm

i) When damage is caused by the enemies of the state, i.e., during war
ii) When damage is caused by negligence of the consignor
iii) When there in a special agreement limiting the liability of the carrier.
The common carrier act divided goods into two categories: scheduled and non-scheduled.
Scheduled goods are valuable goods like gold, silver, etc. All other goods are non-
scheduled goods.

For scheduled goods exceeding Tk.100 in value, the common carrier is liable for all loss
and damage, if the loss or damage is due to a criminal act of the carrier.
In case of loss or damage, the claimant must inform the carrier within six months of the
date of knowledge of the loss or damage.
The characteristics of common carrier:
i. Nature of common carrier:

A common carrier may be one person, a firm ,a company or association of persons.
Railway being owned by the government can not be called a common carrier.
ii. Regular business:

If any carrier does not carry the goods regularly it is not called common carrier. To earn
money a common carrier should carry the goods as a regular business.
iii. Carrier charges:

If the goods are transported from one place to another free of charge it is not a common
carrier. It charges the fare for transporting the goods from one place to another.
iv. Services for all:

A common carrier provides the services of transportation to all the people. It cannot refuse
any person without any reasonable cause. If it reserves the right of rejection then it cannot
be called a common carrier.
v. Carriage of goods only:

Only goods are carried by the common carrier. Passengers are not allowed. If it carriers
passengers then it is not a common carrier.
Q-37. Differentiate between a sub-agent and a substituted agent.
CMA Exam- Dec‘14
Answer.
Sub- agent:
An agent appointed by an agent is known as sub-agent. A sub-agent is a person acts under
the control of the original agent. Here, the agent is responsible to the principal for the acts
of the sub-agent and the sub-agent is responsible for his acts to the agent.
Substituted agent:
Substituted agent is a person appointed by the agent according to the authorization of the
principal to act on behalf of the principal. Substituted agent is an agent of the principal and
he is responsible for his acts to the principal.
Q-38. What are the consequences of anticipatory breach of contract and warranty?
CMA Exam- Dec‘14

Answer.
The consequences of breach of contract:

i) If a condition to a contract of sale is broken, there may arise a right to avoid the contract.
ii) Where either party to a contract of sale avoids the contract before the date of delivery,
the other can claim for damages for the breach of contract.
The consequence of breach of warranty:

i) A breach of warranty gives a right to claim for damages but not gives a right to reject
the goods.
ii) Under certain circumstances a breach of condition is to be treated as a breach of
warranty.
iii) Where there is a breach of warranty by the seller, the buyer is not entitled to avoid the
contract, he can Claim for such breach of warranty.
Q-39. Define a contract of guarantee, Distinguish between a contract of indemnity

and contract of guarantee?
CMA Exam- Dec‘14
Answer.
The differences between contract of indemnity and contract of guarantee are as follows:
Contract of indemnity Contract of guarantee
1. A contract of indemnity is a contract by 1. A contract of guarantee is a contract to
which one party promises to save the other perform the promise of a third person in
party from loss caused to him by the case of his default.
conduct of the promisor himself or by the
conduct of any other person.
2. In contract of indemnity, there are two 2. In a contract of guarantee there are three
parties: the indemnifier and the indemnity parties: the creditor, the principal debtor
holder. and the surely.
3. In a contract of indemnity it is necessary 3. In a contract of guarantee it is necessary
to have only one contract between the to have three contracts between the
parties. parties.
4. Here, the liability of the indemnifier is 4. Here, the liability of the surety is
primary. secondary.
Q-40. What is a continuing guarantee- Explain with an example. How it is revoked?
CMA Exam- Dec‘14
Answer.
A guarantee which covers a series of transactions is called continuing guarantee. For

example, A is a tea dealer supplies tea to B from time to time. C guarantees the payment
of B to A. Here the guarantee given by C is a continuing guarantee.

A continuing guarantee can be revoked under the following circumstances.
i. If the surety gives notice of revocation, the continuing guarantee will be revoked
ii. The continuing guarantee will be revoked if the surety died
iii. A continuing guarantee is terminated under the same circumstances under which a
surety‘s liability is discharged.
Q-41. Explain “No consideration, no contract”.
CMA Exam-Apr‘14
Answer.

Q-42. Narrate exceptions of with examples “No consideration, no contract”.
CMA Exam- Apr‘14
Answer.
There are some exceptional cases where a contract is enforceable by law even though
there is no consideration. These are as follows:
1. Natural love and affection:
An agreement made without consideration is valid if it is done by a written document and

the document is registered according to the law and the agreement is made on account of
natural love and affection and the parties to the agreement hold a near relation to each
other. For example, A for natural love and affection promises to give Tk. 10,000 to his son
B. A puts his promise in writing to B and registers it. This is a contract.
2. Voluntary compensation:
An agreement made without consideration is valid if a person voluntarily done something

for another person. For example, A finds B‘s money bag and gives it to him. B promises to
give Tk.100 to A. This is a contract.
3. Agency:
No consideration is needed to create an agency.

Q-43. Differentiate between common carriers and private carriers. What are the
duties of a common carrier?
CMA Exam- Aug‘13
Answer.
Distinction between a common carrier and a private carrier:
Common Carrier Private Carrier

i. A common carrier is one who carries i. A private cattier is one who dies not do
goods for business and money regular business as a carrier.
ii. A common cattier is not an occasional ii. A private carrier is an occasional
carrier. carrier.
iii. A common carrier is bound to carry iii. A private carrier is not bound to carry
the goods of any person who is ready to to carry the goods of any person.
pay.
iv. The liabilities of a common carrier are iv. The liabilities of a common carrier are
determined by the common carrier act. not determined by the common carrier act.
The duties of a common carrier are as follows:
i) Must carry goods without discrimination: A common carrier is bound to carry the
goods of any person who is ready to pay without any discrimination.
ii) Within the prescribed time: The carrier must deliver the goods at the prescribed time.
If no time has been prescribed the goods must delivery within a reasonable time.
iii) With safety: The goods must be carried with reasonable safety.
iv) Act as insurer: According to the law a common carrier of goods is an insurer. He is
bound to indemnify the owner in full any loss or damage to the goods in course of
carriage.
Q-44. “All contracts are agreement but all agreements are not contract” Discuss with
a suitable example.
CMA Exam-Apr‘13
Answer.
All agreements are not contracts but all contracts are agreements. A contract is an
agreement enforceable by law made between two or more persons.
An agreement enforceable by law is a contract. Therefore in a contract there must be

- an agreement, and
- the agreement must be enforceable by law.

An agreement comes into existence when one or more persons promise to other (s), to do
or not to do something. Some agreements cannot be enforceable by law, such as an
agreement to go to a cinema. An agreement which can not be enforceable by law is not a
contract.
Q-45. Describe circumstances in which a contract would be enforceable without

consideration.
CMA Exam-Dec‘12
Answer.
There are some exceptional cases where a contract is enforceable by law even though
there is no consideration. These are as follows:
1. Natural love and affection:

An agreement made without consideration is valid if it is done by a written document and
the document is registered according to the law and the agreement is made on account of
natural love and affection and the parties to the agreement hold a near relation to each
other.
2. Voluntary compensation:
An agreement made without consideration is valid if a person voluntarily done something
for another person.
For example, A finds B‘s money bay and gives it to him. B promises to give Tk. 100 to A.
This is a contract.
3. Agency:
No consideration is needed to create an agency.
Q-46. “ Risk prima facio passes with property”- Discuss with at least two examples.
CMA Exam- Aug‘12
Answer.
Risk prima facio passes with property. The general rule is that risk passes with property. If
the goods are lost or damaged by accident or otherwise, the loss falls on the person who is
the owner at the time when the goods are lost or damaged.
The risk of goods remains to the seller until the ownership is transferred to the buyer.
After the ownership has passed to the buyer, the goods are at the buyers risk whether
delivery has been made or not.
Q-47. Differentiate between right of lien and right of stoppages in transit.
CMA Exam- Aug‘12

Answer.
Distinction between right of lien and right of stoppage in transit.
Right of lien Right of stoppage in transit

i. The right of lien is applicable to all
i. The right of stoppage in transit in
persons, solvent or insolvent applicable to the insolvent buyer.
ii. The right of lien is applicable to goods
ii. The right of stoppage in transit is
which are in the possession of the seller.
applicable to goods which are in possession
of the carrier.
iii. Lien means the right to retain the iii. Stoppage means the seller‘s right to re-
goods gain the goods.
Q-48. What is meant by crossing a cheque? Who can cross a cheque?
CMA Exam- Aug‘12
Answer.
Crossing a cheque:
When two parallel tines are putted across the face of a cheque, it is known as crossing a
cheque. A crossed cheque can be deposited in a bank account directly but can not be
encased immediately.
Who can cross a cheque:

A cheque can be crossed by the drawer, holder and bank for collection. The drawer can
cross a cheque generally or specially before issuing it. When two parallel lines are putted
across. when the name of bank is written between the parallel lines, it is called special
crossing. A cheque crossed generally can be paid by any bank to which it is presented. A
cheque crossed specially can be paid by the bank named between the parallel lines.
Q-49. What are the rules of a valid offer?
CMA Exam-Aug‘12
Answer.
The contract act contains various rules of a valid offer or proposal: These are stated below:
1. An offer may be express or implied:
An offer may be made in two ways:

i. by words, spoken or written and
ii. by conduct.
When an offer is made by statins in words or in writings, it is called an express offer.

When an offer is made by the conduct of a person, it is called an implied offer.

2. An offer may be specific or general:
An offer may be made to a definite person or to some definite class of persons. An offer
made to a definite person or to a definite class of persons is called specific offer. An offer
made to all persons is called general offer.
For example:
- A offers to sell his car to for Tk. 10 lac. It is a specific offer.
- A transport company runs car on the road to carry passengers at the scheduled fares. It is
a general offer by the company.
3. The terms of the offer must be certain, definite and unambiguous.
4. Legal relationship is required:

The offer must be one which is capable of creating a legal relationship between the parties.
An invitation to play cards can not create any legal relationship ,so it is not an offer.
5. An offer must be communicated to the offeree:

The person to whom the offer is made is called the offeree. A person can not accept an
offer unless he knows the existence of the offer. For example, A offers a reward to anyone
who returns his lost toy. B finds the toy and returns it to A without having heard the offer.
Here, B is not entitled to the reward.
Q-50. Differentiate between the terms misrepresentation and Fraud.
CMA Exam- Aug‘12
Answer.
Distinction between fraud and misrepresentation:
Fraud Misrepresentation
1. The term fraud includes all acts 1. Misrepresentation arises when the
committed by a person with a view to representation made is inaccurate but the
induce a man to believe that a thing is true inaccuracy is not due to any desire to
which is false. cheat the other party.
2. If the statement is dishonest, it is fraud. 2. If the statement is honest, even though
it was wrong, it is misrepresentation.
3. In case of fraud, the contract is voidable 3. In case of misrepresentation the
contract is not voidable
Q-51. “ Mental acceptance, is no acceptance”- Explain
CMA Exam- Apr‘12
Answer.
A mental acceptance is no acceptance. No contract is formed, if the office remains silent

and does nothing to show that he has accepted the offer. An acceptance must be
communicated to the offer or shown by conduct. The offeree may expert his acceptance by
word of mouth, telephone, telegram or by post. Where the offeror or prescribes a particular
made of acceptance, the offeree must follow the particular mode of acceptance.
For example: A person received an offer by letter. He acceptance and put it in his drawer.
It helds that there was no contract because the other party was not informed the
acceptance.
Q-52. What are the three types of delivery?
CMA Exam- Apr‘12
Answer.
Delivery means a voluntary transferor of possession from one person of another. Delivery
may be actual, symbolic or construction.
i) Actual delivery occurs when the goods themselves are delivered. Example: Some goods
are physically handed over to the buyer or to his agent.
ii) Symbolic delivery occurs when the buyer gets the means of obtaining possession.
Example: Certain goods may locked in the go down and the seller gives the key of the go
down to the buyer
iii) Constrictive delivery occurs when the passion of goods can be changed without any
change of the actual position of good can be changed without any change of the actual
position of goods. Example: The delivery of bill of lading with which goods may be
obtained
Q-53. Narrate the rules regarding sales by Auction.
CMA Exam- Apr‘12
Answer.
The following rules are to be followed regarding sale by auction:
i) Where goods are put for sale in lots, cash, lot is considered to be a separate contract of
sale
ii) The sale is completed when the auctioneer announces its completion and until such
announcement in made any bidder may revoke his bid
iii) A right to bid may reserve on behalf of the seller of such right is reserved, the seller
or any person on his behalf may bid at the auction
iv) There may be a reserved price, bellow which the goods will not be sold, the reserve
price may be kept success.
v) If the seller makes use of bide of raise the price, the buyer can avoid the sale .

Q-54. When a contract is said to be discharged? What are the various modes in
which a contract may be discharged?
CMA Exam- Apr‘11
Answer.
Discharge of a contract means termination of the contractual relationship between the

parties of a contract. When the contractual relationship between the parties of a contract is
terminated when the rights and obligation of the parties under the contract come to an end,
it is said to be discharged of a contract.
The various modes of discharge of a contract are as follows:
1. By performance:
When the parties of a contract perform the obligation of the contract, it is said to be
discharged by performance
2. By lack of acceptance:
A contract is discharged when a promisor made an offer of performance but it has not
been accepted by the promise.
3. By lapse of time:
A contract is discharged if it is not performed within a specific period of time.
4. By mutual agreement:
A contract can be discharged by mutual agreement of the parties.
5. By death of the promisor:

A contract is discharged if the promisor of the contract is died.
6. By insolvency:
When a party of the contract declares himself as an insolvent, his liability is discharged
from the date of insolvency.
Q-55. “Insurance contract are basically wagering agreements”. - Discuss.
CMA Exam- Dec‘10
Answer.
A wager is an agreement by which money is payable by one person to another on the

happening or non-happening of a future, uncertain event. The nature of wagering is that
one party is to win and the other party is to lose upon a future event, which at the time of
the contract remains uncertain.
Insurance contract are basically wagering agreements because it holds the following
wagering characteristics:

i) The consideration for the promise under an insurance agreement is to pay or get money
ii) The money is payable on the happening or the non-happening of an event.
iii) The agreement depends on a future and uncertain event.
iv) In this agreement no party has control over the event
Q-56. “Acceptance must be given by the person to whom the proposal is made”,
Discuss.
CMA Exam- Dec‘10
Answer.
A proposal can be accepted only by the person or persons for whom the proposal is made.
A proposal made to a particular person can only be accepted by him because he is the only
person intended to accept. A proposal made to a class of persons can be accepted by any
member of that class.
For example, suppose X sold his business to Y without informing the fact to his customer
Z. Z sent an order to x for goods. Y received this order and sent a letter of acceptance.
Here, there was no contract between Y and Z because Z never made any proposal to Y.
Q-57. What do you understand for „performance of contract‟?
CMA Exam- Apr‘10
Answer.
When the parties of the contract perform the obligation of the contract, the contract is said
to be discharged by performance of contract.
Q-58. What is the effect of refusal to accept performance by the promisee?
CMA Exam- Apr‘10
Answer.
When a promisor made an offer of performance but it has been refused to accept
performance by the promisee, the contract is said to be discharged by attempted
performance
Q-59. What is meant by free consent?
CMA Exam- Apr‘10
Answer.
When two or more persons agree the same thing in the same sense, it is known as tree
consent.

In order to be enforceable by law, an agreement must be based on the free consent of all
the parties. The consent is not free it the agreement is induced by coercion, undue
influence, mistake, misrepresentation and fraud.
Q-60. Discuss the contractual liability of a minor with reference to a leading case.
CMA Exam- Dec‘09
Answer.
The contractual liability of a minor is that the minor is not personally liable for the
payment of a reasonable price for necessaries supplies to the minor. Only the minor‘s
property is liable. The reasonable price is to be determined from the status and social
position of the minor. The price which the trader will get is reasonable price, not the price
―agreed to‖ by the minor.
For example, a trader supplies rice to a minor needed for his consumption. He can recover
the price from the minor‘s property.
Q-61. Define and distinguish between an Agent and the principal. Under what
circumstances an agency may be terminated?
CMA Exam- Dec‘09
Answer.
Definition and distinction between an agent and the principal:

An agent is a person employed to do any act for another. The person for whom such act is
done is called the principal. For example, A appoints B to buy a car on his behalf. Here, A
is the principal and B is his agent.
An agency may be terminated under the following circumstances:
i) Termination by notice:
The principal may by notice be able to terminate the authority of the agent. Similarly, the
agent by notice can terminate the business of agency. But the principal cannot terminate
the authority of an agent when the agent has an interest in the subject matter of the
contract or when the agent has partially exercised his authority.
ii) Termination by expiry of time:

When an agency is for a fixed period of time, it terminates on the expiry of that time.
iii) Termination by performance of the object:

When the agency is for a particular object, it terminates when the object is accomplished.
iv) Death of the principal or Agent:

Death of the principal or the Agent, terminates the agency.

v) Insolvency of the principal:
If the principal becomes insolvent the agency terminates. But insolvency of the Agent
does not terminate the agency.
Q-62. State the rule with regard to revocation of an acceptance.
CMA Exam- Aug‘09
Answer.
An acceptance can be revoked any time before the acceptance comes to the knowledge of
the offer or but not afterwards.
The rules with regard to revocation of an acceptance are stated below:
1. By notice:
If the offeree gives notice of revelation to the offeror before the acceptance is reached, the
acceptance comes to an end.
For example, X offers to sell his house to Y. Y accepts the offer and a letter of acceptance
is sent by post. Y then revokes his acceptance any time before the letter reaches to x.
When the proposer prescribes a time within which the acceptance must be given, the
acceptance revoke as soon as the time expires.
3. After expiry of reasonable time:

If no time has been prescribed, the acceptance lapses after the expiry of a reasonable time.
What is reasonable time will depend on the circumstances of the case.
4. By death:
An acceptance revoke by the death of the acceptor and if the fact of his death comes to the
knowledge of the offeror before acceptance
Q-63. Describe situations in which silence may constitute fraud.
CMA Exam- Apr‘09
Answer.
Silence may constitute fraud in case of following situations:
1. False statement
A false statement willing fully made is fraud.
2. Active concealment:
Non-disclosure is not fraud where the party is not bound to disclose all facts. But active
concealment is fraud.

For example, A sells by action to B a horse. The horse is unfound and A knows that. Here
A is not bound to disclose the fact to B. But if between A and B there is a near relationship
(i.e., if B is A‘s son), it is the duty to disclose the fact to B.
3. Intentional non-performance:
A promise made without any intention to perform it, is constitutes fraud.
Example: Purchase of goods without any intention of paying for it.
4. Omission:
Under the act, the seller of immovable proper) is bound to disclose all material defects to
the buyer. Failure to do so leads to fraud.
Q-64. Illustrate the modes of creation of agency. Can an agent delegate his authority?
Answer.
The modes of creation of agency:
Agency can be created by any of the following modes:
a) Agency by express agreement:

An agency may be created by express agreement. The agreement may be either oral
written.
b) Agency by implied agreement:

An agency may be created by implied agreement. Agency by estoppels and agency by
necessity are cases of implied agency.
c) Agency by estoppels:
Agency may be created by estoppels. When a man by his conduct induced others to
believe the certain person is his agent, this will be an agency by estoppels.
For example, X allows his servant Y to buy goods for him regularly on credit. One day the
servant buys some goods on credit. Not ordered by his master. Here X is responsible to the
shopkeeper for the price because Y in deemed to be his agent by estoppels.
d) Agency by necessity:
Circumstances sometimes force a person to act on behalf of another without any express
authority from him. In such cases an agency by necessity in said to be created.
Three conditions must be satisfied for the creation of agency by necessity:

i) It must be impossible to get the principles instructions.
ii) There must be an actual necessity to act on behalf of another.
iii) The agent of necessity must act honestly.
For example, the captain of a ship finds himself in a distant port without money. He
cannot communicate with the owner of ship. He can pledge the ship for obtaining money.

Delegation the authority of an agent:
The general rule is that an agent cannot delegate his authority or cannot appoint an agent.
An agent cannot employ another to perform acts which he has undertaken to personally.
But there are two exceptional cases to this rule where an agent can delegate his authority
or can appoint an agent:
a) When it is permitted by the authority with which the agency is concerned
b) When it is necessary because of the nature of the agency
Q-65. When the property passes from the seller to the buyer in a contract for sale of
goods?
Answer.
The property passes from the seller to the buyer in a contract for sale of goods under the
following circumstances.
i) Unascertained goods:
When there is a contract for the sale of unascertained goods, property in the goods is not
transferred to the buyer unless and until the goods are ascertained
ii) Specific goods:

When there is a contract for sale of specific goods, the property in the goods is transferred
to the buyer when the contract is made.
iii) When goods ate to be measured and tested:

When there is a contract for sale of specific goods and the seller is bound to measure, test
or do other some other act related to the goods for the purpose of ascertaining the price,
the property does not pass until such act is done.
iv) Delivery to the carrier:

When as the contract, the seller delivers the goods to the buyer or to a carrier for the
purpose of transferring the goods to the buyer, the property passes to the buyer.
For example, X sends certain goods to Y for delivery to W. The property passes to W as
soon as the goods are handed over to the carrier, Y.
v) Goods sent on approval:

When goods are delivered to the buyer on approval or other similar acts, the property
passes from the seller to the buyer.
Q-66. Define auction sale.
Answer.
Auction sale means a public sale where the seller make an invitation, intending buyers at a
prescribed place and offer the price to show their wiliness to purchase the goods. Such
offer is known as ‗Bid‘ and offerer is known as ‗Bidder‘.

Q-67. What are the rules relating to delivery?
Answer.
The sale of goods act, 1930 defines the following rules relating to delivery:
i) Possession of goods:
The delivery of goods sold may be made by transferring the possession of goods or
physically handed over the goods to its buyer or his agent.
ii) Place of delivery:

The goods sold should be delivered at the place at which they agreed to delivery at the
time of agreement to sell.
iii) Time of delivery:

Under the contract of sale, the seller is bound to deliver the goods to the buyer within a
reasonable time but o time to deliver them is fixed.
iv) Expenses of delivery:

If the buyer not agreed, the seller shall bear the expenses of delivery of goods sold and
other related expenses on deliverable stage.
v) Act for delivery:

The seller is not bound to deliver the goods sold until the buyer applies for delivery.
vi) Liability of buyer:

The buyer is liable to the seller for any loss incurred by his neglect or refusal to take
delivery.
Q-68. Write short notes on agency can play with interest.
Answer.
The principal may by notice be able to terminate the authority of an agent. Similarly, the
agent by notice can terminate the business of agency. But the principal cannot terminate
the authority of an agent when the agent has an interest in the subject matter of the
contract or when the agent has partially exercised his authority. This is known as agency
coupled with interest. For example, A gives authority to B to sell A‘s land. A cannot
revoke this authority.
Q-69. “Ignorance of law is no excuse”
Answer.
Ignorance of law is no excuse. The reason is that every man is presumed to know the law
of his own country and if he does not know, he must suffer from such lack of knowledge.
Therefore, mistake on a point of own country‘s law does not affect the contract. It is a

valid contract. But mistake on a point of foreign country‘s law affects the contract and this
contract can be avoided.
Q-70. “Consideration may be past, present or future”- Discuss
Answer.
Consideration may be past, present on future.
Past consideration:
When the consideration of one party is given before the date of promise, it is known as
past consideration. For example, suppose x does some work for Y in the month of January
without expecting any payment. In February Y promises to pay him some money. Here the
consideration of X is past consideration.
Present consideration:
When consideration is given with the promise is called present consideration. For
example, X buys an article from a shop and pays the price immediately. Here the
consideration of X is present consideration
Future consideration:
When the consideration of a promise is given at a future date, it is known as future
consideration.
Q-71. Explain the term „Fraud‟ as per the contract Act. What are its effects upon the
validity of a contract?
Answer.
The term ‗fraud‘ includes all acts committed by a person with a view to induce a man to
believe that a thing is true which is false.
The contract Act states that ‗fraud‘ means and includes false statement, active
concealment, intention to non-performance, omission, etc. A contract made by fraud is
voidable.
The aggrieved party can avoid the contract whenever inform the fraud. He can claim for
damages.
For example, A made an offer to B that he will sell his house for Tk. 50 lac. B accepted
this offer and purchase it. But A conceal that his house is in mortgage. B can avoid this
contract.
Q-72. “Mere silence as to facts is not fraud”. Explain with illustration.
Answer.
Mere silence as to facts is not fraud under the following circumstances:

1. The general rule is that mere silence is not fraud. For example, A and B are traders enter
upon a contract. A has private information of a change in price which would affect B‘s
willingness to proceed with the contract. Here, A is not bound to inform B.
2. If it is the duty of the person keeping silence.
3. If his silence is equivalent to speech. For example, A says to B, if you do not tell
anything, I shall assume that the horse is sound. A says nothing. Here, A‘s silence is
equivalent to speech.
Q-73. Under what circumstances a breach of condition is to be treated as a breach of

warranty?
Answer.
Under the following circumstances a breach of condition i to be treated as a breach of

warranty:
i) Voluntary waiver of a condition:

The buyer may accept to treat a breach of condition as a breach of warranty instead of
rejecting the contract. He may claim for damages.
ii) Compulsory waiver of a condition:

Where a contract of sale is not fully achievable and the buyer has accepted the goods or a
part of this, he cannot reject the contract but can claim for damages.
Q-74. Distinguish between sale and hire purchase Agreement
Answer.
Distinction between sale and hire purchase agreement:
Sale Hire purchase agreement

i. In a sale, the property is transferred to i. In a hire purchase agreement the buyer
the buyer and he can deal with the does not become owner till the full price is
property as he lies even if the price is paid.
unpaid.
ii. If the purchaser has no option to ii. If the purchaser has an option to
terminate the agreement by retuning the terminate the agreement by returning the
goods, the transaction is a sale. goods, the transaction is a hire purchase
agreement.
iii. Here the transferee of the purchase iii. Here the transferee of the purchase gets
gets a good title even if the price is no title till the full price is paid.
unpaid.

Q-75. Can a contract of sales be made for future goods?
Answer.
Future goods are the goods which will be produced or manufactured by the seller after
making a contract of sale. A contract of sale be made for future goods. When the transfer
of ownership is take place at a future time or some conditions to be fulfilled later, the
contract is called an agreement to sell. An agreement to shall become a sell when the
prescribed time elapses or the conditions are fulfilled.
For example, X agrees to sell Y all the mangoes which will be produced in his garden next
year. This is a contract of sale for future goods.
Q-76. State the Agency relationship between husband and wife.
Answer.
The general rule is that the wife is not an agent of her husband hand the husband is not an
agent of his wife. But one of them may be an agent of the other by appointment, because
of necessity.
Where wife lives with her husband, there is a legal rule that a wife has authority to pledge
her husband‘s credit for purchasing necessaries. But the rule is not applicable in the
following cases:
- Where the goods are purchased on credit.
- Where the fife is given sufficient money for purchasing necessaries.
- Where wife lives a part for no fault on her part, she has authority to pledge her husband‘s
credit for purchasing necessaries.
- Where wife lives apart for no fault on her husband‘s part, she has no authority to pledge
her husband‘s credit for purchasing necessaries.
Q-77. Distinguish among (i) Pledge (ii) Bailment and (iii) Hypothecation.
Answer.
Distinction among pledge, bailment and hypothecation are as follows:

Pledge Bailment Hypothecation
i. The bailment of goods i. A bailment is the i. The hypothecation is a
as security for payment of delivery of goods by one transaction in which money
a debt is called pledge person to another for some is lent on the security of
purpose, when the purpose movable property but the
is accomplished be property remains in the.
returned Custody of the owner of the
property.
ii. The bailer is called the ii. The person delivering ii. The owner of goods
pledge or and the bailey is the goods is called the which are hypothecated is
called the pledge. bailer and the person to called the hypothecated and
who these are delivered is the person to hypothecated
called the bailey is called the hypothecated
Q-78. Distinguish between Coercion and undue influence.
Answer.
Distinction between coercion and undue influence:
Coercion Undue Influence

i. Coercion is the threatening any person i. A contract said to be induced by undue
to com it an act or influencing with the influence where one of the parties influence
intention to enter in to an agreement. the will of the other and he influences to
obtain an unfair advantage over the other
ii. Generally, coercion takes place with ii. Generally, undue influence takes place
the use of physical force. with the use of mental pressure.
Q-79. What are the consequences of coercion?
Answer.
The consequences of coercion:

A contract induced by coercion is voidable. The aggrieved party can refuse to perform it.
The aggrieved party may, if heresies, abide the contract.
Special cases:
1. A tract to execute: A threat to execute a contract does not constitute coercion, Undue
influence, fraud, misrepresentation or mistake.
2. High prices and high interest vats: If is not coercion to charge high prices or high
interest rates.
3. A threat to commit suicide: A threat to commit suicide is not coercion because suicide
in not punishable by the law. Only the attempt to commit suicide is punishable. Therefore,
suicide is not a crime.
Q-80. State how offer is made revoked and accepted.
Answer.
An offer can be revoked under the following circumstances:
1. By notice:
If the offer or gives notice of revocation to the other party, the offer comes to an end. An
offer may be revoked any time before acceptance but not afterwards.
For example, A proposal in sent by X to Y and is accepted by Y by letter. The proposal

can be revoked any time before the letter of acceptance was posted but it cannot be
revoked after the letter is posted.

When the proposer prescribes a time within which the proposal must be accepted, the
proposal lapses as soon as the time expires.
3. By expiry of reasonable time:

When the proposer does not prescribe any time, the proposal lapses after the expiry of a
reasonable time. What is reasonable time will depend on the circumstances of the case.
4. By death:
An offer lapses by the death of the proposer, if the fact of his death comes to the
knowledge of the acceptor before acceptance.
5. Counter offer:
When a counter offer is given, the original offer lapse.
An offer can be accepted by the following ways:

An offer involves the making of a proposal. When one person signifies his willingness to
another to do any with a vice to obtaining the assent of that, he is said to make a proposal.
A proposal is also called an offer. When the person to whom the proposal is made signifies
his assent, the proposal is said to be accepted. A proposal when accepted becomes a
promise.
For example, X offers to sell his car to Y at the price of Tk. 5 lac. This is a proposal. If Y
agrees to buy the car at the price stated, the proposal is accepted and Y becomes the
acceptor.
Q-81. What is a bill of lading? What are the characteristics of a bill of lading?
Answer.
Bill of lading:
A bill of lading is a legal document between the shipper of goods and the carrier detailing
the type, quantity and destination of the goods being carried. The bill of lading also serves
as a receipt of shipment when the goods are delivered at the predetermined destination. It
is used as evidence that a carrier received goods from a shipper.
The characteristics of a bill of lading are as follows:

i. It is signed by the ship owner or his agent.
ii. It is an evidence of the contract for the carriage of goods.
iii. It is an evidence of the receipt of goods by the carrier.
iv. Some of the terms may be written down on the bill of lading
v. The ownership of goods can be transferred by delivering the bill of lading
Q-82. Distinguish between crossing a cheque with the words (i) Not negotiable and
(ii) Account page only.
Answer.

Distinction between crossing a cheque with the words not negotiable and accounts payee
only:
i) Crossing a cheque with the word not negotiable can be transferred by the payee. The
transferee will get the same rights on behalf of payment as the transferor had. A person
taking a cheque crossed generally or specially bearing in either case the words not
negotiable, shall not get and shall not be capable of giving a better title to the cheque than
the person from which he took it had.
ii) Crossing a cheque with the word account payee only indicate a direction to the banker
to credit the procecds of the chaeque to the cheque remains transferable. The words
account payee only suggests that the collecting banker shall receive the cheque only for
the payee and shall credit only to his account.
Q-83. What should the holder do when it is dishonored?
Answer.
When a bill of exchange is dishonored, the holder is entitled of claim for the recovers of
the amount due from the parties label to pay. He must give notice of dishonor to practice
against whom he inters to proceed.
Q-84. Explain the meaning of the term revocation of acceptance and communication
of revocation.
Answer.
Revocation of acceptance:
An acceptance can be revoked any time before the acceptance comes to the knowledge of
the proposer but not afterwards.
For example: X offers to sell his house to y. Y accepts the offer and sent a letter of
acceptance by post. Y may revoke his acceptance any time before the letter reaches to x.
Communication of revocation:
The communication of revocation complete-
- As against the person who makes it, when it is put into a course of transmission to the
person to whom it is made.
- As against the person to whom it is made, when it comes to his knowledge.
Q-85. Briefly discuss unilateral contract and bilateral contract.
Answer.
Unilateral contract:
In certain contracts one party has to fulfill his obligations whereas the other party has
already performed his obligations. Such a contract is called unilateral contract.

Bilateral contract:
For the purpose of making a contract, there must be at least two parties. Therefore all
contracts are bilateral or multilateral
Q-86. “There can not be a contract to make a contract”- comment.
Answer.
All contracts are made by the process of a lawful offer by one party and the lawful
acceptance of the offer by other party. For example, if A says to B, will you buy my house
for Tk. 50 lac? This is an offer. If B says yes, the offer is accepted and a contract is
formed.
An offer involves making of a proposal. When the person to whom the proposal is made
signifies his assent, the proposal is said to be accepted. When a proposal is accepted
becomes a promise. Offer alone and acceptance alone are powerless. When separate they
can not lead to the formation of a contract. But an offer together with acceptance leads to a
contract which is enforceable by law.
Therefore, there can not be a contract to make a contract.
Q-87. What essential conditions are necessary to convert a proposal into a promise?
Answer.
An offer involves making of a proposal. When one person signifies his willingness to
another to do or not to do form anything with a view to obtaining the assent of that, he is
said to make a proposal. The person making the proposal is called the ‗promisor‘. The
person accepting the proposal is called the ‗promisee‘. When the person to whom the
proposal is made signifies his assent, the proposal is said to be accepted. When a proposal
is accepted becomes a promise. A proposal may be removed for lack of acceptance or be
revoked before acceptance. Acceptance converts the proposal into a promise and then it is
too late to remove it. For example, if A says to B, will you buy my house for Tk. 50 lac?
This is a proposal. If B says yes, the proposal is accepted and becomes a promise.
Q-88. Distinguish between contingent contract and wagering agreement.
Answer.
Distinction between contingent contract and wagering agreement.

Contingent contract wagering agreement
1. A contingent contract is a contract to do 1. A wagering agreement is an agreement by
or not to do something. which money is payable by one person to
another on the happening or non-happening
of a future, uncertain event
2. A contingent contract is valid 2. A wagering agreement is void
3. In a contingent contract either party or 3. In a wagering agreement the parties have
both may have an interest in the subject no interest except getting or passing money

matter of the contract
4. Contingent contract may not contain 4. Wagering agreement contains reciprocal
reciprocal promises promises
5. For example, A agrees to pay Tk. 20 lac 5. For example, A agrees with B, if there is a
to B, if B‘s house is burnt. This is a rain on a certain day A will pay to B tk 500.
contingent contract. If there is no rain B will pay to A tk. 500.
Q-89. Why it is needed that a person must be of sound mind for the purpose of
making a contract. Explain with an illustration.
Or, “Parties to a contract must be competent to contract”. Explain
Answer.
One of the essential conditions for the validity of an agreement, all the parties to it must
have the capacity to enter into contracts and they must have a sound mind.
A person is said to be of sound mind for the purpose of making a contract if at the time
when he makes it, he is capable of understanding it and is capable of making a rational
judgment. A person who is usually of unsound mind, but occasionally of sound mind, may
make a contact when he is of sound mind.
The contract act states that every person is capable to enter into a contact who has attained
the age of majority according to the law and who is of sound mind and who is not
disqualified by law for making a contract.
The contract act follows that a person is not capable of entering into a contract under the
following circumstances:
i) If he has not attained the age of majority according to the law

ii) If he is not of sound mind, i.e. if he is a lunatic or an idiot or suffering from a similar
disability.
iii) If he is disqualified by law for making a contract.
For example, A person agreed to sell a property worth Tk. 25 lac for Tk. 10 lac. His
mother proved that he is an idiot and requested for cancellation of the contract. The court
holds the agreement as null and void.
Q-90. “A stranger to a contract cannot sue”. - Discuss.
Answer.
A stranger to a contract is one who is not a party to it. A stranger to a contract cannot sue.
It is a fundamental principle of law that only a person who is a party to a contract can sue
on it. For example, a contract between A and B cannot be enforced by C.
But a stranger to the consideration can sue to enforce it implies that he is a party to the
contract. For example, a contract between A, B and C whereby A pays money to B for
delivering goods to C can be enforced by C.

Q-91. What are the essential elements of a valid consideration?
Answer.
The following elements are essential of a valid consideration:
1. Desire of request of the promisor:

The person making the proposal is called the promisor. For a valid consideration, desire or
request of the promisor is essential. An act done without any request is voluntary act and
any voluntary act does not come into the definition of consideration.
For Example, A sees that B‘s house on fire and helps him. A cannot demand any payment
for his services because B did not requested him to help.
2. The consideration must be real:

The consideration must have some value in the eye of law. The impossible acts or non-
existing goods cannot support a contract.
3. The consideration must not be illegal, immoral or opposed to public policy
4. The consideration may be past, present or future:

When the consideration of one party was given before the date of the promise, it is said to
be past consideration. When the consideration moves simultaneously with the promise, it
is said to be present consideration. When the consideration is to move at a future date, it is
said to be future consideration. The consideration may be past, present or future.
5. Consideration may move from the promise:

The person accepting the proposal is called the ‗promise‘. Consideration may move from
the promise
Q-92. “An invitation to offer is not an offer”- Elucidate the statement.
Answer.
An invitation to offer is not an offer. An offer involves making of a proposal. The offer
must be one which is capable of creating a legal relationship between the parties. An
invitation to play cards cannot create any legal relationship, So it is not an offer. But if A
says to B, will you buy my house for Tk. 50 lac? This is an offer. Because it can creates
legal relationship.
A quotation of prices is not an offer, but an invitation for offer. A newspaper

advertisement inviting applications for a job is not an offer. A banker‘s catalogue of
various charges is not an offer. A railway time-table is not an offer. Therefore, if a train
does not work according to the table, the ticket holder cannot claim for breach of contract.
For example, in a shopkeeper a lable on a good shows Tk. 100. It is considered as to sell
the good at tk. 100. It is not an offer. But an invitation for offer.

Q-93. What are the legal rules as to acceptance?
Answer.
The legal rules as to acceptance are as follows:
1. All the terms of offer and acceptance should be specifically defined:

If there is any variation between the terms of the offer and the terms of the acceptance,
there is no contract.
2. Conditional acceptance:
An acceptance with variation is no acceptance, it shows as a counter offer, which must be
accepted by the original offer or before a contract is made. For example, X offered to sell
his house for Tk. 50 lac to Y. Y said accepted for Tk.30 lac. This is not an acceptance but
a counter offer.
3. The acceptance must be expressed in some reasonable manner:

The offeree (the person to whom the offer in made) may express his acceptance by word
of mouth, telephone, telegram or by post. An offer may also be accepted by conduct.
4. Mental acceptance or uncommunicated acceptance is no acceptance:

No contract is formed if the offeree remains silent. Acceptance must be communicated to
the offeror. For example, a person received an offer by letter. He accepted the offer and
wrote a letter of acceptance and put the letter in his drawer. There was no contract because
the other party was not informed about the acceptance.
5. The mode of acceptance:

When the offeror prescribes a particular mode of acceptance, the offeree must follow the
particular mode of acceptance. For example, if the offeror says, a letter of acceptance to be
sent by telegram, the offeree must send a telegram.
6. Time of acceptance:
If the offeror prescribes a time, the acceptance must be done within that time. If no time is
prescribed, the acceptance must be done within reasonable time. What is the reasonable
time depends on the facts of the case.
Q-94. “ A contract can be void ab-initio” - Discuss
Answer.
Any contract the object of which is unlawful in illegal. Such contracts are void ab-initio:
A contract is an agreement enforceable by law made between two or more persons. A
contract the object of which is illegal cannot be enforceable by law and the contract which
cannot be enforceable by law is void ab-intio. Therefore in a contract there must be
- an agreement, and
- the agreement must be enforceable by law
- the object of an agreement must be legal.

Q-95. “ The law of contracts is not the whole law of agreements.” Discuss.
Answer.
The law of contracts is not the whole law of agreement because it does not deal with all
the agreement. It deals with the right and obligation of those agreements which can be
enforceable by law.
All agreements are not contract. An agreement enforceable by law is a contract. An

agreement comes into existence when on or more persons promise to another or others, to
do or not to do something. Some agreements cannot be enforceable by law, such as an
agreement to go to a cinema. An agreement which cannot be enforceable by law is not a
contract. The law of contract is the law of agreement which is enforceable by law.
Q-96. What do you mean by breach of contract? What are the remedies for a breach
of contract?
Answer.
If any party of a contract refuses or fails to perform the act of contract, it is said to be a
breach of contract.
A breach of contract comes into existence when it becomes impossible for any party of a
contract to perform his obligation.
The remedies for a breach of contract:

The contract is not discharged under the following cases:
Default of a third party:

A contract is not discharged if it cannot be performed because of the default of a third
party on whose work the promisor relied.
Partial impossibility:
A contract is not discharged in case of impossibility of some of the objects of the contract.
Difficulty of performance:
A contract is not discharged if its performance has become more difficult, more expensive
or less profitable than that agreed on the date of execution of the contract.
Strikes and lockouts:

A contract is not discharged by strikes and lockouts.
Q-97. Distinguish among void contract, voidable contract and void agreement.
Answer.
Distinction among void contract, voidable contract and void agreement:

Void contract Voidable contract Void agreement
1. A void contract is a 1. A Voidable contract is a 1. An agreement which
contract which was valid contract which is cannot be enforceable by
when entered into but after enforceable by law at the law is a void agreement.
that become void due to option of one or more
impossibility of parties of a contract but not
performance for changing at the option of other or
of law or other reason. others.
2. It is void because of 2. It is void because the 2. It is void because of
missing any essential consent of a party is not mistake, lack of
element of a contract. face. consideration, etc.
3. It is void ab-initio. 3. It is valid until the 3. It is void ab- initio.
aggrieved party refuses it.
4. It cannot be enforceable 4. It is enforceable until 4. It cannot be enforceable
by any party of the the aggrieved party refuse by law.
contract. it.
5. It can never become a 5. On the expiry of a 5. It can become a valid
valid contract. reasonable time it may agreement when
become a valid contract enforceable by law.
Q-98. Distinguish with examples among (i) void contract (ii) voidable contract and
(iii) illegal agreement.
Answer.
Distinction among void contract, voidable contract and illegal agreement:
Void contract voidable contract Illegal agreement

1. A void contract is a 1. A voidable contract is a 1. An illegal agreement is
contract which was valid contract which is one which is against a
when entered into but after enforceable by law at the law.
that become void due to option of one or more
impossibility of performance parties of a contract but
for changing of law or other not at the option of other
reason. or others.
2. It is void because of 2. It is void because the 2. It is void because of
missing any essential element consent of a party is not unlawful consideration
of a contract free
3. It is void ab-initio 3. It is valid until the 3. It is void ab- initio.
aggrieved parties refuse
it.
4. It cannot be enforceable by 4. It is enforceable until 4. It cannot be
any party of the contract the aggrieved parties enforceable by law
refuse it.
5. It can never become a valid 5. On the expiry of a 5. It can become a valid
contract reasonable time it may agreement when
become a valid contract. enforceable by law.
6. For example, the contract 6. For example, X coerces 6. For example, an
of marriage become void Y into entering a contract Agreement to murder,
become of death of a party of for sale of Y‘s house to X robbery, or cheating 936.
the contract. .Then contract can be
avoided by Y.
Q-99. Distinguish among (i) voidable agreement (ii) void agreement (iii) Enforceable
agreement.
Answer.
Distinction among voidable agreement, void agreement and enforceable agreement:

Voidable agreement Void agreement Enforceable agreement
1. A voidable agreement 1. A void agreement is one 1. An enforceable
is one which can be which cannot be agreement is one which can
avoided enforceable by law be enforceable by law and
both of the parties
2. It is valid until the 2. It is void ab-initio 2. It is not void
aggrieved party refuses it.
3. It is enforceable until 3. It cannot be enforceable 3. It can be enforceable by
the aggrieved party by any party of the contract law
refuges it.
4. On the expiry of a 4. It con never becomes a 4. It is a valid contract.
reasonable time it may valid contract.
become a valid contract
Q-100. Distinguish between a void agreement and an illegal agreement.
Answer.
Distinction between a void agreement and illegal agreement:

Void agreement Illegal agreement
1. A void agreement is one which 1. An illegal agreement is one which is
cannot be enforceable by law against a law.
2. It cannot be enforcement by any patty 2. It cannot be enforceable by law
of the contract.
3. It can never become a valid contract. 3. It can become a valid agreement when
enforceable by law.
4. A void agreement may not be illegal 4. An illegal agreement is void.
Q-101. Discus protection to paying banker and collecting banker
Answer.
Protection to paying banker:

A banker is protected if a cheque is paid under ―a payment in due course` the customer‘s
account can be debited with the money paid , Here, the banker is not liable if the payment

has been made to money wrong person the ( such as, where the holder has obtained the
cheque dishonestly or by theft).
Where a cheque is expressed to be payable to its bearer, the banker should pay the amount
mentioned on the cheque to its bearer and he is not liable in case of wrong payment.
In case of a crossed cheque, it is not duty of the paying bank to see that the money reaches
the true owner.
Protection to collections banker:

A banker who received payment for a customer of a cheque crossed generally or specially,
to him, shall not liable to the true owner in case the title to the cheque finds defective.
The collecting banker is not liable to pay compensation to the true owner, if following
conditions are satisfied:
- The collecting banker acts in good faith and without negligence.
- The collecting banker acts on behalf of the customer, i. c., a person having an account
with the book on dealing regularly with it.
- The cheque is a crossed cheque
- The banker is acting as an agent for collecting the cheque.
Q-102. When do you think a banker (i) may refuse (ii) must refuse to pay a cheque?
Answer.
i) A banker may refuse to pay a customer‟s cheque under the following

circumstances:
a) If there is insufficient fund of drawer and there is no arrangement for overdraft.
b) If the cheque is not properly submitted
c) If the signature of drawer does not match with the specimen signature
d) If the cheque is not presented at the branch in which the customer has an account
e) If the cheque is not presented within banking hour.
f) If the cheque contains unsigned alteration.
ii) A banker must refuse to pay a customer‟s cheque under the following
circumstances cheque under the following circumstances:
a) If the customer instructs the banker not to pay
b) If after the issue of a cheque the customer dies and the bank receives the notice of
death.
c) If the customer becomes insolvent and the bank receives the notice of in slovenly
d) If the customer informs the bank that the cheque is lost.
e) If the customer has assigned his credit balance and the bank receives the notice of that
fact.
Q-103. Discuss various kinds of endorsement with reference to qualified

endorsement.
Answer.

Endorsement means signature of the holder made with the object of transferring the
document.
There are two kinds of endorsement:
1. Endorsement in full:
When the endorser (the person who makes the endorsement) mentions the name of the
person to whom the money of an instrument is to be paid, it is known as endorsement in
full.
2. Endorsement in blank:
When the endorser does not mention the name of the person to whom the money of an
instrument is to be paid, it is known as endorsement in blank.
Q-104. When the presentation for acceptance of a bill of exchange not necessary?
Answer.
The presentation for acceptance of a bill of exchange is not necessary in the following
cases:
i. If the maker or acceptor prevents the presentation for acceptance of the bill of exchange
ii. It the instrument being payable at his place of business
iii. If the drawer may not suffer from the want of such presentment
iv. If the drawer waives his right to take advantage of any default in presentation for
acceptance
v. If after maturity, with knowledge that the instrument has not been presented, the
presentation for acceptance is not necessary to make payment whole or a part due on the
instrument
Q-105. Discuss “once a bearer instrument always a bearer instrument”.
Answer.
Once a bearer instrument always a bearer instrument. If a negotiable instrument is payable

to its bearer, it is a bearer instrument. The holder of such instrument may negotiate it by
delivery only. But, if the holder endorses it especially to a person and makes it payable by
the order of such person, the instrument cannot be paid by the order of any person except
the person to whom it is endorsed but the instrument remains transferable by delivery.
For example, X the payee of an instrument endorses it in blank and delivers it to Y. Y

endorses it to Z. Z without any endorsement transfers it to M. M a s the bearer of the
instrument is entitled to receive payment.
Q-106. “Consideration in negotiable instruments is presumed”. Explain.
Answer.

Consideration in negotiable instruments is presumed. The negotiable instruments Act
presume the followings regarding a negotiable instrument:
i. Every negotiable instrument is made or drawn for consideration
ii. Every negotiable instrument bearing a date was made or drawn on such date
iii. Every negotiable is transferable before its maturity.
iv. The holder of a negotiable instrument is a holder in due course.
v. A lost of negotiable instrument must be duly stamped
Q-107. Define arbitration. What matters can and what matters cannot be referred to
arbitration?
Answer.
Arbitration:
Arbitration means the settlement of a dispute by referring the dispute to a third party and
abiding by his decision. All matters which can be decided by a civil court can also be
decided by arbitration. Arbitration is often used to resolve conflict diplomatically to
prevent a more serious confrontation. Examples include disputes about property or money.
Matters personal right and disputes which cannot be decided by civil courts, cannot be
decided by arbitration. The following matters cannot be referred to arbitration:
i. Matrimonial matters like divorce
ii. Insolvency matters
iii. Criminal matters
Arbitration a suit: After a suit is filed, the parties may decide to settle the matter by
arbitration.
Q-108. Discuss the different types of methods of arbitration.
Answer.
The different types of methods of arbitration:
i. Arbitration without the intervention of the court:

In this case the arbitration procedure take place outside the court and the court does not
interfere with the arbitrator.
ii. Arbitration through court:

Where there is an arbitration agreement but no suit is pending, any of the parties may
apply to the court for filing the arbitration agreement. The court there upon issues notice to
the other parties requiring them to show because why the agreement should not be filed.


নিযেয়
যমািাই঱ঃ ০১৭১১১৩৭০৩৯

PART- B
INDUSTRIAL LAWS
Q-1. Write short notes on Civil Liability for Occupational Injuries.
CMA Exam- June‘16
Answer.
Workers often sustain an injury or contract a disease arising out of their employment.
Workemen's Compensation Act 1923 states that employers must pay a certain amount of
money into a central fund each month for occupational injuries. The amount depends on
how dangerous the industry is, how many workers are employed in the company and the
wages paid to the workers. This fund is called the Compensation Fund. If workers are
injured at work or get a disease caused by their work (occupational disease), they get paid
out of this fund. It is not always necessary for the worker to be able to identify a specific
event or date of injury for the claim to be compensable. This is because some injuries are
not easily identifiable. For example, a person who works in a coal mine, cement factory,
foundry, or motor vehicle manufacturing plant, and as a result of the dirty, dusty, oily air,
contracts a lung disease would never be able to identify a specific traumatic event that
caused the condition, or a specific date of injury or disease.
Q-2. What are the prevailing rules for health & safety at work? What are the
remedies to employees if not complied by employers?
CMA Exam- June‘16
Answer.
The prevailing rules for health & safety at work:

Health and Safety at Work Act 1974 make provisions for securing the health, safety and
welfare of persons at work, for protecting others against risks to health or safety in
connection with the activities of persons at work, for controlling the keeping and use and
preventing the unlawful acquisition, possession and use of dangerous substances, and for
controlling certain emissions into the atmosphere. The prevailing rules of health and safety
at work are pointed below:
(1) It shall be the duty of every employer to ensure, so far as is reasonably practicable, the
health, safety and welfare at work of all his employees.
(2) Without prejudice to the generality of an employer‘s duty under the Act, the matters to
which that duty extends include in particular—
a) the provision and maintenance of plant and systems of work that are, so far as is
reasonably practicable, safe and without risks to health;

b) arrangements for ensuring, so far as is reasonably practicable, safety and absence of
risks to health in connection with the use, handling, storage and transport of articles and
substances;
c) the provision of such information, instruction, training and supervision as is necessary

to ensure, so far as is reasonably practicable, the health and safety at work of his
employees;
d) so far as is reasonably practicable as regards any place of work under the employer‘s
control, the maintenance of it in a condition that is safe and without risks to health and the
provision and maintenance of means of access to and egress from it that are safe and
without such risks;
e) the provision and maintenance of a working environment for his employees that is, so
far as is reasonably practicable, safe, without risks to health, and adequate as regards
facilities and arrangements for their welfare at work.
The remedies to employees if not complied by employers:

If the employers not ensure the health and safety at workplace the employees should be
demotivated employee. They feel lack of security during the working hour and it will leads
to less productivity and labour unrest.
Q-3. Write short notes on:

(a) Unfair and Wrongful Dismissal of Employee;
(b) Independent Contractor;
(c) Quasi Contract.
CMA Exam- June‘16
Answer.
(a) Unfair and Wrongful Dismissal of Employee:

Unfair dismissal is when an employee is dismissed from their job in a harsh, unjust or
unreasonable manner. The Fair Work Commission (the Commission) decides on cases
of unfair dismissal.
Wrongful dismissal, also called wrongful termination or wrongful discharge, is a legal

phrase, describing a situation in which an employee's contract of employment has been
terminated by the employer, if the termination breaches one or more terms of the contract
of employment, or a statute provision in employment law.
(b) Independent Contractor:

An independent contractor is a natural person, business, or corporation that
provides goods or services to another entity under terms specified in a contract or within
a verbal agreement. Unlike an employee, an independent contractor does not work
regularly for an employer but works as and when required, during which time he or she
may be subject to law of agency. Independent contractors are usually paid on

a freelance basis. Contractors often work through a limited company or franchise, which
they themselves own, or may work through an umbrella company.
(c) Quasi Contract:

A quasi contract is an agreement between two parties without previous obligations to one
another that has been created and legally recognized by the court system. Under a quasi-
contract, neither involved party is expected to create such an agreement; this contract is
arranged and imposed by a judge to correct a circumstance in which one party acquires
something at the expense of the other party.
Q-4. Who is a collective bargaining agent (CBA)? How is a CBA elected to the office?
Discuss.
CMA Exam- June‘16
Answer.
Collective bargaining agent:

A collective bargaining agent (CBA) is a person who is appointed or _ elected by a union
to represent the group of workers.
Election procedure:
The executive director of the board, or a designee, upon signed request a public employer
alleging that one or more public employees or public employee organizations have
presented to it a claim to be recognized as the representative of a collective bargaining unit
of a public employees, or upon signed petition of at least 30% of a bargaining unit of
public employees that they desire to be represented by an organization, shall conduct a
secret ballot election to determine whether the organization represents a majority of the
members in the bargaining unit. Such an election may be conducted at suitable work
locations.
Q-5. Describe the role of a CBA in settlement of industrial dispute.
CMA Exam- June‘16
Answer.
Collective bargaining is a key means through which employers and their organizations and
trade unions can establish fair wages and working conditions. It also provides the basis for
sound labour relations. Typical issues on the bargaining agenda include wages, working
time, training, occupational health and safety and equal treatment. The objective of these
negotiations is to arrive at a collective agreement that regulates terms and conditions of
employment. Collective agreements may also address the rights and responsibilities of the
parties thus ensuring harmonious and productive industries and workplaces. Enhancing the
inclusiveness of collective bargaining and collective agreements is a key means for
reducing inequality and extending labour protection.

Q-6. Distinguish between discharge and dismissal. What do you mean by
retrenchment?
CMA Exam- June‘16
Answer.
Distinction between discharge and dismissal:
Discharge Dismissal
i. It is end of service contract with mutual i. It is termination of service as a
understanding. disciplinary action taken by management
against a delinquent.
ii. After getting confirmation if any ii. Dismissal is a capital punishment giving
employee done a misconduct, if it is to any employee of the organization after
proved by the enquiry officer after having having conducted enquiry. For this
conducted enquiry we can discharge the punishment employer need not give
employee from the services of the gratuity to the employee. Since it is a
company. capital punishment.
iii. It is termination of service mainly on iii. It is a termination which is inflicted as
medical grounds like continued ill health, a punishment on the delinquent.
partial/total permanent disablement and
cases like that.
Retrenchment is
- the reduction of costs or spending in response to economic difficulty.

- the action of dismissing an employee from a job.
- reduction in the extent or quantity of something.
Q-7. Define misconduct. Describe the punishment for misconduct.
CMA Exam- June‘16
Answer.
Misconduct:
Misconduct is any kind of bad, unethical, or illegal activity. When there's misconduct,
someone is doing something wrong. Since conduct is behavior, misconduct is behavior
that's not quite right: some kind of shady or criminal conduct. For example, if an
accountant cooked the books - lied about finances - that's misconduct. A police officer
taking a bribe is guilty of misconduct. Often, misconduct specifically refers to someone
who does improper things on behalf of someone else, like the misconduct of a dishonest
lawyer.
The punishment for misconduct:

An employee may be suspended for a maximum of 14 days on half pay. Any subsequent
extension of the suspension period shall be on full pay. However, if the employee is found

not guilty, the 14 days held during the first period of suspension will have to be reinstated
in full.
Q-8. Discuss the right to and liability for payment of maternity benefit.
CMA Exam- June‘16
Answer.
The right for payment of maternity benefit:

i. Pregnant employees have the right to 52 weeks maternity leave.
ii. 39 weeks could be paid which may be Statutory Maternity Pay, Maternity Allowance or
contractual maternity pay.
iii. Pregnant employees are protected against unfair treatment and discrimination.
iv. During maternity leave an employee and employer can agree to have up to 10 keeping
in touch days.
v. Employees are entitled to paid reasonable time off for antenatal care.
vi. Women returning to work following Maternity Leave have the right to return to the
original job or suitable alternative.
The liabilities for payment of maternity benefit:

i) Subject to the provisions of the Maternity Benefit Act, 1961, every woman shall be
entitled to, and her employer shall be liable for, the payment of maternity benefit at the
rate of the average daily wage for the period of her actual absence, that is to say, the
period immediately preceding the day of her delivery, the actual day of her delivery and
any period immediately following that day.
ii) The maximum period form which any women shall be entitled to maternity benefit
shall be twelve weeks of which not more than six weeks shall precede the date of her ex
delivery.
Q-9. What types of first aid appliances the factory authorities are bound to provide
for?
CMA Exam- June‘16
Answer.
Following types of first aid appliances the factory authorities are bound to provide for:
i. Water type extinguisher:

The water type extinguisher consists of a cylindrical shaped outer container which is made
of mild steel and treated for anti-corrosion, which contain 9 liters of water. The container
is pressure tested at a pressure of 350 lbs. Psi (24 bars approximately). It has an expansion
space.
ii. Foam extinguisher (Mechanical):

Foam is a frothy substance entirely consisting of bubbles and these bubbles contain either
CO or Air. Mechanical way of producing foam is by self aspiration of a foam solution

through a foam making branch pipe by mechanical means and it will produce 72 to 90
liters of foam.
iii. Dry chemical powder extinguisher:

Various types of dry chemical powders were used for many years. Powder commonly used
for class B & C type fires are usually based on sodium bicarbonate. Potassium bicarbonate
powder is also used in many countries. Powder for dealing with carbonaceous (class A)
fires as well as class B fires known as general purpose one based on ammonium
phosphates. All dry powders are treated to improve their flow and reduce caking.
Q-10. Write short note on i) Dismissal ii) Social Security Compensation
CMA Exam- Dec‘15
Answer.
i) Dismissal:
Dismissal (referred to informally as firing or sacking) is the termination of
employment by an employer against the will of the employee. Such a decision can be
made by an employer for a variety of reasons, ranging from an economic downturn to
performance related problems on the part of the employee. At the time of dismissal, the
employer must show a valid reason that can be justified. To be dismissed, as opposed to
quitting voluntarily (or being laid off), is often perceived as being the employee's fault.
ii) Social Security Compensation:

Social Security Compensation is paid out monthly to retired workers and their spouses
who have, during their working years, paid into the Social Security system. Social Security
Compensation is also available to qualifying individuals who are completely and
permanently disabled, and are determined by a specific and rigid set of criteria issued by
the Social Security Administration.
Q-11. Distinguish between an employee and an independent contractor.
CMA Exam- Dec‘15
Answer.
Distinction between an employee and an independent contractor:

Employee Independent contractor
1. Performs work, under the direction and 1. Has a high level of control in how the
control of their employer, on an ongoing work is done.
basis.
2. Generally works standard or set hours. 2. Under agreement, decides what hours to
work to complete the specific task.
3. Usually has an ongoing expectation of 3. Usually engaged for a specific task.
work.
4. Bears no financial risk. 4. Bears the risk for making a profit or loss
on each task.
5. Tools and equipment are generally 5. Uses their own tools and equipment.
provided by the employer, or a tool
allowance is provided.
Q-12. State penalty for employment of child & adolescent.
CMA Exam- Dec‘15
Answer.
The penalty for employment of child & adolescent:
The original child labour law banned employment of children below 14 in only 18
hazardous industries. The amendments also make it clear that children between 14 and 18
years will also not be allowed to work in hazardous industries.
The changes in the labour law also provide for stricter punishment for employers for
violation. While there is no penalty provision for parents for the first offence, the
employer would be liable for punishment even for the first violation.
In case of parents, the repeat offenders may be penalised with a monetary fine up to
Tk.10,000. In case of first offence, the penalty for employers has been increased up to two
and half times from the existing up to Tk.20 thousand to up to Tk.50,000 now.
In case of a second or subsequent offence of employing any child or adolescent in

contravention of the law, the minimum imprisonment would be one year which may
extend to three years.
Earlier, the penalty for second or subsequent offence of employing any child in
contravention of the law was imprisonment for a minimum term of six months which may
extend to two years.
Q-13. State rules regarding canteen.
CMA Exam- Dec‘15
Answer.
The rules regarding canteen:
i. Provide a large room with sufficient space to be able to accommodate all employees
going on a break at any given time.
ii. Ensure that there's sufficient natural or artificial lighting.
iii. Install ceiling fans or air conditioning to ensure that the canteen is well ventilated, cool
and comfortable.
iv. The flooring should be easy to clean and non-slip.
v. Arrange tables and chairs with good housekeeping principles in mind and in an orderly
fashion.

vi. Provide an information board to display the daily menus and other relevant
information.
vii. Display canteen rules and regulation to inform the diners regarding how to behave, for
example, to wash hands before meals.
viii. Train canteen staff in food preparation, hygiene, food safety, food service and
housekeeping.
ix. The food handlers should wear clean and neatly pressed uniforms daily, which are
different from the factory workers uniforms.
x. Food servers should always wear hairnets and gloves.
xi. Ensure food handlers wash their hands with a sanitiser regularly.
Q-14. Discuss the provision workers of entitlement of festival holiday.
CMA Exam- Dec‘15
Answer.
Every worker shall be allowed at least eleven days festival holidays with full wages in a
year. The days and dates for such festivals may be fixed by the employer. A worker may
be asked to work on a festival holiday but in that case he shall be entitled to two days
leave with full wages and another alternative holiday according to section-103.
Q-15. Discuss illegal strikes and lockouts.
CMA Exam- Dec‘15
Answer.
Illegal strikes:
Illegal Strike is a strike that is called in violation of law. An illegal strike ignores cooling-
off period restrictions or an absolute statutory ban. Such strike is entered without regard to
the no-strike agreement of the union.
The following strikes are illegal:

i. Intermittent strikes, involving the constant repetition of short strikes in which the
employees attempt to pressure the employer to concede to their demands while still
receiving wages;
ii. In-facility or "sit down" strikes, in which the striking employees take possession of the
employer's property and block others from entering;
iii. Recognitional or organization picketing when the employer has lawfully recognized
another union, or when a valid election has been conducted within the preceding 12
months;
iv. Secondary boycotts, in which the employees picket a neutral employer; and
v. Violence and mass picketing.
Lockouts:
Lockout means temporary shutdown of the factory by the employer, but not winding up
(permanent) of the factory. Lockout of the factory maybe happened due to the failure
in the management affected by internal disturbances or maybe by external disturbances.
Internal disturbances maybe caused when the factory management goes in to financial
crisis or got succumbed into financial debts, disputes between workers and workers,
disputes between workers and management or may be caused by ill-treatment of workers
by the management. Sometimes factory lockouts may be caused by external influences,
such as unnecessary political parties involvement in management of workers union may be
provoked for unjustified demands that may be unaffordable by the management, which
may ultimately lead to lockout of the factory. Factory lockout is procedural aspects
governed by the labour legislation of that country. Lockout of the factory is a major issue,
which affects workers as well as management and cannot be initiated for a simple reason.
Q-16. Short Notes:

(i) Maternity benefit;
(ii) Minimum Wage-Board;
(iii) Lay-off & Lock-out;
(iv) Collective Bargaining Agent.
CMA Exam- Dec‘15
Answer.
(i) Maternity benefit:
Maternity Benefit is a payment made to women who are on maternity leave from work.
An employee should apply for the payment 6 weeks before she intend to go on maternity
leave. If she is already on certain social welfare payments then you may get half-rate
maternity benefit.
Some employers will continue to pay an employee, in full, while she is on maternity leave
and require her to have any maternity benefit paid to them. An employee should check
contract of employment to see what applies to her.
(ii) Minimum Wage-Board:
Minimum Wages Board is a Statutory Body established under the Minimum Wages
Ordinance, 1961. Minimum Wages Board Comprises of a Chairman (Secretary Labour
and Human Resource is ex-officio the Chairman of the Board), a Secretary (BS-18), one
Research and Statistical Officer (BS-17).
The major functions of the Board are:-

i. To recommend minimum rates of wages for all classes of workers (skilled and unskilled
etc.) in any grade in any particular industry pursuance of the directions given by the
Provincial Government under Section 5 of the Ordinance.
ii. To carry out periodical revision of minimum wages fixed by the Provincial Government
for both the above categories of workers due to changes in the economic conditions and
cost of living and make suitable recommendations to the Government in this regard.
However, such review cannot be made earlier than one year and later than three years
from the date of fixation of the relevant rates of minimum wages.

(iii) Lay-off & Lock-out:
Lay-off:
A lay-off is the temporary suspension or permanent termination of employment of
an employee or more commonly, a group of employees (collective layoff) for business
reasons, such as personnel management or downsizing an organization. A layoff is not to
be confused with wrongful termination. Laid off workers or displaced workers are workers
who have lost or left their jobs because their employer has closed or moved, there was
insufficient work for them to do, or their position or shift was abolished. Usually a layoff
occurs as a cost-cutting measure.
Lockout:
Lockout means temporary shutdown of the factory by the employer, but not winding up
(permanent) of the factory. Lockout of the factory may be happened due to the failure in
the management affected by internal disturbances or maybe by external disturbances.
Internal disturbances may be caused when the factory management goes in to financial
crisis or got succumbed into financial debts, disputes between workers and workers,
disputes between workers and management or may be caused by ill-treatment of workers
by the management. Sometimes factory lockouts may be caused by external influences,
such as unnecessary political parties involvement in management of workers union may be
provoked for unjustified demands that may be unaffordable by the management, which
may ultimately lead to lockout of the factory.
(iv) Collective Bargaining Agent:
Collective Bargaining Agent is an acronym more often used to refer to the collective
bargaining agreement, or the union contract. Labor unions are designated as the bargaining
agent for employees only upon an official vote, which is a process mandated by the
National Labor Relations Act.
Q-17. Briefly discusses the provisions in the Bangladesh Labor Act, 2006 for the
protection of the interest of the children.
CMA Exam- Dec‘14
Answer.
The provision in the Bangladesh labor Act, 2006 for the protection of the interest of the
children are briefly discussed below:
No child shall be employed or permitted to work in any occupation or establishment

unless-
i) a certificate of fitness in the prescribed form is granted to him b, a registered medical

practitioner
ii) shall apply cither as an apprentice or for the purpose of receiving training

Q-18. What kind of activities of workers are called conviction & misconduct?
CMA Exam- Aug‘14
Answer.
The following activities of a worker are called conviction & misconduct as per the
Bangladesh labour Act, 2006:
i. Fraud or dishonesty in connection with the employers business or property

ii. Taking or giving bribe
iii. Habitual absence without leave
iv. Breach of any law or rule applicable to the establishment
v. Willful negligence of work
vi. Falsifying or damaging of employers official record.
vii. Willful late attendance
Q-19. Discuss the procedure of settlement of an industrial disputes.
CMA Exam- Apr‘14
Answer.
The procedures for settlement of an industrial dispute:
i. If at any time an employer or a collective bargaining agent finds that an industrial

dispute may arise between the employer and the employer or the collective bargaining
agent shall communicate his views in writing to the other party
ii. The other party within fifteen days of receipt the communication shall arrange a
meeting with both of the parties to reach a settlement
iii. If a settlement is arrived, a written memorandum of settlement shall be prepared and

signed by both parties. A copy of such settlement shall be sent to the government by the
employer
iv. If the other party received the communication fails to arrange a meeting within the
prescribed time or if no settlement is made within thirty days of the first meeting or within
extended time agreed by both the parties, any of the parties can request conciliator toy
referring the matter to settle the dispute
v. The conciliator within ten days if the receipt of such request shall arrange a meeting
with both of the parties for settlement
vi. If settlement is arrived the conciliator shall send a report to the government with a
written memorandum of settlement signed by both parties.

vii. If the conciliator fails to settle the dispute, he shall try to agree both the parties to refer
the dispute to an Arbitrator for a settlement
viii. If the parties do not agree to refer the dispute to Arbitrator, the conciliator within
three days for such failure to the parties
ix. If the parties agree to refer the dispute to an Arbitrator for settlement, a joint request by
both the parties in writing shall be sent to the Arbitrator
x. The decision of the Arbitrator concerned with the dispute shall be final and no appeal
shall be applicable against it
Q-20. Briefly state the different kinds of leave provisions as stated in Bangladesh
BLA – 2006.
CMA Exam- Dec‘13
Answer.
The different kinds of leave entitled to a worker in the labor Act, 2006 are described
below:
a) Casual leave:
Every worker shall be entitled to casual leave with full ways for ten days in a calendar
year and such leave shall not be carried forward to the succeeding year.
b) Sick leave:
i. Every worker except a news paper worker shall be entitled to sick leave with full ways
for fourteen days in calendar year
ii. Every news paper worker shall be entitled to sick leave with half wages for not less than
one eighteen of the period of services
iii. No such leave shall be allowed unglued registered medical partition after examination,
certifies that the worker is ill and needs sick leave for treatment for such period specified
by him.
iv. Such leave shall not be carried forward to the succeeding year.
c) Annual leave with wages:

Every adult worker, who has completed continuous service of one year in an establishment
shall be allowed to leave with wages for the subsequent period of twelve months on the
following ways:
i. In case of a commercial or industrial establishment or factory worker, one day for every
eighteen days of work.
ii. In case of news paper worker, one day for every eleven days of work.
iii. Every worker who is not an adult, who has completed continuous service of one year in
an establishment shall be allowed to leave with ways for the subsequent period of twelve
months on the following ways:
iv. in case of a commercial or industrial establishment, one day for every fourteen days of
work

Q-21. Discuss the liability of a Garment Owner in respect of safety of the workers as
per the BLA 2006.
CMA Exam- Aug‘13
Answer.
The liability of a Garment Owner in respect of safety of the workers as per the BLA 2006
are discussed below:
1. Fencing of machinery:
The machinery must be securely fenced. The following machinery must be fenced to be
safe:
- every part of an electric generator
- A motor
- Every dangerous part of any other machinery
2. Work on machinery in motion:

There are some machinery remains in motion while work on it. Such machinery must be
examine before work and while in motion. Such examination must be carried out by a
specially trained adult male worker. He must wear fitting clothes.
No woman or young person shall be allowed to clean or adjust any part of the machinery
while the machinery is in motion. The Act states that following machineries are
dangerous:
- Power supply machine
- Printing supply machine
- Cutting machine
- Press machine, etc
3. Protection of eyes:
In respect of such manufacturing process carried on in a factory which involves a risk to
the eyes because of excessive light, the Bangladesh labour Act 2006 requires that an
effective screen shall be provided for the protection of eyes of the person employed on the
process.
Q-22. Describe the provisions of (i) Interval for rest or meal and (ii) Weekly hours as
per the BLA – 2006.
CMA Exam- Aug‘13
Answer.
i) The provision of interval for rest or meal as per BLA - 2006:

a) A worker in any establishment shall not be liable to work for more than six hours in a
day unless he has been provided an interval of at least one hour during that day for rest or
meal

b) A worker in any establishment shall not be liable to work for more than fire hours in a
day unless he has been provided an interval of at least half an hour for rest or meal.
ii) The provision of weekly hours as per BLA - 2006:

a) No young worker shall be required or allowed to work in an establishment for more
than forty eight hours in a week
b) An adult worker may work for more than forty eight hours in a week but the total hours
of work shall not exceed Sixty hours in a week
Q-23. What are the conditions of employment as per the Bangladesh Labour Act
2006?
CMA Exam- Apr‘13
Answer.
The conditions of employment as per the Bangladesh labour Act, 2006 are as follows:
i. In every establishment, employment of workers shall be regulated in accordance with
the provision of the act
ii. The service rule of the establishment shall be submitted for approval by the employer of
such establishment to the chief inspector,
iii. No service rule can be applied with our, the approval of the chief inspector.
iv. Any person disagree with the order of the chief inspector may within 30 days of the
receipt of the order, may appeal to the government and the order of the government on
such appeal shall be final.
Q-24. What are the deductions which may be made from wages?
CMA Exam- Apr‘13
Answer.
Following deductions are to be made from wages:
1. Deductions for absence from duty:

i. If an employed person is absent at the place where he is required to work, he is
considered as absence from duty and a deduction from wages shall be applicable
ii. If the employed person present at the working but refuses to carry out his work for any
reason which is not reasonable, he is deemed to be absent from duty and deduction from
wages shall be made.
iii. If the Employed person is absent to his duty without due notice and without reasonable
cause, he is also considered as absence from duty and a deduction form wages can be
made.
iv. Deduction from wages shall be made only for the period at which he is considered to
be absent from duty.

2. Deductions for recovery of advances:
i. Deductions form wages are permitted of recovery of advances
ii. Deductions are applicable for adjustment of overpayment of wages
iii. Deductions for recovery of an advance given before the employment of an employee
shall be made from the first payment of wages
iv. No deduction shall be made for recovery of an advance given as travelling expenses
Q-25. What are the objectives of industrial law? Discuss briefly its necessity in an
export-oriented industry.
CMA Exam- Dec‘10
Answer.
The objectives of industrial law:

i. To protect the health of workers
ii. To provide safety of workers
iii. To ensure the welfare of workers
iv. To maintain a good relation between employers and employees
v. To improve the living standards of workers
The necessities of industrial law in an export oriented industry:

i. Workers in industry have to done their work on risk. They can be injured by moving
parts of machines if protective measures are not taken. Therefore laws are necessary for
their safety.
ii. Applying the industrial law is necessary for the protection of labor because an
individual worker is economically week.
iii. The law is necessary to encourage and facilitate the workers
iv. The law is necessary for managing industrial disputes which may arise between
employers and employers
v. The industrial law is needed for the formation of workers association or trade union.
Q-26. State the provisions of health and hygiene as described in the Labor Act 2006.
CMA Exam- Dec‘10
Answer.
The provision of health and hygiene are stated below as described in the Labor Act 2006.
1. Cleanliness:
a) Every factory shall be kept clean
b) Accumulation of dust shall be removed daily by any effective method form the floors
and benches of work rooms

c) The floor of every work room shall be cleaned at least once in a week by washing
d) Internal and external walls, partition and roof shall be well painted.
e) Every walls, partition and roof shall be re-painted at least once in every three years.
f) Effective means of drainage shall be provided and maintained
2. Ventilation and temperature:

a) Effective and suitable provisions shall be made for securing and maintaining adequate
ventilation in every work room of a factory.
b) The walls and roofs should be of such material that the temperature can be kept as low
as possible.
c) Every work room should maintain proper way for circulation of fresh air
d) Every work room should contain enough space to work comfortably.
3. Air:
In any factory in which the humidity of the air is artificially increased, the water used for
humidification shall be taken from a public supply or other source of drinking water and
shall be effectively purified before use. If the water is not so purified, the inspector of the
factory may specify the measures necessary for purifying the water.
4. Lighting:
a) In every part of a factory, where workers are working or passing, there shall provided
and maintained sufficient lighting natural or artificial or both.
b) In every factory all glazed windows that are used for lighting of the work room shall be
kept clean on both the out and inside.
5. Drinking water:
a) In every factory, effective arrangement shall be made to provide and maintain sufficient
supply of drinking water.
b) All such points where drinking water is supplied shall be clearly marked ―Drinking
water‖ in Bangla.
c) In every factory where 250 or more workers are employed proper arrangement shall be
maintained for cooling the drinking water during the hot weather by effective manner.
6. Sanitation:
a) In every factory sufficient latrines san urinals shall be provided
b) Such latrines and urinals shall be provided separately for male and female workers
c) Such latrines and urinals shall be adequately, lighted and ventilated
d) All latrines and urinals shall be maintained in a clean and sanitary condition at all times.
Q-27. When does an individual dispute become an industrial dispute?
CMA Exam- Dec‘10
Answer.
When any employer dismisses, retrenches or terminates the services of an individual

worker, any dispute or difference between that worker and his employer connected with
such dismissal, retrenchment or termination shall be deemed to be an industrial dispute.

A dispute with an individual worker may become an industrial dispute if the worker is
supported by other worker or the Trade Union
For example,
An individual worker wrote a letter to the employers in very polite language requesting
him additional bonus. If the request is refuse and industrial dispute may arise from the
refunds between the worker and the employer.
Q-28. What are the provisions laid down in the Bangladesh labor Act, 2006 for
establishment of participation fund & welfare fund? Discuss how the fund is
managed?
CMA Exam- Aug‘09
Answer.
The provisions laid down in the Bangladesh labor Act, 2006 establishment of participation
fund and welfare fund are as follows:
i. Every company shall establish a workers participation fund and a workers welfare fund
in accordance with the provisions of the Act within one month of the date on which the
provision become applicable to it.
ii. Every company shall pay to the participation fund and welfare fund five percent of the
net profit as 80:20 proportion respectively.
Management of funds:
After establishment of the participation fund and the welfare fund, as soon as possible, the
trusted board shall be constituted with members as mentioned below:
i. Two persons elected by the collective bargaining agent. If there is no collective

bargaining agent in the company, two persons elected by the workers of the company from
among themselves.
ii. Two persons elected by the management of the company of whom at least one shall be
a person from the accounts department of the company. Then the members shall elect a
chairman for one year form among themselves. The board shall manage the funds in
accordance with the provision of the Act.
Q-29. Who is responsible for the payment of wages? What are the deductions which
may be deductible from the wages according the Bangladesh Labour Act, 2006?
CMA Exam- Aug‘09
Answer.
Every employer is responsible for the payment of wages to workers employed by him. The
Act states that, if a worker is employed by a contractor, the chief Executive officer, the

manager or any other, such person is responsible for the payment of wages to the worker.
If the worker employed by a contractor or a chief Executive officer is not paid by such
person the wages shall be paid by the employer of the establishment and the same shall be
adjusted form the contractor or the chief executive officer.
Followings are the deductions which may be deductible form the ways according to the
Bangladesh Labor Act, 2006:
i. Deductions for absence from duty.
ii. Deductions for damage or loss of goods that is done for his negligence.
iii. Deductions for damage or loss of money for which he is required.
iv. Deductions for recovery of advance or loans.
v. Deductions of income tax payable by the worker.
vi. Deductions required to be made by the order of a court.
Q-30. What is the procedure for punishment of a worker?
CMA Exam- Aug‘09
Answer.
The procedures for punishment of a worker are as follows:
1. No order of punishment against a worker shall be made unless:

a) the blame against him is recorded in writing
b) he is given a copy of such blame
c) he is given not more than seven days to explain
d) he is found guilty after enquiry
e) the employer or the manager approves the such order
2. An order or punishment shall be made in writing
3. For an enquiry, the accused worker may be helped by any person nominated by him
who is employed in the establishment
4. If in the enquiry, any oral evidence is given against any party, the evidence shall be
cross examined
5. If after enquiry, a worker is found guilty and is punished, he shall not be entitle to his
wages for the period of punishment.
6. In case of punishment, a copy of the order stating such punishment shall be provided to
the worker concerned.
Q-31. Define industrial establishment as per Bangladesh Labor Act, 2006.
CMA Exam- Apr‘09
Answer.

Industrial establishment means an establishment where several activities are carried on in
an establishment activity one or some of such activities is or are industry or industries.
If any unit of such establishment is servable form the other unit, such unit shall be
considered as a separate industrial establishment.
If any unit of such establishment is not severable form the other unit, the entitle unit shall
be considered as an industrial establishment.
Q-32. Briefly state the different kinds of workers and the period of probation.
Answer.
The different kinds of workers:
i. Apprentice:
If a worker is employed in an establishment as a learner and is paid an allowance during
the period of his training, he is known as apprentice.
ii. Badly worker:

If a worker is employed in an establishment in the post of a permanent worker or during
the period who is temporarily absent, he is known as a badly worker.
iii. Casual worker:

If a worker is employed in an establishment to work occasional and irregular basis, he is
known as a casual worker.
iv. Temporary worker:

If a worker is employed in an establishment for a limited period of time, he is known as a
temporary worker.
v. Probationary worker:
If a worker is provisionally employed in an establishment to fill a permanent vacancy of a
post and has not completed the period of his probation, is known, as probationary worker.
vi. Permanent worker:

If a worker is employed in an establishment without a predetermined time limit and who
has satisfactorily completed the period of his probation, is known as permanent worker.
The period of probation:

The period of probation for a worker whose function is of clerical nature shall be six
months and for other workers such period shall be three month.
If a worker whose service has been terminated during his probationary period, is again
appointed by the same employer within a period of three years, shall be considered as a
probationer unless appointed on a permanent basis and the period of his earlier probation
shall be counted for determining the total period of probation.

Q-33. What are the precautions against dangerous fumes and in case of fire?
Answer.
Precautions against dangerous fumes:

i. In any factory no person shall be permitted to enter into a tank or pipe or other space in
which dangerous fumes may present, unless t is provided with a manhole of adequate size
or other effective means of exit.
ii. No person in any factory shall be permitted to enter into a tank or pipe, until all
reasonable measures have been taken to remove any fumes which may present.
iii. No person in any factory shall be permitted to enter into a boiler tank, until it has been
sufficiently cooled.
iv. If any gas or fume presents in such tank or pipe, no light or lamp shall be permitted to
be used there in.
Precaution in case of fire:

i. In every factory, effective measures shall be taken to prevent unexpected fire and its
spread both internally and externally
ii. The doors of exit from any room shall not be locked so that the workers of a factory can
easily and immediately open it from the inside
iii. In every factory, every window, door or other exit means in case of fire shall be
marked in a language understood
iv. There shall be provided an effective and clearly audible means of giving warning in
case of fire to every person employed in the factory
v. Effective measures shall be taken to ensure that all workers are familiar with the means
of escape in case of fire
vi. Adequate training shall be provided to the workers that need to be followed in such
cases.
Q-34. Discuss the special provision of dangerous operation as per Factories Act, 1965.
Answer.
The Factories Act, 1965 states special provision of dangerous operation for the purpose of
controlling and regulating factories which carry on manufacturing process or operation
may leads to a worker to serious risk of bodily injury or disease.
The following provisions shall be applicable:

i. Such work shall be done by adult male worker
ii. The worker carried out a dangerous operation must be specially trained.
iii. No woman or young person shall be allowed to carried out the dangerous operation
iv. Effective measures shall be taken to avoid the danger
v. payment of fees for medical examination shall be provided by the employer
Q-35. Discuss the provisions of the Factories Act, 1965 regarding holidays and daily
working hours.
Answer.

The provision for holidays:
i. An adult worker employed in a commercial establishment or industrial establishment

shall be allowed to enjoy one and a half days holiday in each week
ii. An adult worker employed in a factory shall be allowed to enjoy one day holiday in
each week
The provisions for daily working hours:
No adult worker shall be required on allowed to work in an establishment for more than
eight hours in a day.
Any such worker may work in an establishment more than eight hours but not exceeding
ten hours in a day.
Q-36. Discuss the provision of „Time of Payment‟ of wages in the payment of wages
Act, 1936.
Answer.
The provisions of ‗Time of Payment‘ of wages in the payment of wages Act, 1936 are
discussed below:
i. In a factory or industrial establishment in which less than 1000 persons are employed,
wages must be paid before the expiry of seven days after the last day of wages period. In
all other factories or industrial establishment, wages must be paid before the expiry of the
of ten days from the last day of the wages
ii. Where the employment of an employee in terminated by the employer, the ways earned
by him shall be paid before the expiry of second working day form the day on which his
employment is terminated.
iii. All payment of wages must be made on a working day.
Q-37. Mention the express and implied terms of a contract of employment.
Answer.
All employees have an employment contract, which can be verbal, written or a

combination of both. It is better to have a written contract of employment so that the
conditions of employment are recorded. The contract should cover the following terms:
- the main duties of the employee,

- the location of the employment site,
- whether the employee is casual, part-time or full-time,
- the normal hours of work and whether the employee is entitled to payment for overtime,

- the level of salary or wages including whether the employee is entitled to pay rises upon
certain occurrences, including cost of living increases, national wage increases, increments
for age or years of service,
- whether the job is for a fixed period or is ongoing,
- whether there is a probationary period and the period of probation, and
- where there is a probationary period, or where the position is for a fixed period but is
renewable, the form of the review process.
Q-38. What are the rights and duties of employers and employees?
Answer.
The rights of employers:

a) To determine whether the person can perform the inherent requirements of the job.
b) To identify if any reasonable adjustments may be needed, either in the selection and
recruitment process or in the work environment and role.
c) To establish facts for entitlements such as sick leave, superannuation, workers‘
compensation and other insurance.
The duties of employers:

a) Provide and maintain a safe workplace, machinery and equipment.
b) Prevent risks from use of any article or substance and from exposure to physical agents,
noise and vibration.
c) Prevent any improper conduct or behaviour likely to put the safety, health and welfare
of employees at risk.
d) Provide instruction and training to employees on health and safety.
e) Provide protective clothing and equipment to employees (at no cost to employees).
f) Appoint a competent person as the organisation‘s Safety Officer.
The rights of employees:

a) A safe and healthful workplace
b) To ask the employer to correct dangerous conditions.
c) To participate in enforcement inspections.
d) To not be discriminated against for exercising the health and safety rights.
e) To refuse work that puts the employee in immediate danger of serious harm.
f) To get information from the employer about organisation standards, worker injuries and
illnesses, job hazards and workers' rights.
The duties of employees:

a) Obey a lawful, reasonable order within the terms of the contract of employment
b) Serve faithfully
c) Co-operate with the employer
d) Perform duties with proper care and diligence
e) Not to misuse the confidential information acquired while in service.
Q-39. State the provision of fines as per the payment of wages Act, 1936
Answer.

The provision of fines as per payment of wages Act, 1936 are stated below:
i. An employed person can be fined only for acts which are specified in a list which is
approved by the government or the proper authority
ii. The list must be exhibited in the place of work
iii. Before the fine is applied on the employed person, he must be given an opportunity of
showing cause against the fine.
iv. No fine is applicable to a person who is below the age of 15
v. No fine can be recovered by installment
vi. No fine can be recovered after the expiry of 60 days from the day on which it was
imposed
vii. All fines shall be recorded in a register


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CMA Exam- June‘16

A contract is a voluntary arrangement between two or more parties that is enforceable at

A contract is like a promise between people. It is an understanding, a deal between two or

The essential elements of a valid simple contract:

Writing: An oral contract is sometimes difficult to prove. Therefore important agreements

Commercial & Industrial Laws 6

CMA Exam- June‘16

An agreement enforceable by law is a contract. Therefore in a contract there must be

Q-3. “No consideration, no contract”– Explain the statement with examples.

CMA Exam- June‘16

A contract without consideration is not a contract. Consideration is essential for the

CMA Exam- June‘16

The key features of ―Sale of Goods Act 1930‖:

1. Title or the seller‟s right to sell the goods:

Commercial & Industrial Laws 7

3. Quality of the goods:

4. Fitness of the goods:

Q-5. What is misrepresentation in terms of Contract Act 1872? How can an

CMA Exam- June‘16

A misrepresentation is a false statement of fact or law which induces the representee to

Avoiding agreement due to misrepresentation:

Commercial & Industrial Laws 8

CMA Exam- June‘16

The essentials of contract of sale are as follows:

2. Money consideration: In a sale there must be money consideration. There must be a

5. Method of forming the contract: A contract of sale may be in writing or by word of

6. Method of forming the contract: A control of sale may be in writing or by word of

Q-7. What are the exceptions to the doctrine of Caveat Emptor?

CMA Exam- June‘16

The exceptions to the doctrine of caveat emptor:

i. Purchase by samples and description:

Commercial & Industrial Laws 9

iii. Usage of trade:

iv. Consent by fraud:

CMA Exam- June‘16

CMA Exam- June‘16

Commercial & Industrial Laws 10

CMA Exam- June‘16

The cheque is issued towards discharge of a debt or legal liability.

CMA Exam- June‘16

The provision of law for crossing a cheque after issue:

CMA Exam- June‘16

Following marks or symbols cannot be registered as trade mark:

Q-13. “Arbitration Agreement” – what does it mean? State the essentials of

CMA Exam- June‘16