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MANAGEMENT
By RAHAT AZIZ
IBA - CEE
WORKSHOP SCHEDULE
ON
CONTRACT MANAGEMENT
DAY - 1
SESSION
START
TIMINGS
9:00 - 09:30 AM
TOPICS
REG./INTRODUCTION
SESSION 1
9:30 - 11-00 AM
CREATION OF CONTRACT
(LEGAL ASPECT)
*Annexures Attached
11:00 - 11:30 AM
DISCHARGEMENT OF
CONTRACT
(LEGAL ASPECT)
*Annexures Attached
SESSION 2
11:30 01:30 PM
01:30 02-30 PM
SESSION 3
02:30 03:30 PM
SPECIALIZED CONTRACT
SPECIAL SESSION
(BY TAHIR SARTAJ)
03:45 -04:45 PM
FINANCIAL RISK
*Annexures Attached
Rahat Aziz
IBA-
IBA - CEE
WORKSHOP SCHEDULE
ON
CONTRACT MANAGEMENT
DAY - 2
SESSION
SESSION 4
TIMINGS
9:00 11:00 AM
TEA BREAK
11:00 - 11:30 AM
SESSION 5
11:30 01:30 PM
01:30 02-30 PM
SESSION 3
02:30 03:30 PM
TERMS (CONTINUED)
SPECIAL SESSION
(BY JUSTICE (R) SHAHID
ANWER BAJWA)
03:45 -04:45 PM
ENFORCEMENT ASPECT
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TOPICS
SPECIALIZED CONTRACT
(CONTINUED)
*Annexures Attached
*Annexures Attached
IBA-CEE
CONTRACT ACT
1872
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CREATION OF CONTRACT
DEFINITION:
An agreement enforceable by law is a contract.
Contract = Agreement + Enforceability
Promise S.2(b)
Consideration
Ss.2c/25
Capacity S.11
Consent S.13
Lawful Object S.24
Writing & Registration
Expressed
Implied
Executed
Executory
Contingent Contracts
S.31
Quasi Contracts S.68-72
PROMISE/AGREEMENT
PROMISE = OFFER + ACCEPTANCE
LEGAL RULES REGARDING A VALID
OFFER
Nature of Consideration:
Goods: Definition:
Means
every
kind
of
moveable
property
other than actionable claims
and money; and
includes electricity,
water, gas, stock and shares, growing
corps, grass and things attached to or
forming part of the land which
are
agreed to be severed before sale or
under the contract of sale
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TRIPS:
Trade related intellectual
properties.
Copy Right:
The Copy Right Ordinance,
1962.
Trade Mark:
The Trade Marks Ordinance,
2001.
Patents:
The Patents Ordinance, 2000.
Registered
Design: Registered
Design
Ordinance,
2000.
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CAPACITY
S.11 lays down that a person is incompetent to
Artificial
Disqualification
Registered
Object
Soundness of mind
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FREE CONSENT
The complainant must prove that if he had known the truth, or had
not been forced to agree, I would not have entered into the
contract.
Forced consent has two further vitiating elements:
In all these 4
Coercion (Section 15)
cases, there is
no free
Undue influence (Section 16)
consent and
the contract is
Truth has two further vitiating element.
voidable at the
Fraud (section 17)
option of the
party whose
Misrepresentation (Section 18)
consent was so
cause.
> When the consent is caused by bilateral mistake, the agreement is
void (section 20)
> A contract is not voidable merely because it was a unilateral
mistake as to matter of fact (Section 22).
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Design.
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IBA-CEE
CLASSIFICATION OF CONTRACT
On the basis of creation, a typical contract can
be classified as:
Express
Creation
Implied
Creation
IBA-CEE
CLASSIFICATION OF CONTRACT
BASED ON EXECUTION
Execute
d
Executor
y
Executed Contract:
A Contract in which the task or action has been
completed by one or both the parties. The parties
are said to be discharged of the contract.
Executory Contract:
A contract in which a task or action is yet to be
completed or partially completed.
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ENFORCEABILITY OF A
CONTRACT
C. A of 1872 S.2(g)
An agreement not enforceable
by law is to be void.
C. A of 1872 S.2(h)
An agreement not enforceable
by law is a Contract.
VOID CONTRACTS
VOIDABLE CONTRACTS
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CONTINGENT CONTRACTS
S. 31 of CA 1872 defines:
A contingent contract is a contract to do or
not to do something, if some event, collateral to
such contact does not happen.
Example
A Contract to sell B 10 gadgets for Rs. 10,000/-, if
the ship by which they are coming returns safely.
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QUASI - CONTRACTS
Under certain special circumstances obligations
resembling those created by contract are
imposed by law although the parties have never
entered into the contract. Such obligations
imposed by law are referred to as Quasi Contracts.
S. 68 -72 of CA 1872 further elaborate such
contract and gives guidelines about its
applications
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Discharge:
(Ways)
DISCHARGEMENT
By Performance
By Mutual Agreement
By Supervening
Impossibility
By Operation of Law
Ss 37-63
By Lapse of Time
By Breach of Sec. 73
Contractual Remidies
Damages
Specific
Performance.
Injunction
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Ss 73-75
IBA-CEE
DISCHARGEMENT
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DISCHARGEMEN
T
By Lapse of
Time
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By Mutual
Consent
By
Supervenin
g
Impossibilit
y or
illegality
IBA-CEE
PERFORMANCE
As the word itself is self- explanatory, when both
Example:
(1) Transfer of Property in case of sale agreement.
(2) Delivery of goods in case of shipment contracts.
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MUTUAL AGREEMENT
Again the word being self-explanatory, a contract
NOVATION
ALTERATION
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RESCISSION
In other words Cancellation
of existing Contract
IBA-CEE
SUPERVENING IMPOSSIBILITY
As per S. 56 CA 1872, any agreement which
APPLICATION INVALID
1. Difficulty of performance
2. Commercial impossibility
4. Change of Law
5. Outbreak of War
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BY OPERATION OF LAW
MERGER
When an inferior
Contract merges
into a Superior
one
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OPERATIO
N OF LAW
INSOLVANCY
When one of the
parties become
insolvent and
court passes
order of
discharge
IBA-CEE
LAPSE OF TIME
Contract may be
discharged by
By operation of
Limitation Act.
If contract is not
performed within
prescribed time,
provided that time is
of essence in that
particular contract.
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BREACH
Breach brings an end to the obligations created by the
ANTICIPATORY
It occurs before the time
fixed for performance of
Contract.
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ACTUAL
It occurs when a party fails
to perform his/ her
obligations upon the date
fixed for performance by
Contract.
IBA-CEE
CONTRACTUAL REMEDIES
SPECIFIC
PERFORMANCE
NON- FINANCIAL
Remedies
(Specific Relief Act
1877)
Whenever
there is a
Breach of
Contract
agreed party
may be
entitled to
INJUNCTION
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DAMAGE
S
FINANCIAL
REMIDIES
(Contract Act
1872)
QUANTUM
MERIUT
IBA-CEE
DAMAGES
Damage is an award of money that is intended to
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IBA-CEE
REMOTENESS OF DAMAGE
Remoteness of damage is tested by the
Vs
Remoteness
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QUANTUM MERIUT
Literal Meaning: as much as earned or in
proportion to the work done
Sometimes the C goes for the protection of
his reliance interest. This refers to the
position he would have been IN had not
relied on the Contract.
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SPECIFIC PERFORMANCE
It is an equitable relief/ remedy.
It occurs when the court orders the D to fulfill a
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INJUNCTION
It is also an equitable relief/ remedy.
Injunction occurs when the court orders
the
defendant to refrain from doing
something that is prohibited by the
contract.
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SPECIALISED CONTRACTS
(Have their own characteristics)
*
*
*
Indemnity
Insurance Concepts Sec. 124
Guarantee
Banking Concepts Sec. 126
Agency Sec.182
Partnership Concepts
Corporate Entity Concepts
Corporate Governance Concepts
IBA-CEE
SPECIALIZED CONTRACT
Indemnity & Guarantee Ss 124 - 147
Bailment & Pledge Ss 148 - 181
Agency Ss 182 238
Indemnity
Guarantee
Bailment
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Insurance Concepts
Banking Concepts
Carriage of Goods
Bill of Lading
concepts
Charter party agree:
Continue
d. IBA-CEE
Pledge
Agency
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CONTRACT OF INDEMNITY
Indemnifier
Indemnified
A contract by which one party promises to save the other from loss caused
to him:
By the conduct of the promisor himself or
By the conduct of any other person:
Called A Contract Of Indemnity
Examples:
Insurance
Indemnity Bond
Implied Indemnity
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IBA-CEE
CONTRACT OF GUARANTEE:
Principal Debtor,
Creditor
Guarantor / Surety
Cr.
Pr.
Db
Capacity
Free consent
Lawful object
Surety /
Guarantor
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IBA-CEE
DISCHARGE OF SURETY
FROM LIABILITY
(1)
(2)
Any change in (1) contract will discharge the liability of
guarantor.
Variance
Release or Discharge of Pr. Db.
Arrangements by Cr. Db.
Cr. Act or Omission.
Loss of Security
Invalidation.
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GUARANTEE
Liability of indemnifier is
Primary.
Liability of Surety is
Secondary.
It is a contract for
reimbursement
of loss.
Indemnifier acts
independently , without any
others request.
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Baile
rBaile
e
Types:
Safe Custody: Commercial
Commodatum.
IBA-CEE
PLEDGE OR PAWN
The bailment of Goods as SECURITY for
PAYMENT of a DEBT or PERFORMANCE of a
promise is called PLEDGE.
The Bailer here is called
The bailee here is called
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Pawner or Pledger
Pawnee or Pledgee
IBA-CEE
BAILMENT
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AGENCY
An agent is a person employed to do any act for another on
to represent another in dealing, with third person. The
person for whom such act is done is called the principal.
TEST OF AGENCY:
Whenever a person has the authority to act on behalf of
the other and to create contractual relations b/w that other
& 3rd persons.
PRINCIPA
L
PRIVITY OF
CONTRACT
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AGEN
T
3RD
PARTY
IBA-CEE
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PERSONAL LIABILITY OF
AGENT TO THIRD PARTY
1.
2.
3.
4.
5.
6.
7.
8.
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Where
Where
Where
Where
Where
sued.
Where
Where
Where
agent
agent
agent
agent
agent
expressly agrees.
acts for a foreign Principal.
acts for an unnamed principal.
acts for an undisclosed principal.
acts for a principal who cannot be
IBA-CEE
CREATION
Expressed
Written
Oral
By Estoppel
Implied
By Holding out
By Necessity
Ratification
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IBA-CEE
Termination of
Agency
By act of Parties
By operation of
Law
Completion of the business of agency.
Expiry of Time.
Death of the Principal of the agent.
Insanity of the principal of agent.
Insolvency of the principal.
Destruction of subject.
Dissolution of Company.
Principal or agent becomes alien enemy.
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IBA-CEE
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Li
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IBA-CEE
CONCEPTUAL POINTS
Goods S. 2 (7), 6 -8
Auction sale S. 64
Caveat Emptor
(Buyer Beware)
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Transfer of Property
Delivery
Remedial Measures
In unascertained & future Goods Ss. 18 - 23
Rules as to delivery of Goods Ss. 33 - 44
Rights of unpaid seller Ss. 45 61
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Transactional contract.
Relationship contract.
Transactional Contract:
Where Consideration is offered and
accepted
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Relationship Contracts:
By sponsors of
a Company: Memorandum and
Articles of Association.
By Author &
Trustee:
Trust Deed.
By Principle &
Agent: Agency Agreement.
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IBA-CEE
TERM:
Classification of Terms:
BY PARTIES
OTHERWISE
SGA
Express
By Court
Condition
Implied
By Statute
Warranty
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EXCLUSION CLAUSES
Construe
BOILER PLATE TERMSBe Interpreted in a particular
way.
Purports
appear to be or do especially
falsely.
Exclude liability altogether
Restrict it by limiting damages
Imposing other onerous condition
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IBA-CEE
BOILER-PLAT TERMS:
Exclusion Clause.
Force Majeure Clause.
Confidentiality Clause.
Arbitration Clause.
Jurisdiction Clause.
Entire Agreement Clause.
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IBA-CEE
IBA-CEE
Situation
Law
Jurisdiction
Lease
Rent Laws
Rent Courts
Employment
Labour Laws
Labour Courts under
(IRA, FA, CA)
IR Laws
SSA, EOBI
Services
Contract Act, 1872 Territorial &
(relevant laws of
Pecuniary
Respect Associations)
Real Estate
Transfer of Property Territorial &
Act, 1882
Pecuniary
Loan
Marital
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Banking Laws
Banking Courts
Negotiable Instrument
Family Laws
Family Courts
IBA-CEE
SCENARIO:
Face to Face
At distance
One to One
Standard
STANDARD CONTRACTS:
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IBA-CEE