my personal notes of law

[SpreadLove]

here are some notes related too contract act 1872
these was created when i study business law book in my second semester
and i ll add some more detail to these notes in few days


here are links


http://www.scribd.com/doc/110611588/...and-Acceptance


http://www.scribd.com/doc/110611580/Contract-Law

http://www.scribd.com/doc/110611556/...ion-and-Object

enjoy friends

[SpreadLove]

 

Contract Law
Definitions
• Business: - Any profitable activity, such as trade, commerce and industry.

Law:-Rules and principles made by competent authority for proper regulation of a community.

Business law is that branch of law which comprises laws concerning trade, industry and commerce.
Contract Act 1872
• Law, governing the Contract in Pakistan is contained in the Contract Act 1872.
• Passed in 1871and came into force on 1st Sep, 1872.
• Based mainly on English Common Law which is to a large extent made up of judicial precedents.
Scheme of the Act
The scheme of the Act may be divided into two main groups,
a. General principles of the law of Contract; (sec 1-75)
b. Specific kinds of Contract;
1. sale of goods; (76-123, repealed)
2. Indemnity and Guarantee; (Sec 124-147)
3. Bailment and Pledge; (Sec 148-181)
4. Agency; (sec 182-238)
5. Partnership; (sec 239-266)
What is Contract
• Sec 2 (h) of CA defines, “an agreement enforceable by law is Contract”.
• Explanation: A Contract is an agreement the object of which is to create a legal obligation, i-e a duty enforceable by law.
What is agreement (Sec 2 (e)
Every promise and every set of promise, forming the consideration for each other, is an agreement.
 Promise: - When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted and a proposal, when accepted becomes promise. Sec 2(b)
(ii) Legal Obligation
1. Duty enforceable by law.
2. An agreement incapable to create a duty enforceable by law is no Contract at all.
3. All Contracts are agreements but all agreements are not Contracts.
Conclusion
“The law of Contract is not the whole law of agreements, nor is it the whole law of obligations. It is the law of those agreements which create obligations, and those obligations, which have their source in agreements”. (Salmond)

Essentials of a Valid Contract
According to Sec 10, “all agreements are Contract if they are made by the free consent of parties, competent to Contract, for lawful consideration with lawful object and or not hereby expressly declared to be Void.
Where necessary the agreement must satisfy the requirements of Law regarding writing, attestation or registration.
1. Offer and Acceptance
For nay agreement there must be lawful offer by one party and lawful acceptance of that offer from other party. The term lawful means that the offer and acceptance must satisfy the requirements of Contract.
2. Legal Obligation
The parties to an agreement must create a legal obligation. It means that if one party does not fulfill his part of promise he shall be liable for breach of Contract.
Example:
a. A offers to sell his watch to B for rupees 200. B agrees to buy. It is a Contract as it creates legal obligation.
b. A husband promise to pay his wife an allowance of $30 every month. Later the parties separated and the husband refused to pay. The wife sued. Held that wife was not entitled as agreement did not create legal obligation. (Belfour vs. Belfour)
3. Lawful Consideration
An agreement is enforceable only when parties get and give something. The something given or obtained is called consideration. Consideration must be lawful as well.
Example:
A promise to give him a government job and B promises to pay Rs. 1 Lac. The agreement is void because consideration is unlawful.
4. Capacity of Parties
An agreement is enforceable only if it is made by parties who are competent to Contract. To be competent to Contract, the parties must be of the age of majority, of sound mind and not disqualified from Contracting by law.
Example
M a person of unsound mind agrees to sell his house to S for Rs. 2 Lac. It is not a valid Contract because M is not competent to Contract

5. Free Consent
Consent means that parties must agree upon the same thing in same sense. For a valid Contract the consent of parties must be free.
(According to Sec. 14) consent is free when it is not obtained by coercion, undue influence, fraud, misrepresentation or mistake. If the consent of either of the parties is not free, the agreement cannot become a Contract.
Example
A compels B to enter into a Contract at gunpoint. It is not a valid Contract as the consent of B is not free.
6. Lawful Object
(According to Sec. 23) it is necessary that agreement should be made for a lawful object. The object of agreement must not be fraudulent, illegal, immoral opposed to public policy, imply injury to the person or property of another. Every agreement with unlawful object is void.
Example
A hires a house to use for gambling, the object of agreement is unlawful, so the agreement is illegal and void.
7. Writing and registration
A Contract may be oral or in writing. If required by law, a particular Contract must be in writing, signed, attested by witnesses and registered; e.g. sales and mortgage of land
Example
A verbally promise to sell his house to B. it is not a valid Contract because the law requires it to be in writing.
8. Certainty of terms
According to section 29, “agreements the meaning of which is not certain or capable of being made certain, are void.”
The terms of agreement must be clear, complete and certain. If the terms are uncertain the agreement is void.
Example
A promise to sell 20 books to B without specifying their titles. The agreement is void because the terms are not clear.
9. Possibility of performance
(According to Sec. 56) The valid Contract must be capable of being performance. An agreement to do an impossible act is void. If the act is legally or physically impossible to be performed, the agreement cannot be enforced by law.
Example
A agrees with B to discover a treasure by magic, the agreement is not enforceable.




10. Not expressly declared void
For a valid Contract, the agreement must not be one of those, which have been declared to be void by the law. Sec (24-30) explains certain agreements which have been expressly declared to be void e.g. agreements in restraint of trade and of wager etc. are expressly declared void.
Example
A promise to pay Rs. 2000 to B if Pakistan wins the world cup final, the agreement is void being a wagering agreement.

Kinds of Contract
The Contracts can be classified into four categories as follows
1. According to enforceability
According to enforceability, a Contract can be divided as under
a. Valid Contract
A valid Contract is enforceable by law. An agreement becomes enforceable by law when all the essentials of a valid Contract are present.
Obligations of parties
In a valid Contract all the parties are legally responsible for the performance of Contract. If one of the party breaches the Contract, the other party can enforce through the court of law.

b. Void Contract
The word void means not binding in law. Section 2 (j) A Contract which ceases to be enforceable by law becomes void, when it ceases to be enforceable. It means that a void Contract is not void from the beginning. It is valid Contract when it is made but subsequently it becomes void due to certain reasons.
Obligation of parties
In void Contract both parties are not legally responsible to fulfill the Contract. Under this Contract the party who has received any benefit is bound to return it to other party.
A Contract becomes void under the following circumstances:
i. Impossibility of performance
A Contract becomes void due to impossibility of performance. A Contract becomes void before performance, when it becomes impossible to be performed by any party due to any reason (Sec 56)
Example
A agrees to sell his house to B after two days. The house is burnt next day. The Contract becomes void.
ii. Subsequent illegality
A Contract becomes void subsequent illegality. A Contract may become illegal before performance due to certain reason. (Sec 56)
Example
A agrees to sell 100 bags of wheat to B. before delivery the government bans private trade in wheat. The agreement becomes void.

iii. Rejection of voidable Contract
A voidable Contract becomes void when the party whose consent is not free rejects the Contract (Sec 19)
Example
A forcibly buys B’s car for Rs. 20,000 the Contract is voidable at the option of B. B may accept or reject it. If B rejects the Contract it becomes void.
iv. Impossibility of depending event
A contingent Contract is that, the performance of which depends upon the happening or non-happening of a certain event. It becomes void when that event does not happen. (Sec 32)
Example
A Contract to give Rs. 1 Lac to B if B gets admission in Hailey College, B fails to get admission. The Contract becomes void.

c. Void agreement
An agreement not enforceable by law is said to be void. The void agreement does not create legal obligation among the parties and is void ab-initio. In void agreement there is absence of one or more essentials of valid Contract except free consent. An agreement with minor and an agreement without consideration are void from the beginning. (Sec 2 (g))
Obligation of parties
In void agreement, any party who has received any advantage is bound to restore it to the party which he received it. Both the parties are not responsible for the performance of the agreement.
Example
A promise to buy a dog from B for Rs. 10,000 the dog was dead before the Contract. The parties were unaware. The agreement is void.

d. Voidable Contract
An agreement which is enforceable by law at the option one or more of the parties thereto, but not at the option of the other or others is a voidable Contract (Sec 2 (i))
1) A Contract becomes voidable when the consent of one or more of the parties to a Contract is obtained by coercion, undue influence, misrepresentation or fraud. (Sec 15-18)
Example
A compels B to sell his car at gunpoint. The Contract is made by coercion and is voidable at the option of B.
2) When a person promises to do something for another person but the other person prevents him from performing his promise, the Contract becomes voidable at his option. (Sec 53)
Example
A Contract to paint B’s house A is ready to paint but B prevents him from doing so. This Contract is voidable at the option of B.

3) When party to the Contract promises to do a certain thing within a specified time, but fails to do it, then the Contracts becomes voidable at the option of the promisee, if time is essence of the Contract. (Sec 55)
Example
A Contract to paint B’s house within week A does not come within specified time. The Contract is voidable at the option of B.
Obligations of parties
• It is a valid Contract for both the parties if it is not rejected by the party having the right to reject
• The law gives an option to one of the parties to avoid it
• The party entitled to cancel the Contract is not bound to cancel. If he confirms it, the other party remains bound to perform.
• The aggrieved party can get damages from the other party
• If one party has received some benefit, he must return it to other
Burden of proof
The burden of proof lies on plaintiff i.e. an aggrieved party. It means that the party who claims that his consent is not free has to prove in the court of law. If he fails to prove the Contract remains valid.
e. Unenforceable Contract
An unenforceable Contract is that Contract which cannot be enforced in a court of law because of some technical defects such as absence of writing, registration, requisite stamp, etc. when these defects are removed, the Contract can be enforced.
Example
A borrows Rs. 1 billion from B and makes a pronote on Rs. 10 stamp paper. It is unenforceable because pronote is undervalued.
Obligation of parties
In unenforceable Contract, the parties may perform the Contract but in breach of such Contract, the aggrieved party is not entitled to the legal remedies.
f. Illegal agreement
An agreement is illegal when its performance is forbidden by law; such an agreement can never become a Contract. An agreement is illegal and void if it is forbidden by law or is of such a nature that, if permitted, it would defeat the provision of any law or is fraudulent or it involves injury to the person or property of another or the court regards it as immoral, or opposed to public policy.(Sec 23)
Example
A gives money to B, a smuggler to buy smuggled goods. The agreement is illegal and the money cannot be recovered.


Obligation of parties
The parties to this agreement are not responsible to perform their promises. There is a punishment for the parties according to law also.

2. According to formulation
According to formulation, a Contract has the following three kinds
a. Express Contract
Express Contract is one which is express in words spoken or written. When such Contract is formed, there is no difficulty in understanding the rights and obligations of the parties. In express Contract, the parties directly state the terms of the Contract. (Sec 9)
Example
A tells on telephone to B that he wants to sell his car and b informs that he agrees to buy the car, it is an express Contract.

b. Implied Contract
An implied Contract is made otherwise than by words spoken or written. It arises from the acts, conduct of the parties, course of dealings or circumstances. It arises when one person without being requested to do so, renders service under circumstances indicating that he expects to be paid for them, and the other person, knowing such circumstances, accept the benefit of those services. (Sec 9)
Example
A went into restaurant and had a cup of tea. It is an implied Contract and A will pay for the cup of tea.

c. Quasi Contract
In a quasi Contract law imposes certain obligations under some circumstances. It is based upon the principle of equity that a person shall not be allowed to get benefit at the cost of another. In fact it is not a Contract but creates relations similar to Contract. It is also called constructive Contract.
Example
A finds lost goods of B. A is bound to return the goods to B.

3. According to performance
According to performance a Contract is of the following two kinds:

a. Executed Contract
A Contract is said to be executed when both the parties have completely performed their obligations. It means that nothing remains to be done by either party under the Contract.

Example
A buys a book from B. a delivers the book and B pay the price. It is an executed Contract.

b. Executory Contract
In an executory Contract something remains to be done. In other words a Contract is said to be executory when both the parties to a Contract have yet to perform their obligations.
Example
M sells his car to N for Rs. 2 Lac N has not yet paid the price and M has not delivered the car. The Contract between M and N is executory.

4. According to party

a. Unilateral contract
In a unilateral contract only one party makes a commitment. In other words, it is a contract where only one party is bound to but the other party chooses to be bound by it.
Example
A promises to pay Rs. 1000 to anyone who finds his lost bag. B finds the bag and returns A. it is a unilateral contract which comes into existence when the bag is found.

b. Bilateral contract
It is a contract where as soon as the contract is made, both parties are bound by it. In other words it is a contract in which both parties have yet to perform their obligations.
Example
A promises to paint the picture for B and b promises to pay Rs. 5000 to A.

Performance of Contracts
• Performance of Contract means “fulfilling of their respective legal obligations created under the Contract by both the promisor and the promisee”.
• Performance by all the parties of the respective obligations is the normal and natural mode of discharging or terminating a Contract.

VARIOUS RULES REGARDING PERFORMANCE OF CONTRACTS
1. Who can demand performance?
• It is only the promisee who can demand performance of the promise under a Contract, for, the general rule is that “a person cannot acquire rights under a Contract to which he is not a party”.
• In case of the death of the promisee, his legal representatives are entitled to enforce the performance of the Contract, against the promisor.
By whom Contracts must be performed?
1. By the promisor himself. (Sec 40)
2. By the promisor or his agent. (sec 40-Clause-2)
3. By the legal representative. (Sec 37-Clause-2)
4. Performance by a third party. (sec 41

Performance of joint promises
• Joint Promise: - (i) where several joint promisors make a promise with a single promisee, A, B and C jointly promise to pay Rs, 50,000 to D.
• (ii) Where a single promisor makes a promise with several joint promisees, P promises to pay Rs, 30,000 to Q and R jointly.
• (iii) Where several joint promisors make a promise with several joint promisees, A, B and C jointly promise to pay Rs, 5,000 to P, Q and R jointly.
Rules regarding performance of joint promises
• Who can demand performance of joint promises?
• (Sec 45) provides that when a promise is made to several persons jointly, the right to claim the performance rests with all the promisees jointly (unless otherwise) and a single promisee cannot demand performance.
By whom joint promises must be performed? (Sec 42-44)
1. All promisors must jointly fulfill the promise.
2. Anyone or more of joint promisors may be compelled to perform.(sec-43)
Example: - A, B and C jointly promises to pay Rs, 3,000 to D. D may compel either A or B or C or all or any two of them to pay him Rs, 3,000.



3. Right of contribution inter-se between joint promisors.(sec-43, Para 2)
Example:
If A is compelled to pay the entire amount of Rs, 3,000, he can realize from B and C Rs, 1,000 each.
4. Sharing of loss by default in contribution. (sec 43)
If A is compelled to pay the whole amount of 3,000 and C is unable to pay anything, A is entitled to receive Rs. 1500 from B. if C’s estate is able to pay one-half of his share, Rs 500, then Rs, 1250 will be received from B.
5. Effect of release of one joint promisor.
If one of the joint promisors is released from his liability by the promisee, his liability to the promisee ceases but this does not discharge the other joint promisor from liability. (Sec 44)

Time and Place for Performance
• Sec 46 to 50 & 55.
1. Where prescribed by the promisee; “the performance of the Contract must be at the specified time and place.
2. Where not prescribed by the promisee;
a. Within a reasonable time, on a working day) and within the usual hours of business.
b. At proper place, (a shop or working place and not at public meeting or a fair).

Effects of failure to perform a Contract within a stipulated time
1. Where “time is of the essence of the Contract”: failure to perform within the fixed time makes the Contract void able at the option of promisee.
2. Where “time is not of the essence of the Contract”: failure to perform within the specified time does not make the Contract voidable.
3. In case of Contract void able due to failure to perform within agreed time/reasonable time, if promisee accepts the delayed performance, can’t claim compensation afterwards for the loss caused by delay, unless giving notice (promisor) at the time of accepting performance.

Contracts which need not be performed
4. In case of “innovation, alteration, or rescission, original Contract need not be performed.62
5. In case of remission, original Contract stands discharged.63
6. when aggrieved party cancels the Contract, need not perform the promise.64
7. If any promisee neglects or refuses to afford the promisor reasonable facilities for the performance of his performance, the promisor is excused for the non-performance of the Contract.67

[testaccount]

hello is that are complete notes for contract act 1872 n if i follow these for css is dat is enough for contract act section in paper or books reading n other aspects of this act cant cover completely in dat notes

[testaccount]

plz help me n rply me soon coz i am worry to collect material regarding law subject n almost hw many days spent for the prep of law 4 css

[mkBug]

http://www.ebrahimhosain.com/laws/Co...ct,%201872.pdf