Business and Commercial Law

8/12/2019 Business and Commercial Law

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Business and Commercial Law.(Knowledge Level). 2010.Collected Questions & Answers

For June-2011 Exam

SHIMUL

9/16/2010


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Business and Commercial Law. (Knowledge Level). 2010.

AL-MAHMUD SHIMUL, ACNABIN Page

Contents

Sl # ACT Page No

*** Question Bank From 3 to 12

01. The Contract and Agency Act-------------1872. From 13 to 46

02. The Sales of Goods Act---------------------1930. From 47 to 54

03. The Partnership Act-------------------------1932. From 55 to 64

04. The Negotiable Instrument Act----------1881. From 65 to 72

05. The Bankruptcy Act-------------------------1997. From 73 to 75

06. The Arbitration Act--------------------------2001. From 75 to 77


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Q.# Question Page

No

The Contract and Agency Act-------------1872.

Q.1. What is a contract and name 3 essential elements of a Contract? (June10)

Or,Define contract and discuss the essential elements of a contract. (Dec09)

13

Q.2. Distinguish between a contract and an agreement.(Dec08)

Or, Distinguish between a contract of a sale and agreement to sell? (June10)

13

Q.3. An agreement enforceable by law is a contract. Explain. (June09) 13

Q.4. In which cases a contract can be void? OR. When is an agreement said to be void? 13

Q.5. What is proposal (Offer) & acceptance? 14

Q.6. What are the 4 essentials of a proposal? (June10) 14

Q.7. What do you understand by counter offer? Give an example. (June10) 14

Q.8. When is the communication of proposal and acceptance complete? 14

Q.9. How and when can be revoked a proposal and acceptance? 15

Q.10. How a proposal would transform into a contract. (June10) 15

Q.11. What are the 4 methods of termination of offer? (June10) 15

Q.12. What is meant by standing contract and open proposal? 15

Q.13 An invitation to offer is not an offer. Explain. (June09) 15

Q.14 What do you mean by consideration? 15

Q.15. What is good consideration? 16

Q.16. In a formation of a contract consideration must be real but need not be adequate Explain. 16

Q.17. No consideration no contract- exceptions to the rule Or, Can a contract be made without

consideration?(Dec08)

16

Q.18. Distinguish between executed and executor consideration. (June10) 16

Q.19. "In the formation of a contract consideration must be real but not be adequate" Explain 16

Q.20. What do you mean by unlawful consideration? 16

Q.21. What is a Void Agreement? 17

Q.22. What do you mean by voidable agreement? 17

Q.23. What types of agreements become void? 17

Q.24. What types of agreements are expressly declared void? 17

Q.25. What is meant by illegal agreement? 17

Q.26. What are the differences between void agreement and voidable agreement? 17

Q.27. Distinct between void agreement and illegal agreement. 18

Q.28. Who is a minor? 18

Q.29. What do you mean by capacity? 18

Q.30. What do you mean by Free Consent? 18

Q.31. What do you mean by undue influence? 18

Q.32. What do you mean by misrepresentation? 19

Q.33. What is fraud? 19

Q.34. What are the various ways through which a contract is discharged? (June10) 19

Q.35. What do you mean by contingent contract? 19

Q.36. Distinguish between a contingent contract and wagering agreement. 19

Q.37. What do you understand by supervening impossibility? 19

Q.38. What do you understand by frustration of contract by supervening impossibility? 19

Q.39. What do you mean by Quasi Contract? Give example. 19

Q.40. What do you mean by contract of indemnity? 20

Q.41. What do you mean by contracts of guarantee? 20


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Q.42. What do you mean by Continuing Guarantee? 20

Q.43. Distinguish between Indemnity and Guarantee. (June10) 20

Q.44. What do you mean by Bailment? 20

Q.45. Who are bailor, baile? 20

Q.46. What are the rights of Bailor? 20

Q.47. What are the rights of Bailee?

Or, Write down 4 rights of a bailee. (June10)

20

Q.48. What are the duties of the Bailor? 21

Q.49. What are the duties of the Bailee? 21

Q.50. What are the kinds of Bailment? 21

Q.51. What are the characteristics of Bailment ? 21

Q.52. What are the difference between Bailment and Pledge? 21

Q.53. When can a non-owner make a valid Pledge? 22

Q.54. What are the rights of the Pledge or Pawnee? 22

Q.55. What are the rights of Pledgor? 22

Q.56. When does a Bailment terminate? 22

Q.57. What are the provisions of law for filling Suits by Bailors or Bailees against wrong-doers? 22

Q.58. What do you mean by Agent, Principal and Agency? 22

Q.59. What do you mean by Sub-agent ? 22

Q.60. What do you mean by co-agent? 22

Q.61. Identify the four ways in which an agency can arise. (June10) 23

Q.62. What are the rights of agents? 23

Q.63. What are the personal responsibility of agent? 23

Q.64. What are the rights of principals? 23

Q.65. What are the different classes of Agents? 23

Q.66. What are the methods of creating Agency? 23

Q.67. What are the duties of agents to the Principals?

Or, Mention 4 duties of Agent to Principal. (June10)

24

Q.68. What are the duties of principals to agents? 24

Q.69. How does an agency terminate? 24

Q.70. What are the legal consequences of the contracts with an undisclosed principal? 24

Q.71. What happens when the agent exceeds his authority? 24

Q.72. What are the exceptions regarding the appointment of an agent by an agent? 25

Q.73. What are the differences between Agent and Bailee? 25

Q.74. Is a wife an agent of her husband? Or, Can a wife bind her husband? 25

Q.75. Some Short Notes 25

Q.76. What do you mean by Sound Mind? 26

Q.77. What is the test of soundness of mind? 26

Q.78. How may the unsoundness of mind arise? 26

Q.79. What do you mean by Idiocy? 26

Q.80. What do you mean by Lunacy or Insanity? 26

Q.81. What do you mean by Aliens? 26

Q.82. What do you mean by Coercion? 26

Q.83. What are the features of coercion ? 26

Q.84. What are the consequences of coercion? 27

Q.85. What do you mean by unconscionable bargains? 27

Q.86. What do you mean fiduciary relationship? 27


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Q.87. What does "to deceive" mean? 27

Q.88. What do you mean by mistake? 27

Q.89. What is meant by bilateral mistake? 27

Q.90. What is meant by unilateral mistake? 27

Q.91. What do you mean by object of an agreement? 28

Q.92. What do you mean by Champerty and Maintenance? 28

Q.93. What do you mean by wager? 28

Q.94. What do you mean by collateral event? 28

Q.95. What do you mean by reciprocal promises? 28

Q.96. What do you mean by accord and satisfaction? 28

Q.97. What is the doctrine of frustration? 28

Q.98. What do you mean by quantum meruit ? 28

Q.99. What do you mean by Injunction ? 28

Q.100. What do you mean by restitution of benefit? 29

Q.101. What is the scope of surety's liability? 29

Q.102. Who are called the co-sureties? 29

Q.103. What do you mean by Pledge or Pawn? 29

Q.104. An offer a reward to whosoever shall return his lost briefcase. B returns the lost briefcase, not

knowing of the advertisement reward. Is A bound to pay the reward to B?

29

Q.105. "Ignorance of law is no excuse to avoid a contract" Discuss. 29

Q.106. Is a promise to make a contribution to charity enforceable by law? 29

Q.107. Can a person who is not a party to a contract sue it? 29

Q.108. "Mere silence is not fraud" Discuss. 29

Q.109. Explain the circumstances under which a valid contract transforms into a void contract? (June09) 30

Q.110. A stranger to the consideration can sue but a stranger to a contract cannot sue.Explain.

(June09)

30

Q.111. Parties to contract must be competent to contract, Explain. (Dec08) 30

Q.112. Distinguish between void and voidable contract. 30

Q.113. What are the difference between undue influence and coercion? 31

Q.114. What are the difference between fraud and representation? 31

Q.115. What are the differences between Indemnity and Guarantee ? 31

Q.116. What are the differences between agent and servant? 32

Q.117. What are differences between liquidated damages and penalty? 32

Q.118. Explain the differences between agency by estoppel and by necessity.(June09) 33

Q.119. What are the differences between executed and executory contracts? (Dec08) 33

Q.120. When is consent said to be free? (Dec08) 33

Q.121. What are the remedies for breach of contract? (Dec08) 33

Q.122. Types of consideration. 33

Q.123. What are the Characteristics / Rules / Essential Factors of consideration? 33

Q.124. Can silence be fraudulent? 33

Q.125. What are the legal consequences of a contract which has been frustrated due to supervening

impossibility?

34

Q.126. What are the breaches due to supervening impossibility? 34

Q.127. What are the remedies for breach of contract ? 34

Q.128. What are the breaches due to supervening impossibility? 34

Q.130. Can a minor make a contract? 34

Q.131. Classification of Contract 34


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Q.132. Rules regarding an offer 34

Q.133. Who can accept an offer 35

Q.134. How an offer to be communicated? 35

Q.135. How an acceptance to be communicated? 35

Q.136. When an agreement doesn't bind contract? 35

Q.138. What are the exceptions to sue upon a person who is not a party/a stranger to a contract? 35

Q.139. Rules regarding acceptance of an offer. 35

Q.140. What are the rights and liabilities of a stranger? 35

Q.141. What are types of agreements said to be void ? 36

Q.142. What types of agreements are unenforceable by law? 36

Q.143. Under which circumstances a person is incapable of entering into contracts? 36

Q.144. What are the exceptions regarding the rules to minor? 36

Q.145. Why should minor be protected? 36

Q.146. What is the prevailing law regarding Minor's Agreement ? 36

Q.147. In which case an unsound mind may make a contact? 37

Q.148. In which case a Sound Mind may not make a contact? 37

Q.149. What are the effects of agreements made by persons of unsound mind? 37

Q.150. In which situation consent is not free? 37

Q.151. What are the special causes which does not constitute coercion? 37

Q.152. What are the presumption to exist undue influence? 37

Q.153. What are the consequences of undue influence? 37

Q.154. How is an undue influence suspected? 38

Q.155. What are the consequences of undue influence in respect of the following? 38

Q.156. What are the causes of misrepresentation? 38

Q.157. What are the consequences of misrepresentation ? 38

Q.158. What type of acts to be considered as fraud? 38

Q.159. Can silence be fraudulent? 38

Q.160. What are the consequences of fraud? 38

Q.161. How can the relief for fraud be obtained? 39

Q.162. What is meant by the Uberrimae fidei contracts? 39

Q.163. What type of contract come within the class of Uberrimae fidei contracts? 39

Q.164. How many classes of mistakes? 39

Q.165. What are the rules regarding mistake? 39

Q.166. When are the consideration and the object of an agreement unlawful ? 39

Q.167. Which are the agreements said to be against public policy? 40

Q.168. The Contract Act specifically declares certain agreements to be void. Can you list down those

agreements? (Dec09)

40

Q.169. What are the cases in which restraint in trade is valid? 40

Q.170. What are the characteristics of an wager agreement? 40

Q.171. Which are the transactions not wagers? 40

Q.172. What are the effects of an wagering agreement? 41

Q.173. What are the effects of the partly unlawful objects or consideration ? 41

Q.174. What are the characteristics of contingent contracts? 41

Q.175. Contingency on act depend on what? 41

Q.176. What are the prevailing rules regarding contingent contract? 41

Q.177. What are the methods of termination of a contract? 41

Q.178. How may the termination of contract by mutual agreement occur? 42


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Q.179. What are the types of supervening impossibility? 42

Q.180. What are the grounds of frustration? 42

Q.181. What are the exceptions of the principle of supervening impossibility? 42

Q.182. What are the effects of supervening impossibility? 42

Q.183. What are the basis of discharge of contracts by frustration? 42

Q.184. When does a contract terminate by law? 43

Q.185. How may the breach of contract arise? 43

Q.186. What are the types of damages? 43

Q.187. What are the rules regarding amount of damages? 43

Q.188. What are the rules regarding the doctrine of quantum meruit ? 43

Q.189. Describe the cases which are to be deemed to be Quasi Contract 43

Q.190. What are the provisions of law regarding compensation in case of quasi contract? 44

Q.191. What are the characteristics of contracts of indemnity? 44

Q.192. What are the rights of the indemnity holder ? 44

Q.193. How many types of contracts of guarantee? 44

Q.194. What are the essentials of valid guarantee? 44

Q.195. Which are the invalid contracts of guarantee? 44

Q.196. How is a continuing guarantee revoked? 45

Q.197. When is a surety discharged from liability? 45

Q.198. What are the rights of the surety? 45

Q.199. What are the rights and duties of finder of goods ? 45

Q.200. What are the duties and obligations of finder of goods ? 45

Q.201. What conditions must fulfill to be a valid ratification? 45

Q.202. Match the terms to its definition: (June10)

(a) Voidable (i) The contract is valid but the parties cannot be held to its terms

(b) Unenforceable (ii) Neither party is bound

(c) Void (iii) The contract is binding unless and until one party chooses to

avoid it.

46

Q.203. What do you understand by supervening impossibility? How it may occur? What are the legal

consequences of a contract which has been frustrated due to supervening impossibility. (Dec09)

46

Q.204. A enters into a contract with B to sell him 1000 bales of cotton and afterwards discovers that B

was acting as agent of C. Advise A as to the person against whom he should bring a suit for the

price of the cotton. (Dec08)

46

Sale of Goods Act-1930DEFINITION :

Q.1. What is doctrine of Caveat Emptor? 47

Q.2. Explain with illustration a contract of Sale and agreement to sale (June08) 47

Q.3. Who is an unpaid seller ? 47

Q.4. Define buyer, seller, and goods. 47

Q.5. What is the meaning of vendors lien? 47

Q.6. Some Short notes : 47


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Q.7. What is meant by Hire Purchase Agreement? 48

Q.8. What do you mean by Condition? 48

Q.9. What do you mean by warranty?(June08) 48

EXPLANATION:

Q.10. No seller can give the buyer better title to the goods then he, himself has Explain. 48

DISTINGUISH:

Q.11. What are the differences between Condition and Warranty?(June08) 49

Q.12. What are the differences between sale and agreement to sale? 49

OTHERS:

Q.13. When does an agreement to sell become sale? 49

Q.14. What are the features of a contract of sale of goods? 49

Q.15. Give an example of implied condition in a contract of sale of goods. 50

Q.16. What are the rules, which determine when ownership of property passes from the seller to the

buyer?

Or,When does title in the property in goods sold pass from the seller to the buyer?

50

Q.17. What are the prevailing rules regarding delivery? 50

Q.18. What are the rights of seller of goods? Or, Discuss the rights of the seller against the buyer. 51

Q.19. What are the rights of an unpaid seller of goods under the Sales of Goods Act 1930? (June10) 51

Q.20. What are the rights of buyer of goods? 51

Q.21. What are the rights of the unpaid seller? 51

Q.22. Who is unpaid seller? What are his rights against goods? (June09) 51

Q.23. What are the consequences of breach of contract of sale? 51

Q.24. What are the essential elements of Contract for the Sale of Goods? 52

Q.25. When can a condition be treated as a Warranty? 52

Q.26. What are the consequences for breach of Warranty? 52

Q.27. What are the consequences for breach of Condition? 52

Q.28. What are the consequences of Implied Conditions? 53

Q.29. What are the exceptions to the rule of Caveat Emptor? 53

Q.30. What are the Implied Warranties? 53

Q.31. Explain briefly the implied conditions and warranties of a contract of sell of goods. (Dec 08) 53

Q.32. Why is the time of transfer of ownership necessary? 53

Q.33. Under what circumstances a person who is not owner, can give to the transferee a valid title to the

goods?

53

Q.34. What are the duties of seller of goods? 54

Q.35. What are the duties of buyer of goods? 54

Q.36. À made an offer to sell his car to `B at a price at Tk.5,00,000/= only. B accepted the offer but

asked À to paint the car before delivery. À sold the car to `C at Tk.5,00,000/= without informing

`B. Advise `B. (Dec09)

54

Q.37. What do you know about consequences of breach of condition and warranty according to Sale of

Goods Act. (Dec09)

54

Partnership Act 1932

DEFINITION :

Q.1. What do you understand by partnership at will?(June08) 55


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Q.2. What do you mean by Registration of Firms? 55

Q.3. What do you mean by Partnership? 55

Q.4. What do you mean by Firm, Firm-name, Partner? 55

Q.5. What do you mean by Partnership property? 55

Q.6. What do you mean by Goodwill? 55

Q.7. What do you mean by Partnership Agreement? 55

Q.8. What do you mean by retired partner and deceased partner? 55

Q.9. What do you mean by dissolution of firm? 56

DISTINGUISH:

Q.10. What are the difference between Partnership and Co-ownership? 56

OTHERS:

Q.11. Can a partner bind the firm? 56

Q.12. What are the essential elements of partnership? (June10)(Dec08) 56

Q.13. Can a firm be liable for the wrongful acts of a partner? 57

Q.14. Is it mandatory for a firm to registration? 57

Q.15. Discuss the effects of non-registration of a partnership firm. (June09) 57

Q.16. Spell out the grounds on which a court may dissolve a partnership firm on a suit filed by a partner.

(June08)

57

Q.17. Can you spell out the procedure for registration of a firm? 57

Q.18. What are the effects or consequences of Non-registration of a firm? 57

Q.19. Can a minor be admitted as a Partner? 58

Q.20. Can a minor become a member of a partnership firm? If so, discuss his rights and liabilities. (Dec09) 58

Q.21. In what situations compulsory dissolution may take place? 58

Q.22. What are the grounds of dissolution? 58

Q.23. Happening of certain contingencies may lead to dissolution of partnership what are those? 59

Q.24. Can an outgoing partner carry guarantee? 59

Q.25. Can an outgoing partner carry on business competing with the firm? (June08) 59

Q.26. What are the ten Important elements of a stand and partnership deed? 59

Q.27. What are the types of partnership forbidden by law? 60

Q.28. What is the legal status of a Firm? 60

Q.29. Who can be a partner? 60

Q.30. What are the classes of Partners? 60

Q.31. What are the classes of Partnership? 60

Q.32. When can the partnership business be registered? 61

Q.33. What re the general rules regarding the conduct of the partners to one another? 61

Q.34. What are the rules regarding the relationship between the partners as regards the management of

the business and their mutual rights?

61

Q.35. What are categories of the authority of a Partner? 61

Q.36. What are the limitations of a partner in case of implied authority? 61

Q.37. What are the rules regarding the alteration of authority? 61

Q.38. What are the rules regarding the authority in Emergency? 61

Q.39. What are the liabilities of partners to outsiders? 62

Q.40. What are the rights of Partners? 62

Q.41. Write down 4 rights of Partners. (June10) 62

Q.42. What are the duties of Partners? 62

Q.43. When can the constitution of a firm be changed? 62

Q.44. When can a partner be expelled? 63


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AL-MAHMUD SHIMUL, ACNABIN Page 1

Q.45. What are the rights of an outgoing partner? 63

Q.46. What are the consequences of dissolution? 63

Q.47. What are the modes of setting accounts upon dissolution? 63

Q.48. What are the circumstances in which a firm may be dissolved by the Court? (June09) 64

Q.49. Happening of certain contingencies may lead to dissolution of partnership What are those?

(Dec08)

64

Q.50. Can a partner be considered agent of other partners? State briefly what is meant by implied

authority of a partner? (Dec09)

64

Negotiable Instrument Act-1881

Definition

Q.1. What is promissory note? 65

Q.2. What are the essential requisites of a Promissory Note? (June10) 65

Q.3. What do you mean by Negotiable Instruments? 65

Q.4. Define Negotiable Instrument. Discuss the effect of crossing a cheque with the words Not

negotiable written across the face. (June09)

65

Q.5. Define Negotiable Instrument with 2 conditions to satisfy. (June10) 65

Q.6. Define cheque with essential elements. 65

Q.7. What is acceptance for honor? 66

Q.8. What is the acceptance for honour. (June08) 66

Q.9. Cheque crossed with the words 'Not Negotiable'- what does it mean? 66

Q.10. What is meant by payment for honor? 66

Q.11. What do you mean by Bill of Exchange? 66

Q.12. Who are called Drawer, Drawee, Payee, Holder and Acceptor of a Bill of Exchange? 66

Q.13. What do you mean by Drawee in case of need? 66

Q.14. What do you mean by holder? 66

Q.15. What do you mean by Banker's Draft? 66

Q.16. What do you mean by acceptance? 67

Q.17. What do you mean by presentment? 67

Q.18. What do you mean by Negotiation? 67

Q.19. What do you mean by Endorsement or Endorsement? 67

Q.20. What do you mean by Payment in Due course of a Negotiable Instrument? 67

Distinguish

Q.21. How does a promissory note differ from bill of exchange?

Or, Difference between promissory note and bill of exchange.

67

Q.22. How would you differentiate between a Promissory Note and a Bill of Exchange? (June09) 67

Q.23. What are the difference between bill of exchange and Cheque? 68

Q.24. Distinguish between a cheque and a promissory note.(June08) 68

Q.25. What is the difference between a general crossing and special crossing of cheque? (Dec08) 68

Q.26. What is distinguish between dishonor by non-performance and dishonor by nonacceptance? 68

Q.27. Distinguish between an `open and a `crossed cheque. (Dec09) 68

Q.28. Distinguish between dishonour by non-performance and dishonour by non-acceptance of a

negotiable instrument. (June09)

68

Others

Q.29. Who can cross a cheque? 69


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Q.30. What are the Characteristics of Negotiable Instruments? 69

Q.31. What punishments the court may award to the drawer for dishonor of a cheque? (June10) 69

Q.32. What are 3 prime features of Negotiable Instruments? (June10) 69

Q.33. When bill of exchange dishonored? / What are the modes of Dishonor? 69

Q.34. Who can accept a bill of exchange? (June08) 69

Q.35. Who may accept a bill of exchange? (June10) 69

Q.36. What are the essential elements of a Promissory Note? 70

Q.37. What are the different types of cheque? 70

Q.38. What are the essential elements of a bill of exchange? 70

Q.39. What are the different modes of crossing of a cheque? 70

Q.40. What are the usual remarks of crossing a cheque? 70

Q.41. List the different parties of Cheque. 70

Q.42. What are the chains of crossing of a cheque? 71

Q.43. Who is the holder in due course? 71

Q.44. What are the rights of Holder in Due Course? 71

Q.45. What are the essential features of Negotiable Instrument? 71

Q.46. What are the types of acceptance? 72

Q.47. Who can present a bill for acceptance? 72

Q.48. Who can accept a bill? 72

Q.49. What are the principles of estoppels? 72

Bankruptcy Act-1997

Q.1. What do you understand by bankruptcy? 73

Q.2. What is meant by bankruptcy? What are the purposes of the Law of Bankruptcy? (June09) 73Q.3. What is meant by discharge of bankruptcy? 73

Q.4. What are the objects of Bankruptcy Act? 73

Q.5. What is right of Bankrupt to surplus property? 73

Q.6. How is theproperty of a bankrupt distributed? (Dec09) 73

Q.7. Who may be adjudged/declared bankruptcy? (Dec08) 73

Q.8. Who may not be adjudged bankruptcy? (Dec08) 73

Q.9. What are the purposes of insolvency? 74

Q.10. What are the acts of insolvency? (Dec09) 74

Q.11. Who are official receivers? (June08) 74

Q.12. Who are eligible creditors under Bankruptcy Act 1997? (June10) 74

Q.13. Can an infant be insolvent? (June08) 74Q.14. When debtor can apply for Insolvent? 74

Q.15. When creditor can apply? 74

Q.16. What properties of a bankrupt debtor are exempted from attachment/freeze? 75

Q.17. Discuss the effect of adjudging a person bankrupt. (Dec09) 75

Q.18 Name the properties of a bankrupt debtor that are exempt from attachment and sale under section

32 of the Bankruptcy Act, 1997? (June08)

75

Arbitration Act 2001

Q.1. What is arbitration? 75

Q.2. How many types of Arbitration are there? 75


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Q.3. What matters cannot be referred to arbitration? (June08)

Or,Name 3 matters that cannot be referred to Arbitration. (June10)

75

Q.4. Who can refer disputes to the arbitrator and what matters can be referred to the arbitrator under

the Arbitration Act? (June09)

76

Q.5. What is procedure of appointment of arbitrators? 76

Q.6. What is an arbitration agreement?(June08) 76

Q.7. What are the effects of an Arbitration Agreement? (June10) (June08) 76

Q.8. Discuss the characteristics of an arbitration agreement. 76

Q.9. What is international commercial arbitration? 76

Q.10. What is award? 76

Q.11. What is an arbitral award? Is it bindings on both parties? (June10) 76

Q.12. What are essential futures of award? 76

Q.13. Discuss the ground on which the court can:

a. Set aside award, and

b. Remit an award for reconsideration under The Arbitration Act 2001

77


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Contract Act 1872

Q.1. What is contract? What are the elements of a contract?

Contract:

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

i) an agreementii) the agreement must be enforceable by law.

There some agreements like an agreement to play cards or to go to a cinema, which cannot be enforced through th

courts of law, are not contract. So an agreement, which can be enforced through the courts of law, is called a

contract.

Elements of a contract:

An agreement becomes enforceable by law when it fulfills certain conditions. These conditions, which may be called

the essential elements of a contract, are explained hereunder:-

i) Offer and acceptanceii) Intention to create legal relationshipiii) Lawful considerationiv) Capacity of the partiesv) Free consentvi) Legality of the objectvii) Certaintyviii) Possibility of performanceix) Void agreement

x) Writing, registration and legal formalities.

Q.2. Distinguish between a contract and an agreement.

Objective Contract Agreement

1. Definition. An agreement enforceable by law

is contract.

Promise or every set of promises

forming the consideration for each

other, is an agreement.

2. Similarity All contracts are agreements All agreements are not contact.

Q.3. An agreement enforceable by law is a contract. Explain. (June09)

Q.4. In which cases a contract can be void? OR. When is an agreement said to be void?

An agreement is said to be void because of mistake, lack of consideration, want of capacity etc. A list of vo

agreements is given below:

1. Lack of capacity.

2. Mutual mistake of fact.

3. Unlawful consideration or object.


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4. Consideration or object partly unlawful.

5. Agreements without consideration.

6. Agreements in restraint of trade.

7. Agreements in restraint of legal proceedings.

8. Uncertain Agreement.

9. Agreements by way of wager.10. Impossible acts.

11. Agreements contingent on impossible event.

12. Reciprocal promises where there are void promises.

13. Agreement is restraint of trade

Q.5. What is acceptance & proposal?

Proposal: When one person signifies to another his willingness to do or to abstain from doing anything, with a view

to obtaining the assent of that other to such act or abstinence, he is said to make a proposal.

Offer: A proposal is also called an offer. The promisor or the person making the offer is called offeror. The person twhom the offer is made is called the offeree.

Acceptance:When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be

accepted. A proposal when accepted becomes a promise.

Q.6. What are the 4 essentials of a proposal? (June10)

Q.7. What do you understand by counter offer? Give an example.

The acceptance shall be unconditional and absolute . If the acceptance is given with any condition changing any

portion of the original offer then it is known as counter offer.

Example: A offer to B to buy his car for tk.100,000 but B agree to pay tk.90,000 the offer made by B is a counter

offer.

Q.8. When is the communication of proposal and acceptance complete?

Completion of proposal: The communication of a proposal is complete when it comes to the knowledge of the

person to whom it is made.

Completion of acceptance: The communication of an acceptance is complete-

a) As against the proposer, when it is put in a course of transmission to him, so as to be out of the powers of tacceptor.

b) As against the acceptor, when it comes to the knowledge of the proposer.


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Q.9. How and when can be revoked a proposal and acceptance?

Revocation/Lapse of proposal : A proposal comes to an end, and is no longer open to acceptance under the

following circumstances:

i) By noticeii) By lapse of timeiii) After expiry of reasonable timeiv) By failure of reasonable timev) By failure of a condition precedentvi) By death of insanityvii) Counter offerviii) By refusal

Revocation of Acceptance: An acceptance can be revoked any time before the acceptance comes to the knowledge

of the proposer but not afterwards.

Q.10. How a proposal would transform into a contract. (June10)

Q.11. What are the 4 methods of termination of offer? (June10)

Q.12. What is meant by standing contract and open proposal?

Contract for the supply of goods over a period of time are sometimes so worded that the buyer has an option

regards the quantity to be purchased and the time of purchase. Such contracts are called Standing Contracts or Ope

Contracts.

Q.13. An invitation to offer is not an offer. Explain. (June09)

Q.14. What do you mean by consideration?

Consideration is an essential element in a contract. Something which receives and gives by each party to a

agreement is called consideration.

When, at the desire of the promissor, the promisee or any other person has done or abstained from doing, or does

abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is

called a consideration for the promise.-[Sec 2(d)]


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Q.15. What is good consideration?

The rules or necessary factors for consideration can be summed up as follows:

i) There must be desire of the promisorii) It must be realiii) Reasonableiv) Not illegal, immoral or opposed to public policyv) Present, past or futurevi) From the promisee or any person

Q.16. In a formation of a contract consideration must be real but need not be adequate Explain.

The consideration must have some value in the eye of law. It must not be sham or illusory. The impossible acts and illusory or non-existing goods cannot support a contract. Therefore, real

consideration comes from good consideration.

A contribution to charity is without consideration. Therefore, it is not real consideration. An agreement to which the consent of the party is freely given is not void merely because the considerationis not inadequate; but the inadequacy of the consideration may be taken into account by the court in

determining the question whether the consent of the promisor was freely given.

Q.17. No consideration no contract- exceptions to the rule Or, Can a contract be made without

consideration?

Consideration is essential for validity of a contract. A promise without consideration cannot create a legal obligation

So consideration is essential for a contract. But there are exceptional cases where a contract is enforceable even

though there is no consideration. They are as follows:

i) Natural love and affectionii) Voluntary compensationiii) Time bared debtiv) Agency

v) Completed gift

Q.18. Distinguish between executed and executor consideration. (June10)

Q.19. "In the formation of a contract consideration must be real but not be adequate" Explain

Q.20. What do you mean by unlawful consideration?

An agreement will not be enforced by the court if its objects or the consideration is unlawful. The agreement

unlawful consideration is void.


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Q.21. What is void agreement?

An agreement, which does not satisfy the essential elements of a contract, is void. An agreement not enforceable b

law is said to be void. A void agreement has no legal effect. If confers no right on any person and creates no

obligations.

Q.22. What do you mean by voidable agreement?

A voidable agreement is one which one which can be avoided. An agreement, which is enforceable by law at the

option of one or more of the parties thereto, but not at the option of the other or others, is a voidable contract.

Q.23. What types of agreements become void?

An agreement, which was legal and enforceable when it was entered into, may subsequently become void due to

impossibility of performance, change of law or other reasons. When it becomes void the agreement ceases to have

legal effect.

Q.24. What types of agreements are expressly declared void?

There are certain agreements, which are expressly declared to be void are summarized hereunder:

Every agreement in restraint of marriage of any person, other than a minor, is void Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of an

kind, is to that extent void

Private individuals cannot by agreement alter or vary their personal law or the statute law Agreements, the meaning of which is not certain, or capable of being made certain, are void Agreement by way of wager are void Agreements to do and act impossible in itself are void Agreements whose objects or considerations are unlawful are void

Q.25. What is meant by illegal agreement?

An illegal agreement is one, which is against a law in force.

Q.26. What are the differences between void agreement and voidable agreement?

Subject Void agreement Voidable agreement

1. Definition An agreement not enforceable by

law is said to be void. .

An agreement, which is enforceable by law at the

option of one or more of the parties thereto, but

not at the option of the other or others, is avoidable contract.

2. Right/ Obligation A void agreement confers no

right on any person and creates

no obligations

But in case of voidable agreement the rights and

obligations of the parties

concerned are present unless it becomes void

3. Necessity to call off As a void agreement is void from

the beginning it is not necessary

for the effected party to declare

the agreement void

But in case of voidable agreement the effected

party needs to call the agreement void


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4. Refund of benefit In case of void agreement the

party is not bound to refund the

benefit received to the other

party

But in case of voidable agreement the party may

refund the benefit to the other party, if the

agreement becomes void later on

5. Grounds A void agreement originates byan agreement made by a minor,

agreements without

consideration, certain

agreements against public policy,

illegal objectives

A voidable agreement originates by contractsbrought about by coercion, undue influence,

misrepresentation

6. Transfer of right The rights obtained by void

agreement, if transferred to a

third party, the third party does

not, under any circumstances

obtains a legal title

In case of voidable agreement, unless the effected

party declared the agreement to be void, the third

party gains legal title for the rights transferred, if

he acts upon good faith

Q.27. Distinct between void agreement and illegal agreement.

Subject Void agreement Illegal Agreement

1.Definition An agreement not enforceable by law is

said to be void. .

An illegal agreement is one, which is

against a law in force.

2. Nature A void agreement is not necessarily illegal. An illegal agreement is also void

3. Contrary to law But an agreement may not be contrary to

law but may still be void

An illegal agreement is always

contrary to law

4. Incidental agreement When the main agreement is void, but not

illegal, agreements which are incidental or

collateral to it may be valid

When an agreement is illegal, other

agreements which are incidental or

collateral to it are void

Q.28. Who is a minor?

A minor is one who has not completed his or her 18th year of age

Q.29. What do you mean by capacity?

Every person is competent to contract who is of the age of majority according to the law to which he is subject and

who is of sound mind, and is not disqualified from contracting by any law to which he is subject.

Q.30. What do you mean by Free Consent ?

Two or more persons are said to consent when they agree upon the same thing in the same sense.

Q.31. What do you mean by undue influence?

A contract is said to be induced by undue influence where

i. one of the parties is in position to dominate the will of the otherii. he uses the position to obtain an unfair advantage over the other


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Q.32. What do you mean by misrepresentation?

Misrepresentation arises when the representation made in inaccurate but the inaccuracy is not to any desire to

defraud the other party. There is no intension to deceive.

Q.33. What is fraud?

The term fraud includes all acts committed by a person with a view to deceive another person. To deceive means to

induce a man to believe a thing is true which is false.

Q.34.What are the various ways through which a contract is discharged? (June10)

Q.35. What do you mean by contingent contract?

A contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or

does not happen.

Q.36. Distinguish between a contingent contract and wagering agreement.

The distinctions between contingent contract and wagering agreement are given below:

Subject Contingent contract Wagering agreement

1. Validity 1. A Contingent contract is valid 1. A wagering agreement is void

2. Dependency 2. It depends on the happening or non-

happening of an event, but the contract isvalid

2. If is void.

3. Reciprocal promises 3. It may not contain reciprocal promises 3. It consists of certain reciprocal

promises.

4. Interest of the

parties

4. Either party or both may have an interest in

the subject matter of the contract.

4. The parties have no interest

either getting or paying money.

5. Future event 5. The future event is only collateral and valid 5. It is valid.

Q.37. What do you understand by supervening impossibility?

When enter into contract it is good but subsequently impossible to perform. That condition is called supervening

impossibility of contract.

Q.38. What do you understand by frustration of contract by supervening impossibility?When the common object of a contract can no longer be carried out ,the court may declare the contract to be at an

end. This is known as the doctrine of Frustration.

Q.39.What do you mean by Quasi Contract? Give example.


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When one person obtains a benefit at the expense of another and the circumstances are such that he ought,

equitably, to pay for it, the law will compel payment even though there is no contract between the parties by whic

payment is promised. The parties will be put in the same position as they would have occupied if there was a

contract between them. Such cases are called Quasi Contract

Example:

Q.40. What do you mean by contract of indemnity?

A contract of indemnity is a contract by which one party promises to save the other party from loss caused to him b

the conduct of the promisor himself, or by the conduct of any other person.

Q.41. What do you mean by contracts of guarantee?

A contract to perform the promise or discharge the liability, of a third person in case of his default.

Q.42. What do you mean by Continuing Guarantee?

A guarantee which extends to a series of transaction is called continuing guarantee.

Q.43.Distinguish between Indemnity and Guarantee. (June10)

See Q.115.

Q.44. What do you mean by Bailment?

A bailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, whethe purpose is accomplished be returned or otherwise disposed of according to the direction of the person deliveri

them.

Q.45. Who are bailor, baile?

Bailor:The person delivering the goods is called the bailor.

Bailee:The person to whom they are delivered is called the bailee.

Bailment:The transaction is called Bailment

Q.46. What are the rights of Bailor?

The rights of Bailor are enumerated hereunder:

Enforcement of rights. Act inconsistent with the terms. Restoration of goods lent gratuitously.

Q.47. What are the rights of Bailee?

The rights of Bailee are enumerated hereunder:

Enforcement of rights.


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Bailment by several joint owners. Bailee not responsible on re-delivery to bailor without title. Bailees particular lien. Bailees general lien.

Q.48. What are the duties of the Bailor?

The duties of the Bailor are given below:

Bailors duty to disclose faults in goods bailed. Payment of expenses in Gratuitous Bailment. Responsibility for breach of warranty of title.

Q.49. What are the duties of the Bailee?

The duties of the Bailee are given below:

Duty of reasonable care. Bailees liability for negligence of servants. Unauthorized use of goods. Mixture of Bailors goods with the Bailees. Duty of returning goods. Accretion to the goods bailed. Liabilities of Innkeeper and Hotelkeepers. Liabilities of carrier.

Q.50. What are the kinds of Bailment?

A. Gratuitous Bailment:A gratuitous bailment is one in which neither the bailor, nor the bailee is entitled to an

remunerationB. Bailment for reward:A bailment for reward is one where either the bailer or the bailee is entitled to a

remuneration

Q.51. What are the characteristics of Bailment ?

The characteristics of Bailment are given below:

Delivery. Purpose Return. Contract. Movable goods. Possession.

Q.52. What are the difference between Bailment and Pledge?

The difference between pledge and other kind of bailment lies in the purpose or objectives of the transaction.

The purpose of a pledge is to provide security for a debtor or the performance of a promise.

But in case of bailment there are other purposes for example- repair, safe custody.

Pledge is a particular kind of bailment.


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Q.53. When can a non-owner make a valid Pledge?

Mercantile Agent. Possession under a voidable contract. Pawnor with a limited interest. Possession with co-owner.

Q.54. What are the rights of the Pledge or Pawnee?

Right of Retainer. Retainer of subsequent advance. Extraordinary expenses. Pawnees right where pawnor makes default.

Q.55. What are the rights of Pledgor?

Defaulting pawnors right to redeem. Preservation and maintenance. Protection of debtor

Q.56. When does a Bailment terminate?

Efflux of time. Fulfillment of purpose. Act inconsistent with the term. Goods lent gratuitously. Death.

Q.57. What are the provisions of law for filling Suits by Bailors or Bailees against wrong-doers?

1. Right to interplead.

2. Suit by bailor or bailee against wrong-doer.

3. Appointment of relief or compensation obtained by such suits.

Q.58. What do you mean by Agent, Principal and Agency?

Agent: An agent is a person employed to do any act for another or to represent another in dealings with third

person.

Principal :The person for whom such act is done or who is so represented, is called the principal.Agency :The relationship is called Agency.

Q.59. What do you mean by Sub-agent ?

An agent appointed by an agent is called a sub-agent. A sub-agent is a person employed by, and acting under the

control of, the original agent in the business of agency.

Q.60. What do you mean by co-agent?


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A co-agent is a person appointed by the agent according to the express or implied authority of the principal, to act o

behalf of the principal in the business of the agency.

Q.61.Identify the four ways in which an agency can arise. (June10)

Q.62. What are the rights of agents?

Enforcement of rights. Agents right of retainer. When agents remuneration becomes due. Agent not entitled to remuneration for business misconduct. Agents lien.

Q.63. What are the personal responsibility of agent?

In case of

Foreign principal. Undisclosed principal. When principal cannot be sued. Fictitious person or non-existent person. Unauthorized acts. Misrepresentation or unauthorized act by agent . Pretended agent. Representation as to liability.

Q.64. What are the rights of principals?

Compensation Agent's duties Revocation

Q.65. What are the different classes of Agents?

Broker. Factor. A Commission Agent. Auctioneer. A Del credere Agent. General Agent and Particular Agent.

Q.66. What are the methods of creating Agency?

Agency by Express Agreement. Agency by Implied Agreement.


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Agency by Estoppel or by Holding Out. Agency of Necessity. Agency by Ratification.

Q.67. What are the duties of agents to the Principals?June10

Agents duty in conducting principals business. Skill and diligence required from agent. Agents duty to render accounts. Agents duty to communicate to principal. Agents not to deal on his own account. Principal to get benefit of agents dealings. Agents duty to pay sums received for principal. Principals death or insanity. Miscellaneous.

Q.68. What are the duties of principals to agents?

Agent to be indemnified against consequences of lawful acts. Agent to be indemnified against consequences of acts done in good faith. Non-liability for criminal acts. Compensation for principals neglect.

Q.69. How does an agency terminate?

1. Termination by act of parties.

2. Termination by operation of law.

Efflux of time. Performance of the object. Determination of subject-matter. Death or insanity of the principal or agent. Insolvency of the principal. The principal becoming an alien enemy. Termination of the sub-agents authority.

Q.70. What are the legal consequences of the contracts with an undisclosed principal?

Legal consequences are as follows-

Principal may require performance of the contract. Other party may refuse to fulfill the contract. Performance is subject to the rights and obligations between agent and the other party. Agent is personally liable.

Q.71. What happens when the agent exceeds his authority?

1. When the authority is separable.

2. When authority can not be separated.

3. When the principal is bound by unauthorized acts of agent-


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Where by the rule of estoppel the principal is precluded from denying the authority of the agent.

Where an agency has been terminated, but notice of termination has not been received by the other partie

concerned.

Q.72. What are the exceptions regarding the appointment of an agent by an agent?

When it is permitted by the custom, of the trade with which the agency is concerned. When it is necessary because of the nature of the agency.

Q.73. What are the differences between Agent and Bailee?

Subject Bailee Agent

1. Possession 1. The bailee has possession of goods of

the bailor

1. An agent may not have possession of

any goods or property of the principal

2. Relationship 2. The bailee has no power to create any

contractual relationship with the third

party

2. An agent has that authority.

3. Act on behalf 3. Under certain circumstances a bailee

may act as an agent

3. An agent can't.

Q.74. Is a wife an agent of her husband? Or, Can a wife bind her husband?

A wife is an agent of necessity, having power to pledge her husband's credit for necessaries of life, when she is not

properly provided for him or when she has been deserted by the husband. But if the husband gives her a sufficient

allowance, she has no authority to pledge his credit and can never be the agent of necessity.

Q.75. Some Short Notes

Express Contract: Express Contract is one which is expressed in words spoken or written. When such a contract is

formed, there is no difficulty in understanding the rights and obligations of the parties.

Implied Contract: The conditions of an implied contract is to be understood from the acts, the conduct of the parties

and/or the course of dealing between them.

Quasi Contract: Quasi contracts are certain types of transactions in which there being no agreement between the

parties, the law creates right and obligations between them which are similar to those created by a contract.

Contingent Contract: A contingent contract is a contract to do or not to do something if some event,collateral to su

contract, does or does not happen. All contracts of insurance and indemnity are contingent contracts. Everyconditional contract is not contingent.

Executed Contract: There are contracts where the parties perform their obligations immediately, i.e.,as soon as the

contract is formed.

Executory Contract: In this contract the obligations of the parties are to be performed at a later time.

Bilateral Contract: There must be at least two parties to the contract. Therefore all contracts are bilateral or

multilateral.


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Unilateral Contract: In certain contracts one party has to fulfil his obligations whereas the other party has already

performed his obligations. Such a contract is called unilateral contract.

Q.76. What do you mean by 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 forming a rational judgment as to it effect upon his interests.

Q.77. What is the test of soundness of mind?

The test of soundness of mind are given hereunder:

capacity to understand the business concerned ability to form a rational judgment

Q.78. How may the unsoundness of mind arise?

Unsoundness of mind arise from-

insanity or lunacy idiocy drunkenness similar factors

Q.79. What do you mean by Idiocy?

Idiocy is a congenital defect caused by lack of development of the brain. The term idiot is applied to a person whose

mental powers are completely absent.

Q.80. What do you mean by Lunacy or Insanity?

A lunatic is one whose mental powers are deranged so that he cannot form a rational judgment on any subject.

Q.81. What do you mean by Aliens?

An alien means a citizen of foreign state. Contracts with alien are valid.

Q.82. What do you mean by Coercion?

Coercion is the committing or threatening to commit, any act forbidden by penal Code, or unlawful detaining, orthreatening to detain, any property, to the prejudice of any person whatever with the intention of causing any

person to enter into an agreement.

Q.83. What are the features of coercion ?

i). Coercion means-

Committing or threatening to commit an act forbidden by the Penal Code.

The unlawful detaining or threatening to detain any property.


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ii). The act constituting coercion, must be directed at any person and not necessarily at the other party to th

agreement.

iii). The act constituting coercion, must have been done or threatened with the intention of causing a

person to enter into an agreement.

Exceptions :

i). Prosecutionii). High prices and high interest rates.

iii). A threat to commit suicide.

Q.84. What are the consequences of coercion?

The consequences of coercion are given below:

A contract brought about by coercion is voidable at the option of the party whose consent was so caused The aggrieved party can have the contract set aside or he can refuse to perform it and take the defense of

coercion if the other party sought to inforce it.

The aggrieved party may if he so desires abide by the contract and insist on its performance by the otherparty.

Q.85. What do you mean by unconscionable bargains?

Unconscionable bargain is one which is against the conscience of reasonable persons and what shocks the public. If

exercise profit is made it will also be within this term.

Q.86. What do you mean fiduciary relationship?

Fiduciary relationship means a relationship of mutual trust and confidence. Such a relationship is supposed to exist

the following cases:

father and son guardian and ward solicitor and client doctor and patient preceptor and disciple trustee and beneficiary

Q.87. What does "to deceive" mean?

Q.88. What do you mean by mistake?

An erroneous belief concerning something is called mistake.

Q.89. What is meant by bilateral mistake?

When both the parties of the contract mistake is called bilateral mistakes.

Q.90. What is meant by unilateral mistake?


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When one of the parties of the contract mistakes is called unilateral mistakes

Q.91. What do you mean by object of an agreement?

By the expression "object of an agreement" is meant its 'purpose' or 'design'. The object and the consideration mus

both be lawful, otherwise the agreement is void.

Q.92. What do you mean by Champerty and Maintenance?

Champerty:When a person helps another in litigation in exchange of a promise to hand over a portion of the fruits

the litigation, if any, it is called Champerty.

Maintenance:When a person agrees to help another by money or otherwise in litigation in which he is not himse

interested, it is called Maintenance.

Q.93. What do you mean by wager?

A wager is an agreement by which money is payable by one person to another on the happening or non happening

a future, uncertain event.

Q.94. What do you mean by collateral event?

A collateral event means an event which is neither a performance directly pro missed as part of the contract, nor th

whole of the consideration for a promise.

Q.95. What do you mean by reciprocal promises?

A contract consists of reciprocal promises when one party makes a promise ( to do or not to do something in thefuture ) in consideration of a similar promise (to do or not to do something in the future) made by the other party.

Such a contract is an exchange of promises.

Q.96. What do you mean by accord and satisfaction?

Accord means the promise to accept less than what is due under the old contract.

Satisfaction means the payment or the fulfillment of the smaller obligation.

Q.97. What is the doctrine of frustration?

When the common object of a contract can no longer be carried out, the court may declare the contract to at an enThis is known as Doctrine of Frustration

Q.98. What do you mean by quantum meruit ?

Quantum Meruit means as much is merited. A person can, under certain circumstances, claim payment for work

done or goods supplied without any contract and in cases where the original contract has terminated by breach of

contract by one party or has become void for some reason. This is known as Doctrine of Quantum Meruit.

Q.99. What do you mean by Injunction ?


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Injunction means an order of the court. In case of breach of contract, the injured party can under certa

circumstances get a negative injunction, i.e., an order prohibiting a party from doing something.

Q.100. What do you mean by restitution of benefit?

An agreement is discovered to be void or when a contract becomes void, any person who has received any advanta

under such agreement or contract is bound to restore it or to make compensation for it, to the person from whom

received it. Such restoring is known as restitution of benefit.

Q.101. What is the scope of surety's liability?

The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by th

contract.

Q.102. Who are called the co-sureties?

Where several persons guarantee a debt or duty, they are called co-sureties.

Q.103. What do you mean by Pledge or Pawn?

The bailment of goods as security of payment of a debt or performance of a promise is called Pledge or Pawn.

Q.104. A offer a reward to whosoever shall return his lost briefcase. B returns the lost briefcase, not

knowing of the advertisement reward. Is A bound to pay the reward to B?

No, A is not bound to pay reward to B. As per contract act an offer must be communicated to the offeree. If the

offeree does any act of acceptance without knowing . it will not crate any legal acceptance or agreement.

Q.105. "Ignorance of law is no excuse to avoid a contract" Discuss.

We all are working and exercising our right and obligation under the law. These laws are unlikely to be known to all

of us. So, The ignorance of law is not a valid reason to avoid contract. In this case, contract should be performed

specifically.

Q.106. Is a promise to make a contribution to charity enforceable by law?

No, a promise to make to charity is not enforceable because it is without consideration.

Q.107. Can a person who is not a party to a contract sue it ?

A stranger to a contract, i.e., one who is not a party to it cannot file s suite to enforce it. A contract between P and Q

cannot be enforced by R. But a stranger to the consideration can sue to enforce it provided he is a party to the

contract. A contract between P, Q and R whereby P pays money to Q for delivering goods to R can be enforced by R

although he did not pay any part of the consideration.

Q.108. "Mere silence is not fraud" Discuss.


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Q.109.Explain the circumstances under which a valid contract transforms into a void contract? (June09)

Q.110.A stranger to the consideration can sue but a stranger to a contract cannot sue.Explain.

(June09)

Q.111.Parties to contract must be competent to contract, Explain. (Dec08)

Q.112. Distinguish between void and voidable contract.

SL & Points Void contract Voidable contract

1. Definition. An agreement not enforceable by

law is said to be void.

An agreement which is enforceable by law at

the opinion of one or more of the parties

thereto, but not at all the opinion of the otheror others is a voidable contract. .

2. Right and obligation A void agreement confers no

right on any person and creates

no obligations

But in case of voidable agreement the rights

and obligations of the parties concerned are

present unlessit becomes void.

3. Declaration for

voiding

As a void agreement is void from

the beginning it is not necessary

for the effected party to declare

the agreement void.


party needs to call the agreement void.

4. Refund the benefit In case of void agreement the

party is not bound to refund the

benefit received to the otherparty.

But in case of voidable agreement the party

may refund the benefit to the other party, if

the agreement becomes void later on.

Extra:

SL Void contract Voidable contract

1. A void agreement is void from the beginning;

for this reason it cannot be called as a

contract.

A void able agreement is one, which can be

avoided, i.e., set aside by some of the parties to it.

Until it is avoided, it is a good contract.


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2. A void agreement confers no right on any

person and creates no obligations

But in case of voidable agreement the rights and

obligations of the parties concerned are present

unless it becomes void.

3. As a void agreement is void from the

beginning it is not necessary for the effected

party to declare the agreement void.


party needs to call the agreement void.

4 In case of void agreement the party is not

bound to refund the benefit received to the

other party.

But in case of voidable agreement the party may

refund the benefit to the other party, if the

agreement becomes void later on.

5 A void agreement originates by an agreement

made by a minor, agreements without

consideration, certain agreements against

public policy, illegal objectives.

A voidable agreement originates by contracts

brought about by coercion, undue influence, and

misrepresentation.

6 The rights obtained by void agreement, if

transferred to a third party, the third party

does not, under any circumstances obtains a

legal title.

In case of voidable agreement, unless the effected

party declared the agreement to be void, the third

party gains legal title for the rights transferred, if he

acts upon good faith.

Q.113. What are the difference between undue influence and coercion?

Undue influence Coercion

1. The influence arises from the domination of the will

of one person over another.

1. The influence arises from committing or threating

to commit punishable offence or detaining or

threating to detain property unlawfully.

2. Undue influence is mental pressure 2. Coercion are mostly cases of the use of physical

force.

Q.114. What are the difference between fraud and representation?

Subject of Differences Fraud Misrepresentation

1. Intension 1. Here implies an intension to deceive 1. No intension to deceive

2. Belief 2. Statement is dishonest. 2. Statement id honest though it is

wrong.

3. Sue for damages 3. The aggrieved party can sue for

damages

3. The aggrieved party can't sue for any

damage.

4. Defence 4. Where the aggrieved party could

recover the truth with ordinary diligence

the contract can't be avoided.

4. The contract can be avoided by the

aggrieved party if he intends to do so.

Q.115. What are the differences between Indemnity and Guarantee ?

Subject Contract of indemnity Guarantee

1.Defiation One party promises to save the other

party from loss caused to him by the

conduct of the promisor himself, or by

the conduct of any other person.

A contract of guarantee is a contract to

perform the promise or discharge the

liability of a third person in cage of his

default.

2. Parties Two parties Three parties


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3. Number of contract In a contract of indemnity it is necessary

to have only one contract

In a contract of guarantee it is

necessary to have three contracts.

4. Sue In a contract of indemnity the

indemnifier can sue only the indemnity

holder for his loss

In a contract of guarantee the

surety can proceed against principal

debtor

5. Liability In a contract of indemnity, the liability of

the indemnifier is primary.

In a contract of guarantee the liability

of the surety is secondary.

6. Arising of liability In a contract of indemnity, the liability of

the indemnifier arises only on the

happening of a contingency.

In a contract of guarantee there is no

existing debt or duty, the performance

of which is guaranteed by the surety In

a contract of guarantee there is no

existing debt or duty, the performance

of which is guaranteed by the surety.

7.Loss In a contract of indemnity the loss falls

on the indemnifier except in certain

special cases

In a contract of guarantee the surety,

after he discharges the debt owing to

the creditor, can proceed against the

principal debtor

Q.116. What are the differences between agent and servant?

The differences between agent and servant are given below:

Subject Agent Servant

1. Authority 1. An agent is to exercise his authority in

accordance with the principals instructions

1. A servant has to act according

to the orders of the master in every

particular

2. Relationship 2. An agent is appointed and employed to

bring the principal into contractualrelationship with third parties

2. A servant cannot do that

3. Binding 3. An agent can bind the principal to the third

parties

3. A servant cannot do so

4. Remuneration 4. The mode of remuneration of an agent

may vary, including a commission on the

basis of the work done

4. A servant is generally paid

through wages

5. Liability 5. An agent is liable for wrong done within

the scope of his authority

5. A master is liable for the wrong of

his servant if it is committed in

course of the servants employment

6. Number of principal 6. An agent may work for several principals 6. A whole-time servant serves

only one master

Q.117. What are differences between liquidated damages and penalty?

It is considered to be liquidated damages when the amount is fixed by the parties on the basis of a reasonab

estimate of the probable actual loss which a party will suffer in case of breach.

On the other hand, the amount fixed is considered to be a penalty if it is not base upon a reasonable calculation of

actual loss but is fixed by way of punishment and as a threat.


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Q.118. Explain the differences between agency by estoppel and by necessity.(June09)

Q.119.What are the differences between executed and executory contracts? (Dec08)

Q.120. When is consent said to be free? (Dec08)

Q.121.What are the remedies for breach of contract? (Dec08)

Q.122. Types of consideration.

Consideration may be classified into three types, as follows:

i) Past consideration: When the consideration of one party was given before the date of the promiseit is said to be Past.

ii) Present consideration: Consideration which moves simultaneously with the promise is calledPresent/Executed Consideration.

iii) Future consideration: When the consideration is to move at a future date, it is called Future/Executory Consideration.Q.123. What are the Characteristics / Rules / Essential Factors of consideration?

The following rules may be laid down regarding consideration:

i) Desire (request)ii) The consideration must be realiii) Public dutyiv) Promise to a stranger

v) Consideration need not be adequate

vi) The consideration must not be illegal, immoral, or opposed to public policy

vii) The consideration may be present, past, or future

viii) Consideration may move from promisee or from any other person

Q.124. Can silence be fraudulent?

i. Mere silence is not fraudii. Silence can be fraudulent in circumstancesiii. Silence is fraud where silence is in itself equivalent to speech


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Q.125. What are the legal consequences of a contract which has been frustrated due to supervening

impossibility?

Q.126. What are the breaches due to supervening impossibility?

Q.127. What are the remedies for breach of contract ?

Rescission of the contract.

Suit for damages.

Suit upon Quantum Meruit

Specific performance of the contract.

Injunction.

Q.128. What are the breaches due to supervening impossibility?

Q.130. Can a minor make a contract?

As per section 11 of contract act a minor is not competent to a contract. So he/she cannot make a contract. If any

contract is made by the minor, it will be a void agreement.

Q.131. Classification of Contract

Valid contract Void contract Voidable contract Illegal contract Unenforceable contract

Q.132. Rules regarding an offer

An offer may be express or may be implied from the circumstances An offer may be made to a definite person; to some definite class of persons; or to the world at large. Legal relationship is required The terms of the offer must be certain, definite, unambiguous and not vague. A mere statement of intension is not an offer. An offer must be communicated to the offeree An offer may be conditional Printed contracts


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Q.133. Who can accept an offer?

An offer can be accepted only by the person or persons for whom the offer is intended which include the following

An offer made to a particular person can only be accepted by him because he is the only person to accept. An offer made to a class of persons can be accepted by any member of the class. An offer made to the world at large can be accepted by any person whatsoever.

Q.134. How an offer to be communicated?

An offer may be communicated to the offeree or offerees by word of mouth, by writing or by conduct.

Q.135. How an acceptance to be communicated?

An acceptance to be communicated by the following:

i. Offer and Acceptance by postii. Offer and acceptance through telephoneiii. Microphone

Q.136. When an agreement doesn't bind contract?

An agreement does not become a binding contract unless there is an intension to enter into legal relationship. The

parties must intend that the transation should be attached by legal consequences and create legal obligation.

Q.138. What are the exceptions to sue upon a person who is not a party/a stranger to a contract?

There are certain exceptions to the rule that a stranger to the contract cannot sue upon it. They are as follows:

i) Beneficiaries in the case of trustii) Provision of marriage settlement of Minoriii) Assignee of a contractiv) Family settlement

v) Acknowledgement or Estoppel

Q.139. Rules regarding acceptance of an offer.

The acceptance of an offer to be legally effective must satisfy the following requirements:

It must be an absolute and unqualified acceptance of all the terms of the offer. Conditional acceptance / Counter offer. Contract subject to condition

Clarification The acceptance must be expressed in some usual or reasonable manner Mental acceptance or un-communicated assent does not result in a contract The mode of acceptance Time of acceptance When acceptance is complete Before offer The acceptance must be made while the offer is in force.

Q.140. What are the rights and liabilities of a stranger?


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With the exception of the above cases, a contract cannot confer rights upon a person who is not a party to it. Also a

contract cannot impose a liability upon a person who not a party to it.

Q.141. What are types of agreements said to be void ?

The following agreements are void from the beginning:

An agreement made by a minor Agreements without consideration Certain agreements against public policy

Q.142. What types of agreements are unenforceable by law?

An agreement which cannot be enforced in a court of law, one or both of the parties, because of some technical

defect, e.g. want of registration or non-payment of the requisite stamp duty is unenforceable by law.

Q.143. Under which circumstances a person is incapable of entering into contracts?

A person is incapable of entering into contracts under the following circumstances:

if he is not attained the age of majority according to the law to which he is subject if he is not of sound mind if he is disqualified from contracting by and any law to which he is subject.

Q.144. What are the exceptions regarding the rules to minor?

To the minor's rule there are two exceptions which are given below:

When a guardian of the minors person or property is appointed by a court of law and When a minors property is taken over by the Court ofWards for management .

In either case minority continues up to the completion of the 21st year.

Q.145. Why should minor be protected?

Minors are very often exploited, ill-treated and their properties stolen. He is incapable of judging what is good for

him. His mental faculties are not matured and therefore law protects him.

Q.146. What is the prevailing law regarding Minor's Agreement ?

The law regarding agreements by minors is summarized hereunder:

1) Minors agreement is void.

2) A minor can be a promisee.3) Minors liability for necessaries.

4) Law regarding compensation or restitution.

5) No estoppel.

6) No ratification.

7) No specific performance.

8) No insolvency.

9) Partnership by minor.

10) A minor can be an agent.

11) Position of minors guardian.


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12) A company shares of a minor.

Q.147. In which case an unsound mind may make a contact?

A person who is usually of unsound mind, but occasionally of sound mind may make a contract when he is of sound

mind.

Q.148. In which case a Sound Mind may not make a contact?

A person who is unusually of sound mind, but occasionally of unsound mind, may not make a contract when he is of

unsound mind.

Q.149. What are the effects of agreements made by persons of unsound mind?

The effects of agreements made by persons of unsound mind are describing hereunder:

Agreements made by a person of unsound mind are void But agreements for supply of necessaries for unsound himself or for persons whom he is sound to support i

valid as quasi contracts.

Q.150. In which situation consent is not free?

The consent is not free if it is caused by-

Coercion Undue Influence Fraud Misrepresentation Mistake

Q.151. What are the special causes which does not constitute coercion?

The special causes which does not constitute coercion are listed below:

Prosecution High prices and high interest rates A threat to commit suicide

Q.152. What are the presumption to exist undue influence?

Undue influence may be presumed to exist in the following cases:

Real or apparent authority or fiduciary relationship stands

Contract makes with a mentally incapable person.Q.153. What are the consequences of undue influence?

The consequences of undue influences are describing are describing hereunder:

It is voidable at the option of the party whose consent was so caused Such an agreement may be set aside absolutely or If the party who was entitled to avoid it has received any benefit thereunder, the court can set it aside upon

such terms and conditions as may seem just


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The aggrieved party may, if he desires, treat the agreement as binding and enforce it against the other partQ.154. How is an undue influence suspected?

An undue influence is suspected in the following cases:

Inadequacy of consideration Fiduciary relationship Inequality between the parties as regard age, intelligence, social status etc. Absence of independent advisors for the weaker party Unconscionable bargains

Q.155. What are the consequences of undue influence in respect of the following?

1). High rates of interest

2). Mental distress

3). High prices

4). Pardanishin woman

Q.156. What are the causes of misrepresentation?

The causes of misrepresentation are

Unwarranted assertion Breach of duty Innocent mistake

Q.157. What are the consequences of misrepresentation ?

The consequences of misrepresentation arei) The aggrieved party can avoid the agreementii) The aggrieved party can insist that the contract be performed and he shall be put in the position is

which he would have been if the representation made had been true.

Q.158. What type of acts to be considered as fraud?

False statement Active concealment Intentional non-performance Deception Fraudulent act or omission

Q.159. Can silence be fraudulent?

i. Mere silence is not fraud

ii. Silence can be fraudulent in circumstances

iii. Silence is fraud where silence is in itself equivalent to speech

Q.160. What are the consequences of fraud?


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A party who has been induced to enter into an agreement by fraud has the following remedies open to him:

Avoidance of performance of the contract Insistence of performance of the contract Sue for damage

Q.161. How can the relief for fraud be obtained?

Relief for fraud can be obtained only if the following conditions are satisfied:

Act committed by a party or agent Act must have been done with the intension to deceive and must actually deceive. Consent obtained by the act complained of The remedy of rescinding not available

Q.162. What is meant by the Uberrimae fidei contracts?

Uberrimae fidei contracts are contracts where law imposes upon the parties the duty of making a full disclo sure of

all material facts.

Q.163. What type of contract come within the class of Uberrimae fidei contracts?

The following types of contract come within the class of Uberrimae fidei:

Contracts of Insurance Fiduciary relationship Contracts for the sale of immovable property Allotment of shares of companies Family settlement

Q.164. How many classes of mistakes?

a) Mistake of law

mistake as to a law in force in Bangladesh. mistake as to a law not in force in Bangladesh.

b) Mistake of fact

Q.165. What are the rules regarding mistake?

Mistake of law Mistake of fact Opinion Unilateral mistake

Q.166. When are the consideration and the object of an agreement unlawful ?

The consideration and the object of an agreement are unlawful in the following cases:

If it is forbidden by law. If it is of such a nature that, if permitted, it would defeat the provision of any law. If it is fraudulent. If it involves or implies injury to the person or property of another.


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If the court regards it as immoral. If the court regards it as opposed to public policy.

Q.167. Which are the agreements said to be against public policy?

The following agreements have been held to be against public policy :

Trading with enemy. Agreements interfering with the course of justice. Traffic in public offices. Agreement creating an interest opposed to duty. Agreement restraining personal freedom. Agreements interfering with parental duties. Agreements interfering with marital duties. Marriage brokerage agreements.

Q.168.The Contract Act specifically declares certain agreements to be void. Can you list down thos

agreements? (Dec09)

Q.169. What are the cases in which restraint in trade is valid?

1. Statutory exceptions

Sale of Goodwill. Partners competing business. Rights of outgoing partner. Partners similar business on dissolution. Rights of buyer and seller of Goodwill. Agreements in restraint of trade.

2. Legal decisions

Trade combination Negative stipulations in service contracts.

Q.170. What are the characteristics of an wager agreement?

The characteristics of an wager agreement are given below:

The consideration for the promise under a wagering agreement is to pay or get money. The money is payable on the happening or the non-happening of an event. The agreement depends on a future and uncertain event. The essence of gaming and wagering is that one party is to win and the other lose. In wagering agreement no party has control over the event. Commercial transactions are valid, but to pay price differences in a wagering agreement is void.

Q.171. Which are the transactions not wagers?

Shares. Games of skill.


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AL-MAHMUD SHIMUL,

Date post:	03-Jun-2018
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