Business & CommBusiness & Commercial Lawercial Law

Business and Commercial Law. (Knowledge Level).
2010.
Business and Commercial Law.
Knowledge Level.
2010.
contents
Sl.No Act Pag
e
O1. The Contract and Agency Act------------
1872.
3-2
!2. The Sale" o# $ood" Act---------------------
1%3!.
2&-31
!3. The Partner"h'( Act------------------------
1%32.
32-1
!. The Negot'a)le *n"tr+,ent Act-----------
1881.
2-8
!&. The -an.r+(tcy Act------------------------
1%%7.
%-&!
!/. The Ar)'trat'on Act-------------------------
2!!1.
&1-&2
2010.
Contract Act 1872.
1. What is contract?
An agreement enforceable by law is a contract. Therefore in a contract there must be
i). an agreement
ii). the agreement must be enforceable by law.
There some agreements like an agreement to play cards or to go to a cinema, which cannot be enforced through
the courts of law, are not contract. So an agreement, which can be enforced through the courts of law, is called a
contract.
2. What are the elements of a contract?
An agreement becomes enforceable by law when it fulfills certain conditions. These conditions, which may
be called the essential elements of a contract, are explained hereunder:
i). !ffer and acceptance
ii). "ntention to create legal relationship
iii). #awful consideration
i$). %apacity of the parties
$). &ree consent
$i). #egality of the ob'ect
$ii). %ertainty
$iii). (ossibility of performance
ix). )oid agreement
x). *riting, registration and legal formalities.
3. Definition of acceptance & proposal.
(roposal: *hen one person signifies to another his willingness to do or to abstain from doing anything, with a
$iew to obtaining the assent of that other to such act or abstinence, he is said to make a proposal.
!ffer: A proposal is also called an offer. The promisor or the person making the offer is called offeror. The
person to whom the offer is made is called the offeree.
4. When is the communication of proposal and acceptance complete?
%ompletion of proposal:
The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.
5. How and when can be revoed a proposal and acceptance?
+e$ocation,#apse of proposal :
A proposal comes to an end, and no longer opens to acceptance under the following circumstances:
i). -y notice
ii). -y lapse of time
iii). After expiry of reasonable
time i$). -y failure of reasonable
time
$). -y failure of a condition precedent
$i). -y death of insanity
$ii). %ounter offer
$iii). -y refusal
+e$ocation of Acceptance
An acceptance can be re$oked any time before the acceptance comes to the knowledge of the proposer but
not afterwards.
2010.
!. What do "ou mean b" consideration?
%onsideration is an essential element in a contract. Something which recei$es and gi$es by each party to an
agreement is called consideration.
#. $"pes of consideration.
%onsideration may be classified into three types, as
follows:
i). (ast consideration
ii). (resent consideration
iii). &uture consideration
%. What is &ood consideration?
The rules or necessary factors for consideration can be summed up as
follows:
i). There must be desire of the
promisor ii). "t must be real
iii). +easonable
i$). .ot illegal, immoral or opposed to public
policy $). (resent past or future
$i). &rom the promisee of
promisor
'. What are the (haracteristics ) *ules ) +ssential ,actors of consideration?
The following rules may be laid down regarding
consideration:
i). /esire 0re1uest)
ii). The consideration must be real
iii). (ublic duty
i$). (romise to a
stranger
$). %onsideration need not be ade1uate
$i). The consideration must not be illegal, immoral, or opposed to public
policy $ii). The consideration may be present, past, or future
$iii). %onsideration may mo$e from promisee or from any other
person
1-. .n a formation of a contract consideration must be real but need not be ade/uate 0
+1plain.
The consideration must ha$e some $alue in the eye of law. "t must not be sham or illusory.
The impossible acts and illusory or nonexisting goods cannot support a contract. Therefore, real consideration
comes from good consideration.
A contribution to charity is without consideration. Therefore, it is not real consideration.
An agreement to which the consent of the party is freely gi$en is not $oid merely because the consideration is
not inade1uate2 but the inade1uacy of the consideration may be taken into account by the court in determining
the 1uestion whether the consent of the promisor was freely gi$en.
11. 23o consideration no contract45 e1ceptions to the rule 6r7 (an a contract be made
without consideration?
%onsideration is essential for $alidity of a contract. A promise without consideration cannot create a
legal obligation. So consideration is essential for a contract. -ut there are exceptional cases where a
contract is enforceable e$en though there is no consideration. They are as follows:
i). .atural lo$e and affection
ii). )oluntary compensation
iii). Time bared debt
i$). Agency
$). %ompleted gift
12. (an silence be fraudulent?
i. 3ere silence is not fraud
ii. Silence can be fraudulent in
circumstances
iii. Silence is fraud where silence is in itself e1ui$alent to
speech
2010.
13. Distin&uish between void and voidable contract.
89 & :oints ;oid contract ;oidable contract
4. /efinition. An agreement not enforceable by law
is said to be $oid.
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 other or others is a
$oidable contract. .
5. +ight and obligation A $oid agreement confers no right on
any person and creates no obligations
-ut in case of $oidable agreement
the rights and obligations of the
parties concerned are present unless
it becomes $oid.
6. /eclaration for $oiding As a $oid agreement is $oid from
the beginning it is not necessary for
the effected party to declare the
agreement $oid.
the effected party needs to call the
agreement $oid.
7. +efund the benefit "n case of $oid agreement the party is
not bound to refund the benefit
recei$ed to the other party.
the party may refund the benefit to
the other party, if the agreement
becomes $oid later on.
14. Distin&uish between a contin&ent contract and wa&erin& a&reement.
The distinctions between contingent contract and wagering agreement are gi$en below:
8ub<ect (ontin&ent contract Wa&erin& a&reement
4. )alidity 4. A %ontingent contract is $alid 4. A wagering agreement is $oid
5. /ependency 5. "t depends on the happening or
nonhappening of an e$ent, but the
contract is $alid
5. "f is $oid.
6. +eciprocal promises 6. "t may not contain reciprocal
promises
6. "t consists of certain reciprocal
promises.
15. What do "ou understand b" supervenin& impossibilit"?
*hen enter into contract it is good but subse1uently impossible to perform. That condition is called
super$ening impossibility of contract.
1!. What do "ou understand b" frustration of contract b" supervenin& impossibilit"?
*hen the common ob'ect 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 &rustration.
1#. What are the breaches due to supervenin& impossibilit"?
1%. What do "ou understand b" counter offer? =ive an e1ample.
The acceptance shall be unconditional and absolute . "f the acceptance is gi$en with any condition changing
any portion of the original offer then it is known as counter offer.
8xample: A offer to - to buy his car for tk.499,999 but - agree to pay tk.:9,999 the offer made by - is a
counter offer.
.
6b<ective (ontract >&reement
4. /efinition. An agreement enforceable by law is
contract.
(romise or e$ery set of promises
forming the consideration for each
other, is an agreement.
5. Similarity All contracts are agreements All agreements are not contact.
2010.
1'. .n which cases a contract can be void?
6*. When is an a&reement said to be void?
An agreement is said to be $oid because of mistake, lack of consideration, want of capacity etc. A list of
$oid agreements is gi$en below:
4. #ack of capacity.
5. 3utual mistake of fact.
6. ;nlawful consideration or ob'ect.
7. %onsideration or ob'ect partly unlawful.
<. Agreements without consideration.
=. Agreements in restraint of trade.
>. Agreements in restraint of legal proceedings.
?. ;ncertain Agreement.
:. Agreements by way of wager.
49. "mpossible acts.
44. Agreements contingent on impossible e$ent.
45. +eciprocal promises where there are $oid promises.
46. Agreement is restraint of trade
2-. What are the differences between .ndemnit" and =uarantee ?
8ub<ect (ontract of indemnit" =uarante
e
4./efiation !ne party promises to sa$e 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.
5. (arties 4. Two parties 4. three parties
6. .umber of contract 5. "n a contract of indemnity it is necessary to ha$e
only one contract
5. "n a contract of guarantee it is
necessary to ha$e three contracts.
7. Sue <. "n a contract of indemnity the indemnifier can sue
only the indemnity holder for his loss
<. "n a contract of guarantee the
surety can proceed against principal
debtor
54. Distin&uish between a contract and an a&reement.
22. > offer a reward to whosoever shall return his lost briefcase. ? returns the lost
briefcase7 not nowin& of the advertisement reward. .s > bound to pa" the reward to ??
.o, A is not bound to pay reward to -. As per contract act an offer must be communicated to the offeree. "f
the offeree does any act of acceptance without knowing . it will not crate any legal acceptance or agreement.
2010.
23. What are the remedies for breach of contract ?
4. +escission of the contract.
5. Suit for damages.
6. Suit upon @uantum 3eruit
7. Specific performance of the contract.
<. "n'unction.
57. What are the ri&hts of a bailor and bailee under the contract act?
T h e r ig h ts of - a ilo r A
The rights of -ailor are enumerated hereunder:
4. 8nforcement of rights.
5. Act inconsistent with the terms.
6. +estoration of goods lent gratuitously.
T h e r ig h ts of - ail e e A
The rights of -ailee are enumerated hereunder:
5. -ailment by se$eral 'oint owners.
6. -ailee not responsible on redeli$ery to bailor without title.
7. -aileeBs particular lien.
<. -aileeBs general lien.
25. @.&norance of law is no e1cuse to avoid a contract@ 0 Discuss.
*e 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 $alid reason to a$oid contract. "n this case, contract should be
performed specifically.
2!. What is void or voidable a&reement?
An agreement, which does not satisfy the essential elements of a contract, is $oid. An agreement not enforceable
by law is said to be $oid. A $oid agreement has no legal effect. "f confers no right on any person and creates no
obligations
2#. What do "ou mean b" consideration?
%onsideration is an essential element in a contract. Something which recei$es and gi$es by each party to
an agreement is called consideration.
*hen, at the desire of the promissory, the promisee or any other person has done or abstained from doing, or does
or 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.
2%. (an a minor mae a contract?
As per section 44 of contract act a minor is not competent to a contract. So he,she cannot make a contract. "f
any contract is made by the minor, it will be a $oid agreement.
2'. What do "ou mean b" undue influence?
A contract is said to be induced by undue influence where
i. one of the parties is in position to dominate the will of the other
ii. he uses the position to obtain an unfair ad$antage o$er the
other
2010.
Oter !m"ortant #uestions
69. Short .otes
8xpress %ontract
"mplied %ontract
@uasi %ontract
8xecuted %ontract)
8xecutory %ontract
-ilateral %ontract
;nilateral %ontract
31. (lassification of (ontract
)alid contract
)oid contract
)oidable contract
"llegal contract
;nenforceable contract
32. *ules re&ardin& an offer
An offer may be express or may be implied from the circumstances
An offer may be made to a definite person2 to some definite class of persons2 or to the world at large.
#egal relationship is re1uired
The terms of the offer must be certain, definite, unambiguous and not $ague.
A mere statement of intension is not an offer.
An offer must be communicated to the offeree
An offer may be conditional
(rinted contracts
33. Who can accept an offer
An offer can be accepted only by the person or persons for whom the offer is intended which includes the following:
An offer made to a particular person can only be accepted by him because he is the only person to accept.
An offer made to a class of persons can be accepted by any member of the class.
An offer made to the world at large can be accepted by any person whatsoe$er.
34. 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.
35. How an acceptance to be
communicated? An acceptance to be
communicated by the following: i). !ffer and
Acceptance by post
ii). !ffer and acceptance through telephone
iii). 3icrophone
3!. .s a promise to mae a contribution to charit" enforceable b" law?
.o, a promise to make to charity is not enforceable because it is without consideration.
3#. (an a person who is not a part" 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 ( and @
cannot be enforced by +. -ut a stranger to the consideration can sue to enforce it pro$ided he is a party to the
contract. A contract between (, @ and + whereby ( pays money to @ for deli$ering goods to + can be enforced by
+ although he did not pay any part of the consideration.
2010.
3%. *ules re&ardin& acceptance of an offer.
The acceptance of an offer to be legally effecti$e must satisfy the following re1uirements:
i). "t must be an absolute and un1ualified acceptance of all the terms of the
offer. ii). %onditional acceptance , %ounter offer.
iii). %ontract sub'ect to condition
i$). %larification
$). The acceptance must be expressed in some usual or reasonable manner
$i). 3ental acceptance or uncommunicated assent does not result in a
contract $ii). The mode of acceptance
$iii). Time of acceptance
ix). *hen acceptance is complete
x). -efore offer
xi). The acceptance must be made while the offer is in force.
3'. What are the e1ceptions to sue upon a person who is not a part")a stran&er to a contract?
There are certain exceptions to the rule that a stranger to the contract cannot sue upon it. They are as follows:
i). -eneficiaries in the case of trust
ii). (ro$ision of marriage settlement of 3inor
iii). Assignee of a contract
i$). &amily settlement
$). Acknowledgement or 8stoppel
4-. What are the ri&hts and liabilities of a stran&er?
*ith the exception of the abo$e 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.
41. What are t"pes of a&reements said to be void ?
The following agreements are $oid from the beginning:
4. An agreement made by a minor
5. Agreements without consideration
6. %ertain agreements against public policy
42. What is void or voidable a&reement?
An agreement, which does not satisfy the essential elements of a contract, is $oid. An agreement not enforceable
by law is said to be $oid. A $oid agreement has no legal effect. "f confers no right on any person and creates no
obligations
43. What t"pes of a&reements become void?
An agreement, which was legal and enforceable when it was entered into, may subse1uently become $oid due to
impossibility of performance, change of law or other reasons. *hen it becomes $oid the agreement ceases to
ha$e legal effect.
44. What t"pes of a&reements are e1pressl" declared void?
There are certain agreements, which are expressly declared to be $oid are summariCed hereunder:
4. 8$ery agreement in restraint of marriage of any person, other than a minor, is $oid
5. e$ery agreement by which anyone is restrained from exercising a lawful profession, trade or business of any
kind, is to that extent $oid
6. (ri$ate indi$iduals cannot by agreement alter or $ary their personal law or the statute law
7. Agreements, the meaning of which is not certain, or capable of being made certain, are $oid
<. Agreement by way of wager are $oid
=. Agreements to do and act impossible in itself are $oid
>. Agreements whose ob'ects or considerations are unlawful are $oid
8ub<ect ;oid a&reement .lle&al >&reement
4./efinition An agreement not enforceable by law
is said to be $oid. .
An illegal agreement is one, which is
against a law in force.
5. .ature 4. A $oid agreement is not necessarily
illegal.
4. An illegal agreement is also $oid
2010.
45. What are the differences between void a&reement and voidable a&reement?
8ub<ect ;oid a&reement ;oidable a&reement
4. /efinition An agreement not enforceable by law is
said to be $oid. .
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 $oidable
contract.
5. +ight, !bligation 5. A $oid agreement confers no right on
any person and creates no obligations
5. -ut in case of $oidable agreement
the rights and obligations of the parties
concerned are present unless it becomes
$oid
6. .ecessity to call off 6. As a $oid agreement is $oid from
the beginning it is not necessary for the
effected party to declare the agreement
$oid
6. -ut in case of $oidable agreement
the effected party needs to call the
agreement $oid
4!. What t"pes of a&reements are unenforceable b" law?
An agreement which cannot be enforced in a court of law, one or both of the parties, because of some
technical defect, e.g. want of registration or nonpayment of the re1uisite stamp duty is unenforceabl e by law.
4#. What is meant b" ille&al a&reement?
An illegal agreement is one, which is against a law in force.
4%. Distinct between void a&reement and ille&al a&reement.
4'. What do "ou mean b" capacit"?
8$ery person is competent to contract who is of the age of ma'ority according to the law to which he is sub'ect
and who is of sound mind, and is not dis1ualified from contracting by any law to which he is sub'ect.
5-. Ander which circumstances a person is incapable of enterin& into contracts?
A person is incapable of entering into contracts under the following circumstances:
4. if he is not attained the age of ma'ority according to the law to which he is sub'ect
5. if he is not of sound mind
6. if he is dis1ualified from contracting by and any law to which he is sub'ect.
2010.
51. Who is a minor?
th
A minor is one who has not completed his or her 4?
year of age.
52. What are the e1ceptions re&ardin& the rules to minor?
To the minorDs rule there are two exceptions which are gi$en below:
4). *hen a guardian of the minorBs person or property is appointed by a court of law and
5). *hen a minorBs property is taken o$er by the %ourt of *ards for management
. "n either case minority continues up to the completion of the 54st year.
53. What do "ou mean b" 8ound Bind?
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 'udgment as to it effect upon his interests.
54. .n which case an unsound mind ma" mae 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.
55. .n which case a 8ound Bind ma" not mae a contact? 0
A person who is unusually of sound mind, but occasionally of unsound mind, may not make a contract when he is
of unsound mind.
5!. What is the test of soundness of mind?
The test of soundness of mind are gi$en
hereunder: i). capacity to understand the business
concerned ii). ability to form a rational 'udgment
5#. How ma" the unsoundness of mind arise?
;nsoundness of mind arise from
insanity or lunacy
idiocy
drunkenness
similar factors
5%. What do "ou mean b" .dioc"?
"diocy is a congenital defect caused by lack of de$elopment of the brain. The term idiot is applied to a person
whose mental powers are completely absent.
5'. What do "ou mean b" 9unac" or .nsanit"?
A lunatic is one whose mental powers are deranged so that he cannot form a rational 'udgment on any sub'ect.
!-. What do "ou mean b" >liens?
An alien means a citiCen of foreign state. %ontracts with alien are $alid.
!1. What are the effects of a&reements made b" persons of unsound mind?
The effects of agreements made by persons of unsound mind are describing hereunder:
i). Agreements made by a person of unsound mind are $oid
ii). -ut agreements for supply of necessaries for unsound himself or for persons whom he is sound to support
is $alid as 1uasi contracts.
!2. What do "ou mean b" ,ree (onsent ?
Two or more persons are said to consent when they agree upon the same thing in the same sense.
2010.
!3. .n which situation consent is not free?
The consent is not free if it is caused by
%oercion
;ndue "nfluence
&raud
3isrepresentation
3istake
!4. What do "ou mean b" (oercion?
%oercion is the committing or threatening to commit, any act forbidden by penal %ode, or unlawful detaining, or
threatening to detain, any property, to the pre'udice of any person whate$er with the intention of causing any person to
enter into an agreement.
!5. What are the conse/uences of coercion?
The conse1uences of coercion are gi$en below:
4. A contract brought about by coercion is $oidable at the option of the party whose consent was so caused
5. The aggrie$ed party can ha$e the contract set aside or he can refuse to perform it and take the defense of coercion if
the other party sought to inforce it.
6. The aggrie$ed party may if he so desires abide by the contract and insist on its performance by the other party.
!!. What are the features of coercion ?
i). %oercion means
committing or threatening to commit an act forbidden by the (enal %ode.
the unlawful detaining or threatening to detain any property.
ii). The act constituting coercion, must be directed at any person and not necessarily at the other party to the
agreement.
iii). The act constituting coercion, must ha$e been done or threatened with the intention of causing any person to
enter into an agreement.
8 x ce ptio n s :
i). (rosecution
ii). Eigh prices and high interest rates. iii).
A threat to commit suicide.
!#. What are the special causes which does not constitute coercion?
The special causes which does not constitute coercion are listed bel ow:
i. (rosecution
ii. Eigh prices and high interest rates iii. A
threat to commit suicide
!%. What do "ou mean b" undue influence?
A contract is said to be induced by undue influence where
iii. one of the parties is in position to dominate the will of the other i$. he
uses the position to obtain an unfair ad$antage o$er the other.
!'. What are the presumption to e1ist undue influence?
;ndue influence may be presumed to exist in the following cases:
i. +eal or apparent authority or fiduciary relationship stands
ii. %ontract makes with a mentally incapable person.
#-. What do "ou mean b" unconscionable bar&ains?
;nconscionable bargain is one which is against the conscience of reasonable persons and what shocks the public. "f
exercise profit is made it will also be within this term.
Andue influence (oercion
4. The influence arises from the domination of the will of
one person o$er another.
4. The influence arises from committing or threating to
commit punishable offence or detaining or threating to
detain property unlawfully.
5. ;ndue influence is mental pressure 5. %oercion are mostly cases of the use of physical force.
2010.
#1. What do "ou mean fiduciar" relationship?
&iduciary relationship means a relationship of mutual tr ust and confidence. Such a relationship is supposed to
exist in the following cases:
father and son
guardian and ward
solicitor and client
doctor and patient
preceptor and disciple
trustee and beneficiary
#2. What are the conse/uences of undue influence?
The conse1uences of undue influences are describing are describing hereunder:
4). "t is $oidable at the option of the party whose consent was so caused
5). Such an agreement may be set aside absolutely or
6). if the party who was entitled to a$oid it has recei$ed any benefit thereunder, the court can set it aside upon
such terms and conditions as may seem 'ust
7). The aggrie$ed party may, if he desires, treat the agreement as binding and enforce it against the other party.
#3. How is an undue influence suspected?
An undue influence is suspected in the following cases:
4). "nade1uacy of consideration
5). &iduciary relationship
6). "ne1uality between the parties as regard age, intelligence, social status etc.
7). Absence of independent ad$isors for the weaker party
<). ;nconscionable bargains
#4. What are the difference between undue influence and coercion?
#5. What do "ou mean b" misrepresentation?
3isrepresentation arises when the representation made in inaccurate but the inaccuracy is not to any desire
to defraud the other party. There is no intension to decei$e.
#!. What are the causes of misrepresentation?
The causes of misrepresentation are
i. ;nwarranted assertion
ii. -reach of duty
iii. "nnocent mistake
##. What are the conse/uences of misrepresentation ?
The conse1uences of misrepresentation are
i). The aggrie$ed party can a$oid the agreement
ii). The aggrie$ed party can insist that the contract be performed and he shall be put in the position is which
he would ha$e been if the representation made had been true.
8ub<ect of Differences ,raud Bisrepresentation
4. "ntension 4. Eere implies an intension to decei$e 4. .o intension to decei$e
5. -elief 5. Statement is dishonest. 5. Statement id honest though it is wrong.
6. Sue for damages 6. The aggrie$ed party can sue for damages 6. The aggrie$ed party canDt sue for any damage.
2010.
#%. What does @to deceive@ mean?
#'. What is fraud?
The term fraud includes all acts committed by a person with a $iew to decei$e another person. To decei$e means
to induce a man to belie$e a thing is true which is false.
%-. What t"pe of acts to be considered as fraud?
i). &alse statement
ii). Acti$e concealment
iii). "ntentional nonperformance
i$). /eception
$). &raudulent act or omission
%1. What are the conse/uences of fraud?
A party who has been induced to enter into an agreement by fraud has the following remedies open to him:
4). A$oidance of performance of the contract
5). "nsistence of performance of the contract
6). Sue for damage
%2. How can the relief for fraud be obtained?
+elief for fraud can be obtained only if the following conditions are satisfied:
4). Act committed by a party or agent
5). Act must ha$e been done with the intension to decei$e and must actually decei$e.
6). %onsent obtained by the act complained of
7). Silence
<). The remedy of rescinding not a$ailable
%3. What are the difference between fraud and representation?
%4. What is meant b" the Aberrimae fidei contracts?
;berrimae fidei contracts are contracts where law imposes upon the parties the duty of making a full disclo sure
of all material facts.
'5. What t"pe of contract come within the class of Aberrimae fidei contracts?
The following types of contract come within the class of ;berrimae fidei:
4). %ontracts of "nsurance
5). &iduciary relationship
6). %ontracts for the sale of immo$able property
7). Allotment of shares of companies
<). &amily settlement
?<. *hat do you mean by mistakeA
An erroneous belief concerning something is called mistake.
%!. How man" classes of mistaes?
4). 3istake of law
mistake as to a law in force in -angladesh.
mistake as to a law not in force in -angladesh.
5). 3istake of fact
2010.
%#. What is meant b" bilateral mistae?
*hen both the parties of the contract mistake is called bilateral mistakes.
%%. What is meant b" unilateral mistae?
*hen one of the parties of the contract mistakes is called unilateral mistakes.
%'. What are the rules re&ardin& mistae?
4). 3istake of law
5). 3istake of fact
6). !pinion
7). ;nilateral mistake
'-. When are the consideration and the ob<ect of an a&reement unlawful ?
The consideration and the ob'ect of an agreement are unlawful in the following cases:
4. "f it is forbidden by law.
5. "f it is of such a nature that, if permitted, it would defeat the pro$ision of any law.
6. "f it is fraudulent.
7. "f it in$ol$es or implies in'ury to the person or property of another.
<. "f the court regards it as immoral.
=. "f the court regards it as opposed to public policy.
'1. Which are the a&reements said to be a&ainst public polic"?
The following agreements ha$e been held to be against public policy :
4. Trading with enemy.
5. Agreements interfering with the course of 'ustice.
6. Traffic in public offices.
7. Agreement creating an interest opposed to duty.
<. Agreement restraining personal freedom.
=. Agreements interfering with parental duties.
>. Agreements interfering with marital duties.
?. 3arriage brokerage agreements.
'2. What do "ou mean b" wa&er?
A wager is an agreement by which money is payable by one person to another on the happening or non happening
of a future, uncertain e$ent.
'3. What are the characteristics of an wa&er a&reement?
The characteristics of an wager agreement are gi$en below:
4. The consideration for the promise under a wagering agreement is to pay or get money.
5. The money is payable on the happening or the nonhappening of an e$ent.
6. The agreement depends on a future and uncertain e$ent.
7. The essence of gaming and wagering is that one party is to win and the other lose.
<. "n wagering agreement no party has control o$er the e$ent.
=. %ommercial transactions are $alid, but to pay price differences in a wagering agreement is $oid.
'4. Which are the transactions not wa&ers?
4. Shares.
5. Fames of skill.
6. A statutory exception.
7. %ontract of "nsurance.
<. -adla.
2010.
'5. What do "ou mean b" contin&ent contract?
A contingent contract is a contract to do or not to do something, if some e$ent, collateral to such contract, does
or does not happen.
'!. What do "ou mean b" collateral event ?
A collateral e$ent means an e$ent which is neither a performance directly pro mised as part of the contract, nor
the whole of the consideration for a promise.
'#. What are the characteristics of contin&ent contracts?
4. The performance of such contract depends on a contingency, i.e., on the happening or non happening of the
future e$ent.
5. The e$ent must be collateral i.e., incidental to the contract.
6. The contingency is uncertain.
'%. What are the methods of termination of a contract?
4. -y performance of the promise or tender.
5. -y mutual consent canceling the agreement or substitute in a new agreement in place of the old.
6. -y subse1uent impossibility of performance.
7. -y lapse of time.
<. -y material alteration without the consent of the other parties.
=. -y breach made by other parties.
''. How ma" the termination of contract b" mutual a&reement occur?
4. .o$ation : .o$ation occurs when a new contract is substituted for an existing con tract, either between the
same parties or between the different parties
5. Alteration: Alteration of a contract means change in one or more of the terms of a contract.
6. +emission: +emission may be defined as the acceptance of less than what was contracted for
7. +escission: Any person interested in a contract in writing may sue ha$e it rescinded.
<. *ai$er: "t means the abandonment of a right. A party to a contract may wai$e his rights under the
contract. Thereupon the other party is released from his obligation.
=. 3erger: *hen a superior right and inferior right coincide and meet in one and the same person , the inferior right
$anishes into the superior right. This is known as merger.
1--. What do "ou mean b" accord and satisfaction?
Accord means the promise to accept less than what is due under the old
contract. Satisfaction means the payment or the fulfillment of the smaller
obligation.
1-1. What are the &rounds of frustration?
Super$ening impossibility may occur in many ways, some of which are explained below:
4. /estruction of an ob'ect.
5. %hange of law.
6. &ailure of precondition.
7. /eath or incapacity of personal ser$ices.
<. !utbreak of war.
1-2. What are the t"pes of supervenin& impossibilit"?
There are types of super$ening impossibility:
4. (ostcontractual impossibility
5. (recontractual impossibility
2010.
1-3. What are the e1ceptions of the principle of supervenin& impossibilit"?
Some points are gi$en below of cases which do not come within the principal of super$ening impossibility:
4. /ifficulty of performances.
5. %ommercial impossibility.
6. Strikes, lockouts, ci$il disturbances and riots.
7. &ailure of one of the ob'ects.
1-4. What are the effects of supervenin& impossibilit"?
*hen the performance of contract becomes subse1uently impossible or illegal, the contract becomes
$oid.
1-5. What is the doctrine of frustration?
*hen the common ob'ect of a contract can no longer be carried out, the court may declare the contract to at an
end. This is known as /octrine of &rustration.
1-!. When does a contract terminate b" law?
A contract terminates by operation of law in case of the following cases:
4. -y death
5. -y insol$ency
6. -y merger
49>. Eow may the breach of contract ariseA
-reach of contract may arise in two ways :
4. by anticipatory breach.
5. by actual breach , present breach
1-%. What are the remedies for breach of contract ?
4. +escission of the contract.
5. Suit for damages.
6. Suit upon @uantum 3eruit
7. Specific performance of the contract.
<. "n'unction.
1-'. What are the t"pes of dama&es?
4. %ompensatory damages.
5. Special damages.
6. .ominal, %ontemptuous damages.
7. 8xemplary, (uniti$e or )indicti$e damages.
11-. What do "ou mean b" /uantum meruit ?
@uantum 3eruit 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 $oid for some reason. This is known as /octrine of @uantum
3eruit.
111. What do "ou mean b" Cuasi (ontract?
*hen one person obtains a benefit at the expense of another and the circumstances are such that he ought,
e1uitably, to pay for it, the law will compel payment e$en though there is no contract between the parties by which
payment is promised. The parties will be put in the same position as they would ha$e occupied if there was a
contract between them. Such cases are called @uasi %ontract.
2010.
112. What are the rules re&ardin& the doctrine of /uantum meruit ?
The rules regarding the doctrine of 1uantum merit are stated below:
4. The in'ured party entitlement to claim reasonable compensation
5. A person who has done something under the contract which is disco$ered to be unenforceable by law for
some technical reasons, is entitled to get compensation.
6. (resumption of law regarding an implied agreement to pay for ser$ices rendered.
7. *here a contract is not di$isible into parts and lump sum of money is promised to be paid for the entire work,
part performance does not entitle a party to claim payment 1uantum meruit.
<. .othing can be reco$ered for 1uantum meruit when there is no e$idence of an excess or implied promise to pay
for work already done.
=. A person guilty of breach 0$iolate) of contract cannot claim payment on 1uantum meruit.
113. Describe the cases which are to be deemed to be Cuasi (ontract.
The cases which are to be deemed to be @uasi %ontract are describing below:
4. .ecessaries for incapable person.
5. +eimbursement of interested person.
6. -enefit of nongratuitous act.
7. &inder of goods.
<. /eli$ery by mistake or under coercion.
114. What do "ou mean b" contract of indemnit"?
A contract of indemnity is a contract by which one party promises to sa$e the other party from loss caused to him
by the conduct of the promisor himself, or by the conduct of any other person.
115. What are the characteristics of contracts of indemnit"?
The characteristics of contracts of indemnity are gi$en hereunder:
4. A contract of guarantee must satisfy all the essential elements of a contract.
5. The contract may be expressed or implied.
11!. What are the ri&hts of the indemnit" holder ?
4. All damages which he may be compelled to pay in any suit in respect of any matter to which the promise
to indemnify applies.
5. All costs which he may be compelled to pay in such suits.
6. All sums which he may ha$e paid upon compromise of such suit.
11#. What do "ou mean b" contracts of &uarantee?
A contract to perform the promise or discharge the liability, of a third person in case of his default.
11%. How man" t"pes of contracts of &uarantee?
4. &or payment to the creditor to the principal debt or by the guarantor.
5. (ayment of price for goods sold.
6. &idelity guarantee.
11'. What are the essentials of valid &uarantee?
4. 3ust satisfy all the essential elements of a contract.
5. 3ay be oral or written.
6. There must be three parties.
7. The primary liability is that of principal debtor.
<. 3inor
=. %onsideration
2010.
12-. Which are the invalid contracts of &uarantee?
4. 3isrepresentation.
5. %oncealment.
6. *hen cosurety does not 'oin.
7. #ack of essential elements.
121. What do "ou mean b" (ontinuin& =uarantee D
A guarantee which extends to a series of transaction is called continuing
guarantee.
122. How is a continuin& &uarantee revoed?
4. -y notice of re$ocation by the
surety.
5. -y the death of the surety.
123. What do "ou mean b" ?ailment?
A bailment is the deli$ery of goods by one person to another for some purpose, upon a contract that they shall,
when the purpose is accomplished be returned or otherwise disposed of according to the direction of the person
deli$ering them.
124. Who are bailor7 baile?
-ailor: The person deli$ering the goods is called the bailor.
-ailee: The person to whom they are deli$ered is called the
bailee.
-ailment: The transaction is called
-ailment.
125. What are the characteristics of ?ailment ?
The characteristics of -ailment are gi$en
below:
4. /eli$ery.
5. (urpose
6. +eturn.
7. %ontract.
<. 3o$able goods.
=. (ossession.
12!. What are the inds of ?ailment?
4. Fratuitous -ailment: A gratuitous bailment is one in which neither the bailor, nor the bailee is entitled to
an remuneration
5. -ailment for reward: A bailment for reward is one where either the bailer or the bailee is entitled to
a remuneration
12#. What are the duties of the ?ailee?
The duties of the -ailee are gi$en
below:
4. /uty of reasonable care.
5. -aileeBs liability for negligence of
ser$ants.
6. ;nauthoriCed use of goods.
7. 3ixture of -ailorBs goods with the -aileeBs.
<. /uty of returning goods.
=. Accretion to the goods bailed.
>. #iabilities of "nnkeeper and
Eotelkeepers.
?. #iabilities of carrier.

2010.
12%. What are the duties of the ?ailor?
The duties of the -ailor are gi$en below:
4. -ailorBs duty to disclose faults in goods bailed.
5. (ayment of expenses in Fratuitous -ailment.
6. +esponsibility for breach of warranty of title.
12'. What are the ri&hts and duties of finder of &oods ?
4. (ossession.
5. %ompensation and #ien.
6. +eward.
7. Sale.
13-. What are the ri&hts of ?ailor?
The rights of -ailor are enumerated hereunder:
5. Act inconsistent with the terms.
6. +estoration of goods lent gratuitously.
131. What are the ri&hts of ?ailee?
The rights of -ailee are enumerated hereunder:
5. -ailment by se$eral 'oint owners.
6. -ailee not responsible on redeli$ery to bailor without title.
7. -aileeBs particular lien.
<. -aileeBs general lien.
132. When does a ?ailment terminate?
4. 8fflux of time.
5. &ulfillment of purpose.
6. Act inconsistent with the term.
7. Foods lent gratuitously.
<. /eath.
133. What are the duties and obli&ations of finder of &oods ?
4. Ee must take reasonable care of the goods.
5. Ee must not mix the finderBs goods with his own goods.
6. The goods must be returned to the real owner.
7. "f there is an accretion to the goods found, it must be gi$en to the real owner.
<. Ee must not use the goods for his purpose.
=. Ee must try to find out the true owner of the goods.
134. What do "ou mean b" :led&e or :awn?
The bailment of goods as security of payment of a debt or performance of a promise is called (ledge or (awn.
135. What are the difference between ?ailment and :led&e?
The difference between pledge and other kind of bailment lies in the purpose or ob'ecti$es of the transaction.
4. The purpose of a pledge is to pro$ide security for a debtor or the performance of a promise.
-ut in case of bailment there are other purposes for example repair, safe custody.
5. (ledge is a particular kind of bailment.
2010.
13!. When can a non5owner mae a valid :led&e?
4. 3ercantile Agent.
5. (ossession under a $oidable contract.
6. (awnor with a limited interest.
7. (ossession with coowner.
13#. What are the ri&hts of the :led&e or :awnee?
4. +ight of +etainer.
5. +etainer of subse1uent ad$ance.
6. 8xtraordinary expenses.
7. (awneeBs right where pawnor makes default.
13%. What are the ri&hts of :led&or?
4. /efaulting pawnorBs right to redeem.
5. (reser$ation and maintenance.
6. (rotection of debtor
13'. What do "ou mean b" >&ent7 :rincipal and >&enc"?
Agent: An agent is a person employed to do any act for another or to represent another in dealings with third person.
(rincipal : The person for whom such act is done or who is so represented, is called the principal.
Agency :The relationship is called Agency.
14-. What are the differences between a&ent and servant?
The differences between agent and ser$ant are gi$en below:
Sub'ect Agent Ser$ant
4. Authority 4. An agent is to exercise his authority in
accordance with the principalBs
instructions
4. A ser$ant has to act according
to the orders of the master in e$ery
particular
5. +elationship 5. An agent is appointed and employed to
bring the principal into contractual
relationship with third parties
5. A ser$ant cannot do that
6. -inding 6. An agent can bind the principal to the
third parties
6. A ser$ant cannot do so
7. +emuneration 7. The mode of remuneration of an agent
may $ary, including a commission on the
basis of the work done
7. A ser$ant is generally paid
through wages
<. #iability <. An agent is liable for wrong done
within the scope of his authority
<. A master is liable for the wrong
of his ser$ant if it is committed in
course of the ser$antBs
employment
=. .umber of principal =. An agent may work for se$eral
principals
=. A wholetime ser$ant ser$es
only one master
$. %annu $ian (A. #asem & Co). 'age 21
2010.
141. What are the differences between >&ent and ?ailee?
Sub'ect -ailee Agent
4. (ossession 4. The bailee has possession of goods
of the bailor
4. An agent may not ha$e possession
of any goods or property of the
principal
5. +elationship 5. The bailee has no power to create
any contractual relationship with the
third party
5. An agent has that authority.
6. Act on behalf 6. ;nder certain circumstances a bailee
may act as an agent
6. An agent canDt.
142. What are the different classes of >&ents?
4. -roker.
5. &actor.
6. A %ommission Agent.
7. Auctioneer.
<. A /el credere Agent.
=. Feneral Agent and (articular Agent.
143. What are the methods of creatin& >&enc"?
4. Agency by 8xpress Agreement.
5. Agency by "mplied Agreement.
6. Agency by 8stoppel or by Eolding !ut.
7. Agency of .ecessity.
<. Agency by +atification.
145. .s a wife an a&ent of her husband? 6r7 (an a wife bind her husband?
A wife is an agent of necessity, ha$ing power to pledge her husbandDs credit for necessaries of life, when she is
not properly pro$ided for him or when she has been deserted by the husband. -ut if the husband gi$es her a
sufficient allowance, she has no authority to pledge his credit and can ne$er be the agent of necessity.
14!. What happens when the a&ent e1ceeds his authorit"?
4. *hen the authority is separable.
5. *hen authority can not be separated.
6. *hen the principal is bound by unauthoriCed acts of agent
*here by the rule of estoppel the principal is precluded from denying the authority of the agent.
*here an agency has been terminated, but notice of termination has not been recei$ed by the other parties
concerned.
14#. What do "ou mean b" 8ub5a&ent ?
An agent appointed by an agent is called a subagent. A subagent is a person employed by, and acting under
the control of, the original agent in the business of agency.
2010.
14%. What are the e1ceptions re&ardin& the appointment of an a&ent b" an a&ent?
4. *hen it is permitted by the custom, of the trade with which the agency is concerned.
5. *hen it is necessary because of the nature of the agency.
14'. What do "ou mean b" co5a&ent?
A coagent is a person appointed by the agent according to the express or implied authority of the principal, to act
on behalf of the principal in the business of the agency.
15-. How does an a&enc" terminate?
4. Termination by act of parties.
5. Termination by operation of law.
8fflux of time.
(erformance of the ob'ect.
/etermination of sub'ectmatter.
/eath or insanity of the principal or agent.
"nsol$ency of the principal.
The principal becoming an alien enemy.
Termination of the subagents authority.
151. What are the duties of a&ents to the :rincipals?
4. Agents duty in conducting principals business.
5. Skill and diligence re1uired from agent.
6. AgentBs duty to render accounts.
7. AgentBs duty to communicate to principal.
<. AgentBs not to deal on his own account.
=. (rincipal to get benefit of agents dealings.
>. Agents duty to pay sums recei$ed for principal.
?. (rincipalBs death or insanity.
:. 3iscellaneous.
152. What are the duties of principals to a&ents?
4. Agent to be indemnified against conse1uences of lawful acts.
5. Agent to be indemnified against conse1uences of acts done in good faith.
6. .onliability for criminal acts.
7. %ompensation for principalBs neglect.
153. What are the ri&hts of principals?
4. %ompensation
5. AgentDs duties
6. +e$ocation
154. What are the ri&hts of a&ents?
5. AgentBs right of retainer.
6. *hen agents remuneration becomes due.
7. Agent not entitled to remuneration for business misconduct.
<. Agents lien.
2010.
155. What are the personal responsibilit" of a&ent?
"n case of
4. &oreign principal.
5. ;ndisclosed principal.
6. *hen principal cannot be sued.
7. &ictitious person or nonexistent person.
<. ;nauthoriCed acts.
=. 3isrepresentation or unauthoriCed act by agent .
>. (retended agent.
?. +epresentation as to liability.
15!. What are the le&al conse/uences of the contracts with an undisclosed principal?
#egal conse1uences are as follows
4. (rincipal may re1uire performance of the contract.
5. !ther party may refuse to fulfill the contract.
6. (erformance is sub'ect to the rights and obligations between agent and the other party.
7. Agent is personally liable.
2010.
(ale o) *oods Act+1,-0
"%A- @uesti ons a nd Ans we rs
1. When does an a&reement to sell become sale?
An agreement to becomes a sale when the prescribed time elapses or the conditions, Sub'ect to which
the title , (roperty in the goods is to be transferred, are fulfilled.
2. What are the features of a contract of sale of &oodsA
The essential elements of a contract for t he sale of goods are gi$en hereunder:
4. 3o$able Foods.
5. 3o$able Foods for 3oney.
6. Two parties.
7. &ormation of the contract of sale.
<. 3ethod of forming the contract.
=. The terms of contract.
>. !ther essential elements.
3. What are the differences between (ondition and Warrant"?
The differences between condition and warranty are sited bellow:
89 3o& 8ub<ect (ondition Warrant
"
4./efinition A condition is a stipulation
essential to the main purpose of
the contract, the breach of which
gi$es rise to right to treat the
contract as repudiated
A warranty is a stipulation
collateral to the main purpose of
the contract, the breach of which
gi$es rise to a claim for damages
but not to a right to re'ect the
goods and treat the contract as
repudiated.
5.Terms %ondition is a term which is
essential to the main purpose of
the contract.
*arranty is only a collateral
term.
6.%on$ertion A breach of condition may under
certain circumstances, be treated
as warranty.
-ut a warranty cannot become a
condition.
4. =ive an e1ample of implied condition in a contract of sale of &oods.
There is an implied condition on the part of the seller that, in the case of sale, he has a right to sell
the goods and that in the case of agreement to sell, he will ha$e a right to sell the goods at the time
when the property is to pass.
8xample: A bought a motorcar from - and used it for four months. - had no title on that car. A
was forced to return the car to the true owner. Eeld, there is a breach of the implied condition as to
title and A is entitled to get back the purchase money paid notwithstanding the fact that he had used
the car for four months
2010.
5. What is doctrine of (aveat +mptor?
%a$eat 8mptor is a #atin expression which means Gbuyers bewareH. The doctrine of ca$eat emptor means
that, ordinarily, a buyer must buy goods after satisfying himself of their 1uality and fitness. "f he makes
a bad choice he cannot blame the seller or reco$er damages from him.
!. What are the rules7 which determine when ownership of propert" passes from the
seller to the bu"er?
!r, When does title in the propert" in &oods sold pass from the seller to the bu"er?
4). ;nascertained Foods.
5). The intention of the (arties.
6). Specific goods.
7). *hen seller has something to do.
<). *hen goods are to be measured, tested, etc.
=). ;nconditional appropriation.
>). /eli$ery to the carrier.
?). Foods sent on appro$al or Gon sale or returnH.
#. What are the prevailin& rules re&ardin& deliver"?
4). (ossession of -uyer.
5). 8ffect of part deli$ery.
6). Application for deli$ery.
7). (lace of deli$ery.
<). Time of deli$ery.
=). (ossession of a third person.
>). 8xpenses of deli$ery.
?). /eli$ery of the wrong 1uantity.
:). "nstallment deli$ery.
49). /eli$ery to the %arrier or *harfinger.
44). 8xamining the goods.
45). Acceptance.
46). -uyer is not bound to return re'ected goods.
47). #iability of -uyer.
%. 23o seller can &ive the bu"er better title to the &oods then he7 himself has4 0 +1plain.
Seller is the true owner of the goods. -ut he cannot gi$e better title, property in the goods then
he, himself has. There is a #atin phrase in this concept D.emo dat 1ui non habetD, which
represents, none can gi$e, who does not himself possess. This rule is applicable for mo$able and
immo$able goods excepting some conditions.
8xample: A horse was sold in a public auction. -ut the horse was a thie$ery item and was
without the knowledge of both the buyer and the auctiontaker. "t was held that the real owner of
the horse could reco$er his horse.
'. Who is an unpaid seller ?
The seller of goods is deemed to be an unpaid seller:
when the whole of the price has not been paid to tendered.
when a bill of exchange or other negotiable instruments has been recei$ed and the condition on which
it was recei$ed has not been fulfilled by reason of the dishonor of the instrument or otherwise.
2010.
1-. Define bu"er7 seller7 and &oods.
4. -uyer: -uyer, means a person who buys or agrees to buy goods.
5. Seller : Seller, means a person who sells or agrees to sell goods.
6. Foods : Foods, means e$ery kind of mo$able property other than actionable claims and money2 and
includes stock and shares, growing crops, grass, and things attached to or forming part of the land which
are agree to be se$ered before sale or under the contract of sale.
i.e. DFoodsD includes e$ery kind of mo$able property except 0i) actionable claims and 0ii) money.
11. What are the ri&hts of seller of &oods?
6r7 Discuss the ri&hts of the seller a&ainst the
bu"er.
4). +emedies.
5). 8nforcement of liabilities of buyer.
6). !ther rights
/amages for non deli$ery.
+emedy for breach of warranty.
+epudiation of contract.
"nterest and special damages.
12. What are the ri&hts of bu"er of &oods?
4). /eli$ery.
5). +epudiation.
6). -uyerBs right of examining goods.
7). -uyer is not bound to return re'ected goods.
<). /amages for nondeli$ery.
=). Specific performance.
>). +emedy for breach of warranty.
?). +epudiation of %ontract.
:). 8ffect of tax changes.
13. What are the ri&hts of the unpaid seller?
A. Against the goods:
4). SellerBs lien or )endorBs lien.
5). The right of stoppage in transit.
6). The right of resale.
- Against the buyer personally:
4). Suit for the price.
5). Suit for damages.
6). %laim for interest and special damages.
14. What is the meanin& of vendorEs lien?
;npaid seller has right to lien on goods while he is in possession of them, in the following cases :
i). when the goods ha$e not sold in credit,
ii). when the goods sold in credit but credit period has expired,
iii). the buyer has become insol$ent.
Seller has right to lien if the possession of goods kept by him as an agent or bailee of buyer.
Seller has right to lien on the remainder goods after pare deli$ery.
2010.
15. What are the conse/uences of breach of contract of sale?
A. SellerBs +emedies Against the Foods.
4). SellerBs lien or )endorBs lien.
5). The right of stoppage in transit.
6). The right of resale.
-. +emedies of the Seller Against -uyer (ersonally.
4). Suit for the price.
5). Suit for damages.
6). %laim for interest and special damages.
%. -uyerBs +emedies Against the Seller.
4). /amages for nondeli$ery.
5). Specific performance.
6). +emedy for breach of warranty.
7). +epudiation of contract.
!ther "m portant @uestions and Answers
4=. 8hort notes :
4. +1istin& &oods : 8xisting goods are goods which are already in existence and which are presented in
some personDs possession and ownership.
5. &uture goods: &uture goods mean goods to be manufactured or produced by the seller after the
making of the contract of sale.
6. %ontingent goods : There may be a contract for the sale of goods for the ac1uisition of which by th e
seller depends upon a contingency which may or may not be happen.
7. (rice: (rice, means the money consideration for a sale of goods.
<. (roperty: (roperty, means the general property in goods and not merely a special property.
=. /eli$ery: /eli$ery, means $oluntary transfer of possession from one person to another.
>. /eli$erable State: Foods, are said to be in a deli$erable state, when they are in such state that the
buyer would under the contract be bound to take deli$ery of them.
?. Specific , Ascertained Foods: Specific , Ascertained goods identified and agreed upon at the time
when a contract of state is made.
:. Feneric , ;nascertained Foods: Feneric , ;nascertained goods are not identified and agreed upon at
the time when a contract of state is made.
49. Sale and Agreement to Sell: *here the transfer of the property in the goods is taken place at a
future time or sub'ect to some condition thereafter to be fulfilled, the contract is called agreement to sell.
1#. What are the essential elements of (ontract for the 8ale of =oods?
i) 3o$able goods
ii) 3o$able goods for money
iii) Two parties
i$) &ormation of the contract of sale
$) The terms of contract
$i) !ther essential elements:
2010.
1%. What are the differences between sale and a&reement to sale?
8l.& 8ub<ect 8ale >&reement to sale
4./efinition *here under a contract of sale, the
property in the goods is transferred
from the seller to the buyer, the
contract is called a sale
*here the transfer of the property
in the goods is taken place at a
future time or sub'ect to some
condition thereafter to be fulfilled,
the contract is called agreement to
sell.
5.Transfer of ownership The property in the goods passes to
the buyer.
The property remains with the seller
until the agreement to sell becomes
a sale.
6. .ature of contract Sale is an Dexecuted contract The agreement to sell is an
Iexecutable contractB.
1'. What is meant b" Hire :urchase >&reement?
A higherpurchase agreement is one under which a person takes deli$ery of goods promising to pay the
price by a certain number of installments and until full payment is made, to pay higher charges for using
the goods.
2-. What do "ou mean b" (ondition?
A condition is a stipulation essential to the main purpose of the contract, the breach of which gi$es rise
to right to treat the contract as repudiated 0re'ected). Sec. 45 05)
8xample: A buyer placed an order to the seller of furniture stating that, the furniture would be made
of tickwood, otherwise he would not take it. "n this case, furniture made of tick wood is a condition.
21. When can a condition be treated as a Warrant"?
4). )oluntary wai$er of a condition.
5). %ompulsory wai$er of a condition.
22. What do "ou mean b" warrant"?
A warranty is a stipulation collateral to the main purpose of the contract, the breach of which gi$es rise
to a claim for damages but not to a right to re'ect the goods and treat the contract as repudiated. Sec. 45
06)
8xample: A buyer placed an order to the seller of furniture stating that, the furniture would be made
of good 1uality wood, and the seller agreed to make it with tickwood. "f the furniture would not
make of tickwood, it would be treated as the breach of warranty not any condition.
23. What are the conse/uences for breach of Warrant"?
4). Suit for damages:
A breach of warranty gi$es rise to claim for damages but not to a right to re'ect the goods and treat the
contract as repudiated.
5). Ad'ustment for damages:
A breach of warranty by the seller may rise to claim to the buyer for compensation or making
ad'ustment from the selling price of the goods.
2010.
24. What are the conse/uences for breach of (ondition?
4). +epudiation or re$ocation of
goods:
A buyer, upon the breach of condition if it done by the seller, may re'ect the goods. !n the other hand
a seller, upon the breach of condition if the buyer does it, may repudiate the contract.
5). +epudiation of
contract:
*here either parties to a contract of sale repudiates the contract before the date of deli$ery, the other
party may either treat the contract as subsisting and wait till the date of deli$ery, or he may treat the
contract as rescinded and sue for damages for the breach.
6). %laim for
damages:
"n the case of any breach of contract, the $ictim is moreo$er entitled to claim for damages after
repudiation of goods and contract.
25. What are the conse/uences of .mplied (onditions?
4). %ondition as to
title.
5). Sale by
description.
6). Sale by
sample.
7). Sale by sample as well as
description.
<). %ondition as to fitness or
1uality.
2!. What are the e1ceptions to the rule of (aveat +mptor?
4). *here the buyer relies upon the skill and 'udgment of the
seller.
5). *here by custom an implied condition of fitness is annexed to a contract of
sale.
6). *here there is a sale of goods by description there is an implied condition that the goods are fit
for sale.
7). *here the seller is guilty of
fraud.
2#. What are the .mplied Warranties?
4). The buyer must get 1uiet
possession.
5). The goods must be free from
encumbrance.
6). &itness of goods, re1uired for a purpose, may be warranted by usage of
trade.
2%. Wh" is the time of transfer of ownership necessar"?
4). +isk passes with
property.
5). *ho can take
actionA
6). *hat is the effect of
insol$encyA
2'. Ander what circumstances a person who is not owner7 can &ive to the transferee a
valid title to the &oods?
4). 8stoppel.
5). Sale by a mercantile
agent.
6). Sale by one of se$eral 'oint
owners.
7). Sale of goods obtained under a $oidable
agreement.
<). Sale by the seller in possession of goods after
sale.
=). -uyer in possession of goods o$er which the seller has some
right.
>). An unpaid seller.
?). Sale under the %ontract
Act.
2010.
3-. What are the duties of seller of &oods?
The following are the duties of seller of goods:
4. /eli$ery
5. +isk of deterioration of goods
6. /amages for nondeli$ery
7. Specific performance.
31. What are the duties of bu"er of &oods?
The buyer of goods has the following duties:
4. (ayment of price
5. %ompensation
6. /eli$ery
7. #iability of buyer
<. "nterest and special damages.
2010.
'artnersi" Act 1,-2.
"%A- @ ue stio n a nd A ns we r
1. (an a partner bind the firm?
A partner can bind the firm by the means of his acts relating to partnership business. (ersons carrying on
business in partnership are agents as well as principals. The business of a firm is carried on by all or any one
or more of them acting for all. 8$ery partner has the authority to act on behalf of all and can, by his actions,
bind all the partners of the firm.
2. What are the essential elements of a :artnership?
The following three elements are the essential of a partnership
4.%ontractual relation , )oluntary agreement:
There must be an agreement entered into by two or more 059, but in case of -anking 49) persons.
5. Sharing profit, loss:
The agreement must be to share the profits of a business.
6. %arrying of business:
The business must be carried on by all or any of the partners acting for all.
3. (an a firm be liable for the wron&ful acts of a partner?
A firm can be liable for the wrongful acts of a partner. *here, by the wrongful act or omission of a partner
acting in the ordinary course of the business of a firm, or with the authority of his partners,
loss or in'ury is caused to any third party, or any penalty is incurred, the firm is liable therefore is liable to
the same extent as the partner.
4. What do "ou understand b" partnership at will?
A partnership is called a partnershipatwill2
a. when the partnership is not for a fixed period of time, and
b. when no pro$ision is made as to when and how the partnership will come to an end. A
partnership at will can be dissol$ed whene$er any partner chooses to do so.
5. What do "ou mean b" *e&istration of ,irms?
+egistration of firm means the registration of the contract with the registrar. "t is not compulsory but an
unregistered firm suffers from certain disabilities and therefore registration is necessary for carrying on
business.
!. .s it mandator" for a firm to re&istration?
The registration of a partnership firms is not mandatory. Therefore an unregistered firm is not an illegal
association. -ut an unregistered firm suffers from certain disabilities and therefore registration is necessary
form carrying on business.
2010.
#. (an "ou spell out the procedure for re&istration of a firm?
a. "f any firm wants to be registered then it shall ha$e to made application to the registrar
;nder prescribed form J fee mentioning the following sub'ects , information:
i. .ame of the firm
ii. The principal office
iii. The branch office 0if any)
i$. !b'ecti$es
$. /ate of 'oining of each partner $i. /ate
of constitutions
$ii. .ame and full address of the partners
$iii. /uration of the firm
b. The abo$e application must be signed J $erified by all partners or their agent specially authoriCed on this
behalf.
c. "f registrar satisfies with the application he record an entry of the statement in the +egister of &irm
and the firm is thereupon considered to be registered.
%. What are the effects or conse/uences of 3on5re&istration of a firm?
An unregistered firm and the partners thereof suffer from certain disabilities:
4. A partner of an unregistered firm cannot file a suit 0against the firm or any partner thereof)
for the purpose of enforcing a right arising from contract or a right conferred by the
(artnership Act.
5. .o suit can be filed on behalf of an unregistered firm against any third party for the
purpose of enforcing a right arising from a contract.
6. An unregistered firm cannot claim a setoff in a suit.
7. %annot claim to the court for the recei$able amount exceeding Tk.499 from the third party.
8 xcep t ion s :
4. A partner of an unregistered firm can file a suit for the dissolution of the firm and for
accounts.
5. Suits can be filed for the realiCation of the properties of a dissol$ed firm e$en though it
was registered.
6. The !fficial Assignee or +ecei$er can realiCe the properties of an insol$ent partner of an
unregistered firm.
7. There is no bar to suits by unregistered firms and by the partners thereof in areas where the
pro$ision relating to the registration of firms do not apply by notification of State
Fo$ernment under Section <=.
<. (artners ha$e right to claim for his portion of share from access the assets of dissol$ed
firm.
=. An unregistered firm can file a suit 0or claim a set off) for a sum of not exceeding Tk. 499.
'. (an a minor be admitted as a :artner?
A minor cannot enter into a contract of partnership because an agreement by a minor is $oid. -ut if
all partners agree, a minor may be admitted to the benefits of an existing firm.
2010.
1-. .n what situations compulsor" dissolution ma" tae place?
/issolution of a partnership firm is compulsory in case of following cases:
a. by the ad'udication of all the partners or of all the partners but one as insol$ent, or
b. by the happening of any e$ent which makes the business of the firm unlawful.
11. What are the &rounds of dissolution?
A firm may be dissol$ed on any of the following grounds:
5. -y agreement: A firm may be dissol$ed any time with the consent of all the partners of the firm.
(artnership is created by contract2 it can also be terminated by contract.
6. %ompulsory dissolution: A firm is dissol$edK
a. by the ad'udication of all the partners or of all the partners but one as insol$ent, or
b. by the happening of any e$ent which makes the business of the firm unlawful.
7. !n the Eappening of %ertain %ontingencies:
Sub'ect to contract between the partners, a firm is dissol$edK
a. if constituted for a fixed term, by the expiry of that term2
b. if constitute to carry out one or more ad$entures or undertakings, by the completion thereof2
c. by the death of a partner2 and
d. by the ad'udication of a partner as an insol$ent.
<. -y .otice :*here the partnership is at will, the firm may be dissol$ed by any partner gi$ing notice in
written to all other partners of his intention to dissol$e the firm.
=. /issolution by the %ourt:
At the suit of a partner the court may dissol$ed a firm on any one of the following grounds:
a. "nsanity: "f a partner has become of unsound mind. The suit for dissolution in this case
can be filed by the next friend of the insane partner or by other partner.
b. (ermanent "ncapacity: "f a partner becomes permanently incapable of performing his duties as
a partner. The suit for this case must be brought by a partner other than the person who has
become incapable.
c. Fuilty %onduct: "f a partner is guilty of conduct which is likely to affect pre'udicially the carrying
on of the business, regard being had to the nature of the business.
d. (ersistent -reach of Agreement: "f a partner willfully and persistently commits breach
of the partnership agreement regarding management, or otherwise conducts himself in such
a way that it is not reasonably practicable for the other partners to carry on business in
partnership with him.
e. Transfer of *hole interest: "f a partner has transferred the whole of his interest in the
firm to an outsider or has allowed his interest to be sold in execution of a decree.
f. #oss: "f the -usiness of the firm cannot be carried on except at a loss.
Lust and 81uitable %lause: "f the court considers it 'ust and e1uitable to dissol$e the firm.
2010.
12. Happenin& of certain contin&encies ma" lead to dissolution of partnership what are
those?
Sub'ect to contract between the partners, a firm is dissol$ed on the happening the following of certain
contingencies
a. if constituted for a fixed term, by the expiry of that term2
b. if constitute to carry out one or more ad$entures or undertakings, by the completion thereof2
c. by the death of a partner2 and
d. by the ad'udication of a partner as an insol$ent.
13. (an an out&oin& partner carr" &uarantee?
A continuing guarantee gi$en to a firm or to a third party in respect of the transactions of a firm is, i n
the absence of agreement to the contrary, re$oked as to future transactions from the date of any change
in the constitution of the firm.
14. What are the ten .mportant elements of a stand and partnership deed? F: 0 2-%G
The important elements of a stand and partnership deed are as follows:
4. .ame and address of the partners
5. &irm name
6. .ature of business
7. (lace of business and business address
<. /uration of the partnership and mode of dissolution
=. The amount of capital to be contributed by each partner
>. The mode of management
?. The powers of the partners
:. Terms on which a partner can retire
49. 8xpulsion of partners
44. "ntroduction of new partners
!ther "mpo rtant @uestions
15. What do "ou mean b" :artnership?
(artnership is the relation between persons who ha$e agreed to share the profits of a business carried on by
all or any of them acting for all.
1!. What are the t"pes of partnership forbidden b" law?
a. .umber of partners.
b. An agreement to form a partnership, for the purpose of carrying on an illegal trade.
1#. What do "ou mean b" ,irm7 ,irm5name7 :artner?
(ersons who ha$e entered into partnership with one another are called indi$idually GpartnersH and
collecti$ely Ga firmH and the name under which their business is carried on is called the Gfirm nameH

2010.
1%. What is the le&al status of a ,irm?
1'. Who can be a partner?
;nder the (artnership Act, a person may be partner if he has the capacity to enter into a
contract.
&rom the purposes of the (artnership Act, the term IpersonB does not include a partnership or a
limited company. Thus a company ( cannot form a partnership with a company @. Similarly, a
firm M cannot form a partnership with firm N. -ut all the partners of firm M and all the partners of
firm N can form a single partnership, sub'ect to the rules regarding the number of partners.
Eowe$er, it is assumed that except the followings all are eligible to become a partner of a firm:
a. 3inor: A minor cannot be a partner. -ut in an existing partnership, a minor can be
admitted into a firm if all the partners of the firm agree. Such minor gets all the
benefits of the partnership.
b. (erson of unsound mind: A person who is of unsound mind cannot become a partner.
c. "nsol$ent: A person, who is ad'udged insol$ent by the court, cannot become a partner.
d. %ompany: "n a %ompany the capacity to enter into contract is determined by the
3emorandum and Articles of the Association of the %ompany. The liability of the
members of a firm under the (artnership Act, for the debts of the firm, is
unlimited. -ut a company cannot incur unlimited liability. Therefore a company
cannot become a partner of a firm.
e. An alien enemy: An alien enemy cannot enter into a contract of partnership with a citiCen
of the country.
f. Ambassador: Any foreign ambassador in -angladesh cannot enter into a partnership in
the country.
2-. What are the difference between :artnership and (o5ownership?
/ifference between partner and coownership are sited below:
8ub<ect :artnership (o5ownership
4./efinition (artnership is the relation
between persons who ha$e agreed
to share the profits of a business
carried on by all or any of them
acting for all.
%oownership means 'oint
ownership
5. Agent
"n a partnership each partner is
the agent of the others.
-ut a coowner is not the agent of
the other owners.
6. Agreement
(artnership always arises out of
agreement.
%oownership may arise by
agreement or by operation of law.
7. -usiness
A partnership always implies a
business.
%oownership may exist without
any business.
<. Sharing of profit
"n a partnership there must be
sharing of profit.
Since a coownership may exist
without a business, the 1uestion
of sharing profits or loss is
immaterial in a coownership.
2010.
21. What are the classes of :artners?
a. Acti$e partner: An acti$e partner is one who actually participates in the business of the
firm. A person becomes a partner only by agreement.
b. /oormat, Sleeping or .ominal partner: These partners 'oint the firm by agreement but
do not take any acti$e part in the business. Their liabilities are same as of Acti$e
(artners.
c. Subpartner : The transferee of a share of a partnerBs interest in a firm is called a sub
partner. Suppose (, the owner of O of firm, transfers P of his share to @. @ will
be called a subpartner. Eis rights and liabilities are limited.
22. What are the classes of :artnership?
There are four type of partnership are sited
bellow:
4. (artnershipatwill: ;,s > of the Act, partnership is called a partnershipatwill2
c. when the partnership is not for a fixed period of time, and
d. when no pro$ision is made as to when and how the partnership will come to an end.
5. (articular partnership: ;,s ? of the Act, a particular partnership is one, which is formed for
a particular ad$enture or a particular undertaking. Such a partnership is usually dissol$e on
the completion of the ad$enture or the undertaking.
6. #imited partnership: "f the liability of one or more partner of a partnership is limited whether
by the contract or by legislation, such a partnership is called limited partnership.
23. What do "ou mean b" :artnership propert"?
The property of the firm includes all property and rights and interests in property originally
brought
into the stock of the firm or ac1uired by purchases or otherwise, by or for the firm, or for the
purposes and in the course of the business of the firm, and includes also goodwill of the
business. Thus the property of the firm means
a. property originally brought in by the partners
b. property obtained while the firm was in business and
c. the goodwill of the firm.
24. What do "ou mean b" =oodwill?
Foodwill may be described as the ad$antage, which is ac1uired by a firm 0o$er and abo$e the
$alue
of stock in trade and capital and funds) from the connections it has built with its customers and
the reputation it has gained.
25. What do "ou mean b" :artnership >&reement?
The writing or oral agreement in which the terms are incorporated to carry on business in
a partnership is called the /eed of (artnership or the Articles of (artnership.
2!. When can the partnership business be re&istered?
A firm can be registered at any time. -ut an unregistered firm cannot file certain suits. A firm
must be registered before it can file suits or claim setoff. A firm can be registered e$en after the
partners
ha$e agreed to dissol$e the
firm.
2#. What re the &eneral rules re&ardin& the conduct of the partners to one another? F: 0
211G
a. Feneral duties of partners.
b. "ndemnity.
2010.
2%. What are the rules re&ardin& the relationship between the partners as re&ards
the mana&ement of the business and their mutual ri&hts?
a. +ules regarding the conduct of the business.
b. 3utual rights and duties
c. (ersonal profits earned by partners
d. %ontinuance of perexisting terms
2'. What are cate&ories of the authorit" of a :artner?
The authority of a partner to act on behalf of the firm can be di$ided into two categories:
a. 8xpress Authority: Any authority, which is expressly gi$en to a partner by the
agreement of partnership called 8xpress Authority. The firm is bound by all acts
done by a partner by $irtue of any express authority gi$en to him.
b. "mplied Authority: "mplied Authority means the authority to bind the firm which arises
by implication of law from the facts of partnership.
3-. What are the limitations of a partner in case of implied authorit"?
The section 4:05) of (artnership Act 4:65, which are gi$en below, limits the implied authority of
a partner:
4. Submission of a dispute relating to the business of the firm to arbitration,
5. !pen a banking account on behalf of the firm in his own name,
6. %ompromise or relin1uish any claim or portion of a claim by the firm,
7. *ithdraw a suit or proceeding filed on behalf of the firm,
<. Admit any liability in a suit or proceeding against the firm,
=. Ac1uire immo$able property on behalf of the firm,
>. Transfer immo$able property belonging to the firm, or
?. 8nter in partnership on behalf of the firm.
31. What are the rules re&ardin& the alteration of authorit"?
The express or implied authority of a partner may be altered, extended, or restricted by
agreement
between the partners at any
time.
32. What are the rules re&ardin& the authorit" in +mer&enc"?
A partner has authority in an emergency, to do all such acts for the purpose of protecting the firm
from loss as would be done by a person or ordinary prudence, in his own case, acting under
similar circumstances, and such acts bind the firm.
33. What are the liabilities of partners to outsiders?
4. #iability of a partner for acts of the firm.
5. #iability of the firm for wrongful act of a partner.
6. #iability of firm for misapplication by partners.
2010.
34. What are the ri&hts of :artners?
4. %onduct of business.
5. %an express opinion.
6. Access, inspection, copy.
7. 81uity of profits.
<. "nterest on capital.
=. "nterest on ad$ance.
>. To get indemnity.
?. Application of property of firm.
:. (artnerBs authority.
49. (owers in an emergency.
44. +econstitution.
45. /issolution.
46. +ights to carrying on a competing business.
47. +ight to share profit after retirement.
35. What are the duties of :artners?
4. Lustice, &aithfulness, True Accounts, &ull "nformation.
5. To pay indemnity.
6. To attend diligently.
7. .o remuneration.
<. 81uity of losses.
=. To pay indemnity for willful neglect.
>. .o pri$ate benefit.
?. .o secret profit.
:. ;nlimited liability.
3#. What do "ou mean b" retired partner and deceased partner?
+etired partner: A partner who has retired from the firm but allows the use of his name in
connection with the firm may become liable to third parties by the principle of holding out.
/eceased partner: The legal representati$e of a deceased partner do not become liable for the debts
of the firm merely because the name of the deceased is used as a partner of the firm name.
3%. When can the constitution of a firm be chan&ed?
4. "ntroduction of a new partner.
5. +etirement of a partner.
6. 8xpulsion of a partner.
7. "nsol$ency of a partner.
<. /eath of a partner.
=. Transfer of s partnerBs interest.
3'. When can a partner be e1pelled?
4. *hen the contract of a partnership contains a pro$ision for explosion under stated
circumstances.
5. The power to expel is exercised in good faith by the ma'ority of the partners
6. The expelled partner has been notice of the charges against him and has been gi$en an
opportunity to answer the charges.
2010.
4-. What are the ri&hts of an out&oin& partner?
4. +estraint of trade.
5. To carry on competing business.
6. To share subse1uent profits.
7. +e$ocation of continuing guarantee by change in firm.
41. What do "ou mean b" dissolution of firm?
/issolution of a firm means the end of a firm by the breakup of the relation of partnership between
all the partners.
42. What are the conse/uences of dissolution?
4. Acts done after dissolution: ;ntil public notice is gi$en of the dissolution, the partners
continue to be liable to third parties for all acts done in connection with the affairs of the
firm.
5. *inding up: (artner is liable to winding up by the following way:
a. 3eet up liabilities by sale of properties2 and
rd
b. 3eet up liabilities of 6 parties at first
"f any deficit arise in doing the abo$e work partners will bear that according to the terms of
agreement of partnership. And
"f any surplus arises they ha$e right to take the same in proportion of their respecti$e share.
6. %ontinuing authority of partners for purposes of winding up: (artners ha$e ri&ht
to5 a. complete pending work regarding winding up2 and
b. complete incomplete transactions.
7. (rofit earned after dissolution: "f any partner earns any profit from any transaction
connected with the firm after its dissolution, he must share it with the other partners
and the legal representati$e of the deceased partners.
<. +eturns of premium: *here a partner has paid a premium on entering into partnership for a
fixed term, and the firm is dissol$ed before the expiration of that term, he shall be
entitled to repayment of the premium.
!. *i&ht to restrain from use of firmEs nameD 8$ery partner has right to restrain any other
partner
from using firmBs goodwill. -ut if a partner has purchased the goodwill of the firm, he
can use the firmBs name.
43. What are the modes of settin& accounts upon dissolution?
Sub'ect to agreement between the partners following rules are laid down for settlement
of accountsK
2010.
4. #osses are to be paid first out of profits, next out of capital, and lastly if necessary by the
partners indi$idually in the proportions in which they were entitled to share profits.
%apital deficiency is to be treated as loss and is to be borne by the partners in
proportion to the profit sharing ratio.
5. The assets of the firm including any sums contributed by the partners to make up
deficiencies of capital, shall be applied in the following manner and order:
a. "n paying the debts of the firm to third parties2
b. "n paying to each partner ratably what is due to him from the firm for ad$ances as
distinguished from capital2
c. "n paying to each partner ratably what is due to him on account of capital2 and
d. The residue, if any, shall be di$ided among the partners in the proportions in which
they were entitled to share profits.
e. "f a partner becomes insol$ent or otherwise cannot pay his share of the
contribution, the capital of the sol$ent partners cannot be returned in full. "n
this case, the sol$ent partners must share ratably the a$ailable assets, i.e. the
rule laid down in the 8nglish case, Farner )s. 3urray.
6. (ayment of the firm debts and of separate debts: *here there are 'oint debts from the
firm, and also separate debts due from any partner, the property of the firm shall be
applied in the first instance in payment of debt of the firm, and if there is any surplus,
then the share of each partner shall be applied in payment of his separate debts or
paid to him The separate property of any partner shall be applied first in the payment
of his separate debts, and the surplus 0if any) in the payment of the debts of the firm.
2010.
%egotia.le !nstrument Act +1881.
1. What is promissor" note?
A promissory note is a negotiable instrument, containing an unconditional undertaking signed by the
maker to pay a certain sum of money only to, or to order of a certain person, or to the bearer of the
"nstrument. "t is not a bank note or currency. There are two parties in the promissory note2 maker
and the payee.
2. What do "ou mean b" 3e&otiable .nstruments?
D.egotiableD means transferable by deli$ery, and D"nstrumentD means a written document by which a
right is created in fa$or of some person who is holder of it. So, .egotiable "nstrument means
document transferable by deli$ery.
-esides abo$e, .egotiable "nstrument means a promissory note, bill of exchange or che1ue .
3. Define che/ue with essential elements.
A %he1ue is a bill of exchange drawn upon a specified banker and payable to bearer or on demand.
The essential features of che1ue are gi$en below:
4). *ritten.
5). Signed
6). (ayable to bearer, order or on demand
7). Sufficient funds
<). .o legal bar to che1ue being hand written
=). Tally of signature with specimen signature.
>). /ated
?). Time of presentation
:). )alidity 0six months)
49). ;nconditional order.
44). %ertain amount of money.
45). Transferability.
46). (rinted
7. Who can cross a che/ue?
A che1ue can be crossed by the drawer, the holder and the bank 0for collection). -ut,
The holder and the bank can cross a che1ue under the following circumstances:
*here a che1ue is uncrossed, the holder may cross it generally or specially.
*here a che1ue is crossed generally, the holder may cross it specially.
*here a che1ue is crossed generally and specially, the holder may add the words,
Qnot negotiableQ
*here a che1ue is crossed specially, the banker to whom it is crossed specially may
again cross it specially to another banker, his agent, for collection.
2010.
5. How does a promissor" note differ from bill of e1chan&e?
6r7 Difference between promissor" note and bill of e1chan&e.
The differences between the promissory note and bill of exchange are stated here under:
$erms of differences :romissor" 3ote ?ill of +1chan&e
4. /efinition A promissory note is a negotiable
instrument in writing containing an
unconditional undertaking signed by
the maker, to pay a certain sum of
money only to, or to order
of a certain person, or to the bearer of
the instrument.
A bill of exchange is an instrument in
writing containing an unconditional
order, signed by the maker, directing a
certain person to pay a certain sum of
money only to, or to
the order of a certain person or to the
bearer of the instrument.
5. .umber of
parties
Two parties2 the maker and the
payee
Three parties2 drawer, drawee and
payee.
6. Acceptance .o acceptance is necessary acceptance is re1uired
7. +elationship The maker stands in an immediate
relationship to the payee
A drawer stands in immediate
relationship with the acceptor and
not to the payee.
!. What are the difference between bill of e1chan&e and (he/ue?
/ifference between -ill of exchange and che1ue are sited below:
8ub<ect ?ill of e1chan&e (he/ue
4. /rawn %an be drawn upon any person %an be drawn upon only a bank
5. Acceptance Acceptance is re1uired Acceptance not re1uired
6. (ayment (ayable only after maturity (ayable on demand
7. Stamped 3ust be stamped .ot re1uired
<. %rossed %annot be crossed 3ay be crossed
#. What are the (haracteristics of 3e&otiable .nstruments?
4). 3ust be written J signed by the parties.
5). 3ust be payable by legal tender money and the sum of money must be certain.
6). 3ust ha$e negotiability, but the payee must be certain.
7). 3ust contain in an order to pay.
<). Should be unconditional.
=). "t is not necessary to gi$e notice of transfer of a negotiable instrument to
the party liable to pay. The transferee can sue in his own name.
>). "t has the popularity in commercial transaction because of their
easy negotiability and 1uick remedies.
?). A document, which fails to 1ualify as a negotiable instrument, may
ne$ertheless be used as e$idence of the fact of indebtedness.
%. When bill of e1chan&e dishonored? ) What are the modes of Dishonor?
4). -y nonacceptance
5). -y nonpayment.
2010.
'. Who can accept a bill of e1chan&e?
!nly the following persons can accept a the bill of exchange:
4). The drawee of the bill.
5). The drawee in case of need.
6). The legal representati$e, when the drawee is dead.
7). The !fficial Assignee or !fficial +ecei$er.
<). Acceptance for se$eral drawee not partner.
=). Acceptance for honor.
1-. What is acceptance for honor?
*hen a bill of exchange has been noted or protested for non acceptance or for better security,
any person not liable on the bill, may accept the bill for honor of any party thereto. This is called
acceptance for honor.
41. Distin&uish between a che/ue and a promissor" note.
A che1ue is a bill which is drawn on any bank for payment on presentation.
!n the other hand, a promissory note is a unconditional promise to pay a certain amount by the debtor
to the creditor on a certain future date.
42. (he/ue crossed with the words H3ot 3e&otiableH5 what does it mean?
A che1ue marked with the words Q.ot .egotiableQ can be transferred or assigned by the payee.
This sort of words on che1ue refers that transferee of this che1ue will get the same right, as
regards payment, as the transferor had.
Though there are the words Dnot negotiableD written on the face of the che1ue, it can be transferable
by authoriCation of transferor and the transferee will get same title as the transferor had.
46. *hat is meant by payment for honorA
when the bill is presented to the drawee for payment and the drawee dishonor it and subse1uently
it is paid by the referee, acceptor or by a third party, it is known as payment for honor.
14. What is the difference between a &eneral crossin& and special crossin& of che/ue?
The difference between a genera crossing and special crossing of che1ue as follows:
Sub'ect Feneral cross che1ue Special cross che1ue
/efinition *hen che1ues are crossed by two parallel line
on the left corner of the che1ue mentioning or
not mentioning J co, not negotiable, account
pay etc, then it is known as general crossing of
che1ue
*hen che1ues are crossed by
two parallel lines mentioning the
name of any bank, then it is
known as special crossed che1ue.
%ollection The che1ue can be collected through any bank. The che1ue only be collected
through the bank mentioned in
the che1ue.
15. What do "ou mean b" ?ill of +1chan&e?
A -ill of 8xchange is an instrument in writing containing an unconditional order, signed by the
maker, directing a person to pay a certain sum of money only to, or to the order of a certain
person
or to the bearer of the instrument.
2010.
1!.What is distin&uish between dishonor b" non5performance and dishonor b"
non5 acceptance?
/ishonor by nonperformance:
when any negotiable instrument is not presented in compliance with the terms and condition of the
instrument and is dishonor subse1uently on presentation by the /rawee,Acceptor. "t is known as
dishonor by nonperformance.
/ishonor by nonacceptance:
*hen only bill of exchange is presented to the /rawee for acceptance and the /rawee disagree to
gi$e acceptance. "t is known as dishonor of bill of exchange by non acceptance.
!t he r " mpor ta nt @ ue stio ns a nd A ns we r s
1#. What are the essential elements of a :romissor" 3ote?
i). *ritten
ii). Signed by the maker , marked,crossed
iii). (romise to pay 0not implied or
inferred) i$). ;nconditional
$). The maker must certain and
definite $i). Stamped
$ii). %ertain sum of
money $iii). #egal
tender money
ix). (ayable to a definite person
x). (ayable on demand or after definite period of time
1%. Who are called Drawer7 Drawee7 :a"ee7 Holder and >cceptor of a ?ill of
+1chan&e?
/rawer: The maker of the bill of exchange
/rawee: The person who is directed to pay the bill of exchange.
(ayee: The person who will recei$e the money
Eolder: The payee who has the custody of the bill of exchange
Acceptor: *hen the drawee accepts the bill, the drawee becomes the acceptor.
1'. What are the different t"pes of che/ue?
4). !pen che1ue: (ayable in cash across the counter of the bank
5). %ross che1ue: Two parallel lines marked across its face paid only another banker
not across the counter of the bank.
2-. What are the essential elements of a bill of e1chan&e?
i). *ritten
ii). Signed by the drawer
iii). ;nconditional order to pay
i$). The drawer, drawee and payee must be certain and definite
indi$iduals $). %ertain sum of money
$i). #egal tender
money $ii). Stamped
$iii). (ayable on demand or after definite period of time
2010.
21. What do "ou mean b" Drawee in case of need?
Sometimes the name of another person is mentioned as the person who will accept the bill if the
original drawee does not accept it. Such person is called a Ddrawee in case of needD.
22. What are the different modes of crossin& of a che/ue?
4). Feneral crossing: (utting two parallel lines across the face
5). Special crossing: (utting two parallel lines across the face along with bank
name between the parallel lines
23. What are the usual remars of crossin& a che/ue?
4). Account (ayee
5). .ot .egotiable
24. 9ist the different parties of (he/ue.
4). /rawer.
5). /rawee.
6). (ayee.
7). Eolder.
<). 8ndorser.
=). 8ndorsee.
>). Eolder in duecourse.
25. What are the chains of crossin& of a che/ue?
i. *here the che1ue is uncrossed, the holder can cross it generally or
specially. ii. *here the che1ue is crossed generally, the holder can cross it
specially.
iii. *here the che1ue is crossed generally or specially, the holder may add the word
Q.ot .egotiableQ
i$. *here the che1ue is crossed specially, the banker to whom it is crossed it specially
may again cross it specially to another banker, his agent, for collection.
2!. Who is the holder in due course?
The holder in due course is a particular kind of holder. The holder of a negotiable instrument is
%alled the Dholder in due courseD if he satisfies the following conditions:
Ee obtained the instrument for $aluable consideration.
Ee became holder of the instrument before its maturity, i.e. before the mentioned
in it became payable.
Ee had no cause to belie$e that any defect exis ted in the title of the person from
*hom he deri$ed his title.
2#. What do "ou mean b" holder?
The holder of a negotiable instrument means any person entitled in his own name to the
possession thereof and to recei$e or reco$er the amount due thereon from the parties thereto.
2%. What do "ou mean b" ?anerHs Draft?
A bill of exchange drawn by a bank is called bankerDs draft.
2010.
2'. Who can cross a che/ue?
A che1ue can be crossed by
The drawer
The holder
The bank 0for collection).
The holder and the bank can cross a che1ue under the following circumstances:
*here a che1ue is uncrossed, the holder may cross it generally or specially.
*here a che1ue is crossed generally, the holder may cross it specially.
*here a che1ue is crossed generally and specially, the holder may add the
words, Qnot negotiableQ
*here a che1ue is crossed specially, the banker to whom it is crossed specially
may again cross it specially to another banker, his agent, for collection.
3-. What are the ri&hts of Holder in Due (ourse?
The holder in due course of negotiable instruments has the following rights:
4). /efects of instruments are eliminated.
5). ;nauthoriCed acts of an agent may be $alid.
6). Food title in an inchoate stamped instrument.
7). #iability of prior parties to holder in due course.
<). Eolder can file suits in his own name.
=). Acceptance of bill drawn in fictitious name.
>). ;nlawful instruments.
?). 8stoppel against denying original $alidity of instrument.
:). 8stoppel against denying capacity of payee to endorse.
49). Transferee from a holder in due course.
31. What are the essential features of 3e&otiable .nstrument?
The essential features of .egotiable "nstrument are listed below:
4). *riting and signature.
5). 3oney.
6). .egotiability.
7). Title.
<). .otice.
=). (resumptions.
>). Special procedure.
?). (opularity.
:). 8$idence.
32. What do "ou mean b" acceptance?
A bill of exchange is said to be accepted when the drawee puts his signature on it,
thereby acknowledge his liability under the bill.
63. What are the t"pes of acceptance?
4). Feneral Acceptance: ;nconditional and un1ualified
5). @ualified Acceptance: %onditional
34. Who can present a bill for acceptance?
The holder or agent can present a bill for acceptance.
2010.
35. What do "ou mean b" presentment?
(lacing of the negotiable instrument before the drawee is called presentment. (resentment may be
for any of the following three purposes:
(resentment for acceptance.
(resentment for sight
(resentment for payment.
3!. Who can accept a bill?
4). The drawee of the bill.
5). The drawee in case of need.
6). The legal representati$e, when the drawee is dead.
7). The !fficial Assignee or !fficial +ecei$er.
<). Acceptance for se$eral drawee not partner.
=). Acceptance for honor.
3#. What do "ou mean b" 3e&otiation?
.egotiation of an instrument is the process by which the ownership of the instrument is
transferred from one person to another.
3%. What do "ou mean b" +ndorsement or +ndorsement?
8ndorsement means signature of the holder made with the ob'ect of transferring the document.
The person who makes the endorsement is called the endorser.
3'. What do "ou mean b" :a"ment in Due course of a 3e&otiable .nstrument?
(ayment in due course means payment in accordance with the apparent tenor of the instrument
in good faith and without negligence to any person in possession thereof under circumstances,
which do not afford a reasonable ground for belie$ing that he is not entitled to recei$e payment
of the amount therein mentioned.
4-. What are the principles of estoppels?
The principle of estoppels is a rule of e$idence. *hen a man has, by words spoken or written, or
by conduct, induced another to belie$e that a certain state of things exists, he will not be allowed
to deny the existence of that state of things.
8stoppels arise when you are precluded from denying the truth of anything, which you ha$e
represented as a fact, although it is not a fact.
2010.
-ankruptcy Act 4::>
1. What do "ou understand b" banruptc"?
-ankruptcy is also referred to as the insol$ency. "t means one unable to pay his debts. "t has
two conditions:
A person is to be a debtor who has not sufficient assets to pay of his debts.
Ee will do any act of insol$ency.
2. What are the purposes of insolvenc"?
The purposes of the law insol$ency are as
under:
/istribution of assets of the insol$ent rationally.
Settlement of all liabilities of the insol$ent to make him free.
To sa$e the interest of creditors.
.ew life starting of the insol$ent.
3. Who are official receivers?
As per section =7 of the -ankruptcy Act 4::> the court appoints official recei$er ha$ing
general power as conferred by section =< of the Act for administering the property of the
insol$ent. The court may itself act as an official recei$er under section >9 of the Act.
4. Who ma" be ad<ud&ed)declared banruptc"?
Any person may declare bankruptcy,
who
"s domiciled or maintains his principal business office in -angladesh.
At any time within a year immediately before filing of the plaint, ordinarily resided
in, or had a dwelling house or a place of business in -angladesh.
Fenerally carries on business in -angladesh.
5. Who ma" not be ad<ud&ed banruptc"?
The following persons may not declare
bankruptcy
Any Fo$t. organiCation or 'udicial body.
Any charitable or religious body.
Such statutory bodies whose principle ob'ecti$e is not financial gain.
Any autonomous body.
!. What is meant b" dischar&e of banruptc"?
/ischarge of bankruptcy means the insol$ent is free from his all debts or claims against
him. "t re1uires an order of the court on an application made to it to the effect that the
insol$ent is
discharged all debts J claim
etc.
2010.
#. (an an infant be insolvent?
.o, an infant cannot be declared as an insol$ent.
%. What properties of a banrupt debtor are e1empted from attachment)freeIe?
The following properties are exempted from attachment
4. Tools used by the debtors.0maxim 6 lac)
5. *earing apparels, household furniture or accessories 03axi 6 lac).
6. /ebtorBs unmortgaged dwelling place. 0.ot exceeding 5<99 sft).
'. What are the acts of insolvenc"?
&ollowing are the acts of insol$ency
4. "f he transfers of all his property for the benefit of creditors generally.
5. "f he transfers of property with intent to defeat or delay creditors.
6. Act of fraudulent preference.
7. Stay outside the country or goes to outside the country.
<. Absent himself from office or residence.
=. 8scaped,Eide him of communication from the creditors.
>. Submit application of insol$ency by the debtor to court.
?. "f he notice for suspension of payment of debt.
1-. What are the ob<ects of ?anruptc" >ct?
The ob'ects of bankruptcy act are
4. To ensure the fair distribution of the property of a bankrupt debtor among his creditors.
5. To allow the debtor to relie$e himself of the burden of his debts and start again.
6. To pre$ent illtreatment of the process.
11. When debtor can appl" for .nsolvent?
*hen a debtor is unable to pay his debts amount to
Tk.59,999.
12. When creditor can appl"?
*hen the debtor owing by the debtor to the creditor amounting Tk.<99,999 or if the two
or more creditors 'oin the petition the aggregate amount to such creditors amount to
tk.<99,999.
43. What is ri&ht of ?anrupt to surplus propert"?
The bankrupt shall be entitled to recei$e any surplus remaining after payment in full of his
creditors with interest as pro$ided by this Act and of expenses of the proceedings taken
there under.
2010.
Arbitration Act 5994.
1. What is international commercial arbitration?
The arbitration that arises between the parties in different countries and which is created for
settlement of disputes, noncompliance by any party of stipulations relating to any
international transaction that is called international commercial arbitration. #ike #,%.
2. What matters cannot be referred to arbitration?
The following matters cannot be referred to arbitration:
3arital matter. 0#ike di$orce).
Testamentary matter, 0like $alidity of a will).
"nsol$ency matters.
3atters relating to the guardianship.
%riminal matters.
@uestions relating to charities or charitable trust.
3. What is an arbitration a&reement?
An arbitration agreement means a written agreement to submit present or future differences
to arbitrations, whether an arbitrator is named therein or not.
4. What is arbitration?
Arbitration means the settlement of dispute by referring the dispute to third party and
abiding,taking by his decision.
5. Discuss the &round on which the court canD
a. Set aside award,
and
b. +emit an award for reconsideration under The Arbitration Act 5994
a) Set aside award: The decision of arbitration may be set aside as under:
The arbitrator umpire adopts unfair means.
The order is made after the setting aside of the order.
The decision is made un'ustified.
b) +emittance of the award:
The decision is
uncertain.
Any decision outside of the arbitration brought in the arbitration for decision.
The decision is impossible for execution.
2010.
!. Discuss the characteristics of an arbitration a&reement.
An arbitration agreement shall be in writing and, and it deemed to be in writing if there
contained in:
A document signed by the
parties.
An exchange of letters, telex, telegrams, fax, e mail, or other means
of telecommunication which pro$ide a record of the agreement.
An exchange of statement of claim and defenses in which the existence of the
agreement is alleged by one party and not denied by the other.
#. What is effect of an arbitration a&reement?
*hen some persons ha$e entered into an agreement to refe r disputes relating to a matter to
arbitration they may be pre$ented from agitating the same matter in court of law.
%. What is procedure of appointment of arbitrators?
Tow arbitrators are appointed by one of each party and third by the arbitrators.
'. What is award?
The award means the decision of arbitrator or the umpire.
1-. What are essential futures of award?
The essential futures of award are stated below:
*riting
/ate and signature
&ees and charge
#egality
11. Describe the appeals procedure.
An appeal shall lay the following orders of the court to the Appellate /i$ision, namely
4. Setting aside 0out of the way) or refuse to set aside an arbitral award.
5. +efuse to enforce the arbitral award.
6. +efuse recogniCe or enforce foreign arbitral award.
12. How man" t"pes of >rbitration are there?
There are three types of arbitration in there:
0a) Arbitration without the inter$ention of court.
0b) Arbitration through court when no suit
pending. 0c) Arbitration a suit.

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