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Conrtact Final Paper - The assignment of contract which deals with several questions and their answers.

The assignment of contract which deals with several questions and their answers.
Course

contract act (BALLB3)

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Academic year: 2020/2021
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Atta Simair
Shah Abdul Latif University
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LAW OF CONTRACT – FINAL PAPER

Name: Attaullah Simair Class: BL – III Roll No: LLB-19- Subject: Law of Contract Teacher: Respected Sir Mujeeb U Rehman Khuhro Sahab Department: SZAB School of Law

Q2: Explain different types of contracts with examples?

Ans: There are three bases on which contract is divided.

  1. On the basis of enforceability

  2. On the basis of formation or modes of creation

  3. On the basis of Performance

  4. On the basis of enforceability

I. Valid contract: A valid contract is the one which full fills all necessary elements of contract law. It is an agreement which legally binding and enforceable. All the parties are legally bound to perform the contract. Valid contract is defined under section 10 of the Contract Act 1890 as;

Section 10: All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.

Nothing herein contained shall affect any law in force in Bangladesh, and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents.

Example: If one signs to buy a Mehran Suzuki Car Model 2016, and the car is as same as provided details while making contract. Hence, the contract is valid.

II. Void Contract: A contract which ceases to be enforceable by law. It may be valid when the contract was made but due to change in circumstances, contract become void. It may become void due to change in the law because pf circumstances. Hence, it will become unperformable.

It is defined in the Section 2 (J)

Section 2 (J) A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable.

Example: A gave money to B to murder C. B did not murder C. Now, A cannot go to court to enforce the contract because the terms of the contract are illegal.

III. Voidable Contract: A voidable contract is valid and enforceable until one of the parties rejects it for a certain flaw found in the contract after signing. Such a contract remains valid if both parties decide to proceed regardless of the defect. In voidable contracts, one party is bound by the terms, while another one is free to cancel the contract any time. The unbound party's rejection of the contract makes it voidable. The following circumstances can deem a contract voidable:

 A party was forced or threatened to sign the contract.  A party was under undue influence.  A party was mentally incompetent, such as a minor or a person suffering from mental illness.  A breach of contract occurred.  Mistakes were made by both parties. Note that this is different from simply not reading a contract, which does not make a contract voidable.  A fraud was committed (withholding or falsifying information or having no intention to deliver on the terms of the contract).  Facts were misrepresented.

Example: A sells horse to B. A is selling horse because he is insane but he does not mention anything about the insanity of the horse. Later, B discovers that the horse is insane. Hence, such contracts will be considered voidable contract. Moreover, every such case which contain above mentioned points which make a contract voidable will be considered as voidable contract.

IV. Unenforceable: Unenforceable contracts are valid it would not be accepted by the court as a legal because of a condition which is not legal

Example: (the example has been given as per English Law) an unenforceable contract is a contract for prostitution under English law. Prostitution is not actually a crime under English law, but both soliciting a prostitute and living off the earnings of a prostitute are criminal offences. Yet so long as the contract is fully performed, it remains valid. However, if either refuse to complete the bargain (either the prostitute after being paid or the payer after receiving the services), the court will not assist the disappointed party.

V. Illegal contract: An illegal agreement is any contract that is forbidden by law. This includes any agreement that is against the law, is criminal, or that is against public policy. Illegal agreements are invalid from their creation, meaning that agreements associated with the original contract are also considered void. Because illegal agreements are against the law, joining an illegal agreement can also bring punishment.

Example: A and B have signed a contract in which it is decided that A will give car to B. For which B will pay 5 Lacs to A. Both parties performed their obligations.

II. Executory contract: executory are such contracts which are contracted to be executed in the future.

Example: A buys a car from B for Rs 10 lacs. Now, A has made the payment but B has not transferred the contract. It is an executory contract as both parties have to meet the obligations.

III. Unilateral contract: These contracts are one-sided contracts. When one party has discharged his obligations either before time or at the time to enter into contract.

Example: The insurance company promises it will pay the insured person a specific amount of money in case a certain event happens. If the event doesn't happen, the company won't have to pay.

IV. Bilateral Contract: Bilateral contracts are those contracts in which both parties yet have to perform their obligations.

Example: A wants to buy 100 jackets for his business from Amazon. Amazon take money after delivery. Now, none of the parties has performed their work but they have to perform. When Amazon delivers jacket, A will pay the money.

Q03: Describe privity of contract with exceptions?

Strangers to a contract cannot sue only a person who is party to a contract. No party in a contract can file suit.

A and B are making a contract. Anyone of them can sue each other but C, who is not a party in a contract, cannot sue either A or B.

Exceptions

  1. Trust: A appoint B as trustee and beneficiary is C. In this case, beneficiary can file case by enforcing his right under the trust. Even though he is stranger to the contract.

  2. Family settlement: If a contract is made under a family arrangement to benefit a stranger (person not a party to the contract), then the stranger can sue in his own right as a beneficiary of the contract. From Section 37 to Section, the contract act deals with such exceptions.

  3. Assignment of contract: If a contract is made for the benefit of a person, then he can sue upon the contract even though he is not a party to the agreement. It is important to note here that nominees of a life insurance policy do not have this right.

  4. Contract with an agent: (Principle= owner of property) agent appointed by Principle. Agent sells property to third party. Now, the person can also sue owner of the property even though contract was not made with principal

  5. Official receiver: The Court appoints an official receiver to get amount from the auction of the insolvent person.

  6. Acknowledgment of debt: It is one of the exceptions of privity of contract. In which an stranger to a contract can sue a party. For Example: A takes loan from B. Now, A says to Bank that C will pay the loan. Bank can sue both B and C. This deals with the Section 41 of the contract.

  7. Partnership Act: The whole firm will be held liable for the act of a partner who has acted under implied authority.

  8. Drawer and Payee: Drawer is a person who pays and payee is the one to whom the amount is paid.

For Example: A is appointed by B to sell the product of company at the price of Rs. 2000. A is selling that product at the price of Rs. 1600. Such act of A will bring disadvantage to B. Hence, B can sue A for selling their product at low price.

  1. Pre-Emption Act: It can be understood as; A and B are the owners of a car which B sells to C without the consent of A. A has authority to sue both B and C.

Q01: What are the circumstances where the law requires person to perform an obligation similar to a contractual obligation although he/she has not entered into any contractual relationship?

Ans: Obligations which are not contained in the court, but are implied by the courts arbitration panels and dispute review boards.

The circumstances where the law requires a person to perform such obligations are given below;

  1. Warranty of plans and specification
  2. Duty to hinder or delay
  3. Duty to provide access to the site
  4. Duty to coordinate multiple prime contractors or sub-contractors
  5. Duty to provide adequate supervision
  6. Duty of good faith and fair dealing
  7. Duty to ensure a safe workplace

Q4:

Ans: Damages awarded for breach of contract. Generally, the purpose of an award of damages for breach of contract is to compensate the injured party. The general rule is that damages are meant to place the claimant in the same position as if the contract had been performed. Damages are usually awarded for expectation loss (loss of a bargain) or reliance loss (wasted expenditure).

Damages can be made up of various elements, some less obvious and less common than others. It is important for a party who has a claim for breach of contract against a defaulting party to consider any likely award of damages before issuing a claim.

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Conrtact Final Paper - The assignment of contract which deals with several questions and their answers.

Course: contract act (BALLB3)

16 Documents
Students shared 16 documents in this course

University: Shah Abdul Latif University

Was this document helpful?
LAW OF CONTRACT – FINAL PAPER
Name: Attaullah Simair
Class: BL – III
Roll No: LLB-19-018
Subject: Law of Contract
Teacher: Respected Sir Mujeeb U Rehman Khuhro Sahab
Department: SZAB School of Law
Q2: Explain different types of contracts with examples?
Ans: There are three bases on which contract is divided.
1. On the basis of enforceability
2. On the basis of formation or modes of creation
3. On the basis of Performance
1. On the basis of enforceability
I. Valid contract: A valid contract is the one which full fills all necessary elements of contract
law. It is an agreement which legally binding and enforceable. All the parties are legally
bound to perform the contract. Valid contract is defined under section 10 of the Contract
Act 1890 as;
Section 10:
All agreements are contracts if they are made by the free consent of parties competent to
contract, for a lawful consideration and with a lawful object, and are not hereby
expressly declared to be void.
Nothing herein contained shall affect any law in force in Bangladesh, and not hereby
expressly repealed, by which any contract is required to be made in writing or in the
presence of witnesses, or any law relating to the registration of documents.
Example: If one signs to buy a Mehran Suzuki Car Model 2016, and the car is as same as
provided details while making contract. Hence, the contract is valid.
II. Void Contract: A contract which ceases to be enforceable by law. It may be valid when
the contract was made but due to change in circumstances, contract become void. It may
become void due to change in the law because pf circumstances. Hence, it will become
unperformable.
It is defined in the Section 2 (J)
Section 2 (J)
A contract which ceases to be enforceable by law becomes void when it ceases to be
enforceable.

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