Assignment

Course Code- 518

Sec- 4

Submitted to:

Dr. Mohammad Nazmuzzaman Bhuian

Professor

Department of Law

North South University

Submitted by:

NAME ID

Gazi Shaila Shafi Tisa 2016540660

Submission Date:4th June 2020

 Answer to the question no-1
Issues:

Is the product is in merchantable quality or not, also whether the bailee examined the goods or
had reasonable opportunity to inspect the goods before purchasing.

Is the sale of good act meet with the contract for any specific goods or not, and here is the
intention meet with the terms of the contract.

After supplying the product is bailor disclose about the faults of goods.

As a bailee is NSU perform their duty properly?

What is the liability of buyer for neglecting or refusing delivery of goods?

Rule:

According to the Sale of Goods Act 1930, the goods sold must be of merchantable quality.
Merchantability quality means that the goods are of such quality and in such condition that a
reasonable man acting reasonably would accept them under the circumstances of the case.
Section 16(2) of the Act provides that where goods are bought by description from a seller who
deals in goods of the descriptions, whether he is a manufacturer or not, there is an implied
condition that the goods are of merchantability quality i.e. fit for sale. If the goods sold are not of
merchantable quality, the buyer can reject the goods. There is an exception that if the buyer had
examined the goods or had reasonable opportunity to inspect the goods before purchasing, then
no implied condition with regard to defect which such inspection would have revealed.

According to sale of good acts 1930, sec 19(1) and (2) of the Act provides that where there is a
contract for the sale of specific goods, ownership passes when parties intend to pass it. The
intention must be determined from the terms of the contract, the conduct of the parties and the
circumstances of the case.

According to sale of good acts 1930, sec 150, the bailor is bound to disclose to the bailee faults
in the goods bailed, of which the bailor is aware, and which materially interfere with the use of

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them, or expose the bailee to extraordinary risks; and if he does not make such disclosure, he is
responsible for damage arising to the bailee directly from such faults.
According to sale of good acts 1930, sec 151 in all cases of bailment the bailee is bound to take
as much care of the goods bailed to him as a man of ordinary prudence would, under similar
circumstances, take of his own goods of the same bulk, quality and value as the goods bailed.

According to Sale of Goods Act 1930 sec 44 when the seller is ready and willing to deliver the
goods and requests the buyer to take delivery, and the buyer does not within a reasonable time
after such request take delivery of the goods, he is liable to the seller for any loss occasioned by
his neglect or refusal to take delivery and also for a reasonable charge for the care and custody of
the goods.

Analysis:
If we looked at the first scenario we will find that NSU entered into a contract with a
manufacturer of Trophy. Here Seller asked NSU to visit the shop and examine the trophies
before delivery, but NSU officials did not have any time to do so. So when they were distributing
them to the participants, one trophy just broke down on its own. So here this scenario can be
under Conditions as to merchantability. If NSU inspect the product before delivery then there
was no implied condition as to merchantable quality of goods because the inspection would have
revealed the defective goods.
Here the seller of the trophy bears no responsibilities because here NSU failed to inspect the
trophies before they were delivered. So here NSU bears the responsibility for falling to check
the product. NSU can't take any legal action against the seller of the trophy.

In the second scenario NSU ordered chicken snacks and the receipt showed chicken snacks were
delivered. But the seller supplied Beef snacks. On the other hand, few of the snacks contained
small pieces of bones inside and one guest got injured during eating.
As per as stated condition, here the food was supposed to match with the description, but it was
not. So the seller bears all the responsibilities for the food and also liable for as one guest injured
during eating snakes. So NSU and guest can sue the food seller.

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In the third scenario carpeting company send carpet NSU on sale or return basis. But after the
ceremony it was stolen, and NSU refused to take responsibility and also not go for any legal
action. Here the ownership has not also been transferred among themselves. Even if the sale was
not approved, they have to either return the carpet to the seller or purchase it. Here the carpet was
stolen from the NSU, when NSU had the title of ownership. Though here the sale was not
approved, either NSU have to return the carpet to the seller or purchase it. As it was stolen, when
NSU had the title of ownership. So here NSU is responsible to paying the seller of the carpeting.
Because they were not enough careful for taking care of it.

Conclusion:
Here the seller of the trophy will bears no responsibilities of the trophies because NSU bears the
responsibility for falling to inspect.
The seller of the food has to bears all the responsibilities. Here NSU and the injured guest can
sue the food seller and the injured guest also should get compensation from the food seller.
In the carpeting scenario here NSU was taking responsibilities as the bailee. As they does not
taking proper care of the carpet that's why they have to give compensation to the carpeting
company? If they don't agree to give them then the carpeting company can sue them.

Answer to the Question No 2

Issue:

Here the firm did its registration or not? Is the firm follow the maximum number of partners?
When a firm dissolved automatically? Is there any contract happened between the partners of the
firm that after death of any partners the firm will run continue? As per as law when Polyphonic
dissolved automatically are they divided all the assets between the partners? What are the rights
of the partner after dissolved any firm?

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Rule:

According to Partnership Act 1932, sec. 69(2) provides that no suit can be filed by or on behalf
of an unregistered firm in a court. This means the firm must have certificate of registration
before any suit is filed in a court.

According to Companies Act 1994, sec. 4 the maximum limit is as under in case of a partnership
firm, carrying on any other business – 20. If the number of partners exceeds the aforesaid limit,
the partnership firm becomes illegal association.

According to Partnership Act 1932, sec 42 a firm is dissolved on the happening on any death of a
partner.

According to Partnership Act 1932, Dissolution of firm means the dissolution of partnership
between all the partners of a firm. In such a situation, the business of the firm is discontinued, its
assets are realized, the liabilities are paid off and the surplus (if any) is distributed among the
partners according to their rights.
Analysis:

In the case two software firms Titanic and Satanic amalgamate their business by an oral contract
between the partners, and created a firm, called polyphonic. And suddenly one partner died due
to cancer. According to Partnership Act 1932, polyphonic is liable for failing to dissolve the firm
after the death of one partner of the polyphonic firm who was originally a partner of titanic. Here
as one partner of Satanic claimed about the dissolved after the death of one partner, which
indicated that they don't gone for any agreement that if any partner die the company will run as
same. So here they are liable to pay the entire asset to the partner. As after the death of one
partner is dissolved automatically so they can't go for any new contract, because it's totally
illegal. However, where the terms of the partnership act are silent on continuance of partnership's
business, a contract to continue the partnership after the death of a partner may be implied from
the conduct of the parties. Which indicated that such an intention was present, legal
representative of the dead partner can take the place of dead partner and business of the firm can
be continued with the opinion that the partnership will never dissolved on the death of any
partner. But here polyphonic at the last ignored such claim and entered into a contract with two

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more partners with a new profit sharing ratio. In the case when they form Polyphonic there were
20 partners, but after the death of partner they added 2 more partners which indicated the
violation of maximum number of partners in the firm.

Polyphonic enter into a contract with Samsung. But Samsung failed to deliver televisions in time.
So Polyphonic tried to bring legal action against Samsung to claim compensation, but Samsung
claimed that the contract was not valid as per the law. Titanic and Satanic amalgamated their
business by an oral contract and did not make any formal registration. Based on the provision-
No suit in a civil court by the firm or other copartners against any third party. If the firm does not
do its registration then the firm or any other person on its behalf cannot file a suit against a third
party for breach of contract. The firm can only filing the case against third party when they did
their register.
Conclusion:

As per as act the happening of any event that is against the law for the business of the firm to be
carried on, so as entering into new contracts without adhering to dissolution, then firm is liable
such as in Polyphony's case.

After the death of a Polyphonic partner it's automatically dissolution. But Polyphonic breached
the contract by conducting themselves in matters relating to business which is not sensibly
practical for some of its members to carry on the business in the partnership. So here if the firm
is dissolved then any partner can sue the firm and get of his share in the firm's property.

When Polyphonic formed there were 20 partners, but after the death of partner they become 19,
so they added 2 more partners. In a firm there would not more than 20 partners in a firm. So it
indicated the violation of maximum number of partners in the firm.

In the case of Samsung a partner of the firm or any person on his behalf cannot take legal action
because Polyphonic is not registered firm.

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 Answer to the Question No 3

Issue:

Is the company maintaining the minimum number of members on the basis of public company
act?

As they are a public company, on the basis of that at least how many directors the company has?

As per as company act 1994, When first general meeting was held, and after that when the next
meeting was held?

Are the director calls an extraordinary general meeting whenever they consider it desirable?
What is the requisition of the holders of issued share capital, for call an extraordinary general
meeting?
Rule:

According to Company act 1994, sec. 81 A general meeting of every company shall be held
within eighteen months from the date of incorporation and thereafter once at least in every
calendar year and not more than fifteen months after the holding of the last preceding general
meeting.

As per as Company act 1994, sec. 84 the directors may call an extraordinary general meeting
whenever they consider it desirable. Further, the directors of the company shall, on the
requisition of the holders of not less than one- tenth of issued share capital, call an extraordinary
general meeting.

According to Company act 1994, the minimum number of members in case of public company is
seven.

According to company act 1994 sec. 52 the directors can only pay if the articles of the company
allow them to do this.

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As per as company act 1994 the minimum number of members in case of public company is
seven.

Analysis:

Mr. Rahim formed a public limited company named “Rahim & Sons Ltd”. The members of this
new company were Mr. Rahim himself and his four sons. When the prospectus issued by the
Company, many people showed interest in buying shares and the number increased from five to
twenty quickly. As per as company act 1994 the minimum number of members in case of public
company is seven. So here they have 20 shareholders. So there is no violation occurred.

In the case the member of the Board of Directors were Mr. Rahim and his eldest son. It creates a
violation against the company act 1994. According to law in a public company, there must have
at least three directors.
As per as Companies Act 1994 Sec. 81 the first AGM must be held within 15 months from the
date of incorporation. Here this was done in this case so there is no violation in conduct of the
first AGM. Here the next AGM must be held within a period not more than 15 months from the
first AGM. But the next AGM was held more than 18 months after the first AGM so there was a
violation of law.
As per as Company act 1994, sec. 84 in the case there is a violation occurred in EGM. The
directors are requisite to convene the EGM on demand of holders of at least 1/10th of issued
share capital. Based on case, the five shareholders of the company requested for an extraordinary
general meeting, but the holders of the company asked for 1/3rd of capital of the company
shares. Since 1/3rd is larger than 1/10th. Shareholders had a legal right to request for the meeting
and the directors were liable for except the request. Here the directors did not organize the
meeting, so they violated section 84 of The Company Act 1994.

On the basis of case, general meeting held by the board of directors and the directors never
issued dividends. According to company act 1994 sec. 52 the directors can only pay if the
articles of the company allow them to do this.

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Since there are no clear facts of what the articles of the company demanded based on case facts,
so the directors cannot be held liable for violating section 52 of the Company Act 1994, or they
cannot be held liable for failure to pay dividends.
Conclusion:

As per as company act 1994 the minimum number of members in case of public company is
seven. So here they have 20 shareholders. So there is no violation occurred.

According to company act 1994 in a public company, there must have at least three directors.
But in the case "Rahim and Sons Ltd" violated the act. Here Rahim and his elder son were the
only directors.
Here the first AGM held within 15 months from the date of incorporation, so there is no violation
in conduct of the first AGM. But the next AGM was held more than 18 months after the first
AGM so there was a violation of law.
Here the board of directors violated Company Act 1994, sec 84.

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 Referencing

1) The Contract act 1872 Of Bailment, URL: http://bdlaws.minlaw.gov.bd/act-

26/chapter-details-87.html

2) The Companies Act, 1994: Part 4. (2020). Bida.gov.bd. Retrieved 3 June 2020,
from http://bida.gov.bd/wp-content/uploads/2019/01/part4.html
3) (2020). Retrieved 3 June 2020, from
https://www.iiiglobal.org/sites/default/files/companiesact_0.pdf
4) Company Act 1994, URL: http://bdlaws.minlaw.gov.bd/act-788.html

5) Course Hero, URL: https://www.coursehero.com/qa/wait/21480576/

6) Course Hero, URL: https://www.coursehero.com/qa/wait/21481260/

7) My honorable faculty Dr. Mohammad Nazmuzzaman Bhuian class note.

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