ASSIGNMENT

Corporate and Business Law

Amna Khalid
20201-27536

Business: In this course business has a different meaning other than buying and selling, it’s
about personal activities that are done by you.

Law:
The system of rules. Rights that are implemented to us by a higher authority.
E.g.: In our home our parents make the law, we have to follow what they have said, as they are
the higher authority of us. In school our principal makes the rules and we have to follow them,
such as be in proper uniform, and maintain discipline. Similarly there are some traffic rules as
well , that wear seat belt, do not over speed and follow the signal. And in a country the
government is the higher authority. There are many situations in which we have to follow the
rules and regulations.
There is no ignorance of law, you have to follow the law no matter what the situation would be.
Law is important for everyone, without it our rights wouldn’t be secure as we won’t be aware
of it.
Law is either public or private law.
Public law includes: Constitutional law, Administrative law and Criminal law.
 Constitutional law: The parliament of the country make this law.
 Administrative law: Custom department, police department enforces this law.
 Criminal law:
Private law incudes:
 Contract:
 Agency: Real estate agent
 Sales: Buying and selling
 Suretyship: Guarantee
 Negotiable instruments: pay order, bills, promissory notes etc

Sources of law: The sources of law are as follows:

 Formal sources: Government laws or sources from the courts. (decision of the courts)
  Material sources: There are certain laws which are derived by people themselves or
legally. E.g.: dowry
a) Historical sources: laws are framed traditionally in an unauthorized way, with time
everyone starts accepting it. This is common law of equity.
b) Legal sources: laws are framed through legal sources such as legislature, agreements,
and precedents.
 Legislature: made by people in the parliament, bill is passed on absolute majority 2/3 rd
and then became law.
 Precedent: Judgement of the court on the basis of old cases decisions refer it to the old
identical case to save time.
 Customary conducts: The initial source of law is based on customary conducts of
community life. People create customs and with time it becomes old and accepted by
the majority of people. And a lot of people start following the conducts in respect and as
an honor.
 Agreement: Contracts between parties. None of the agreements can be against the laws
of organization.

Legal System of Pakistan:

Pakistan adopted the legal system of British. Its teachings were based on Quran and Sunnah. No
law can be against Quran or Sunnah. The system has undergone the Federal Sharia courts, the
foundation is on the British legal system, but the characteristics are Islamic.
Following are the current sources of law in Pakistan:
1. Holy Quran: The Holy Quran is the primary source of law. It was revealed on the
Prophet (P.B.U.H) through Angel Gabriel.
Revelation has been of two kinds:
 Manifest (zahiri) and
 Internal (batin).
Manifest revelation were sent by God to Prophet (p.b.u.h) through Angel Gabriel. Matters
which relate to Quran passed by Muhammad (p.b.u.h) is Ahadits. Quran was revealed during
the space of 23 years. Quran is divided into Surah’s or Chapters, composed of Ayahs and
Verses, each having designations of different kinds. There were certain verses which were
revealed to settle questions that aroused in the minds of humans to get an answer about
objectionable customs, such as gambling, usury, polygamy and infanticide.
Ijma: Ijma is the decision that is taken with the agreement of the researchers of various sects
on themes which are referenced in Quran in various ways. For instance, the appropriate
method of presenting namaz is concurred by every one of the researchers in various ways and
all are right since all are demonstrated with Quran.
Ijtihad: Ijtihad is the common (mutual) assent of scholars of various groups over an inquiry
which isn't obviously addressed in the Quran. For instance, the utilization of TV or loud
speakers was first prohibited by religious scholars however at that point they settled upon it
and permitted individuals to utilize it.
2. Precedent: In Precedent the judge sees if a similar case has come to the later court.
There are some points while making a precedent.
 Question of law should be same
 Question of facts should be same
 Ratio of decendi should be same (Reason)
 Preceding court has a higher or equal status to that of the later court.

3. Legislation: The 1973 Constitution of Pakistan was promulgated on 14th August 1973.
The parliament system of government consist of two houses; Upper (senate) and lower
(national assembly). There is a Majlis e shoora, consisting of a President and two
houses. The president is the head of the state and the prime minister as the head of the
government. There are representatives from the FATA and from Islamabad Capital
Territory. Law is enforced. Bill is present, it is presented in the cabinet or discussed,
when final bill is discussed in the assembly then by voting a bill finance act is made.
Finance bills are approved by the NA.
Difference between Act and Ordinance is that an Act includes majlis e shoora (President, senate
and NA) and an Ordinance has one part of majlis e shoora i.e.: President.
Gazette of Pakistan: It’s a Pakistani pamphlet in which posting of lawyers is mentioned, and
the result of CSS. There are two types of officers:
 Gazette: grade 17 officer or above.
 Non gazette: below 17 grade officer.
After 17 grade there are some levels,
 Minister
 Officer
 Assistant secretary
 Deputy secretary
 Additional secretary
 Full secretary
 Chief secretary
Permanent legislative body cannot be dissolved.
 4. Customs: When a society performs an activity it is called usage. And when the usage is
observed by community it becomes Custom. The laws of custom are called customary
laws and it is substituted by Sharia laws. There are some good and bad customs
practiced in the society. Karo Kari etc.

Contract Laws in Pakistan:

Pakistani Contract Act, 1872 contains the law relating to contracts. It provides the rules relating
to commercial transactions. For example, purchases and sales of daily routine things like bread,
milk, or newspapers.
“A contract is an agreement creating and defining obligations between the parties.”
FORMULA: -
CONTRACT = AN AGREEMENT + ENFORCEABLITY
There are two main elements of a contract;
1. Agreement: A promise or set a set of promise is an agreement. For an agreement there
has to be an offer from one party which should be accepted by the other party creating
legal obligations between them.
2. Enforceability: Agreement should be enforceable by law.
There are two types of agreements which are;

 Social agreement –between father and son, etc.

 Legal agreement – like legal business agreements

There are 10 basic ingredients of a valid contract and they are:
1. Offer and Acceptance: lawful offer and contracts, there should be no “ifs” and “buts” in
case laws.
2. Legal relationships: there should be a legal relationship between the parties.
3. Lawful consideration: give and take (by both parties) e.g. services, goods and money.
Consideration is the reason of an agreement.
4. Capacity of parties: age of majority (18 plus) , sound mind (normal)
5. Free consent: not with coercion (forcefully), undue influence (there should be a
relationship between two individuals. For example: doctor will say that first pay me then
I will do your work and so does a lawyer.
6. Lawful object: the object should be lawful (land, gift, property etc)
7. Writing and Registration: Actions, Verbal (oral) and writing is preferable because we can
prove it. (property, membership, nikkah)
8. Certainty: clear and certain
9. Possibility of performance: relationship
 10. Not expressly declared void: Restraint of trade: you can do work anywhere on free will.
Wager: a contract through gambling will be illegal.

Discharge of Contract:
Our obligation, their right. When rights arising out of a contract comes to an end the contract is
terminated. For example: We graduated, our degree has completed not the contract from IoBM
comes to an end. Discharge of contract comes to an end by the following ways:
1. Discharge by performance: It is the natural mode of discharge. When the share of
promises is performed by the parties even if there is only one of several parties, the
contract is terminated. Performance may be:
 Actual performance: when party fulfills the obligations.
 Offer of performance or tender: when one party offers a contract to the other
party but the other party does not accept it. It is termed as Tender or Attempted
performance.
Essentials of a valid offer of performance by tender:
 Must be unconditional.
 Must be made at proper time.
 Must be of the whole quantity contracted for.
 Promisee must have the opportunity to check the goods.
 Must be made by who is able to perform the promise.
 Tender to any one is valid if several joint promisees.
 Exact amount should be tendered.

2. Discharge by Agreement:
 Novation: another contract can replace the existing contract. Parties also change
 Alteration: when terms of a contract are changed.
 Rescission: by mutual consent, contract can be cancelled.
 Remission: lesser sum accepted.
 Wavier: intentional abandonment of a right.
3. Discharge by Subsequent Impossibility:
 Initial: Impossible act is Void ab initio
 Subsequent: contract after formation becomes impossible or unlawful.
Doctrine of Frustration:
Specific grounds of frustration:
 Destruction of subject matter: subject matter destroyed without the fault of promisor or
promisee.
 Failure of ultimate purpose: change in state of things.
  Death or personal incapacity: illness, in capacity, death of a person can make a contract
discharged.
 Change of a law: when contract after formation are changed becomes unlawful.
 Declaration of War: contract with alien (foreign) enemy is illegal.

4. Discharge by Lapse of time: Limitation act 1908, states that a contract should be
performed in a specified period of time.
5. Discharge by Operation of law:
 Insolvency: bankrupt
 Merger: when inferior right merges with superior right
 Unauthorized material alteration: there should be mutual consent by both the
parties, if any one of them declines it can be avoided.
6. Discharge by Breach of contract: Contract should be performed according to its terms
and conditions. When it is failed, breach of contract takes place.
There are two types of breach of contract:
a) Actual breach: when a party fails to perform a contract, but by compensation he
can perform, if time is not the essence.
b) Anticipatory breach: it occurs before time fixed for performance.
 Express: party communicates with the other party and his intention of
not doing has arrived.
 Implied: party does an act, which makes impossible the performance of a
contract
Effect of an anticipatory breach:
 Promisee is excused from performance.
 Treat contract as rescinded and sue party for damages.
 Ignore the conduct of promisor and wait till time of performance then sure.

Remedies for Breach of Contract:

1. Suit for recession: when one party commits breach of contract, the other party is
released from his obligation.
2. Suit for Damages: damages are awarded to compensate and injured person
 General damages: injured party can recover from damaged party
 Special damages: through which we can expect huge profit
 Exemplary damages: awarded in order to punish guilty party
 Liquidated damages: less amount would be awarded
 Nominal damages: recognition of the right

Bailment and Pledge: Contract of bailment: French word “baillior” meaning to deliver. It
means delivery of goods by one person to another for some purpose. Bailment arises when a
person with free consent transfer possession of goods by owner to another person. (Amanat)
  Bailor: who deliver goods
 Bailee: to whom goods are delivered.
Essential features of a contract of bailment:
1. Contract
2. Specific purpose
3. Delivery of goods
4. No change of ownership
5. Return of same goods
Kinds of Bailment:
 Duties of bailor:
 Duties of bailee:
 Rights of bailee:
 Rights of bailor:
Termination of Bailment:
1. Expire time
2. Accomplishment of purpose
3. Unauthorized use
4. Death of either party
5. Bailor’s termination
6. Destruction of subject matter
Finder of lost goods:
 Duties of finder
 Rights of finder
 Duties of pawnee
 Rights of pawnor
 Duties of pawnor
 Pledge of non-owners
Essentials of pledge:
 Moveable property
 Limited interest
 Transfer
 No transfer of ownership
 Not by mere custody

Incorporation of a Company:
According to companies act 2017 the promoters decided to have a company
 decide whether it is going to be a public limited or private limited company
 registered or unregistered
 Location of the registered office (province)
 Initial members in private and public company
 Registered in SECP and allows certain names for the company
 Opening bank accounts for the company
 Printing necessary documents for the incorporation
a) Memorandum Of Association
b) Articles Of Association
 It should be signed by the initial members
 Submitting an application to the registrar if the registrar is satisfied he issues the
certificate of origin (birth certificate of the company)
 After the Certificate of Incorporation the private company can start its business
 After which the company issues the prospectus for motivate people to invest in
 Then the public company starts its business after the Certificate Of Commencement
 Public limited listed company grants approval from stock exchange of Pakistan.
Memorandum of Association
It is the charter of the company and includes the external affairs of the company.
 Contents
 Name
 Location of the office
 Limited by shares or guarantee
 Share capital
 In private company; MOA should be subscribed by 2 or more people
 In public company; MOA should be subscribed by 7 or more people
 Printed
 In paragraphs and numbered
 Acknowledged and signed by members in front of a witness with his sign too

Articles of Association
 Focuses on the internal affairs of the company (includes the rights of the corporation)
 Unlimited companies have their own articles
 Printed
 In paras and numbered
 Signed in front of a witness
 Public limited company
 Un listed public company
 Listed public company
 Private limited company
 SMC private limited
 Other private limited