CL Descriptive Q&A June Attempt 2022 ICMAP

Q #1 What is the Essential of a valid contract?

ANS. Essentials of a valid contract [Section 10]
An agreement is a contact if it meets the following conditions:
The agreement is made by the free consent of the parties.
The parties making the agreement are competent to contract.
The agreement is made for a lawful consideration.
The agreement is made with a lawful object.
The agreement is not expressly declared to be void by law.

Q #2 What is difference b/w void and valid?

ANS. Void: Not an actual contract and is unenforceable.
Valid: Legally binding and enforceable in a court of law.

Void agreement [Section 2(g)]

An agreement not enforceable by law is said to be void.
Notice that a void agreement is void ab initio i.e. void from the beginning.
Valid contract [Section 2(h)]
An agreement enforceable by law is a contract.
Void contract [Section 2(j)]
A contract which ceases to be enforceable by law becomes void when it ceases
to be enforceable.
Note: Void contract was valid contract at the time of formation but
subsequently it ceases to be enforceable.

Q #3 Define Offers and offered rules and regulations?

ANS. Proposal / Offer
When one person signifies to another his willingness to do or to abstain from
doing anything,
with a view to obtaining the assent of that other to such act or abstinence, he
is said to make a proposal.
Essentials of an offer
 Offeror cannot make offer to himself
 Certain and definite
 Conditional
- An offer may be subject to some condition.
- If there are special terms in an offer, they must be specifically communicated
to offeree.
 Invitation of an offer
- An intention of a person to invite others with a view to enter into an
agreement.
- Purpose of such invitation is to circulate information of his readiness to do
transaction
- Such intentions are not considered offers.
 Communication
- Offer must be communicated to offeree.
- Communication is complete when it comes to the knowledge of offeree
- If offer is made by post, its communication will complete when letter reaches
offeree.
- Offer can be made by words spoken or written or through conduct of the
person.

Q #4 What is the essentials of promisory note?

ANS. Essential elements of a promissory note
In writing
 An oral promise to pay does not become a promissory note.
 Words must convey a clear undertaking to pay (use of words “promise” is
not necessary)
Promise to pay
 A mere acknowledgement of indebtedness is not a promissory note
Definite and unconditional
 Promise must not depend upon the happening of some uncertain event
 But a promise to pay is not conditional if the amount is made payable
- At a particular place or
- After a specified time or
- On happening of an event which must happen
Signed by maker
 Promissory note should be duly authenticated by the signature of the maker.
 If the maker is illiterate, he may place his thumb mark.
Certain parties
 Instrument point out with certainty as to who is the maker and who is the
payee.
 If parties cannot be identified with certainty, the instrument is not a
promissory note.
 A promissory note cannot be made payable to the maker himself.
Sum payable must be certain
 Amount payable must not be capable of contingent addition or subtraction
 The sum payable is certain.

Q #5 What is the bill of exchange?

ANS. Bill of exchange
“A bill of exchange is an instrument in writing containing an unconditional
order, signed by the maker, directing a certain person to pay on demand or at
a fixed or determinable future time a certain sum of money only, to or to the
order of, a certain person, or to the bearer of the instrument.”

Q#6 Every agreement is contract but every contract isn't an

agreement define?
ANS .An agreement starts from an offer and ends on consideration but a
contract has to achieve another target i.e. enforceability. Due to this breach of
the contract provide a legal remedy to the aggrieved party against the guilty
party. So we can say that all contracts are an agreement but all agreements are
not contracts.
Q#7 Why do we need law?
ANS. Law in society is not something which arises from outside the borders of
society. It is in reality a fundamental concept of society. The law represents
society’s norms and is what is good, equal and fair as per the society. Each
society has its own rules, but with the modification in society’s norms, these
rules alter.

Q#8 Define estoppels?

ANS. Within contract law, promissory estoppel refers to the doctrine that a
party may recover on the basis of a promise made when the party's reliance
on that promise was reasonable, and the party attempting to recover
detrimentally relied on the promise.

Q#9 Define drawee?

ANS. A drawee is the person or other entity that pays the owner of a check or
draft. The holder of the check is the payee and the check writer the drawer.
Most often, if you deposit a check, your bank or check-cashing service is the
drawee.

Q#10 Define Partnership rules and regulations?

ANS. 1) Association of two or more persons
 There can be no partnership consisting of a single individual.
 If the number gets reduced to one, for any reason, it ceases to be a
partnership.
 Partnership Act does not say anything about the maximum number of
partners.
2) Agreement
 This agreement may be express (written or oral) or implied.
 The written agreement is known as ‘partnership deed’.
 In Pakistan partnership arises from contract and not from status.
3) Carrying on business
 The parties must have agreed to carry on a business.
 Where there is no business to be done, there can be no question of
partnership.
 If the purpose is to carry on some charitable work it will not be a
partnership.
4) Sharing of profits
 Partners may share it equally or in any other proportion.
 It is not necessary that the partners should agree to share losses.
5) Mutual agency
 Mutual Agency relationship means that each partner is both an agent and a
principal.

Q#11 Define negotiable instrument?

ANS. Negotiable instruments
A negotiable instrument is a signed document that promises a sum of payment
to a specified person or the assignee.

A negotiable instrument means a:

 Promissory note
 Bill of exchange or
 Cheque

Q#11 Which contract is void ab initio?

ANS. A contract which is void ab initio is a contract which was invalid from its
very inception. “Ab initio” is Latin for “from the beginning”, and is used to
describe contracts which were legally unenforceable from the moment they
were created.