Business Law Paper

Syed Danyal Shah

BBA
Group E
Semester 4
Submitted To; Hassam Raoon
Question 1.

Mr. A is a person who at different intervals of time is of unsound mind, offered Mr. B a piece of
land for consideration of rupees 1 million pkr when Mr. A is of sound mind. The offer was
communicated to Mr. B and Mr. B accepted the offer. After the acceptance Mr. B communicated
the acceptance of offer to Mr. A, but before the acceptance came to the knowledge of Mr. A, Mr.
A became permanently insane.
Now under the Contract Act 1872 explain
I) That whether the contract is made or not? Give your reasons
II) If there is a contract explain why by giving reasons under the relevant sections of
law
Answer
I. At the time of contract, Mr. A was in sound mind and according to the section 12, a
person in a sound mind occasionally is able to make a contract. So the proposal has been
made by Mr. A.
II. According to section 4, the proposal of Mr. A has been completed at that time when he
posted the proposal to Mr. B. Hence the proposal has been done by Mr. A in a sound
mind.

Question 2.

Mr. A, who is illiterate and due to this reason Mr. A cannot read and write. Mr. B who wants to
enter into a contract with Mr. A prepared a written contract and read it over to Mr. A. Mr. A after
listening to the contents of the document agreed to the terms and conditions find the contract.
Now when it came to the performance of the contract Mr. A came to know that the material terms
(subject matter) of the contract was different than what was agreed between Mr. A and Mr. B.
I) Under the given circumstances please explain that whether Mr. A’s consent was
free or not?
II) If the consent was free give your reasons under the relevant law?

Answer
I) No, the consent of Mr. A is not free because according to section 14, consent is
said to be free when it is not caused by any coercion, undue influence, fraud,
misrepresentation or mistake. The illustration shows that Mr. A has been misled
by Mr. B either intentionally or unintentionally. Therefore it is the case of
mispresentation or fraud which has been done by Mr. B and this is not the free
consent of Mr. A and this agreement is void and will not be acceptable.

Question 3.
What considerations and objects are lawful and what not?  Also explain what void contracts are.
Answer

According to section 23, those consideration and object are lawful which do not have frauds,
which is not forbidden by law, injuries of others, which is moral and do not opposed by law, or
against the public policy

Fraud
Any type of cheating with the opponent party by telling them a lie or any mispresentation
intentionally.

Public Policy
Any act which violate the public, or law policies of the state.

Immoral activities
Agreements done for the dealings of immoral activities like drugs, gambling etc.

Others Injuries
Consideration which includes any type of injuries of others or any type of damages or
destruction of the property of other person.

Agreements in which the consideration is unlawful will be void and will not be effected
in the court

Void agreement
Contracts that are void mean they cannot be enforced by either party. Essentially, it’s a contract
that is no longer able to be used, and the courts will look at it like there was never a contract to begin
with. One issue that can lead to a contract being void is the subject matter of the contract being illegal in
the particular state or throughout the country. Depending on the terms, and what aspect was illegal,
one or both parties could be facing criminal charges.