Busniess Law

Presented by: Khawar Abbasi

 Contract of Agency and
its Creation
• A contract of agency is an agreement between two parties where one party (the principal)
appoints another party (the agent) to act on their behalf in certain matters. The principal
grants the agent the authority to make decisions and take actions on their behalf.
• There are several ways that an agency can be created, including:
• Express Agency: This is where the agency relationship is created through a written or
verbal agreement between the principal and the agent. The agreement outlines the scope
of the agency, the tasks the agent is authorized to perform, and any limitations on the
agent's authority.
• Implied Agency: This is where the agency relationship is created based on the actions of
the parties involved. For example, if a principal hires someone to perform a task on their
behalf, the person they hire may be considered an agent even if there is no written or
verbal agreement in place.
• Apparent Agency: This is where the agency relationship is created based on the actions of
the principal. If the principal acts in a way that leads others to believe that the agent has
authority to act on their behalf, then an agency relationship may be created, even if there
is no actual agreement between the parties.
 Termination Of Agency Relationship
• Revocation: This is where the principal terminates the agency relationship by
revoking the agent's authority to act on their behalf. The principal can do this
at any time, but may be liable for any damages caused by the revocation.
• Renunciation: This is where the agent terminates the agency relationship by
renouncing their authority to act on the principal's behalf. The agent must
give the principal reasonable notice of their intent to renounce.
• Completion: This is where the agency relationship terminates automatically
when the task or project for which the agent was hired is completed.
• Expiration: This is where the agency relationship terminates automatically
when a specified period of time has elapsed.
• Mutual Agreement: This is where the principal and the agent agree to
terminate the agency relationship.
 Rights and Duties of a Principal
Principal Agent:

• The role of a principal in an organization or institution is critical, as they are

responsible for overseeing the daily operations and ensuring that the institution runs
smoothly. In carrying out their responsibilities, principals have both rights and duties.
Rights of a Principal:
• Authority: A principal has the right to manage and direct the institution, including its
personnel, resources, and programs. They have the authority to make decisions that
affect the organization, its students or employees, and other stakeholders.
• Privacy: Principals have the right to protect the confidentiality and privacy of their
students, employees, and other stakeholders.
• Safety: A principal has the right to maintain a safe and secure environment within the
institution. This includes implementing safety procedures, protocols, and measures to
ensure that all students, employees, and visitors are protected.
• Discipline: Principals have the right to enforce disciplinary measures to maintain
order and ensure that all students and employees adhere to the rules and regulations of
the institution.
• Fairness: A principal has the right to ensure that all stakeholders are treated fairly and
without bias, regardless of their background, race, gender, or any other factors.
 Rights and Duties of a Principal
Duties of a Principal:

• Leadership: Principals have the duty to provide effective leadership to the institution,
including setting goals and objectives, developing strategies to achieve them, and
motivating and inspiring their team to work towards them.
• Administration: A principal has the duty to manage and oversee the day-to-day
operations of the institution, including finances, personnel, and resources.
• Communication: A principal has the duty to maintain open and effective
communication with all stakeholders, including students, parents, teachers, and staff.
• Curriculum: Principals have the duty to ensure that the institution's curriculum is
effective, relevant, and meets the needs of the students.
• Evaluation: A principal has the duty to assess and evaluate the institution's
performance, including student achievement, personnel performance, and program
effectiveness. They should use the evaluation results to identify areas of improvement
and implement necessary changes.
In summary, the rights and duties of a principal are interrelated, and they must be
carried out with diligence, transparency, and a sense of responsibility to ensure the
institution's success.
 LAW OF SALE OF GOODS
Sale and agreement to sell are two different types of contracts used in business transactions. Here are some points on which
we can distinguish them:
•Transfer of ownership: In a sale, the ownership of the goods is transferred from the seller to the buyer immediately at the
time of the contract. In contrast, in an agreement to sell, the ownership is transferred from the seller to the buyer at a
future date or upon the fulfillment of some conditions.
•Transfer of possession: In a sale, the possession of the goods is transferred from the seller to the buyer immediately at the
time of the contract. In contrast, in an agreement to sell, the possession of the goods may or may not be transferred
immediately. It may be transferred at a later date or upon the fulfillment of some conditions.
•Risk: In a sale, the risk of loss or damage to the goods is transferred from the seller to the buyer immediately at the time of
the contract. In contrast, in an agreement to sell, the risk remains with the seller until the ownership and possession of the
goods are transferred to the buyer.
•Nature of the contract: A sale is a completed contract, while an agreement to sell is an executory contract. In a completed
contract, all the terms of the contract have been fulfilled, and the contract has come to an end. In an executor contract,
some terms of the contract remain to be fulfilled, and the contract has not yet come to an end.
•Insolvency of seller: In an agreement to sell, if the seller becomes insolvent before the ownership and possession of the
goods are transferred to the buyer, the buyer will not have any claim on the goods in the hands of the seller's creditors. In
contrast, in a sale, if the ownership and possession of the goods have been transferred to the buyer before the seller
becomes insolvent, the buyer will have a claim on the goods in the hands of the seller's creditors.
Overall, the main difference between sale and agreement to sell lies in the timing of the transfer of ownership, possession,
and risk of loss or damage to the goods.
 Rights of an unpaid seller?
An unpaid seller is a seller who has not yet received payment for the goods they have sold. The term "unpaid
seller" applies in situations where the buyer has not paid the full price of the goods or has not paid at all.
• Under the Sale of Goods Act 1930 in India, an unpaid seller has the following rights against the goods and
the buyer:
• Right of Lien: An unpaid seller can retain possession of the goods until the full payment is made by the
buyer. This right of lien can be exercised by the seller even if the ownership of the goods has passed to the
buyer.
• Right of Stoppage in Transit: If the goods are in transit and the seller becomes aware that the buyer is
insolvent, the seller can stop the delivery of goods to the buyer and resume possession of the goods.
• Right to Resell the Goods: An unpaid seller can resell the goods to recover the amount due from the buyer.
If the seller resells the goods, they can recover any loss incurred as a result of the resale from the original
buyer.
• Right to Sue for Damages: The seller can sue the buyer for damages if the buyer refuses to accept the goods
or pay for them. The seller can claim compensation for any loss suffered as a result of the buyer's breach of
contract.
Overall, these rights ensure that the seller is protected in case the buyer defaults on payment. However, it is advisable
for the seller to take measures to secure payment in advance or as soon as possible after delivery to avoid such
situations.
 Implied conditions
and Warranties
In the context of contract law, conditions and warranties are terms that
define the obligations of the parties involved in the contract. These terms
may be expressly stated in the contract, or they may be implied by law.
• Express conditions and warranties are terms that the parties have
explicitly agreed upon and included in the contract. For example, if
you buy a car and the seller promises that it will be delivered to you
with a full tank of gas, that promise is an express condition of the
contract.
• Implied conditions and warranties are terms that are not explicitly
stated in the contract, but are assumed to be a part of the agreement
based on the circumstances surrounding the contract. For example, if
you buy a car, it is implied that the car is of a certain quality, is
roadworthy, and will be fit for its intended purpose. These implied
terms are often a matter of law, and may be different depending on
the jurisdiction and the type of contract.
 Implied Condition and Warranties
• The doctrine of caveat emptor is a principle that places the
responsibility for ensuring the quality and suitability of a
product on the buyer. The term "caveat emptor" means "let the
buyer beware." This doctrine assumes that the buyer has equal
knowledge and bargaining power as the seller, and should
therefore be responsible for investigating and assessing the
product before purchasing it.
• However, in modern times, this doctrine has been somewhat
modified, and the law imposes certain duties on the seller to
disclose information about the product and ensure its quality.
For example, the seller may be required to disclose any known
defects in the product, or to provide a warranty that the product
will be of a certain quality for a certain period of time.
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 a certain sum of money only to or to the order of, a
certain person or to the bearer of the instrument”.
 PROMISSORY NOTE
A promissory note is an instrument in writing, containing an
unconditional undertaking, signed by the maker 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
 Cheque
A cheque is a bill of exchange drawn on a specified banker and not
expressed to be payable otherwise than on demand”.