Tell about different areas of business law

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Department: Commerce
Semester: 3rd
Subject: Business Law
Submitted by: Foqia Ali
Submitted to : Dr Muhammad Jawad
Roll Number: 2019-B.COM.007
Assignment Number-1
Fatima Jinnah Women University Rawalpindi

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Question No. 1:
Discuss any business related law with at least three examples
Solution:
I will discuss the business law regarding the cheques
Meaning and definition of cheques:
Section 6 of negotiable instruments defines cheques as
“A cheque is a bill of exchange drawn on a specified banker and not expressed to be payable
otherwise than on demand.”
Parties Involved in issuing or withdrawal of cheques:
• Drawer:
A person who draws the cheque is called drawer.
• Drawer:
A banker who is directed to pay the amount of the cheque is called drawer
• Payee:
The person who will receive the amount is called payee.
Characteristics of cheques:
The cheques Is consider as valid when it possesses all the following characteristics
➢ In writing:
A cheque must be in writing. A printed cheque is also valid. Cheque must be drawn in ink. A cheque
written pencil is not unpaid.
Examples:
The following cheques are valid:
A. Pay X or bearer Rs.500
B. Pay X Rs.500.
➢ Unconditional Order:
A cheque must contain an order to pay unconditionally. If bank is ordered to pay upon the condition
of payee's signing the receipt, it is not a cheque.
Examples:
A. A draws a cheque, ' Pay C Rs.300'. It is a valid cheque
B. A draws a cheque, ‘Pay C Rs.400, if you can.’ It is not valid cheque as it is conditional.
➢ Signed by drawer:
A cheque will be valid only if it is signed by the account holder or by someone who is authorized to
sign on his behalf.

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Examples:
A draws a cheque but doesn’t sign thereon: ' Pay M, Rs.500.’ It is not a valid cheque.
➢ Payable on demand:
A cheque is always drawn payable on demand. The demand must be made within reasonable time. In
Pakistan, the cheque must be presented within six months from the date of issue.
Example:
Y draws a cheque on 1st
June, 2016 as ' Pay Rs.500 to X'. It is valid for six months.
➢ Certain sum:
The amount mentioned in a cheque must be certain. In practice, banks return the cheque if the
amount in words and figures differ from each other.
Example:
M draws a cheque, 'Pay Rs.500 to N and some according to his needs'. It is not a valid cheque.
➢ Payable to bearer or order:
The drawer of the cheque can make it payable to the bearer or any specified person. If the customer
marks cheque 'Pay cash or order', the bank may treat it as payable to the bearer.
Examples:
Following cheques are valid:
A. Pay Rs.500 to M
B. Pay N or bearer Rs.500
3 different example of cheques that are used in business and that are valid:
a. A Pay B Rs.300
b. Pay A Rs.500
c. Pay B some amount according to his needs.
Question No.2:
Discuss any international business law that is applicable in Pakistan after some
amendments.
Answer:
Sale of Goods Act:
The law is relating to sale of goods is contained in the sale of Goods Act, 1930. This
Act came into force on 1st
July, 1930. This Act contain 66 sections and extends to the
whole of Pakistan.
Contract of Goods:

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A contract of sale of Goods is a contract whereby the seller transfer or agrees to
transfer the property in goods to the buyer for a price. There may be a contract of sale
between one part-owner and other.
Amendments:
Insertion of section 16 A, Act 3 of 1930:
There is amendment in sale of goods section 16 where a new section 16 A is added
which says that:
‘ 16A, seller to inform buyer of defect in goods sold- Not with standing anything
contained in section 16, and save where the parties have entered into an agreement to
the contrary, the seller shall be under an obligation to inform the buyer of any defect in
goods sold the goods at the time of the contract except in a case where the defect is
obviously known to the buyer'
Amendment of Section 37, Act 3 of 1930:
In the said act, I. Section 37, in the sub-section (2) after the word 'or' the commas and
words “if the goods, delivered such that it is difficult or time consuming to separate
the quantity contract for” be inserted.
Question No. 3:
Discuss five rights of yours with three examples
Solution:
Rights with three examples;
Right 1:
• As a student, we have the right to learn and to be free to express their opinions,
feelings and ideas.
Example:
• I can express my opinion on any topic that is being discuss on class. Teacher
can agree or disagree with me but he cannot stop me to express my feelings.
• As a student I have right to learn but if any teacher is not performing his duty
of teaching us, I can complain against that teacher to the higher authorities.
• I have the right to express my feelings on a particular situation that occurs or
being discuss in the class.
Right No. 2:

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• As a girl, I have right to get education. The Religion Islam also give this
right to me.
Examples:
• As I have right to get education, if some one stops me, I can complain against
him.
• As a girl, I have a right of education so their must a fair distribution of seats for
girls and boys in every institution.
• As a girl, if I want to get higher education society should encourage it because it
is my basic right.
Right No. 3:
• I have the right to vote
Examples:
• As a young girl, I have right to vote, I can vote any party which I like or agree
with their opinions.
• If somebody forcefully want me to vote their party, I can complain against him.
• As a citizen, I have right that I can express my opinions on all the political
parties of Pakistan.
Question No. 4:
Which law is illegal? State one example.
Solution:
A contract is illegal if it involves doing something that is a criminal act or civil wrong
or against the public good. In this contract there is no legal obligations between the
parties. Money paid under this contract cannot be recovered.
Example:
• Selling fire arm to one who doesn’t have a license to hold one.
• B hires a house to use for gambling as object of agreement is unlawful so it is
known as illegal contract.
Question No. 5:
State at least one example on different breach of contract and remedies.
Solution:
Example on different types of Breach of contract:

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• Material breach:
Material breach is a contract law term which refers to a failure of performance
under the contract which is significant enough to give the aggrieved party the right
to sue for breach contract.
Example: If A contract with B to have a house built a material breach would be
that the contractor doesn’t build a house at all.
Minor breach:
It is less severe than material breach and it gives the harmed party to sue for
damages but doesn’t usually excuse him for future performance
Example: In minor breach the house is built fully but the painting of one of the
room have the wrong colour that is different from other room.
Anticipatory breach:
An Anticipatory breach occurs when a party demonstrates his intention to break a
contract.
Example:
A agrees to sell 1000 units of his products to B on December 10, and will charge
Rs.100 per unit. But before 10 December, B told A that he cannot come up with
the money on time. From communication with B, A assumes that B is in
anticipatory breach. Now A can sell his product to someone else or can sue B for
breach of contract.
Actual breach:
In Actual breach when the time arrives for a party to perform their side of an
agreement and they don’t perform
Example:
A promises B that he provide 1000 units of his products to B on 10 December and
charges Rs.100 per unit. But on 10 December A refuses to have his products. It is
known as actual breach of contract. As in this B faces damages so he can sue A in
the court
Examples of remedies for breach of contract:
1. Suit for Rescission:
A rescission means cancellation of the contract. When one party refuses to perform
his obligation, the other party is released from his obligation under the contract.

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The aggrieved party can bring suit for rescission of the contract against the guilty
party for the breach of contract.
Example:
A contract to supply cement to B on 15 April. B agrees to pay the price on receipt
of goods. A doesn’t supply on due date. B is discharge from liability to pay. B can
rescind and claim damages.
2. Suit for damages:
The damages are a monetary compensation awarded by court to the aggrieved party
for the loss suffered by him as a result of the breach of contract.
The aggrieved party can claim the following kind of damages:
• Ordinary damages:
These damages arise directly as a result of breach of contract. The ordinary damages
are usually assessed on the basis of actual loss.
Example:
A contract to pay Rs.1 Lac to B on 1st
May. A failed to pay on that day. As a result, B
is ruined. A is liable to pay B only principal sum and interest on it.
• Special damages:
The special damages are payable to aggrieved party under some special circumstances.
The parties must be aware of the circumstance which may create special damages.
These damages include indirect loss which may arise due to breach of contract.
Example:
A contract C to buy 1 ton of iron for Rs.80,000. A also contracts to sell B, 1 ton iron
for Rs.1 Lac. A informs C about the purpose of contract. C fails to supply. As a result,
A cannot supply to B. C is liable for loss of profit which A would have earned from B.
• Exemplary damages:
The exemplary damages are awarded not compensate the aggrieved party, but to
punish the guilty party and to prevent him from committing further breaches.
Example:
OS Bank promised to give loan to W for a trip to California by crediting his account.
OS Bank failed to do so and W's cheque was dishonoured. The court allowed
exemplary damages for emotional stress.

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• Liquidated damages:
These are the damages that are specially stated on the contract by the parties. Where a
sum is agreed in the contract to be paid by the defaulting party in case of breach of
contract, the court will allow reasonable damages not exceeding the amount already
agreed. If the actual loss is more than the agreed amount, damages will be payable to
the agreed amount.
Example:
A contracts to pay Rs.20,000 as damages to B, if he fails to pay Rs.5 Lac on a given
day. A fails to pay on that day. B can recover damages not exceeding Rs.20,000
• Nominal damages:
These are the damages which are awarded when aggrieved party doesn’t suffer
monetary loss.
Examples:
A promises to sell cement to B for Rs.200 per bag. A doesn’t supply. At the time of
breach , market rate of cement is the same. B is entitled to nominal damages.
3. Suit upon Quantum Meruit:
Where a party to the contract performs the contract partially, and the other party
breaches the contract, a suit can be filed to claim proportionate remuneration. It is
called Suit upon Quantum Meruit.
Example:
B contract to build a three storey house for A. When one storey is complete, A stops B
from work. B can get compensation for work done.
4. Suit for specific performance:
It is a decree issued by court to require the guilty party to complete his obligation
according to the terms of contract.
Example:
B agrees to sell his plot to C, who wants to erect a factory. B commits breach. On the
suit of C, B is directed by the court to perform the contract.
5. Suit for Injunction:
It is the order of court by which a party is prevented from breaching the contractual
obligations. It means to demand a court’s stay order.

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Example:
G agreed to take the supply of electricity only from M Co. G was, restrained by an
injunction from buying electricity from any other country.