Law of Tourism Business

1. Business law and legal issues in Tourism
Chapter 1
Prepared By
Md.Iqbal Hossain
Lecturer
Department of Tourism and Hospitality Management
Mirpur University College

2. Define Contract
A contract is a legally binding agreement between two or more
parties that defines the terms and conditions of their agreement.
It lays out the rights and obligations of each party, as well as the
consequences of not fulfilling those obligations. Contracts can be
written or verbal, but written contracts are generally preferred
because they provide a clearer record of the agreement and are
easier to enforce in court if necessary.

3. Write down the essential elements of a contract
The essential elements of a contract are:
1. Offer: An offer is a proposal made by one party to another, indicating a willingness
to enter into a contract on specific terms.
2. Acceptance: Acceptance is the agreement by the other party to the terms of the offer.
3. Consideration: Consideration refers to something of value that each party gives or
promises to give to the other, and it is what makes the contract legally binding.
4. Capacity: Capacity refers to the legal ability of each party to enter into a contract.
Parties must be of legal age, of sound mind, and not under duress or undue influence.

4. 5. Intention to create legal relations: The parties must have a mutual intention to create a
legally binding agreement.
6. Certainty: The terms of the contract must be clear and certain, so that the parties
understand their obligations and the consequences of not fulfilling them.
7. Free Consent: Both parties must freely and willingly agree to the terms of the contract
without any coercion, fraud, misrepresentation, or mistake.
8.Lawful Object: The object of the contract must be lawful. A contract to do something
illegal, immoral, or against public policy is not valid.
These elements are essential to the validity and enforceability of a contract. If any of these
elements are missing, the contract may be void or unenforceable.

5. What conditions are necessary for converting an
agreement into a contract - Elucidate your answer
Answer of this question is similar to the answer of the
following question
“ Write down the Essential elements of a contract “

6. “A contract is an agreement enforceable by law” -
Discuss
The statement "A contract is an agreement enforceable by law" is a widely accepted
definition of a contract. It means that a contract is a legally binding agreement between
two or more parties, which can be enforced in a court of law if either party fails to meet
their obligations under the agreement.
To be enforceable, a contract must have certain elements, including an offer, acceptance,
consideration, and a mutual intention to create legal relations. The offer must be made
with the intention of creating a legal relationship, and it must be accepted by the other
party. Consideration refers to something of value that each party gives or promises to give
to the other, and it is what makes the contract legally binding.
In conclusion, a contract is an agreement enforceable by law, and it is a cornerstone of
business and commercial transactions. It provides a framework for parties to make legally
binding promises and to hold each other accountable for fulfilling those promises

7. ‘No consideration No contract’ - State this rule with
exceptions.
The rule "no consideration, no contract" means that a contract must be supported by
consideration to be enforceable. Consideration is something of value that is given by one party
to another in exchange for something else of value. Without consideration, the agreement is
considered a gift or a promise, which is not legally binding.
However, there are some exceptions to this rule, which include:
1. Promissory Estoppel: Under this exception, even if there is no consideration, a promise
can still be enforced if one party has relied on the promise to their detriment. For example,
if someone promises to donate money to a charity, and the charity relies on that promise to
fund a project, the promise can be enforced, even though there was no consideration.
2. Statutory Exceptions: Some contracts, such as contracts under seal or contracts for the
sale of land, are enforceable without consideration.

8. 3. Contracts with Minors: In some cases, contracts with minors are enforceable
even if there is no consideration, but this is subject to certain restrictions and
limitations.
4. Gifts: Gifts are not considered contracts and do not require consideration.
In conclusion, while the general rule is that no consideration, no contract, there
are some exceptions where a contract may be enforceable even without
consideration.

9. State the cases in what way an agreement
without consideration is valid.
Answer of this question is same as the answer of the
following question
‘No consideration No contract’ - State this rule
with exceptions.

10. Difference between Contract and Agreement
Basis of Comparison Contract Agreement
Definition
A contract is a legally binding
agreement that is enforceable by
law, where two or more parties
agree to fulfill certain
obligations and responsibilities
An agreement is a meeting of the
minds between two or more parties,
where they reach a common
understanding on their rights and
obligations.
Nature
A contract is always a formal
agreement that is enforceable by
law.
An agreement can be formal or
informal and may or may not be
enforceable by law.
Creation
A contract must be in writing,
except in certain circumstances,
and must contain all the
necessary elements to be
enforceable by law.
An agreement can be created
verbally or in writing, and can be
implied or inferred from the actions
of the parties involved.

11. Enforceability
A contract is always legally
binding and enforceable by
law.
An agreement may or may not be
enforceable by law, depending on
the circumstances.
Legal Consequences
A contract has legal
consequences, and a breach
of contract can result in legal
action.
An agreement does not have legal
consequences, unless it is
enforceable by law.
Elements
A contract requires all the
necessary elements, such as
consideration, offer,
acceptance, and intention to
create legal relations.
An agreement does not require all
the elements of a contract, such as
consideration, offer, and acceptance.

12. Explain different types of Contract or Agreement.
There are several types of contracts or agreements, each with its own unique characteristics and
legal requirements. Here are some of the most common types:
1. Expressed contract: An express contract is an agreement in which the terms and conditions
are explicitly stated, either in writing or verbally.
2. Implied contract: An implied contract is an agreement in which the terms and conditions are
not explicitly stated, but are instead inferred from the actions of the parties involved.
3. Unilateral contract: A unilateral contract is an agreement in which one party makes a
promise in exchange for the other party's performance of a specific action. For example, a
reward poster offering a reward for information leading to the recovery of lost property creates
a unilateral contract.
4. Bilateral contract: A bilateral contract is an agreement in which both parties make promises
to each other. For example, a contract for the sale of goods is a bilateral contract because both
parties are making promises to each other.

13. 5. Executed contract: An executed contract is an agreement in which both parties have fulfilled
their obligations under the contract.
6. Executory contract: An executory contract is an agreement in which one or both parties
have not yet fulfilled their obligations under the contract.
7. Void contract: A void contract is an agreement that is not enforceable by law, usually
because it is illegal or against public policy.
8. Voidable contract: A voidable contract is an agreement that is enforceable, but one party has
the option to cancel or void the contract due to certain circumstances, such as fraud or duress.
9. Unenforceable contract: An unenforceable contract is an agreement that cannot be enforced
by a court of law, usually because it does not meet the legal requirements for a valid contract.
These are just a few of the many types of contracts and agreements that exist. It is important to
understand the different types of contracts and their legal requirements when entering into any
type of agreement.

14. Define Void and Voidable Agreements
Void contract: A void contract is an agreement that is not
enforceable by law, usually because it is illegal or against public
policy.
Voidable contract: A voidable contract is an agreement that is
enforceable, but one party has the option to cancel or void the
contract due to certain circumstances, such as fraud or duress.

15. Difference between void agreements and
voidable agreements
Basic of Comparison Void Agreements Voidable Agreements
Definition
A void agreement is one that is not
enforceable by law from the
beginning
A voidable agreement is one
that is enforceable by law until
it is avoided by one of the
parties.
Validity A void agreement is invalid from
the very beginning, and therefore,
cannot be enforced under any
circumstances.
A voidable agreement is initially
valid, but it can be avoided by
one of the parties later on.
Legal Consequences A void agreement has no legal
consequences, and it does not
create any legal rights or
obligations for the parties
A voidable agreement creates
legal rights and obligations for
the parties involved, but these
can be avoided by one of the

16. Consent
A void agreement is one that
lacks free consent of the parties
involved.
A voidable agreement is one
that is made with free consent,
but the consent of one party is
influenced or obtained through
fraud, misrepresentation, undue
influence, or coercion.
Effect on Parties
A void agreement does not
affect the parties in any way
since it is unenforceable from
the beginning.
A voidable agreement affects
the parties involved until it is
avoided, and the parties can
enforce the agreement until it is
avoided.
Example
An agreement to commit a
crime or fraud is an example of
a void agreement.
An agreement to sell a property
by an unauthorized person is an
example of a voidable
agreement.

17. "All contracts are agreements but all agreements are not
contacts" - Explain the statement.
The statement "All contracts are agreements but all agreements are not contracts"
means that while every contract is an agreement, not every agreement is a contract.
An agreement is a mutual understanding or arrangement between two or more
parties, which may or may not be legally enforceable. It can be an informal
arrangement or a formal document, such as a memorandum of understanding.
A contract, on the other hand, is a legally binding agreement between two or more
parties that creates an obligation to do or not to do something. It must meet certain
legal requirements, such as offer, acceptance, consideration, and an intention to
create legal relations.
Therefore, every contract is an agreement because it involves an understanding
between parties, but not every agreement rises to the level of a contract because it
may not meet the necessary legal requirements to be enforceable.

18. Define ‘Offer’ and ‘Acceptance’.
Offer
An offer is a proposal made by one party to another party with the intention of creating a
legally binding agreement. It is a promise to do or refrain from doing something in exchange
for something else. An offer must be communicated to the offeree and must be clear, definite,
and certain. It must also be made with the intention of creating a legal obligation. An
invitation to treat, which is an invitation to make an offer, is not an offer.
Acceptance
Acceptance is the agreement by the other party to the terms of the offer. It must be clear,
unequivocal, and communicated to the offeror. Acceptance must also be made while the offer
is still open and before any revocation of the offer. Silence or inaction generally does not
constitute acceptance. Once an offer is accepted, a contract is formed and the parties are
legally obligated to perform their respective obligations under the contract.

19. “An offer must be expressed “ - Explain.
An offer must be expressed means that the offer must be communicated clearly and
unambiguously to the offeree. It can be communicated orally, in writing or by conduct.
The offeror must clearly communicate the terms of the offer, including the subject matter,
price, and any conditions, so that the offeree can understand what is being offered. An
offer must also be definite and certain, meaning that the terms must be specific and
capable of being accepted or rejected.
For example, if a person offers to sell a car to another person for $10,000, the offer must
be communicated clearly to the offeree, and the terms must be definite and certain. The
offeree must understand that the offer is to buy a specific car for a specific price and under
specific conditions. A vague or ambiguous offer will not be valid, as it will not provide the
necessary information for the offeree to make an informed decision about whether to
accept or reject the offer.

20. How an offer is to be communicated?
An offer can be communicated in several ways, depending on the context and the purpose of
the offer. Here are some common methods:
➔ Verbal offer: This is when someone offers something verbally, either in person or over
the phone.
➔ Written offer: This is when someone offers something in writing, such as in an email
or a letter.
➔ Offer letter: This is a formal document that outlines the terms and conditions of an
offer, such as a job offer.
➔ Proposal: This is a detailed offer that includes a plan or proposal for a project or
service.
➔ Bid: This is an offer to buy something at a certain price, such as in an auction or a
tender process.

21. How and When Offer can be revoked?
An offer can be revoked under certain circumstances. Here are some common scenarios
where an offer can be revoked:
❏ The offeror revokes the offer before it is accepted by the offeree.
❏ The offeror sets a deadline for acceptance and the offeree fails to accept within that
time frame.
❏ The offeree rejects the offer.
❏ The offeree makes a counteroffer, which terminates the original offer.
❏ The subject matter of the offer becomes illegal or impossible to perform.
❏ The offeree dies before accepting the offer.
It's important to note that an offer is not legally binding until it is accepted by the offeree.
Before acceptance, either party can withdraw or modify the offer. However, if the offer
has been accepted, it becomes a legally binding contract and can only be terminated
according to the terms of the agreement or by mutual agreement of both parties.

22. What do you mean by breach of contract?
A breach of contract occurs when one party fails to fulfill their
obligations under the terms of a contract without a lawful excuse. In
other words, it is a violation of one or more terms of the contract. A
breach of contract can occur in many ways, such as failing to
deliver goods or services as agreed, failing to pay for goods or
services, or failing to perform under the terms of the contract within
the agreed-upon time frame.

23. What are the remedies of breach of contract?
There are several remedies available for breach of contract, depending on the nature and
severity of the breach. Here are some of the common remedies:
1. Compensatory Damages: This is the most common remedy for breach of contract. It
is a monetary award that is intended to compensate the non-breaching party for the
actual losses suffered as a result of the breach.
2. Consequential Damages: Sometimes referred to as special damages, these are
damages that are not a direct result of the breach, but rather are a consequence of the
breach. For example, lost profits resulting from the breach.
3. Liquidated Damages: This is a predetermined amount of damages that the parties
agree upon in the contract in the event of a breach. It is intended to be a reasonable
estimate of the damages that would result from a breach.

24. 4. Specific Performance: This remedy requires the breaching party to perform their
obligations under the contract. This remedy is typically used when the subject matter of the
contract is unique or rare, such as a work of art.
5. Rescission: This remedy cancels the contract and restores the parties to their pre-
contractual position. This remedy is typically used when the contract was entered into under
duress, fraud or misrepresentation.
6. Reformation: This remedy is used to correct a mistake or ambiguity in the contract. It
allows the court to rewrite the contract to reflect the true intentions of the parties.
It is important to note that not all remedies are available in every situation, and the
availability of a particular remedy will depend on the specific facts of the case.

25. What do you mean by unlawful agreement?
An unlawful agreement is a contract that is illegal or against public policy. It is an
agreement that is not enforceable by law because it violates a statute or a
fundamental principle of law. Examples of unlawful agreements include contracts
to commit a crime, contracts that are against public policy, and contracts that
violate law. Unlawful agreements are considered void and unenforceable, and the
parties to the agreement are not entitled to any relief in court. Moreover, if any
party to the unlawful agreement has suffered any loss or damage, they cannot
seek any remedy in court.

26. Review the usual steps to be taken
in the formation of a contract.
The usual steps to be taken in the formation of a contract are:
1. Offer: One party makes an offer to the other party, indicating an intention to enter into
a contract.
2. Acceptance: The other party accepts the offer, indicating agreement to the terms of
the offer.
3. Consideration: There must be some form of consideration for the contract to be valid.
Consideration is something of value that is exchanged between the parties, such as
money, goods, or services.

27. 4. Capacity: Both parties must have the legal capacity to enter into the contract. This means
that they must be of legal age, not under duress or undue influence, and not under the
influence of drugs or alcohol.
5. Legality: The contract must be for a lawful purpose. Contracts that are illegal or against
public policy are not enforceable.
6. Mutual intent: Both parties must have a mutual intent to enter into the contract. This
means that they must both understand and agree to the terms of the contract.
7. Form: In some cases, the contract must be in writing and signed by both parties in order to
be enforceable.
Once all of these steps have been taken, the contract is considered valid and enforceable.

28. A makes an offer to B for the sale of a tour package for BDT 2000
only. Next day A sell the tour package to C and this fact comes to
the knowledge of B from his friend. Can B still accept the offer of
A? Elucidate the statement.
No, B cannot accept the offer of A after learning that A sold the tour package to
C.
When A made the offer to sell the tour package to B for BDT 2000 only, it was a
unilateral contract where one party (A) makes an offer and waits for another party
(B) to accept it. However, once A sold the tour package to C, he is no longer in a
position to fulfill his original offer to B.

29. In other words, when A sold the package to C before receiving acceptance from B
on his original offer, he breached the terms of their contract. This means that
there is no longer any valid agreement between A and B regarding this particular
transaction.
Therefore, even if B still wants to buy the tour package from A after learning
about its sale to C and offers him money for it later on - such an agreement would
be considered as a new negotiation or fresh proposal rather than accepting an
earlier unilateral contract by fulfilling its conditions.

30. Critically write the consequences of absence of consent and
free consent.
Consent is one of the essential elements that make a contract legally binding. The absence of
consent or free consent can have severe consequences in a contractual agreement. Here are some
critical consequences:
❏ Contractual Agreement becomes voidable: In case there is no mutual agreement
between the parties, where any party has been forced, coerced, or induced into signing the
contract against their will, such an agreement becomes voidable at the option of the
aggrieved party.
❏ No Legal Obligation to Perform: A person who has not given his/her consent freely
cannot be held legally responsible for performing obligations under that particular contract
as it was not entered into voluntarily.

31. ❏ Consequences on Legality and Validity: Any legal action taken based on a contract
with absent or non-free consent may be considered illegal and invalid by law.
❏ Termination of Contractual Relationship: If one party discovers that they did not
enter into a contractual relationship freely without proper understanding and
knowledge about terms & conditions - they may terminate this relationship
immediately upon discovery because it lacks mutual intent from both sides.
❏ Criminal Liability for Coercion/Threats/Fraudulent Acts: Those who use
coercion/threat/fraudulent acts to induce someone else into entering into an
agreement can face criminal liability under applicable laws governing contracts in
various jurisdictions around the world.