 Registration No : BALLB/3-18/M003

 Student Name : Abdul Subhan Soomro

 Title of Assignment : Mid-terms

 Title of Course : Contract Act II

 Name of Faculty Member : Sir Aijaz jatoi

 Submission Date : 9-may-2020, Saturday.

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Answer sheet

Question I : What are essential of the valid contract explain it in detail?

When a contract is formed it must have those essential elements

in order to be it a valid contract,
1. Offer Proposal is written under section 2(a) of the Contract Act, 1872 "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/offer

1.1 Offer & acceptance Section 3 to 9 of the Contract Act, 1872

The first and foremost piece in the contract is an offer and acceptance that must be in-line with the
law made exchanged between the parties to form a contract. And to do that there shall be two or
more parties that will examine the offer acceptance and choose to whether to enter in or not.
Without both of these together the contract doesn’t exist eg: there is an offer/promisor and no
acceptance/promise hence there is no contract or agreement.

A simple example is that you walk into a showroom you find a vehicle that you plan to buy the car
dealer strikes you with an offer quoting the price of the vehicle.
You the other party has the right to determine whether the offer is reasonable or not. In case you
are pleased with the offer the two of you will enter into a contract. In the other scenario where you
don’t accept the offer, there will be no contract, to begin with.

These offers can be made orally or written and for you to give it acceptance in written or orally,
but note to make a contract stand in court it should be written and notarized. Any verbal contract
you might have may hold very little in court since there is no evidence but a memory and oral
statements.

1.2 Acceptance

According to Section 2(b), "When the person to whom the proposal is made signifies his assent thereto,
the proposal is said to be accepted." It must be total, and not partial, and properly communicated given
within proper time frame and not late, if the time is of an essence.

End note “this may appear as basic. A large bulk of commercial cases, which, requires the parties to deal
with the basic questions, are (a) Whether there has there been an offer at all in the particular case, or
whether there is something less than an offer; (b) If there is an acceptance; whether it is in the proper
form; (c) Whether there has been an acceptance of the offer; (d) Whether the acceptance has been
communicated to the offeror.” Source http://pgil.pk/wp-content/uploads/2015/05/THE-LAW-OF-
CONTRACT-IN-PAKISTAN.pdf

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2. Lawful Consideration Section 2(d) states, that: "When at the desire of the promisor, the
promisee has done or abstained from doing, or does or abstains from doing, or promises to do or
abstain something, such an act or abstinence or promise is called consideration for the promise."

2.1 In defines that when the contract is created the parties involved are exchanging there terms and
conditions to which they agree and want to further in that context it is necessary that when one
party is providing something or doing something for the other party the other HAS TO PROVIDE
SOMETHING IN RETURN, it can be value, an act to do something.
2.2 A simple example you buy goods the seller hands you items and you transfer cash. Hence a
contract executed.
In the contract it vary to any sort of thing that can be exchange. In present or future.
2.3 But keep in mind that it should be legal, paying someone to acquire smuggled goods that
contract is void, any term that defeats the purpose of law voids the contract. Or any provision
which is fraudulent, or extorting money, involves injury to anyone or anything the court of law
regards it as immoral and against the public policy.

3. Legal Capacity : the essential of valid contract requires that the parties who are involving in a
contract are of competent authority which translates into according to section 11 of the Contract
Act, and satisfies these rules.
3.2 The person has reached the age of majority, over 18 in Pakistan possessing NIC
Minority deceiving the other party to enter into contract, the burden of liability will remain on
eligible party in-case the minor breaks the contract since contract is void, the minor is not bound
to abide by any terms. In other case a guardian can enter into contract on behalf of minor
3.3 The person is of sound mind, a unsound minded person who cannot distinguish between
what is right from wrong or certified by doctor to be mentally ill cannot enter into contract although
if unsounded mind person enters into contract during the intervals of sanity these contract are
declared void from beginning (ab initio)
3.4 The person is not disqualified from contracting by any law, that could be political status or or
Job status of special category eg “CEO cannot enter into certain contract.”
Foreign person who is not the citizen of the land of whose laws apply,
insolvent person, convict felon.

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4. Free consent : when entering into the contract it is important that parties that agreeing on terms
and conditions should have free and absolute consent and their personal will to enter into contract,
if this situation is not satisfied the contract is deemed invalid
See Section 13, " two or more persons are said to be consented when they agree upon the same thing in
the same sense” meeting of the minds.

4.1 It is a free consent when it’s not acquire by any force, undue influence, fraud, mis-
representation of facts, or mistake.
An agreement without consideration is void hence if the consent is distorted in a consideration it
voids the agreement at all.
If the consent if achieved by any of the above mentioned factors the person from who the consent
was given can withdraw at his option.
4.2 Section 15 to 20, voiding free consent
Some of examples. If a person was coerced in to sign papers important paper at the gun point, it
will render the contract as invalid
If any person misrepresented facts about the deal and the parties agreed on the deal without
knowing the, later the aggrieved party discovers the fact, the contract will render invalid.
Fraud, one party intents to deceives and conceals facts about the contract the counter realizes only
later after entering into the contract the aggrieved party has no obligation to full the contract.

5. Legal Object : all the contracts that are carried out must have legal object that means that the all
and any provision of the law should be with aligned of laws that contract applies, if any provision of the
contract prescribes illegal object it is avoid from the beginning of its existences and warrants a punishment
by court of law if applicable,

5.1 Eg: any activities which harms other person or people, or public, or harms goods, property of someone,
else or is against the law that which the contract applies to, the contract is void ab initio.

Bribing to not partake in legal proceedings, or

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6. intention to create a legal relation: if any contract is created it is entirely crucial that the both
engaging parties intend to create a legal relation that can be uphold in court anytime a dispute
occurs, the opposite of it is described as when the parties sit together to discuss about something
and they come at the conclusion to agree at the deal the contract is done and orally but has not
legal weightage sine the right and obligations are not enforceable
6.1 Eg if your boss during a dinner at restaurant tells you to stay at work past 6 Pm for 1 week and
in bonus he will pay you 1 million, In verbal agreement after execution of terms the employee asks
for bonus but the boss refuses, the employee has no legal course to pursue any claim since it was
not in any formal condition but just a mere talk..

7. Certainty of terms: It is essential that when in contract the terms and provisions are clearly
understandable and not vague, uncertain terms voids the contract because it does not clearly
express the provisions rather it implies. Example you go to show room to buy a car, the car dealers
shows you dozens of vehicle from his garage, but you insist that you want a car and do not describe
any type of car, it could be used new black, registered the dealer has no idea of what you want
hence the contract is deemed void.

Conclusion of valid contract: it is of great concern that all contract that you enter into should cross
check and carefully asses that all the terms therein are legal and valid that does not void it in any
subsequent future. In order to be proceeded in the court of law. In case of dispute

Question II . Differentiate the Principle & master, Agent and servant?

These terms in the legal dictionary are tend to refer the contractual relationship between the two
parties or more parties that have legal obligation bound by each other
A. Principle can hire any agent to work on his behalf the agent will be paid in commission. He
will designate powers or authority to the agent to do the job or transact in business the principle
will give instruction on how the business should done, the agent duty is to figure out how the
final job can be done. The agent needs to act on behalf on principle and not have any conflict of
interest that harms principle.
B. The master hires a servant to work to do his service the servant is paid in salary, the employer
does not surrender its power to the employee for job he will give instruction for work and will
also oversee and order the employee of how exactly the work is done. The employer has no
conflict of interest obligation during the course of employment if employee came across
sensitive situation that can give undue benefit to him. Unless limited by the work contract.

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These terms are used to for purpose to determining liability for Master (employer) and servant
(employee)
hence Principle, (Individual) agent (designated person) to do duty on behalf of principle.
Master and Servant :- Employer and employee respectively the relationship states that the servant
is bound by the employee to provide the service to the master and the master has the obligation to
provide the servant with the value or salary, the scope of the relationship defines the liability
The master has responsibility if the servant causes damage of any sort while on the work hence he
is answerable. To the any party where the damage is caused. A master can hire a servant on work
and dismiss him/her if the duties prescribed by the master are not done.
Suppose the CEO of the company ask his employees to sell a defected product in the market, the
blame purely lies on CEO (master) to be liable of in case of damage to the customer. see vicarious
liability
The servant is bound to adhere by reasonable orders of his master during the course of
employment. Unlike agent or independent contractor who has no supervisor but perform
instruction that only that fits his/her method of work direction given by principle and are aligned
with law.

Principle and agent: Section 182 of Contract Act 1872

182. An "agent" is a person employed to do any act for another or to represent another in
dealings with third person. The person for whom such act is done, or who is so represented,
is called the "principal".
The relation between these two parties is an arrangement of hiring a person to legally act on his/her
behalf the agent has authority to create a contractual relationship between two or more parties
eg: a lawyer representing you in a deal and creating a contract between you and the other party.
The principle will provide instruction to what job is to be completed and the agent will do the job
it has been appointed with and in addition he has not be actively supervised. Unlike the employee
by his employer as already stated.
The agent and the principle have no directly liability to each other. All the performance is done
according to the law and in case there is a mistake the principle on who instruction the task was
completed is liable and further depending on the authority provided by the principle to agent for
eg a person gives general attorney rights to a lawyer. By law the lawyer has to act on the principle
behalf
But in case the lawyers commits a mistake while representing the principle, which in result puts
the principle in trouble, the principle has to answer for himself further.

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Question No. 3

AGREEMENT FOR BAILMENT

This Bailment Agreement is made at Karachi on this day of Saturday 10, May, 2020.

Between
Gash clothing store, Karachi, by their representative agent, Zulfi soomro office in Karsaz
commercial area. Hereinafter referred to as the First Party.

AND
Karachi trust port having office near Port grand office area 23A block 4, Karachi,
hereinafter referred to as called the Second Party (receiver)
Whereas the first party (Bailor) who is will be entrusted there stock of clothing on bailment
to the second party is Bailee

The two parties agree onto terms and conditions of which are as follows
1. For the purpose of this agreement the term property will be referred to as the
stocks of clothing of gash store, which include 2.5 ton of clothing fiber packaged
in a protective container and resting on wheels. The first party has entrusted there
property to the second party

2. The valuation of the property is around 1,500,000 the transfer of bailment is

being done on the grounds that the Second party will keep the property of the
first party in the storage for 30 days.

3. The second party has agreed and showed competency to agree on the task of
storing the property and taking adequate care of it.

4. The first party will pay the consideration of 10,000 Rupees per month of
consideration demanded by second party as the use of their storage located at
Karachi trust port.

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 5. The contract shall remain in effect till termination in written by both parties. And
completion of the task. That is till September 12-2020 or the date rolled to further
future date. In order to revoke the contract the first party has to notify prior 14
days before revoking.

6. It is responsibility of the second party to take adequate care of the property

entrusted by the first party and prevent any damages, also prevent any act of theft
to steal the property in case of the damage to the property, the second party is
liable to pay for the damages claim filed the second party is free from any
liability in case the damage is arrived by act of god. Like natural disaster
hurricane or flood.

7. Our representative of first party gash store can arrive at the storage facility prior
notifying the bailor to take a look of the property store, the second party has right
decline the request in-case the work is going on or the area is not suitable to visit
for inspection.

8. The second party has right to withhold the property of gash clothing store in case
the payment is revoked by the first party as a form of consideration that was
contracted. And the first party has right to revoke payments after terminating the
contract

9. The contract applies the laws of Pakistan and if any provision of this contract is
voidable all the rest of the provision will remain in-force.

The contract was executed on 10-may-2020

1st Party: Gash clothing store rep, 2ndParty: Karachi port trust

CNIC No. 8787-454544-1 CNIC No. 4545-646544-4

Witnessed by
1.Adv.jameel 2 . Abid Ali
CNIC No. 1234-546544-4 CNIC No.4545-454546-4

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Question No. 4

AGREEMENT FOR Pledge

This pledge of Agreement is made at Karachi on this day of Saturday 10, May, 2020.

Between
Scion jewelers, office located Jewel road Karachi block -1B here by referred as a first
party (pawnee)

AND
Mr.Zammer ali s/o murhsad ali NIC 2434-434323-1 here by referred as a second party
(pledgor)

Terms and conditions are here as follows as agreed by the both parties.
1. WHEREAS the second party will entrust there gold ornaments valued at 200,000
as a bailment to the first party scion jewelers (Pawnee) For the purpose to avail a
debt of 150,000 with interest rate of 2.3% to be paid by 60 days from date of the
execution of this contract
2. The gold ornaments are 2 necklaces of gold and 1 ring which shall be entsuted to
the first party (scion jewelers)
3. The first party has the liability to keep the security pledged protected from any
harm or damage,
3.1 It is responsibility of the first party to prevent theft of any item securitized by
the second party
3.2 In case the scion jewelry (first party) lost or damages the ornaments it will be
liable to pay in full immediately to the second party mr.Zameer.
3.3 The security that is pledged is insure by the scion jeweler from any damage.
4 .it is imperative that the second party mr.Zamer who is availing the loan of 150,000
Should pay in timely manner as mentioned in section 1
4.1 The scion jewels is has no liability in-case the money giving to the second party is
lost or robbed it has no hence forth business into where the money is being
used at and subsequently it is free from any incurring liability
4.2 Mr.zameer has to also pay the interest rate 2.3% on his debt of rupees 150,000
4.3 The total amount that mr.zameer has to pay to sicon jewelers by the deadline is
RS.153,450 IN WORDS. 150,000 + 3450 INTEREST.
(ONE-HUNDRED-FITY-THOUSAND-FOUR-HUNDRED-AND-FITY

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 4.4 Mr.zameer has clarified that he is capable of paying debt in the timely manner and
managing his finance properly.
5. In-case Mr. Zameer defaults on his payment of debt by the time of expiring this
agreement the scion jewelers has right to seize and retain the jewels
ornaments that were entrusted by the first party to scion,
5.1 This agreement expires by the time when the all the debts are paid and items are
return to the owner.

The contract was executed on 10-may-2020

1st Party: Scion Jewelerss, 2ndParty: Mr.Zameer s/o murshad ali

CNIC No. 8787-454544-1 CNIC No. 4545-646544-4

Witnessed by
1.Adv.saleem 2 . nabeel Ali
CNIC No. 1234-546544-4 CNIC No.4545-454546-4

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