Business Law Notes
Business Law Notes
1. What?
a. Definition: Enforceable set of rules established by the power of higher
authority to regulate human conduct.
b. What makes a law
i. Authority
ii. Procedures
iii. Functions
c. Major Characteristics of valid rules
i. General (applied to all) and abstract (no one has a higher power)
ii. Enforceable rules that govern our social behavior
iii. Punishments are defined by the law and enforced by the power of
higher authority
2. Why?
a. Law is needed to
i. Protect society
ii. People
iii. Properties
iv. Promote Justice
b. Law vs Right
i. Law defines what is right
c. Law vs Punishment
i. Law defines what is wrong and the consequences of these actions
3. Where?
a. Formal Source of law (Have to follow)
i. Legislation/constitution (Dostoor)
1. Written, Superior, Declaration that is rigid
2. Book that contains number of articles
3. Each article contains 1 separate law
ii. Religion
iii. Constitution
b. Informal Source of law (Doesn’t Have to follow)
i. Court Decision
1. Taking previous judgments as a reference when making other
judgments
ii. Scientific Opinion
1. Is a scientific contribution considering a certain case
2. Informal because it is not liable (Matter of opinion)
Lecture 2
The Basics of Contract Law
Ch.7
Contract:
1. Definition of Contract: Voluntarily legally binding agreement, created between two,
or among number of competent parties, in return for a consideration, and that the
agreement itself must be legal
2. Types of Contracts
a. Oral Contract: Legally binding agreement, but u have to prove (simple
transactions, supermarket, parking etc.)
a. Agreement
i. Social Agreement (No one Can sue or blame)
d. Legality
i. Legal agreement so u can claim your right
4. Types of Contracts:
a. Bilateral
i. Is the contract that will be automatically created once both exchanged
promises
b. Unilateral
i. Promise in return of a performance
c. Volid
d. Void Contract (Batel):
i. Invalid Contract is a contract that is missing legality
1. Selling a stolen car
2. Buying something with fake money
e. Voidable contract:
i. Valid
ii. Enforceable
iii. Becomes voidable when the incompetent party set aside the contract
(canceled by the incompetent party)
iv. Having in competent parties
1. Dealing with a minor
f. Unenforceable Contracts
i. Some contracts require written contracts to be forceable
ii. If they lack written contract, they become unenforceable
g. Express Contract:
i. Super detailed contract
ii. Contains all possibility of changes
iii. Best example of express contract is insurance contract
h. Implied Contract
i. Implied in fact
1. Is a contract created by both parties by their actions rather
than any dialog
ii. Implied in Law/Quasi Contract ()شبه العقد
1. Contract created if a party did an action for another even
though there was no clear agreement
a. A doctor helping someone without them being
unconcise they can sue them for money if they survived
2. To prevent any person from facing any unjustly act
i. Formal Contract
i. Certain format to be approved
ii. Example: Cheque
j. Informal Contract
i. Doesn’t require a certain format
ii. However, I can still sue
k. Executory
i. Not fully preformed by one or by both parties
ii. The contract is still not done
1. Either both of them didn’t fulfill their parts
2. Or one fulfilled their own part and the other didn’t
l. Executed:
i. Both parties fulfilled their part of the agreement
Lecture 3
Agreement – Offer
Ch.7
Offer
1. To have a valid Agreement: There must be an offer and acceptance.
2. Offer: is a promise of doing or not doing something given by the offeror to the
Offeree in return of doing something or not to do something.
3. Valid Offer
a. Seriously Intended:
i. Not a Jest
ii. Not a Joke
iii. Not under pressure
iv. Free Will
b. Objective Theory of Contract:
i. Offeree has a role in analyzing the offer from the offeror
1. Has to analyze the state of the offeror (Consouis, Free will,
Seriously)
2. What’s being offered has a reasonable return for its value
3. Analyze Words, Language, and the Way of the offeror
ii. If offeree is unaware its fair market value than the contract is valid
c. Intended:
i. Offer Definite and Precise offer
1. Detailed Description of the thing offered
ii. The offer must Written as I promise to do/sell …
iii. To whom?
iv. Price
1. Doesn’t have to be previously stated
2. On Going Price: Average between a range price value usually
the average is stated by the market value and it is open for
barganing
3. Ex: Asking a plumber to fix the water tap promising money in
return but not stating the exact amount
v. Invitation to have a deal (Antonym of a definite deal)
1. I invite you to sell/do ….
2. In precise
3. Vague offer made to the general
4. Ex: Buy One get one free
5. Ex: Catalogues
6. Ex: Ads
7. Ex: Radio offers
vi. Bid & Auction
1. Auction (Mozayda)
a. Offer something and choose the highest offer
2. Bid (Monaksa)
a. Offer something and chose the lowest
3. With reserve (terms and conditions)
a. Then the offeror doesn’t have to choose the highest or
the lowest offer
b. Because the offeror is in control of choosing since
he/she has terms and conditions so if it’s applied in a
middle offer, they can choose it
d. Communicated Logically
i. A specific Person
1. Offeree Must except
ii. Public
1. First come, first serve
4. How to terminate the offer.
a. Simplest way is when the offeree accepts the offer; hence, I can’t offer the
thing I am selling to someone else
b. Lapse of time: is expiration of time (offeror setting a time to the offer)
i. Ex: Offering stocks in the market, the offeree must respond
immediately
c. Rejection
i. The offeree rejected the contract
d. Revocation
i. The offeror withdrawing the offer before the offeree
Option offered the offeror can’t terminate
ii. Certain amount of money given by the offeree by the offeror to
reserve the offer and keep it open and irrevocable for a certain
duration
iii. The offeree either pays the full amount
iv. Or, the offeree takes his option back before the duration passes, if it
passed, he can’t take it back
v. If the offeror sold the offer to
vi. someone else, the offeror must pay the offeree double the option
e. Counter offer:
i. Is an Offer offered by the offeree in reply of the offer offered by the
offeror
ii. Hence a Counter offer cancels or terminates the original offer offered
by the offeror
f. Death or Insanity
i. If the offeree died and the deal was accepted before the
death/insanity then the deal is valid
ii. If the offeree died/insane before the deal was accepted then deal is
invalid (Terminated)
g. Impossibility
i. If the law or the governor issued a law after my offer was accepted
and done then I am not liable.
h. Illegality
i. Offeror offering something that they don’t own (ex: stolen)
Lecture 4
Agreement – Acceptance
Ch.7
Acceptance:
1. Acceptance: is the approval of the offeree to the proposal given by the offeror
2. Valid Acceptance:
a. Must Come Only by the offeree
i. (Private Offer)
1. If the offer was intended to a certain person he/she are than
only ones who can accept or reject
2. An offeree can’t accept an offer that wasn’t offered to them
3. Offeree can ask for an offer to be issued for them by the
offeror
4. Ex: If my friend got rejected from an interview offered for her
only, I can’t accept it for myself because I wasn’t offered in the
first place
c. Communicated
i. Bi – Lateral: Acceptance must be communicated in a form of a
promise
ii. Uni Lateral: Acceptance must be communicated in s form of a
performance
iii. Mail Box Rule: Most offers are done overseas; offeree must follow the
method of communication determined by the offeror
1. Authorized: offeree followed the offeror method of
communication
a. Offer Determines:
b. Medium of communication
c. Duration of the communication
d. If the offeree sent acceptance using the offeror method
and offeror didn’t receive the acceptance, still the
contract is still valid and it should run through
e. If the offeree’s acceptance was sent by the mail, and
the mail got lost, still the deal is valid and the offeree
can still ask for the contract to run through using the
mail box’s receipt
2. Unauthorized: offeree didn’t follow the offeror method of
communication
a. The offer will not be valid, and the offeror can cancel
the agreement
3. If the offeror didn’t decide on a method of communication
a. Offeree must accept using methods used in previous
deals
b. If there were no previous dealings, use the same way of
communication used by the offeror to issue the offer
c. Use the convenient method to accept a deal based on
the type of trade
iv. Silence:
1. Is Invalid method of acceptance
2. Offeror Issued an offer and said if you stayed silence it’s
considered as silence
3. This is an Invalid Agreement
4. A contract must be done VOULENTARILY, using FREE WILL
5. Silence is VALID when BOTH parties agree on silence being the
method of acceptance
6. Example: Offeror (Dr. Ahmed Sallam) agreed with the offeree
(Students) that silence is a method of acceptance (they
understand)
3. Mutual Assent/Meeting in minds
a. If we have a valid offer, and we have a valid acceptance then its called mutual
assent by law
Lecture 5
Consideration
Ch.8
1. Cash
a. Cash In return of something
2. Swap
a. Swapping products
b. Your car for my car
c. Your house for my car
3. Legal Detriment: Something that I am not legally required to do/ refrain from doing.
a. Do
i. Ex: If my father said he will give me a car if I do my masters, then I
have a legal detriment (I will do something that I am not required to
do, so I can have the car)
b. Refrain/Forbearance
i. Ex: If I stopped smoking my dad will get me a car ( I have a legal
detriment of refraining smoking, so I can get the car)
4. Adequacy of consideration
a. Law Didn’t specify that the product delivered to the offeree must have
adequate value in return to the offeror
b. Identicality of consideration is when swapping currencies only. Because it
affects the economy.
5. Invalid Consideration
a. Moral Consideration:
i. Moral commitment rather being in a legal obligation
b. Past Consideration:
i. An unexpected gift for an action that had been done in the past.
1. Someone gave me their notes not expecting anything in return
and after studying I invited them for lunch as a consideration
to their previous action (not a valid consideration because this
is not an offer)
6. Problems in Consideration
a. Pre-existing contractual agreement
i. A contract that is already formed and agreed upon between
contractor and client` before any exchange occurred,
ii. Client is not liable to do anything outside of the contract
iii. However,
iv. Force Majure: Client must compensate the contractor when
something unanticipated happens such as Natural hazards
(earthquakes, hurricanes) , wars, lack of raw material, changes in
currency
b. Pre-existing duty to pay a debt
Liquidated claim
i. We have a debt in existence that both debtor and creditor agree on
(No dispute)
ii. We have the debtor paid the creditor part payment at the maturity of
debt
1. The creditor will take the partial payment
iii. Debtor can pay partial payment + additional consideration
1. Additional is something of value that is given as a partial
payment to the debt
iv. creditor doesn’t have to accept the additional and asks debtor to
liquidate the additional.
v. Release: is a written document given by the creditor to the debtor
taking only the partial payment and release the rest of the payment
obligated off of the debtor
Unliquidated claim
i. We have a debt in existence that both debtor and creditor disagree on
(dispute)
1. The offeror offered something that the offeree didn’t agree on
ii. Honest Contractor can Barging with the client to Increase the value
in return and vice versa
iii. Disputed debt Cheque that has the statement “paid in full” (counter
offer) that is legally binding
1. Although we have a previous agreement, honoring the check
that has a partial payment and the statmen “paid in full” will
make me lose the rest of the payment because I agreed on the
counter offer
ii. Composition of creditors
1. Creditor Accepting percentage of the amount and waving the
right off of the rest of the money because the debtor is broke
or financially insolvent.
2. Because sending the debtor to jail is not beneficial for me.
Lecture 6&7
Chapter 9
Competent Parties/Competency/Capacity of parties
1. Legal
a. Adult (Reached of age of maturity)
b. Minor (Incompetent)
i. I have to ask the minor for a Guardian
ii. If I don’t have a guardian, than the minor has the upper hand which
means that they can terminate the contract
iii. The minor is contract can agree, or set off the contract any time
c. Rectify
d. Emancipated minor
i. Below the age of maturity
ii. But the law treats the minor as an adult
e. Stational life
i. According to the social status law views necessities
1. Different types
2. Mentally
a. Sober (Voidable)
i. If the deal is fair (value for value), then the contract will be valid even
if a party is unsober because being unsober is a voluntarily act
1. If the offer is not fair and a party was unsober then the
unsober person can sue to set off the offer
ii. If the other party forced another to be unsober, then the contract is
invalid
b. Ward (Void)
i. The ward is not legally liable at all
ii. Hence, their guardian can set off the deal at any time of
iii. Should avoid dealing with a person who is considered a ward and
confirmed by a court order
c. I must be mentally aware in order to take care of my right
d. Insane but not with a court order (voidable)
i. Split personality, PTSD
ii. Don’t deal with a person that has a period of innormalicy
iii. They are currently unstable, yet they have a possibility of improving
iv. The Insane party has a limited reasonable duration to set aside the
contract, if this time passed then the insane person will have no right
in setting off the contract
Lecture 7
Chapter 11
Enforceability
Contracts that must be in writing to be enforceable: is a valid contract but fails to meet with
certain requirements to be enforceable by law
1. Statute of fraud
a. 5 contracts Requires writing since writing is sufficient as evidence
b. The written document Is sufficient
2. Perjury under oath
a. To lie under oath
3. Contract 1: Contract to pay a debt for another person
a. Offeror requires the offeree to have a grantor ( )ضامنin case the offeree
failed to pay, the offeree must go to the grantor so They can pay the offeror
back
i. Offeree First Party
ii. Grantor second party
iii. Offeror cannot contact the second party
b. The offer contract must be written in order to ensure that the grantor will
step in if the primary partner is unable to complete their part of their deal
4. Contract 2: Contract to pay a debt to a deceased person
a. If a person died and a relative (for example) said he will pay for the deceased
person
i. The relative is NOT LIABILE TO PAY
ii. However, if the creditors have a written document that the relative is
going to pay off the deceased debtors’ debt then they can sue if they
don’t
b. Eexecutor/Administrator (( الوالي/الواصي
c. Someone appointed by the family to handle the finances, assets of a minor
i.
5. Contract 3: Contract to real property
a. Money:
i. Movable: Cash, car, bike, glasses etc.
ii. Immovable: Real property
b. Real Properties: must have a written document that proves that I own the
property
c. Lease
i. Tenant and Rentor must have a contract
If the contract is valid, enforceable and legal, Any of the original contracting parties have
the right to a third party and that is called assignment (tawkeel)
Rights --> assignments --> assigner (the one who decide to transfer)
--> assignee ( the third party to whom the right is going to be
transferred)
--> obligor ( the second original contracting party, the one who will
either perform a service or pay the money)
Once I transfer my right to the assignee, my right in that matter will be extinguished (done-
paid-finished)
The obligor must go back to the assginer to make sure that the assignee has the right- he has
to (obligated) go back to the assigner and check the assignment
-------------------------------------
Duties --> delegation (enaba) --> delegator (the one who decide to transfer his duty)
--> delegetee (the third party to whom the duty is transferred)
--> obligor (the second original contracting party who will be
receiving the money or the service
The duty will remain your responsibility even after it was performed (you will remain liable)
--> prof sallam was sick and told zeina to explain the lecture, he has to ask the students if they
are satisfied, if only one was not satisfied enough, he has to re-explain the whole thing
Transferred duties --> non personal and standardized (could be done by any qualified person
: if I am paying for a certain dentist who is well known and skilled, I have the right to receive
the service done by himself, not his assistance
-------------------------------------
---------------------------------------
Problems in transferring:
Sometimes the assigner may assign the right to 2 parties at the same time (by mistake or can
be done to fraud)
Solutions:
NEW YORK COURT --> the first assignee to whom the right is assigned to, can claim the right
UNITED KINGDOM COURT (applied in Egypt) --> the assignee who contacted the obligor first,
can claim the right,, despite the fact that this assignee got the assignment a couple of weeks
after the other assignee (but the other assignee did not notify the obligor)
Notice of assignment:
Who must contact who??
The assigner --> the assignee --> the obligor
-If the obligor paid the full amount to the assigner before getting the notice of the assignment,
the obligor will be totally free (released)
-If the obligor paid part of the amount to the assigner and another part of it will be paid later
(the obligor did not receive a notice of the assignment) --> the assigner either take the money
and give it to the assignee or just ask the obligor to give the money to the assignee (the obligor
liability will be lessen but will not be released)
Step in right
Jana purchased a car from sallam's showroom, she paid 50% of the ammount. In the contract
is says the car is 1800cc
Sallam has a debt to pay to rodina, so he assigned rodina to receive the other 50% of the
amount so his debt will be paid
Jana discovered that sallam dealt fraudly and the car is not 1800cc it is 1200cc so jana will not
be asked to pay the other 50% because she was deceived and so rodina will not receive the
50% (sallam debt)
Jana can get back her 50% if she finds sallam
Rodina can get the her debt if she finds sallam
Chapter 13
Termination of Contract
Discharge
a. If a creditor didn’t ask the debtor to pay the debt amount after 6 years from
issuing the debt, then the debtor is not liable after this period of time
because the liability has been outlawed/barred. Then
b. Tolling: to extend the duration legally by being hospitalized, army, abroad,
being imprisoned.
c. Outlawed
d. Barred
Chapter 14
Breach of Contract: one or both parties failed to perform as agreed upon in the contract
1. Actual
a. Actual Breach (Concerned with the time AFTER the time set): is that a
contracting party did not perform as agreed upon after the duration stated in
the contract.
2. Anticipatory (expected): before the duration stated in the contract a party will
announce (express confession) that they will not fulfill their part of the contract.
a. You can sue using express confession
b. However, it is preferred that you wait for a short period of time because the
breaching party might change his or her mind
3. Material: inexcusable failure to perform an essential part of the contract will accord
4. Minor: failure to perform a minor part of the contract
5. Remedy: is a course of action available to the non-breaching party to compensate to
reach a status as if nothing occurred to him/her.
a. When a breach occurs, the non-breaching party will file a case for remedy.
b. Legal Remedy: Is Only Money and can be set by both parties or through
court order
i. Compensatory remedy
1. Mitigate your Loss
2. This is when one party is awarded damages, or money, in order
to compensate them for the losses they suffered as a result of
the other party breaching the contract. In other words,
compensatory damages restore the injured party to where
they would have been had the contract violation not occurred.
3. Pay the difference to get the job done + any damage that
occurs due to a party breaching the contract.
6. Waiver:
a. Voluntarily surrender of a given right To give up the remedy (having the right
to sue and collect the remedy, but waive their right). Once a waiver happened
you can’t revive it again.
- (Silence is not a type of fraud; unless when asked about the truth you intentionally kept silent.
However, in order to avoid fraud a party must disclose all the truth).
- If the Defendant knows about the fraud in the first place or he/she needs the consideration
regardless of it is of value or not, they can’t use the fraud against the Plaintiff to reason the
breaching.
Public Wrong
1. Public Wrong:
a. False Pretense: Pretending to be someone I am not doing
2. Defense: Reasons offered by defendant to reduce or to put him off out of the legal
liability and responsibility
a. 0-7: Infant Minor (No liability) Parents are liable No balminess
b. 7-17: Minor
i. 1st Public wrong will go to juvenile
ii. If the wrong doing was re committed, the person goes under the adult
and wrong doing
c. Insane: Not liable
i. Qualified insane by a doctor
ii. Can’t differentiate between wrong and right
iii. No clear intent
e. Duress:
i. Any illegal action will be acceptable by court as defense Except of
killing
f. Entrapment: Being a mediator
i. Law enforcement
Chapter 4
1. Tort = Private wrong: Defined as any legal wrong, something twisted, legislations
create tort law to cover areas not covered in criminal law. Tort occurs when someone
sustains emotional or physical injury to another
2. Crimes Vs Tort
a. Crimes Defined: as Public wrong
i. If you commit a crime, you will be detained Infront of criminal court
ii. And penal law (criminal law) will be applied
iii. Proving intent Is the backbone of proving someone as a criminal
iv. Most important element in qualifying someone as a criminal is the
intent
v. If you commit a crime, you will be in prison or jail
b. Tort Defined as: private wrong
i. If you commit a tort I’ll be detained of civil court
ii. Civil law will be applied
iii. No intent; however, you are liable no matter the age
iv. If you commit a tort, you will pay a fine
c. Types of torts
i. Intentional Tort:
1. Occur when someone inflicts physical or emotional injury in a
spur of a moment not because of a previous problem
2. When someone interferes in someone’s life (تعرضتله
3. The purpose behind saying intentional it is not intentional to
harm, but the intent to interfere.
4. Assault Tort: Threatening someone, yet not going on with the
joke.
5. Battery Tort: Carrying out a threat with bad intent but the
result occurred was more tremendous
6. False Imprisonment: someone who has the authority (parent,
husband) over you and imprisons you
7. False arrest: being arrested from officer or a guard
8. Defamation: Spreading untrue negative story about someone
a. Slander: Is Oral defamation; however, to sue have to
have a proof that this defamation or story being said is
not true. Liable: Written Defamation
Defamation causes reputational harm, while a disclosure in false light invades the
victim's privacy and caused emotional distress.
9. Invasion of Privacy:
a. taking someone’s photos without their Consent.
b. Stalking, or
c. interfering in someone’s privacy. f
d. Spreading someone’s Secrets.
b. Time/Promise C.Ds
i. Two Parties (No bank involved)
1. Maker
2. Payee
ii. promissory note
iii. Bank
iv. Parties:
1. Depositor (customer)
2. Payee (Customer can give it to themselves or give it to other
person)
3. Drawee (Bank)
v. Writing
vi. Signed
vii. Condition
1. Specific time
2. Specific 20
3. Issue (7 conditions to be valid):
a. Written Form
b. Signature
c. Unconditional Promise or Order to Pay
d. Fixed Amount of Money
2. Discharge:
a. Payment from the original drawer
i. All payees paid except the drawer, not discharged
b. Alteration
i. To add or omit a number The drawer will be charged for the original
value only