1. Contract Law (Introduction).ppt

Lecture: 1
Contract Law - Introduction
@ Rupam Chy

According to Woodrow Wilson “Law is that portion of the established habit and
thought of mankind which has gained distinct and formal recognition in the
shape of uniform rules backed by authority and power of the government”.
The term Commercial Law or Mercantile Law is mainly related to the rules
relating to industry, trade, and commerce. Thus, Commercial law or mercantile
law can be defined as that part of law which regulates the transactions of the
mercantile community.
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Commercial Law

Distinction between Law, Morals and Ethics
• Morals- rules, which individuals apply to determine whether their behaviour is
right/just/fair or wrong
• Ethics- are a standard of behaviour which applies not only to the individual
but to all persons to act in a morally correct and honourable way. Not
enforceable unless become law
• Law- set of rules regulating people’s interactions with each other and setting
standards of conduct between each other which are enforceable through
sanction. Laws are reflective of the morals, ethics, politics and religion of the
individuals who make up that society
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Commercial Law

Sources of law in Bangladesh:
There are many sources of law. The political scientists have pointed out the six sources of law. These main
sources of laws are-
(1) customs
(2) Religion
(3) Adjudication
(4) Scientific deliberation/discussion
(5) Equity
(6) Legislature.
1. Customs: The rules and regulations that are prevalent in society for a long time are called customs. With
the change of time the different customs get the statutes of law.
2. Religion: From religion, the religious dictates and the religious books the laws originated. The Hindu laws,
the Muslim laws etc. are the best example.
3. Adjudication: In many cases judgment cannot be made with the prevalent laws. The existing laws fall short
to settle the case. The judges then, with their intelligence and wisdom, give interpretation of the prevalent
ambiguous law to settle the matters. Thus new laws are created and later these laws are taken as a
precedent in the similar cases. These laws are called the judge-made laws.
4. Scientific deliberations: Writings and scientific deliberations of renowned jurists are also regarded as
important source of laws. The commentaries of the jurist and their opinions are very often accepted by the
court. In England great importance is attached to the opinions of coke. Black Stone, and Hale.
5. Equity: Many a time the judges settle the case by their own sense of justice. Thus new laws are formulated
by the judge's sense of justice.
6. Legislature: In modern time legislature is the most important source of law. The legislature creates new
laws according to the needs of the state.
source: Islam, M. (2023). Legal Affairs of Bangladesh. https://wikieducator.org/Legal_Affairs_of_Bangladesh
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Commercial Law: Sources of Law

TYPES OF LAW
Law can be classified into two major areas: public law and private law.
Public law: this includes various laws between individual and
government. For example, constitutional law, revenue law and
taxation, administrative law, industrial and labour law and criminal law.
Private law: this means the law between person and person. E.g. family
law, property law, contract law, tort law, company law, wills and trust.
Public and private laws includes a variety of laws. To list a few:
Commercial Law - consists of that part of civil law that governs the
contractual and statutory rights, of individuals in relation to other
individuals. e.g. law of contract, law of partnership, consumer
protection law, property law, company law and law of securities e.t.c.
Law of Torts - is that part of a civil law that is concerned with the rights
other than contractual rights of an individual. E.g. negligence, trespass,
nuisance and defamation. @ Rupam Chy 5
Commercial Law

Scope of Commercial Law: The scope of Commercial Law is enormous. It includes
the law relating to contract, negotiable instruments, sale of goods, partnership,
companies and so on.
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Commercial Law

What is Law of Contract?
The law of Contract deals with agreements which can be enforced
through courts of law.
A Contract can be defined as an enforceable set of mutual obligations
for which the law provides a remedy, recognizes a duty, or provides for
court enforcement.
“Contract is an agreement creating and defining obligations between
the parties” – [Salmond].
According to William Anson “A Contract is an agreement enforceable
at law made between two or more persons, by which rights are
acquired by one or more to acts or forbearances on the part of the
other or others”.
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Importance of Contract Law
In a contract there must be an agreement and the agreement must be
enforceable by law.
 It is a Basic of all business relationship
 It is a legitimate relationship
 It create enforceable obligation
 It helps to reduce business instability
 It assures a reasonable remedy if an obligation is breached.
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Essential elements of Contract
1. Offer and acceptance
2. Intention to create legal relationship
3. Lawful Consideration
4. Capacity of Parties
5. Free Consent
6. Legality of the object
7. Certainty
8. Possibility of performance
9. Void agreement
10. Writing registration and legal formalities.
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Classification of Contract
Contracts are classified in several ways:
Method of Formation -
 Express Contract
 Implied Contract
 Quasi Contract.
The Time of Performance -
 Executed Contract
 Executory Contract
The Parties of the Contract -
 Bilateral Contract
 Unilateral Contract
Legality or Validity of the Contract -
 Valid Contract
 Void Agreement
 Voidable Agreement
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Classification of Contract (Cont…)
 Express Contract – is one which is expresses in words spoken or written. It arises from
the parties’ outward expression of mutual assent , i.e. written employment agreement.
E.G. A tells “I would like to sell this car for Tk 3 Lakhs” and B replies “I agree” – this is an
express contract. Thus express contract may be of two types:
 Implied Contract – is one which is inferred from the parties’ action i.e. contract
between taxi driver and passenger. For instance, if a shoe shiner starts polishing the
shoes of one person and the later permits it remaining silent knowingly that the first
person is doing so to get a payment in exchange of this service, it will be treated by the
law as a case of implied contract
 Quasi Contract – A quasi-contract (or implied-in-law contract) is a fictional contract
created by courts for equitable, not contractual purposes. A quasi-contract is not an
actual contract, but is a legal substitute for a contract formed to impose equity between
two parties. The concept of a quasi-contract is that of a contract that should have been
formed, even though in actuality it was not. It is used when a court finds it appropriate
to create an obligation upon a non-contracting party to avoid injustice and to ensure
fairness. It is invoked in circumstances of unjust enrichment, and is connected with the
concept of restitution.
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 Executed Contract – where the parties
perform their obligations immediately, i.e. as
soon as the contract is formed.
 Executory Contract – where the obligation of
the parties are to be performed at a later
time.

 Bilateral Contract – where there are two promises, one from each party.
 Unilateral Contract – where one of the parties does not look for a return
promise but instead asks for the other party’s actual performance. In this case
one party has to fulfill his obligations whereas the other party has already
performed his obligations.
 Valid Contract – is completely enforceable by either party if it meets all of the
necessary legal requirements.
 Void Contract – is invalid and unenforceable. It arises when a contract has an
illegal objective or when a party to a contract is adjudged to have been insane
or incompetent before contracting.
 Voidable Contract - allows one or both of the parties to rescind or cancel
because of a problem such as incapacity, fraud, misrepresentation, duress,
undue influence, or mistake.
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1. Contract Law (Introduction).ppt

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