Commercial & Industrial Law

Commercial & Industrial Law
Solution of Past Papers & Manual

SYED M HOQ, ACCA
2013
COMMERCIAL LAW
THE CONTRACT ACT 1872
Q.1.
What is mercantile law?

Mercantile law is a part of civil law which includes law relating to various contracts, partnerships, companies,
negotiable instruments, insurance, carriage of goods, arbitration etc. Though the mercantile law is mainly
intended for mercantile activities, some law e.g. the law of contract is applicable in every step of human
activity. However, mercantile law mainly deals with the rights and obligations of mercantile people arising out
of mercantile transaction in respect of mercantile property.
Q.2.
State the sources of law referring to Bangladesh.

The sources of law referring to Bangladesh may be briefed as follows;
a) Laws promulgated during British Period
Like all other civil and criminal laws, we have inherited mercantile laws promulgated during British rule in
India. Some of these laws have been replaced or amended by Acts, ordinances and SROs during Pakistan
period and subsequently after independence of Bangladesh.
b) Bangladesh State Laws
In conformity with the modern system of enactment of law by the parliament or order of the supreme
authority, laws relating to mercantile activities are being amended or replaced to suit with the changed
requirement.
c) Judicial Decisions or Precedents
As a matter of fact the laws/statutes give the guiding principles. So, whenever dispute arose on
interpretation or on matters of equity, good conscious and justice, different courts gave decisions. These
decisions are considered as part of the standing mercantile law.
d) Customary Law
Customary laws are rules/practices which gained acceptance through its reasonability and practice since
long. However, a custom gets its legal recognition when it is accepted by the court and incorporated in the
judicial decisions.
Q.3.
Discuss the legal status of judicial decisions, customs and usage and the English Common Law in adjudication
of mercantile disputes.
A custom gets its legal recognition when it is accepted by the court and incorporated in the judicial decisions. It
is mentionable that the contract Act is not exhaustive and where the Act does not cover the case with which
the court has to deal, the court is bound to follow the principles of English Common Law i.e. the rules of justice,
equity and conscience.
Q.4.
Define contract. Discuss the essential elements of a contract.

An agreement enforceable by law is a contract. Following are the essential elements of a contract which are
required in an agreement to be enforceable by law:
i) Offer and acceptance
ii) Consideration
iii) Legal capacity to contract
iv) Free consent
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v)
vi)
vii)
viii)
Q.5.
Lawful object
Certainty of meaning & object
Possibility of performance
Written and registered
Differentiate between
i) Implied contract and express contract
An express contract is one which is expressed in words, spoken or written. Such contracts are clearly
understood or interpreted. Offer and acceptance for particular act of abstinence is instance of such
contract. On the other hand implied contracts are neither spoken nor written. It is inferred from the
conduct of a person or circumstances of the particular case. For instance while riding a bus on a public
route, a passenger enters into an implied contract and has the obligation to pay prescribed fare.
ii)
Void contract and void-able contract

Void contract:
The contract act 1872 defines void contract as The contract which ceases to be enforceable by law
becomes void when it ceases to be enforceable.
Voidable contract:
Section 2 (i) of the contract Act defines voidable contract as, an agreement which is enforceable by law at
the opinion of one or more of the parties thereon but not at the option of the other or others, is a voidable
contract.
The distinction between void contract and voidable contract is as follows:
iii)
S.I.
Particulars of element
Void contract
Voidable contract
Ab-initio validity
It is ab-initio void, i.e. void from the

very beginning.
It is valid when contracted and

continue to be valid until the
aggrieved party repudiate.
Missing of essentials
of contract
It is void because missing of any

essential element other than free
consent.
It is void because the consent of a

party is not free.
Enforceability by law
It cannot be enforced by any party.
It is enforceable and continues to

be enforceable until any aggrieved
party repudiates it.
Third partys right
No third party acquires any right
Any third party who purchases

goods on good faith and for
consideration before the contract is
repudiated acquires a good title to
those goods.
Effect of lapse of
reasonable time
Even on lapse of the reasonable

time it can never become a valid
contract.
On the expiry of a reasonable time

it may become a valid contract if
the aggrieved party does not
repudiate the contract within
reasonable time.
Claiming of damage
The question of damage does not

arise.
The aggrieved party can claim

damage.
Void contract and unenforceable contract

Void contract
The contract act 1872 defines void contract as The contract which ceases to be enforceable by law
becomes void when it ceases to be enforceable. The clarification is that a void contract is a contract which
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was valid when entered into but subsequently become void due to impossibility of performance, change of
law or some other reason. For instance contract of marriage become void due to impossibility of
performance consequent upon death of one of the parties to the contract.
Unenforceable contract
Such contracts are actually valid but are not enforceable due to some technical defects like noncompliance of requirement of law for written or registered contract. For instance an oral agreement for
arbitration is not enforceable as the law requires a written agreement. Such agreement is enforceable on
getting the requirement of law done.
iv)
Void agreement and illegal agreement

Void agreement:
Section 2 (g) states that an agreement not enforceable by law is void. Such agreements are ab-initio void.
These agreements never mature into a contract. Agreement with a minor or a person of unsound mind,
lunatic or idiots are instances of such agreements.
Illegal agreement:
Any agreement, the object of which is unlawful is illegal. Such agreements are ab-initio void.
v)
Executed agreement and executory agreement

Depending upon the time of performance contracts are divided into two types executed contract and
executory contract.
Executed contract:
It is a contract where both the parties have fulfilled their respective obligations under the contract.
Executory contract:
This is the contract where the parties are yet to perform their obligations under the contract.
vi)
Quasi contract and implied contract

Quasi contract:
Quasi contracts are, as a matter of fact extension of implied contracts. It is an obligation imposed by law
upon a person for the benefit of another even in the absence of a contract. It is based on the principles of
equity, which means, no person shall be allowed to unjustly avail a benefit at the expense of another. Such
obligations are called quasi contracts.
Implied contract:
Implied contracts are neither spoken nor written. It is inferred from the conduct of a person or
circumstances of the particular case. For instance while riding a bus on a public route, a passenger enters
into an implied contract and has the obligation to pay prescribed fare.
Q.6.
State the salient features of a quasi contract with relevant example.

The salient features of quasi contract are:
i)
ii)
iii)
iv)
v)
It is imposed by law and does not arise out of any agreement

It is created by the duty of a person and not in consequence of a contract
The right under it is always a right to money and generally, though not always, to liquidate or sum of
money
The right under it is available against specific person (s) and not against the world
A suit for its breach may be filed in the same manner as in the case of a contract.
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Instances of quasi contracts:
i) Right to recover the price of necessaries supplied
The person who supplied the necessaries to a person who is incapable of contracting or anyone whom
such incapable person is legally bound to support is entitles to claim their price from property of such
incapable person.
Q.7.
ii)
Right to recover money paid for another person

A person who is interested in the payment of money which is bound by law to pay, and who therefore,
pays it, is entitled to be re-reimbursed by the other. For instance the goods belongings to A were wrongly
attached in order to realize the arrears of government revenue due by G. A paid the amount to save the
goods from sale. It was held that A was entitled to recover the amount from G.
iii)
Right to recover for non-gratuitous Act

Acts of supplies made lawfully without intensions to do gratuitously and benefit actually enjoyed by the
person for whom the act was done or supplies were made is the instance of such contract. For instance, A,
a trader left some goods to Bs house. B thought it is his own. B is bound to pay A for them. But saving of
ones property from fire which the circumstances show that was intended gratuitously, is not entitled to
compensation.
iv)
Responsibility of finder of goods

A person who finds goods belonging to another and takes into custody is entitled to be compensated.
v)
Right to recover from a person to whom money is paid or thing is delivered by mistake or under coercion:
A person to whom money has been paid or anything delivered by mistake or under coercion, must repay
or return it.
Comment on the following statements:

i)
All contracts are agreements but all agreements are not contracts
Offer and acceptance constitutes an agreement but to constitute a contract an agreement must have
enforceability by law. Therefore, to become a contract there must be an agreement and it must be
enforceable by law. Agreement not duly enforceable by law is void contract. So, all contracts are
agreements but all agreements are not contracts.
ii)
The law of contract is neither the whole law of agreements nor it is the whole law of obligations
An agreement becomes a contract when it is enforceable by law. Consequently, the law of contract does
not deal with all the agreements. It deals with rights and obligations of those agreements which by their
enforceability by law are considered as contract.
The law of contract is concerned with those obligations which arise out of the agreement. It does not deal
with the obligation created through natural or social requirement like maintenance of wife, children etc.
and not by the consequence of any agreement.
iii)
In mercantile agreements the usual presumption is that the parties intend to create legal relations.
Intention to create legal relations is one of the essentials of a valid contract. The parties to the agreement
must have an intention to create legal relationship. In social or domestic agreement the usual presumption
is that the parties do not intend to create legal relation but in cases of business or commercial agreement,
the usual presumption is that the parties intend to create legal relationship unless otherwise agreed upon.
As a matter of fact a business agreement may not be enforceable by law where the agreement so
provides.
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Q.8.
iv)
A contract without consideration is void.

Consideration is essential for validity of a contract. A promise without consideration cannot create a legal
obligation. So consideration is essential for a contract. But there are exceptional cases where a contract is
enforceable even though there is no consideration. They are as follows:
a) Agreement made on account of natural love and affection
b) Promise to compensate
c) Promise to time bared debt
d) Agency
e) Completed gifts
v)
Acceptance must be given by the person to whom the proposal is made.

An agreement is concluded by absolute and unqualified acceptance of the person to whom the offer or
proposal is made. Section 2 (b) defines acceptance as: when the person to whom the proposal is made
signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes a
promise. Acceptance must be communicated by the offeree himself or by the person authorized by him.
vi)
Insurance contract is basically wagering agreements.

No, insurance contract is basically an example of contingent contract. A contingent contract is a contract to
do or not to do something if some events, collateral to such contract, does or does not happen. Essentials
features of contingent contract are:
i) Dependent on a future event
ii) Events collateral
iii) Event uncertain.
A mere mental acceptance, not evidenced by words or conduct is in the eye of law no acceptance. Discuss.
Communication is one of the rules for a valid acceptance. The acceptance must be communicated. Mere
acceptance without communication does not form a contract. In case of acceptance by post, the proposer is
bound by the acceptance so long the letter of acceptance is properly stamped and posted; it does not matter as
to whether the letter is delayed or lost in transit.
Q.9.
Acceptance must be absolute and must correspond with the terms of the offer. Discuss with suitable
example.
Absolute and unqualified is one of the essentials of a valid acceptance. The acceptance must be absolute and
unconditional without any reservation or variation or condition.
Q.10.
Define acceptance. State the essential requirement of a valid acceptance.

signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes a promise.
The essential requirements of a valid acceptance are as follows:
i)
Absolute and unqualified

The acceptance must be absolute and unconditional without any reservation or variation or condition.
ii)
Manner
The acceptance must be in the manner prescribed by the offer. For instance, acceptance by post of an
offer with condition to accept the telegram can be rejected by the offeree. However, if the acceptance is
not revoked within reasonable time, it will be deemed that the offerer accepted the acceptance.
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Q.11.
iii)
Communication
acceptance without communication does not form a contract. In case of acceptance by post, the proposer
is bound by the acceptance so long the letter of acceptance is properly stamped and posted; it does not
matter as to whether the letter is delayed or lost in transit.
iv)
Authority for acceptance

Acceptance must be communicated by the offeree himself or by the person authorized by him.
v)
Communication to appropriate person

Acceptance must be communicated to the offerer himself.
vi)
Time limit
The acceptance must be made within prescribed time, if any or within a reasonable time. The reasonable
time depends of the facts and circumstances of the case.
vii)
Before lapse of offer

The acceptance must be made before the offer lapse of withdrawn.
Define offer. State the essentials of a valid offer.

An offer is a starting point of an agreement. An offer made by one party or person is called a proposal. The
person making the offer is called offerer or proposer. Section 2 (a) of the Act defines an offer as: 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 proposal.
The essentials of a valid offer are as follows:
i)
Intention to create legal relationship

An offer must be such that when accepted it must create legal relationship.
ii)
Certain and unambiguous

The offer must be clear, certain and unambiguous and not vague.
iii)
Different from mere declaration

An offer must be different from mere declaration of intention. Thus notice stating that the goods
mentioned in the notice will be sold by tender is not offer for sale.
iv)
Different from an invitation to offer

The offer must be distinguished from an invitation to offer. Thus articles displaced in a departmental store
with price list are an invitation to offer. The selection by a customer is an offer by the customer and this
offer becomes a contract when the cashier accepts.
v)
Communication
An offer must be communicated to whom the offer is meant for. An offer without the knowledge of the
offeree does not create any obligation of acceptance.
vi)
No term, the non compliance of which amount to acceptance

An offer must not contain any term that the non compliance of which would be treated as acceptance.
Thus an offer stating the condition that if the offer is not accepted or revoked with a specified date will be
treated as acceptance is not valid.
vii)
Communication of special terms or standard form contracts

The standard term of the contract must be communicated along with the offer. Otherwise those terms will
not bind the acceptor upon the contract.
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Q.12.
Who is competent to contract? Can a contract executed by a minor be ratified when he attains the age of
majority? If not why.
The contract Act 1872 state, Every person is competent to contract who is of the age of majority according to
the law to which he is a subject, and who is of sound mind, and is not disqualified from contracting by any law
to which he is subject. Thus a minor, a person of unsound mind and person disqualified by law are not
competent to enter into a contract.
An agreement with a minor cannot be ratified on minoritys attaining majority. It is because of the fact that the
ratification goes back to the date of contract when the contract itself was void.
Q.13.
State the effect of a contract where a minor who is party to the contract is guilty of deliberate
misrepresentation with regard to age.
In case of fraudulent representation by minor inducing the other party to enter into the contract, the court may
award compensation to the other party. The court may direct minor on equal grounds to restore the money or
property to the other party if the money or property could be traced.
Q.14.
State the persons disqualified by law other than minor and person of unsound mind to enter into a contract.
Comment on the legal position of contract with such person.
Person disqualified by law are:
i) Alien enemies
ii) Foreign sovereign
iii) Convicts
iv) Insolvent
Disqualified person is not competent to enter into a contract and any contract with such person is ab-initio
void.
Q.15.
When a contract is said to be discharged? Discuss the modes of discharge of a contact.

Discharge of a contract means termination of the contractual relationship between the parties to a contract.
That means a contract is treated as discharged when the rights and obligations of the parties under the
contract come to an end.
Modes of discharge of a contract:
A contract may be discharged in different manner which are discussed below:
i)
By actual performance
When the parties to the contract perform the obligation of the contract, the contract is said to be
discharged by performance.
ii)
By attempted performance or tender

So far as the case of tender is concerned, a contract is said to discharge by attempted performance when
promisor has made an offer of performance but it has not been accepted by the promisee.
iii)
Discharge by mutual agreement

Discharge by mutual agreement may be in the following manner:
a) Novation
Novation means substitution of the original contract by a new contract. Such contract may be
between the same parties or between different parties. The consideration of the new contract is the
discharge of original contract.
b) Rescission
Rescission means the cancellation of the contract by any party or all the parties to the contracts.
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c) Alteration
Alteration means change in the terms of a contract with mutual consent. When alteration is made, a
new contract takes place in and new contract comes into existence. In such alteration, parties to the
contract remain the same.
d) Remission
Remission means acceptance by the promissee of the lesser fulfilment of the promise made.
e) Waiver
Waiver means intentional relinquishment of a right under the contract.
iv)
Discharge by operation of law

Discharge by operation of law takes place in the following manner:
a) By death of the promisor
A contract involving the personal skill or ability of the promisor is discharged on the death of the
promisor.
b) By insolvency
When a person is declared insolvent, he is discharged from his liability upto the date of insolvency.
c) By unauthorized material alteration
If any party makes a material alteration in the contract without the consent of the other party, the
contract comes to an end.
d) By identity of the promisor and promise
When promisor becomes the promise, the other parties are discharged.
v)
Discharge by impossibility of performance

Discharge by impossibility of performance takes place in the following manner:
a) When both the promisor and the promisee know about the initial impossibility the agreement is
void ab-initio.
b) When both the promisor and promisee do not know about the initial impossibility, such agreement is
void on the ground of mutual mistake.
c) When the promisor alone knows about the initial impossibility, such promisor must compensate any
loss caused to promisee.
d) When an act becomes impossible after the contract is made, such contract becomes void when the
act becomes impossible.
e) When an act becomes unlawful by reason of some event beyond promisors control, the contract
becomes void when the act becomes unlawful.
f) When an agreement is discovered to be void or when the contract becomes void:
Any person who has received any benefit under such agreement is bound to restore it or to make
compensation.
g) Destruction of subject matter
The contract is discharged if the subject matter under the contract is destroyed after the formation of
the contract without any fault of either party.
h) Death or personal incapacity
The contract is discharged on the death or incapability or illness of a person if the performance of a
contract depends on his personal skill or ability.
i) Declaration of war
The contracts pending for execution at the time of war remains suspended or declared void.
j)
Change of law
The contract becomes automatically discharges where act becomes impossible or unlawful due to
change of law after entering into the contract.
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k) Non-existence or non-occurrence of a particular state of things necessary for performance
The contract is discharged if that particular state of things which form the basis of a contract ceases to
exist or occur.
Q.16.
vi)
Discharge by lapse of time

The contract is discharged if it is not performed or enforced within a specified period, called the period of
limitation.
vii)
Discharge by breach of contract

A contract is said to be discharged by breach of contract if any party to the contract refuses or fails to
perform his part of the contract or by his acts makes it impossible to perform his obligation.
Insufficiency of consideration is immaterial but an agreement without consideration is void discuss.

See question # Q.7 (iv).
Q.17.
State the circumstances in which a contract without consideration is valid.

See question # Q.7 (iv).
Q.18.
What do you mean by offer? How does an offer lapses?

An offer lapses on the grounds as briefed below:
i) By revocation
An offer lapses if the offerer withdraws his offer before acceptance.
ii)
By lapse of time
An offer lapses if it is not accepted within the prescribed time or reasonable time.
iii)
By death or insanity of the offerer or offeree

An offer lapses by the death or insanity of the offerer if the fact of death of insanity comes to the
knowledge of the acceptor before acceptance. That is, if the offer is accepted in ignorance of the death or
insanity of the offerer there will be a valid contract. But in English Law the death of the offerer terminates
the offer even if acceptance is made in ignorance of the death.
iv)
By failure to accept pre-condition

An offer lapses if it is accepted without fulfilment of the pre-condition to offer.
v)
By counter offer
An offer lapses if counter offer is made.
vi)
By not accepting in the prescribed or usual mode

An acceptance not in prescribed or usual manner lapses the original offer.
vii)
Rejection of offer by the offeree

An offer lapses if the offeree rejects it or accepts it on certain condition.
viii) By subsequent illegality or destruction of subject matter of offer

An offer lapses if it becomes illegal or the subject matter of offer is destroyed before its acceptance by the
offeree.
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Q.19.
Who is minor? What is legal status of an agreement by a minor?

A minor is one who has not completed his or her 18th year of age.
Position of agreement by a minor
i)
Validity
An agreement with a minor is void ab-initio.
ii)
No estoppels
A minor is not estoppels from setting up the plea of minority. He may plead infancy to escape from being
liable.
iii)
Fraudulent representation of age by minor

In case of fraudulent representation by minor inducing the other party to enter into the contract, the court
may award compensation to the other party. The court may direct minor on equal grounds to restore the
money or property to the other party if the money or property could be traced.
iv)
Ratification on attaining the age of majority

An agreement with a minor cannot be ratified on minoritys attaining majority. It is because of the fact that
the ratification goes back to the date of contract when the contract itself was void.
v)
Validitys of minors agreement jointly with a major

A contract executed with a minor jointly with a major is void to the extent of minor but it is enforceable
against the major who is joint promisee.
vi)
Minor as a partner
A minor cannot be a partner of a partnership firm. He, however, can be admitted to the benefits of the
partnership with the consent of partners. This means that he can share the profit without any personal
liability.
vii) Minor as an agent

A minor can act as an agent and bind his principal by his act without incurring any personal liability.
viii) Minor as a shareholder of a company
A minor can be a shareholder of a company if the shares are fully paid and the articles of the company do
not prohibit so.
ix)
Minor as an insolvent
A minor cannot be declared insolvent because he is not competent to contract.
x)
Contract for the benefit of minor

A minor can be a promisee. A mortgage executed in favour of a minor who has advanced the mortgage
money is enforceable by him or by any other person on his behalf. In case of sale of goods by a minor, he is
entitled to recover the price from the buyer. Thus a minor can be promisee but not promisor on a
promissory note or drawer but not a drawee on a bill of exchange.
xi)
Contract by minors guardian

The contract executed by the guardian of a minor or the manager of his estate on his behalf is enforceable
by and against the minor if the guardian or the manager concerned had the authority to do so and the
contract is for the benefit of the minor. It may be specially noted that the guardian cannot enter into valid
contract for purchase of the immovable property of the minor for his/her own service.
xii) Contract of supply of necessaries

A person who has supplied the necessaries to a minor or to those who are dependent on him is entitled to
be reimbursed from the property of such minor. A claim for supply of necessaries may be made against
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minors property. The parents or guardian of a minor cannot be held liable unless those goods/services are
supplied/rendered to a minor as the agent of the parents or guardian.
Q.20.
Who is a man of unsound mind? State the legal status of a contract by a man of unsound mind.
A person is considered as a man of unsound mind who:
i) Is not capable to understand the terms of the contract
ii) Is unable to form a rational judgement as to its effect upon his interest.
A contract by a person of unsound mind is void. But there are circumstances where such a person can enter
into valid contracts. These are:
i) Person who is usually of unsound mind but occasionally of sound mind: Sections 12 of contract Act states
that a person who is usually of unsound mind but occasionally of sound mind may make a contract when
he is of sound mind.
ii) Person who is usually of sound mind but occasionally of unsound mind: Similarly, a person who is of sound
mind and occasionally of unsound mind may not make a contract when he is of unsound mind.
Q.21.
State the person disqualified by law for executing contract.

See question # Q.14.
Q.22.
Differential between
i)
Fraud and misrepresentation
The term fraud means a false representation of fact with a view to deceive the other party. Section 17 of
the contract Act states, Fraud means and includes any of the following acts committed by a party to the
contract or with his connivance or by his agent with intent to deceive another party thereto or his agent or
to induce him to enter into a contract.
Misrepresentation means a false representation of fact made innocently or non disclosure of material fact
without any intention to deceive the other party. Section 18 defines misrepresentation as:
misrepresentation means and includes:
a) The position assertion, in a manner not warranted by the information of the person making it, of that
which is not true, though he believes it to be true,
b) Any breach of duty, which, without intent to deceive, gains an advantage to the person committing it
or anyone claiming under him, by misleading another to his prejudice or to the prejudice of anyone
claiming under him, and
c) Causing, however innocently, a party to an agreement, to make a mistake as to the substance of the
thing which is the subject of the agreement.
Fraud differs from misrepresentation in the following manner:
S.I.
Element of differences
Fraud
Misrepresentation
1.
Intention
The wrong representation is made

wilfully to deceive the other party.
The wrong representation is made

innocently without any intention
to deceive the other party.
2.
Knowledge
falsehood
The person making representation

does not believe it to be true.
The
person
making
the
representation believes it to be
true.
3.
Right to claim damage
The aggrieved party can claim

damage.
The aggrieved party cannot claim

damage.
4.
Ability to discover the

truth
Except where silence amounts to

fraud, the contract is voidable
even if the aggrieved party had the
means of discovering the truth
The aggrieved party cannot avoid

the contract if he had the means of
discovering the truth with ordinary
diligence.
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with ordinary diligence.
ii)
Coercion and undue influence

Coercion means compelling a person to enter into a contract under a pressure or threat. Section 15 of the
Act states that a contract is said to be caused by coercion if it is obtained by:
1) Committing any act forbidden by penal code
2) Threatening to commit any act which is forbidden by penal code
3) Unlawful detaining of any property
4) Threatening to detain any property.
Undue influence means dominating the will of other person to obtain an unfair advantage over the other.
Section 16 (1) of the Act states, a contract is said to be induced by undue influence:
1) Where the relations subsisting between the parties are such that one of them is in a position to
dominate the will of the other and
2) The dominant party uses that position to obtain an unfair advantage over the other.
In both the cases of coercion and undue influence the consent is not free and the contract is voidable at
the option of the aggrieved party. But there are some differences in character which are shown below:
iii)
S.I.
Element of differences
Coercion
Undue influence
Relationship
Parties to contract may or may not

be related to each other
Parties to the contract are related

to each other
Consent
Consent are obtained by giving a

threat of an offense or by
committing an offense
Consent is obtained by dominating

will.
Nature of presence
It involves physical presence
It involves moral presence
Excising person
It can be exercised even by

stranger
It can be exercised only by a party

to the contract
Restoration of benefit
The aggrieved party has to restore

the benefit received under section
64
The party avoiding the contract

may or may not return the benefit.
Presumption
Coercion has to be proved by the

party alleging it, in no case it is
presumed by the law
It may be presumed by law in

consideration of facts and
circumstances. The party against
whose such presumption lies must
disapprove it.
Nature of liability
The party committing the crime

may be punishable under BPC.
It does not involve any criminal

liability
Mistake and fraud

The term fraud means a false representation of fact with a view to deceive the other party. Section 17 of
the contract Act states, Fraud means and includes any of the following acts committed by a party to the
contract or with his connivance or by his agent with intent to deceive another party thereto or his agent or
to induce him to enter into a contract.
Mistake is occurred where the parties intending to do one thing do something else by error. Mistake is an
erroneous belief concerning something.
iv)
Unilateral mistake and bilateral mistake

A contract is not voidable merely because it was caused by one of the parties to it being under mistake as
to the matter of fact. However, an agreement is void where a unilateral mistake relates to the identity of
the person contracted with or as to the nature of the contract.
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Bilateral means where both parties to the agreement are under same mistake. Section 20 of the Act states,
where both the parties to an agreement are under a mistake as to a matter of fact essential to the
agreement, the agreement is void.
v)
Mistake of law and mistake of fact

When mistake of law occurs the contract is not voidable because everyone is supposed to know the law of
his country. A mistake of foreign law is considered as mistake of fact i.e. contract is void if both parties are
under a mistake as to a foreign law because one cannot be expected to know the law of other country.
Mistake of fact is divided into two categories as unilateral mistake and bilateral mistake.
Q.23.
Mere silence as to fact does not constitute fraud Discuss with examples
As explanation to section 17 states, mere silence as to facts to affect willingness of a person to enter into a
contract is not fraud. For instance selling a horse by auction knowing that horse is not sound without disclosing
fact of soundness is not fraud. In other case the price of a business while making contract was true but while
entering into the contract if fell down which was within the knowledge of the selling party is not a fraud. A
candidates failure to mention short fall of attendance in the examination form is not fraud. The exception to
this general rule is as follows;
Where the circumstance is that, regard being had to them, it is the duty of the person keeping silence to speak.
Such cases arise:
i) Where parties stand in fiduciary relationship like parent-child, trustee beneficiary. For instance, as stated
earlier in case of sale of an unsound horse by a father to his daughter who has just come of her age, the
father must disclose the fact of unsoundness of the horse.
ii) Where the silence itself is equivalent to speech. In the same case of selling of horse where the buyer tells
that if you do not deny it will be taken that horse is sound. The silence of the seller is fraud.
Q.24.
What is free consent? When consent is said to be free?

As section 13 of the contract Act states, two or more persons are said to consent when they agree upon the
same thing in the same sense. Thus a consent indicates an identity of mind on the subject matter of contract.
According to section 14 of the Act, consent is said to be free when it is not caused by
i) Coercion or
ii) Undue influence or
iii) Fraud or
iv) Misrepresentation or
v) Mistake
Q.25.
A contract may be ab-initio void. Comment

Ab-initio void means void from the very beginning.
Q.26.
What is a contingent contract? What are its essential features?

A contingent contract is a contract to do or not to do something if some events, collateral to such contract,
does or does not happen. Essentials features of contingent contract are:
i) Dependent on a future event
ii) Events collateral
iii) Event uncertain.
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Q.27.
What is the difference between contract of indemnity and contracts of guarantee?

Distinction between contract of indemnity and contract of guarantee are shown below:
Q.28.
S.I.
Particulars
element
of
Contract of indemnity
Contract of guarantee
No. of parties
Two parties viz indemnifier and

indemnity holder
Three parties viz principal debtor,

creditor and surety
No. of contracts
Only one contract between the

indemnifier and the indemnity holder
Three contracts, one between

creditor and principal debtor, second
between surety and principal debtor
and third between surety and creditor
Undertaking or taking
of reponsibility
The indemnifier undertakes to

compensate or indemnify the
indemnity holder from any loss
The surety undertakes or takes

responsibility for payment of the debt
of principal debtor
Nature of liability
The liability of indemnifier is primary

and unconditional
The liability of the surety is secondary

and conditional
Nature of event
The liability arises on happening of a

contingency
The liability arises on the nonperformance of existing promise or

non-payment of existing debt
Initiation
contract
The indemnifier need not act on the

request of the indemnity holder
The surety acts at the request of the

principal debtor
Right to sue
Indemnifier cannot sue a third party

in his one name because of absence
of privity of contract between him
and third party. He can sue the third
party in his own name if there is an
assignment in his favour
A surety discharge the debt of

principal debtor, can sue the principal
debtor in his own name
of
the
State the essential features of a contract of guarantee?

The essential elements are as follows:
i) The agreement is tripartite
ii) Consent of three parties necessary
iii) Existence of a specific liability
iv) Essentials of valid contract
v) Guarantee not to be obtained by misrepresentation
vi) Guarantee is not to be obtained by concealment of material fact.
Q.29.
How a surety is discharged?

A surety is said to be discharged as and when the liability of the surety ends. A surety may be discharged by way
of:
i) Revocation of surety
Revocation may be made as:
a) By notice: A specific guarantee may be revoked by surety by a notice to the creditor before accrual of
liability against the surety. A continuing guarantee may be revoked for future transactions by a notice
to the creditor. The liability for transaction before notice remains with the surety.
b) By the death of the surety: In the absence of anything to the contrary, the death of a surety draws an
end to the operation of continuing guarantee automatically for future transaction. But for past
transactions his estate will be attached for making good the loss or to compensate. For the future
transactions after death the surety or his estate will not be liable even if the creditor gets no notice of
the death of surety.
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c) By innovation: If a new contract between the parties or between other parties is entered into for
mutual discharge of the old contract, the old contract is treated as discharged. And thus the liability of
surety is discharged.
Q.30.
ii)
By conduct of creditor
Surety may be discharged by the following conduct of the creditor:
a) By variation in terms of contract
b) By release or discharge or principal debtor
c) By arrangement
d) By creditors act or omission impairing suretys eventual remedy
e) Loss of security
iii)
By invalidation of contract
It may be as follows:
a) Guarantee obtained by misrepresentation
b) Guarantee obtained by concealment (section 143)
c) Failure of co-surety to join a surety (section 144)
Mr. Sumon started self service system in his shop. Ms. Suborna entered the shop, took a basket and after
taking articles of her choice into the basket reached the cashier for payments. The cashier refuses to accept
the price. Can Mr. Sumon be compelled to sell the said articles to Ms. Suborna.
Displaying articles with price list in a shop is an invitation to offer, it is not a valid offer. Therefore, the offer
cannot be accepted. In this case, Ms. Suborna cannot compel Mr. Sumon to sale the articles. Here, Mr. Sumon
can accept or reject the offer made to him by Ms. Suborna who is the offeree in this instance.
Q.31.
An agreement gives birth to a contract explain.

An agreement with enforceability is called a contract. Therefore not all agreements give birth to a contract.
Q.32.
Mental acceptance is no acceptance explain.

Q.33.
Under what circumstances a person can sue to enforce a contract even though he is not a party to that
contract?
The rule that a stranger to contract cannot sue is subject to following exceptions:
i)
In case of trusts
The beneficiary i.e. the person for whom the trust has been created may enforce the contract.
ii)
In case of family settlements

The person for whose benefit the provision is made under family arrangement may enforce the contract.
iii)
Acknowledgement
The person who becomes an agent to third party by acknowledgment or otherwise cab be sued by such
third party.
iv)
Assignment of a contract
Where benefit under a contract has been assigned, the assignee can enforce the contract subject to all
equities between the original parties to the contract e.g. the assignee of an insurance policy.
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Q.34.
No man should grow rich out of anothers loss discuss in the light of the Contract Act.
It is based on the principles of equity, which means, no person shall be allowed to unjustly avail a benefit at the
expense of another.
Q.35.
An acceptance is to offer what a lighted match is to a train of gun powder discuss with example.
proposal is made. An offer does not constitute any contract until there is a valid acceptance of it. Thus, an offer
is of no use until it is accepted. Only then the parties involve require to perform the action that they are
supposed to do under the contract. Similarly, gun powder is of no use until it comes in touch with a lighted
match. That is why is said that an acceptance is to offer what a lighted match is to a train of gun powder.
Q.36.
Is communication of an offer necessary?

An offer must be communicated to whom the offer is meant for. An offer without the knowledge of the offeree
does not create any obligation of acceptance.
Q.37.
Mr. X offers a reward to whosesoever shall bring to him lost dog. Mr. Y brings to Mr. X his lost dog. Can Mr. Y
claim the reward? Answer giving reasons.
The offer of Mr. X is a general offer which is made to the public in general. By bringing the missing dog Mr. Y
has accepted the offer of Mr. X by his conduct. As both the offer and acceptance is valid, Mr. Y can claim the
reward.
Q.38.
Distinguish between enforceable and illegal contract.

Enforceable contracts are those which are enforceable by law. These contracts are valid contracts. On the other
hand an agreement, the object of which is unlawful is illegal. Such contracts are ab-initio void.
Q.39.
Discuss the rules regarding minors agreement in details.

Q.40.
An agreement is the sum total of offer and acceptance discuss.

signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes a promise.
As the offer is the starting point of an agreement and the acceptance concludes the agreement, it is said that an
agreement is the sum total of offer and acceptance.
Q.41.
Describe whether a price list to sell goods in a shop can be treated as an offer?
The offer must be distinguished from an invitation to offer. An invitation to offer is not a valid offer. Thus a
price list to sell goods in a shop cannot be treated as an offer.
Q.42.
Explain with example how an offer is made.

See question # Q.11. (rules of a valid offer)
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Q.43.
Discuss the basic elements of a valid contract.

Section 10 of the contract Act, 1872 states, All agreements are contracts if they are made by the free consent
of the parties competent to contract for a lawful consideration and with a lawful object and are not hereby
expressly declared to be void. The following are the essential elements of a valid contract:
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
x)
Proper offer and its proper acceptance

Intention to create legal relationships
Free consent
Capacity to contract
Lawful consideration
Lawful object
Agreement not expressly declared void
Certainty of meaning
Possibility of performance
Legal formalities.
For description please see ICMAB manual page # 12-14.

Q.44.
What situation may vitiate the legality of a contract as not being free?
The consent of the parties to the contract must be free. According to section 14 of the Act, consent is said to be
free when it is not caused by:
i) Coercion
ii) Undue influence
iii) Fraud
iv) Misrepresentation
v) Mistake
Q.45.
Who are competent to enter into a contract? Discuss the contractual liability of a minor with reference to a
leading case.
The parties to an agreement must be competent to execute the contract. Section 11 of the contract Act states,
Every person is competent to contract who is of the age of majority according to the law to which he is subject
and who is of sound mind and is not disqualified from contracting by any law to which he is a subject. The
following qualifications of a party or persons are required to become party to a contract;
i)
ii)
iii)
Q.46.
The person must be major as per existing law of the land

He must be of sound mind
He must not be disqualified for making any contract as per existing statutes.
State the rule with regard to revocation of an offer and an acceptance.

Revocation of an Offer:
An offer or proposal is revoked:
1. By the communication of notice of revocation by the proposer or by his authority to the other party;
2. By the lapses of time prescribed in proposal of its acceptance, or if not time is so prescribed, by the lapses
of reasonable time, without communication of the acceptance;
3. By the failure of the acceptor to fulfil a condition precedent to acceptance;
4. By the death of insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the
acceptor before acceptance;
5. By an act of the proposer inconsistent with the proposal.
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Revocation of an acceptance:
An acceptance may be revoked at any time before the communication of the acceptance is complete as against
the acceptor, but not afterwards.
Q.47.
In which situation may a person be held liable on an oral promise to pay the debt of another person?
See ICMAB manual for details.
Q.48.
Describe four situations in which silence may constitute fraud.

Q.49.
Mr. Saimon made an offer to Mr. Rimon to sell a car stating that the offer would remain open for 30 days.
Can Mr. Saimon revoke the very next day if he wishes?
A proposal/offer may be revoked at any time before the communication of its acceptance is complete as
against the proposer, but not afterwards. So, Mr. Saimon can revoke the very next day before the offer being
accepted by Mr. Rimon.
Q.50.
Most contracts are terminated by the conduct of the parties themselves explain.
Q.51.
Discuss the Doctrine of supervening impossibility.

As per section 56 a contract to do an act which after the contract is made becomes impossible, or by reason of
some events which the promisor could not prevent, unlawful, becomes void when the act becomes impossible
or unlawful. Following are the events:
i) Destruction of an object necessary for the performance of the contract.
ii) Failure of preconditions for performance of contract
iii) Personal incapability or death
iv) For declaration of war.
Q.52.
Describe situations in which contracts may be enforceable even though they are illegal in some respect.
If the illegal part of the contract can be separated then the court will enforce the legal part and reject the illegal
part. In case the objects of the agreement are partly legal and partly illegal, if the illegal part cannot be
separated, the whole agreement is illegal.
Q.53.
What constitutes a ratification of a contract and what is its legal effect?

An offer is the starting point of an agreement or contract. Absolute and unqualified acceptance of that offer by
the person(s) to whom the offer is made concludes the contract. Thus a contract is ratified by the acceptance of
an offer.
A proposal/offer when accepted becomes a promise/agreement and become legally enforceable. Both the
parties can be held liable for not performing their part of the contract after this point.
Q.54.
Distinguish between anticipatory breach of contract and actual breach of contract.

Anticipatory breach of the contract occurs when party declares his intention of not performing the contract
before the performance is due.
Actual breach of contract is of following two types:
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On the due date of performance
If any party to a contract refuses or fails to perform his part of the contract at the time fixed for performance, it
is called an actual breach of contract on the due date of performance.
During the course of performance
If any party has performed a part of the contract and then refuses or fails to perform the remaining part of the
contract, it is called an actual breach of contract during course of performance.
Q.55.
An offer may be specific or general. Narrate with at least one example for each.
A specific offer is one which is made to a specific person or to a specific group of person. The acceptance of
such offer is to be made by that specific person or group of persons.
A general offer is not made to a particular person but to the world at large or the public in general.
Advertisement of finding a missing boy is the instance of such an offer.
Q.56.
What do you mean by communication of acceptance? Are contracts over telephone/telex/fax/email

acceptable or not?
The communication of acceptance means that the offeree must notify the offerer his consent of the offer. The
acceptance requires to be communicated otherwise it is not a valid acceptance. Contracts over
telephone/telex/fax/email are acceptable. The communication of acceptance must be made before the offer is
revoked. In case of acceptance by post, the proposer is bound by the acceptance so long the letter of
acceptance is properly stamped and posted. It does not matter as to whether the letter is delayed or lost in
transit.
Q.57.
Explain the meaning of the terms revocation of acceptance and communication of revocation.
The communication of revocation is complete as against the person who makes it, when it is put into a course
of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; as
against the person to whom it is made, when it comes to his knowledge.
Q.58.
Discuss the term continuing guarantee. How can it be revoked?

A continuing guarantee extends to a series of transactions and continues until the guarantee is revoked.
Revocation may be made as:
i) By notice
A specific guarantee may be revoked by surety by a notice to the creditor before accrual of liability against
the surety. A continuing guarantee may be revoked for future transactions by a notice to the creditor. The
liability for transaction before notice remains with the surety.
ii)
By the death of the surety

In the absence of anything to the contrary, the death of a surety draws an end to the operation of
continuing guarantee automatically for future transaction. But for past transactions his estate will be
attached for making good the loss or to compensate. For the future transactions after death the surety or
his estate will not be liable even if the creditor gets no notice of the death of surety.
iii)
By innovation
If a new contract between the parties or between other parties is entered into for mutual discharge of the
old contract, the old contract is treated as discharged. And thus the liability of surety is discharged.
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Q.59.
When is the communication of acceptance complete as against i) the offerer and ii) the acceptor?
The communication of an acceptance is complete, as against the proposer, when it is put in a course of
transmission to him, so as to be out of the power of the acceptor; as against the acceptor, when it comes to the
knowledge of the proposer.
Q.60.
What are the essential elements of valid consideration?

The following are the essential elements of valid consideration:
Q.61.
i)
Movement at the desire of the promiser

An act having consideration must be done at the desire of the proposer. So any act at the desire of a
stranger or without the desire of the promiser does not constitute a contract.
ii)
Movement
An act consisting consideration may be done by the promisee himself or any other person. So it is
immaterial as to who furnishes the consideration and therefore, may move from the promisee to any
person.
iii)
Time of consideration
A consideration may be past or present or future. The consideration which has already moved before the
formation of the agreement is past consideration. The consideration which moves simultaneously with the
promise is called present consideration and the consideration which is to be moved after formation of the
agreement is called the future consideration. However, the English Law does not recognize past
consideration.
iv)
Value
The consideration need not be adequate to the promise but it must command some value in the eye of
law. The law states that there must be something in return and that something may be adequate or grossly
inadequate.
v)
Consideration must be real but not illusory

The consideration must be real and not illusory. For instance engagement of workman with promise to
reasonable wages is uncertain and illusory.
vi)
Consideration other than existing obligation

The act constituting consideration must be something which the promisor already is not bound to do
because to do what promisor already bound to do adds nothing to the existing obligation.
vii)
Lawfulness
The consideration must neither be unlawful nor opposed to public policy.
Distinguish between coercion and threat.

See manual for details.
Q.62.
Distinction between misrepresentation and fraudulent misrepresentation.

Q.63.
Acceptance must be absolute and must correspond with the terms of the offer explain.
To be a valid acceptance it must be absolute, unconditional and unqualified. The offer must be accepted in full
without making any kinds of modification or variation in it. If the offer is not accepted in full or if there is any
variation made then the offer is said be revoked and acceptance in this way is called counter offer. Therefore,
the acceptance must be absolute and must correspond with the terms of the offer.
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Q.64.
What are the consequences of anticipatory breach of contract?

When there is anticipatory breach of contract occurs, the contract is said to be discharged. And the party who is
anticipated to breach the contract can be held liable by the other party and the other party can take legal
action against him.
Q.65.
What essential conditions are necessary to convert a proposal into a promise?

When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be
accepted. A proposal when accepted becomes a promise.
Q.66.
What is the effect of an agreement entered into by a minor for supply of necessaries, money taken as a loan,
and for buying a house?
See ICMAB manual page # 22.
Q.67.
A enters into a contract with B to sell him 1000 bales of cotton and afterwards discovers that B was an
agent of C. Advise A as to the person against whom he should bring a suit if the price of the cotton is not
paid.
Q.68.
A agrees to pay B Tk. 100 and in consideration B agrees to write for A 50 pages within five minutes. Is it
a valid contract? Give reasons in favour of your answer.
No, it is not a valid contract. As both the A and B should know about the initial impossibility of the performance,
the contract is ab-initio void.
Q.69.
Rafique buys a painting from a shop thinking that it is a painting by the famous Zainul Abedin. The
shopkeeper knows that it is not a painting by Zainul Abedin and is also aware that Rafique thinks it is. The
shopkeeper makes no representation of any sort. Can Rafique rescind the contract in the following day? Give
reasons for your answer.
Non-disclosure of material fact constitutes misrepresentation and the contract can be rescinded in the
following day. The shopkeeper was aware of the fact that Rafique was thinking that the painting was by the
famous Zainul Abedin which was not the case. But the shopkeeper did not disclose the fact even though he was
aware that Mr. Rafique was mistaken. That is why the contract is not valid.
Q.70.
Distinguish between void contract and void agreement.

A contract not enforceable by law is called void contract and an agreement without proper offer and
acceptance is called void agreement.
Q.71.
An invitation to offer is not an offer elucidate the statement.

The offer must be distinguished from an invitation to offer. In the case of an invitation to offer, the person
sending out the invitation does not make an offer but only invites the other party to make an offer. His object is
merely to circulate information that he is willing to deal with anybody, who on such information, is willing to
open negotiations with him. Such invitations for offers are therefore not offers in the eye of law and do not
become agreements by their acceptance. An invitation to offer is not a valid offer. For instance articles
displaced in a departmental store with price list are an invitation to offer. The selection by a customer is an
offer by the customer and this offer becomes a contract when the cashier accepts.
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Q.72.
Acceptance cannot be implied from the silence of the offeree. Explain with an example.
Q.73.
Why it is needed that a person must be of sound mind for the purpose of making a contract? Explain with an
illustration.
It is needed that a person must be of sound mind for the purpose of making a contract because a person of
unsound mind is not capable to understand the terms of the contract and is unable to form a rational
judgement as to its effect upon his interest.
Q.74.
What are the consequences of coercion?

The consequences of coercion are as follows:
i) Option of aggrieved party to avoid the contract
ii) Obligation of aggrieved party to restore benefit
iii) Obligation of other party to repay or return.
Q.75.
Consideration may be past, present of future explain.

Q.76.
When joint promisors are liable under the Contract Act, 1872?
42. When two or more persons have made a joint promise, then, unless a contrary intention appears by the
contract, all such persons during their joint lives, and after the death of any of them his representative jointly
with the survivor or survivors, and after the death of the last survivor, the representatives of all jointly, must
fulfil the promise.
43. When two or more persons make a joint promise, the promisee may, in the absence of express agreement
to the contrary, compel any one or more of such joint promisors to perform the whole of the promise. Each of
two or more joint promisors may compel every other joint promisor to contribute equally with himself to the
performance of the promise, unless a contrary intention appears from the contract. If any one of two or more
joint promisors makes default in such contribution, the remaining joint promisors must bear the loss arising
from such default in equal shares.
44. Where two or more persons have made a joint promise, a release of one of such joint promisors by the
promisee does not discharge the other joint promisor or joint promisors; neither does it free the joint
promisors so released from responsibility to the other joint promisor or joint promisors.
45. When a person has made a promise to two or more persons jointly, then, unless a contrary intention
appears from the contract, the right to claim performance rests, as between him and them, with them during
their joint lives, and, after the death of any of them, with the representative of such deceased person jointly
with the survivor or survivors, and, after the death of the last survivor, with the representatives of all jointly.
Illustration
A, in consideration of 5,000 Taka lent to him by B and C, promises B and C jointly to repay them that sum with
interest on a day specified. B dies. The right to claim performance rests with B's representative jointly with C
during C's life, and after the death of C with the representatives of B and C jointly.
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Q.77.
Past consideration is no consideration explain.

If one party voluntarily performs an act, and the other party then makes a promise, the consideration for the
promise is said to be in the past. The rule is that past consideration is no consideration, so it is not valid and
cannot be used to sue on a contract. For example, A gives B a lift home in his car. On arrival B promises to give
A Taka 50 towards the petrol. A cannot enforce this promise as his consideration, giving B a lift, is past.
Q.78.
Distinguish between contingent contract and wagering agreements.

Distinction between a contingent contract and wagering agreement are as follows:
Q.79.
S.I.
Contingent contract
Wagering agreement
1.
It is a valid contract
It is a void agreement
2.
No characteristics of wagering
It is a gambling
3.
Uncertain to all parties
All parties enter into agreement considering the

certainty
State how offer is made revoked and accepted. What are rules when offer is made through post office and
over the telephone?
Q.80.
A stranger to a contract cannot sue explain.

Stranger to a contract cannot sue because of the absence of privity of contract. The rule that a stranger to
contract cannot sue is subject to following exceptions:
i) In case of trusts
The beneficiary i.e. the person for whom the trust has been created may enforce the contract.
Q.81.
ii)
In case of family settlements

The person for whose benefit the provision is made under family arrangement may enforce the contract.
iii)
Acknowledgement
The person who becomes an agent to third party by acknowledgment or otherwise cab be sued by such
third party.
iv)
Assignment of a contract
Where benefit under a contract has been assigned, the assignee can enforce the contract subject to all
equities between the original parties to the contract e.g. the assignee of an insurance policy.
Ignorance of law is no excuse explain.

We all are working & exercising our right & obligation under the law. These laws are unlikely to be known to all
of us. The ignorance of the law is not a valid reason to avoid contract. In this case, contract should be
performed specifically. But not knowing these does not exclude one from the obligations & rights stemming
from law. For non-performance of the contract one will be held liable for damages as contained in the Act for
breach of the contract on the ground of ignorance of law only.
Q.82.
What do you mean by breach of contract? What are the remedies for a breach of a contract?
Breach of contract means contracting party's actual failure or refusal to perform (or a clear indication of its
intentions to not perform) its obligations under the contract.
Following are the remedies for the person in the contract who suffered losses for breach of a contract:
1. Rescission or exoneration of the contract
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2.
3.
4.
5.
Q.83.
Claim for damages

Claim quantum merit is reasonable sum
Specific performance of contract
Injunction.
A contract to enter into a contract is not a valid contract explain.

Q.84.
Mr. Saimon offers a post of an officer to Ms. Selsia. Ms. Selsia asks for a day, to consider the offer to which
Mr. Saimon agrees. At the end of the day Ms. Selsia goes to Mr. Saimon to signify her acceptance of the offer
but was told by Mr. Saimon that the post has been given to a third party. Has Ms. Selsia any remedy against
Mr. Saimon?
No, Ms. Selsia does not have any remedy against Mr. Saimon as an offer can be revoked before acceptance.
Q.85.
A tells B in the course of a conversation with him that he will give Tk. 100,000 to anyone who marry his
daughter with his consent. B marries As daughter with As consent. Is B entitled to recover this amount?
Yes, B is entitled to recover the amount form A. Mr. A made a general offer. By marrying As daughter with his
consent B has fulfilled the condition necessary for Acceptance.
Q.86.
What do you understand for performance of contract?

It means the fulfilment of legal obligations created under contract by the promisor and promisee. Contract
comes to an end when both the parties performed the contract properly.
Q.87.
What is the effect of refusal to accept performance by the promisee?

Q.88.
Distinguish between general acceptance and qualified acceptance.

Q.89.
What is a proposal? How and when a proposal may be revoked?

A proposal is an offer. It is the starting point of an agreement. Section 2 (a) of the Act defines an offer as 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 proposal.
The communication of a revocation is complete, as against the person who makes it, when it is put into a
course of transmission to the person to whom it is made, so as to be out of the power of the person who makes
it, as against the person to whom it is made, when it comes to his knowledge.
An offer or proposal is revoked:
1. By the communication of notice of revocation by the proposer or by his authority to the other party;
2. By the lapses of time prescribed in proposal of its acceptance, or if not time is so prescribed, by the lapses
of reasonable time, without communication of the acceptance;
3. By the failure of the acceptor to fulfil a condition precedent to acceptance;
4. By the death of insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the
acceptor before acceptance;
5. By an act of the proposer inconsistent with the proposal.
Syed M Hoq, ACCA
Page 25
THE SALE OF GOODS ACT 1930

Q.90.
Define goods. How will you classify goods? State the different classes of existing goods.
Goods include every kind of movable property except a) Auction able claim and b) money {Section 2(7)}
Three types of goods are discussed below:
i)
Existing goods
Goods which are already in existence and which are physically present in some persons possession and
ownership are existing goods {Section 6 (1)}.
ii)
Future goods
Goods which will be manufactured or produced or acquired by the seller after entering into the contract of
sale are future goods {Section 2 (6)}.
iii)
Contingent goods
Contingent goods are those goods, the acquisition of which by the seller depends on contingencies which
may or may not happen.
Existing goods are classified as follows
Q.91.
i)
Specific Goods
These are the goods which are identified and agreed upon at the time when a contract for sale is made.
ii)
Ascertained goods
Goods are called ascertained, when out of a mass of unascertained goods, the quantity extracted for is
identified and set aside for a given contract. Thus when a part of the goods lying in bulk are identified and
earmarked for sale, such goods are ascertained goods.
iii)
Unascertained goods
These are the goods which are not identified and agreed upon at the time when a contract of sale is made
e.g. the goods in stock are lying in lots.
What is actionable claim? State the essential elements of a contract of sale.

Auction able claim means a debt or claim for money which a person may have against another and which he
may recover by suit.
Essential elements of contract for sale are:
i)
Seller and buyer

There must be a seller and a buyer. As a buyer cannot buy his own goods, the transaction is bilateral i.e.
existence of two parties is a must.
ii)
Movement of goods
There must be contract for the movable goods other than Auction able claims and money.
iii)
Transfer of property
There must be either a transfer of ownership of goods or an agreement to transfer the ownership of
goods. The transfer may take place either immediately or in future.
iv)
Price
There must be a consideration in money value i.e. price. When the consideration is in goods that is treated
as barter. When there is no consideration, it is treated as gift. However, the consideration may be partly in
money and partly in goods.
v)
Formation of contract for sale

There must be existence of offer and acceptance to constitute a contract.
Syed M Hoq, ACCA
Page 26

vi)
Method of contract
The contract may be spoken or written or implied.
vii)
Terms of contract
The parties may agree on any terms relating to the sale of goods. These terms may be essential and nonessential. The essential terms are called conditions and non-essential terms are called warranties. The Act
provides that in the absence of contract to the contrary, certain conditions and warranties are to be
implied in all contracts of sale.
viii) Essential elements of a valid contract

In addition to the essential elements discussed above, all the essential elements of a valid contract as
specified under section 10 of the Contract Act, 1872 must also be present as contract for sale is a special
type of contract.
Q.92.
Differentiate between condition and warranty. State the circumstances in which condition can be treated as
warranty. Can a warranty be treated as a condition?
A condition is a stipulation:
a) Which is essential to the main purpose of the contract and
b) The breach of which gives the aggrieved party a right to terminate the contract.
A warranty is a stipulation:
a) Which is collateral of the main purpose of the contract, and
b) The breach of which gives the aggrieved party a right to claim damages but not a right to reject goods and
to terminate the contract.
Distinction between condition and warranty
Q.93.
S.I.
Element
Condition
Warranty
Treatment
It is a stipulation which is essential to the

main purpose of the contract.
It is a stipulation which is only collateral

to the main purpose of the contract.
Right in case
of breach
The aggrieved party can terminate the

contract.
The aggrieved party can claim damage

but cannot terminate the contract.
Modification
A breach of contract can be treated as a

breach of warranty and a buyer may like
to retain the goods and claim only
damages.
A breach of warranty cannot be treated

as a breach of condition.
What is contract for sale? What are the express and implied conditions and warranties?
According to section 4 (1) of the sale of goods Act, 1930 contract of sale of goods is a contract where the seller
transfers or agrees to transfer the property in goods to the buyer for a price. Contract of sale includes both a
sell as well as an agreement to sell.
Express conditions and warranties:
These are expressly provided in the contract. For brand of any car or TV is express condition and mentioning
guarantee for duration is express warranty.
Implied conditions and warranties:
These are implied by law in every contract of sale of goods unless a contrary intention appears in the terms of
the contract.
Syed M Hoq, ACCA
Page 27

Implied conditions:
The following are the implied conditions:
i) Condition as to title section 14
Implied condition on the part of seller that:
a) In the case of a sale, he has a right to sel the goods and
b) In the case of an agreement to sell, he will have a right to sell the goods at the time when the
property is to be delivered.
ii)
Sale by description section 15

Where there is a contract of sale of goods by description there is an implied condition that the goods shall
be of the prescribed description. Description may be:
a) Where the buyer has never seen the goods and buys them only on the basis of description given by
the buyer:
b) Where the buyer has seen the goods but buys them only on the basis on description of the seller;
c) Where the method of packing has been described.
iii)
Sale by sample section 17

A contract for sale by sample is a contract where there is a term in the contract, express or implied to that
effect. Such sale is subject to following conditions:
a) The goods must correspond with the sample in quality.
b) The buyer must have a reasonable opportunity of comparing bulk with the sample.
c) The buyer must be free from any defect which render them un merchantable and which would not be
apparent on reasonable examination of the sample. Such defects are called latent defects and may be
discovered when the materials are put in use. It may specially be noted that the seller cannot be held
liable for apparent or visible defects which could easily be discovered by an ordinary prudent person.
iv)
Sale by sample as well as description section 15

If the sale is by sample as well as description, the goods must correspond with the sample as well as
description.
v)
Condition as to quality and fitness

There is no implied condition as to the quality or fitness for any particular of goods supplied under a
contract of sale. That is the buyer must satisfy himself about the quality and suitability of the goods. This is
expressed by the maxim caveat emptor (let the buyer beware). However, there is an implied condition that
the goods shall be reasonably fit for a particular purpose if the following conditions are satisfied:
a) The particular purpose for which the goods are required must have been disclosed by the buyer to the
seller. This condition need not be fulfilled if the goods can be used only for a particular purpose.
b) The buyer must have relied upon the sellers skill and judgement
c) The sellers business must be to sell such goods.
This condition cannot be invoked against a casual seller.
vi)
Condition as to merchantable quality section 16 (2)

Where the goods are bought by the description from a seller who deals in goods of that description
(whether he is the manufacturer or producer or not). There is an implied condition that the goods shall be
of marketable quality. The expression of marketable quality means that the quality and condition of the
goods must be such that a man of ordinary prudence would accept them as the goods of that description.
Goods must be free from any latent or hidden defects.
vii)
Condition as to wholesomeness
In case of eatables or provisions on food stuffs, there is an implied condition as to wholesomeness.
Condition as to wholesomeness means that the goods shall be fit for human consumption.
viii) Condition implied by custom section 16 (3)

The condition as to quality or fitness for particular purpose may be annexed by the usage of trade.
Syed M Hoq, ACCA
Page 28

Implied warranties:
These are as follows:
i) Warranty as to quit possession section 14 (6)
There is an implied warranty that the buyer shall have and enjoy quite of the goods. The breach of this
warranty gives buyer a right to claim damage from the buyer.
Q.94.
ii)
Warranty of free encumbrance

There is an implied warranty that the goods are free from any charge or encumbrance in favour of any
third person if the buyer is not aware of such charge or encumbrance. The breach of the warranty gives
the buyer a right to claim damages from the seller.
iii)
Warranty as to quality or fitness for particular purpose

This may be determined by the usage of trade.
iv)
Warranty to disclose dangerous nature of goods

In case of goods of dangerous nature, the seller must disclose or warn the buyer of the probable danger. If
the seller fails to do so, the buyer may make him liable of implied warranty.
How a contract for sale is performed? State the rules of delivery of goods.
The performance of a contract is accomplished by delivery. A delivery may be of the following types:
i) Actual delivery
Actual delivery occurs when the goods themselves are delivered; the goods are physically handed over to
the buyer or his agent.
ii)
Symbolic delivery
Symbolic delivery occurs when the buyer gets the means of obtaining possession.
iii)
Constructive delivery
Constructive delivery occurs when a change in the possession of the goods without any change in the
actual and visible custody i.e. the delivery of the bill of lading by which goods may be obtained.
Rules regarding the delivery of goods are as follows (see manual page # 47, 48 & 49 for details):
i) Possession of buyer section 33
ii) Effect of part deliver section 34
iii) Application for delivery
iv) Place of delivery section 36 (1)
v) Time of delivery section 36 (2), (4)
vi) Possession of a third person section 36 (3)
vii) Expenses of delivery section 36 (5)
viii) Delivery of the wrong quality section 37 (1, 2, 3, & 4)
ix) Instalment delivery section 38 (2) (2)
x) Delivering to the carrier or wharfinger section 39
xi) Examining the goods section 41
xii) Acceptance section 42
xiii) Buyer is not bound to return rejected goods section 43
xiv) Liability of buyer section 44
Q.95.
What is auction sale? State the rules regarding sales of goods by auction.
Auction sale means a public sale where on invitation of the seller, intending buyers assemble at a prescribed
place and offer the price to show their readiness to purchase the goods. Such offer is known as bid and offerer
is known as bidder. The owner of the goods himself or any other person on his behalf may conduct the
auction.
Syed M Hoq, ACCA
Page 29

The rules regarding auction are:
i) Where goods are put up in lots, each lot is prima facie deemed to be subject of a separate contract of sale.
Section 64 (1).
ii) A sale is complete when the auctioneer its completion by the fall of the hammer or in other customary
manner, for example by saying one, two and three or by shouting going, gone etc. section 64 (2).
iii) Until the announcement of completion of sale is made, any bidder may withdraw hid bid. Section 64 (2).
iv) A right to bid may be reserved expressly by, on behalf of the seller, and where such right is expressly so
reserved, the seller or any one person on his behalf may bid at the auction. Section 64 (3).
v) Where a sale is not notified to be subject to a right to bid on behalf of the seller, it shall not be lawful for
the seller to bid himself or to employ any person to bid at such sale, or for the Auctioneer knowing to take
any bid from the seller, or any such person, and any sale contravening the rule may be treated as
fraudulent by the buyer. Section 64 (4).
vi) A sale may be notified to be subject to a reserve or upset price. Reserve or upset price is defined as the
minimum price below which the Auctioneer will not sell the goods placed for auction. Section 64 (5).
vii) If a seller makes use of pretended bidding to raise the price, the sale is voidable at the option of the buyer.
Section 64 (6).
Q.96.
State the liabilities of an auctioneer.

On the basis of the different decisions of courts, an Auctioneer is liable for damages in the following cases:
i)
ii)
iii)
iv)
Q.97.
If the Auctioneer has no authority to sell the goods;

If there is a defect in principals title;
If the Auctioneer refuses to give the possession on the payment of the price;
If the buyers possession is distributed by his principal or himself.
Discuss the circumstances of transfer of goods by non-owner.

Transfer of title by non-owner:
i) Estoppels
Under certain circumstances, the true owner may be prevented, by his conduct from denying the sellers
authority to sell.
ii)
Sale by mercantile agent section 27

Sale of goods by a mercantile agent gives a good title to the buyer even in cases where the agent acts
beyond his authority.
iii)
Sale by one of joint owners section 28

If one of several joint owners of goods has the sole possession of them by permission of the co-owners,
the property in the goods is transferred to any person who buys them from such joint owner provided the
buyer acts in good faith and without knowing that the seller has no authority to sell.
iv)
Sale of goods obtained under a voidable contract section 29

When the seller of goods has obtained possession thereby under voidable agreement but they agreement
has not been rescinded at the time of sale, the buyer obtains a good title to the goods provided he buys
them on good faith and without notice of sellers defect on title.
v)
Sale by the seller in possession of goods after sale section 30 (1)

Where a person having sold goods, continues to be in possession of the goods or of the documents of the
title to the goods, a transfer of title by him or his agent by way of sale or pledge, gives a good title to the
transferee, provided the transferee acted in good faith and had no knowledge of sellers want of title. The
original buyer, however, in such cases can claim damages from the seller but cannot recover the goods
from the second buyer.
Syed M Hoq, ACCA
Page 30

vi)
Buyer in possession of goods over which seller has some right section 30 (2)
When goods are sold subject to some lien or right of the seller (e.g. for unpaid price), the buyer may sell,
pledge, or otherwise dispose of the goods to a third party and give him a good title provided the following
conditions are satisfied:
a) The first buyer is in position of the goods or of the documents of the title to the goods with consent of
the seller;
b) The transfer is by the buyer or by the mercantile agent acting for him;
c) The person receiving the same acts in good faith and without notice of any lien or other right of the
original seller;
vii)
An unpaid seller section 54

An unpaid seller of goods under certain circumstances can resell the goods. The purchaser in such goods
gets a valid title.
viii) Sale under the contract Act section 176

a) a pawnee may sell the goods of pawnor if the later makes a default of his dues
b) a finder of goods can sell the goods under certain circumstances.
Q.98.
Discuss the doctrine of caveat emptor stating the exceptions.

The expression of caveat emptor means let the buyer beware. The provision in section 16 of the act in this
respect reads subject to the provision of this act and any other law for the time being in force, there is no
implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a
contract of sale. It means that it is not part of sellers duty to point out defects of the goods which he offers for
sale rather it is the duty of the buyer to satisfy him about the quality as well as the suitability of the goods. This
doctrine is however, subject to following exceptions:
i)
In case of misrepresentation by the seller

Where the seller makes a misrepresentation and buyer acted relying on that misrepresentation.
ii)
In case of concealment of latent defect

Where the seller conceals a defect which would not be found out by reasonable examination
iii)
Sale by description section 5

Where the goods are sold by description and supplied goods do not agree with the description of the
contract.
iv)
Sale by sample section 17

Where the sale was concluded based on a sample but the supply do not agree with the sample.
v)
Sale by sample as well as description section 15

Where the sale are by sample as well as by description and the supply do not agree with both sample and
description.
vi)
Fitness for particular purpose section 16 (1)

Where the seller or a manufacturer is a dealer of the type of goods sold by him and buyer has disclosed the
purpose for which goods are required and relied upon sellers skill and judgement, but the goods supplied
do not agree with the buyers requirement.
vii)
Merchantable quality section 16 (2)

Where the goods are bought by description from the seller who is dealer of the goods of that description
(whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be
merchantable quality but if the supply are not merchantable quality)
Syed M Hoq, ACCA
Page 31

Q.99.
What do you mean by sale and agreement of sale? State their differences.
As contained in section 4 (3) of sale of goods Act 1930, sale is the transfer of title/ownership of goods from
seller to buyer.
An agreement to sale is the agreement between seller and purchaser for transferring the ownership of goods in
a future date, subject to, fulfilment of some conditions. Goods may or may not be transferred in case of an
agreement to sale.
The differences between sale and agreement of sale are as follows:
Q.100.
S.I.
Element of distinction
Transfer of ownership
Transfer
of
ownership
immediate effect.
takes
Transfer of ownership is to take place

on certain future date or subject to
fulfilment of some conditions.
Nature of contract
It is an executed contract because

nothing remains to be done.
It is an executor contract because

something remains to be done.
Conveyance
property
Buyer gets a right to enjoy the goods.
Buyer does not get right to enjoy the

goods but acquires a right against the
seller.
Transfer of risk
Transfer of risk of loss takes place

immediately.
That
is
risk
automatically transferred to the
buyer.
The transfer of risk does not take

place because ownership still remains
with the seller.
Right of seller against

the buyers breach
Seller can sue the buyer for the price

even though the goods are in his
possession.
Seller can sue the buyer for damages

even though the goods are in the
possession of the seller.
Right of buyer against

the sellers breach
Buyer can sue the seller for damages

and sue the third party who bought
those goods.
Buyer can sue the seller for damages

only.
Effect of insolvency of
seller
having
possession of goods
Buyer can claim the goods from the

official receiver or assignee because
ownership was transferred to the
buyer.
Buyer cannot claim the goods when

he has paid the price because
ownership has not been transferred.
The buyer who has paid the price can
only claim rateable dividend.
Effect of insolvency of
the buyer before
paying the price
Seller must deliver the goods to the

official receiver or assignee. He can
only claim rateable dividend for the
unpaid price.
Seller can refuse to deliver the goods

unless he is paid full price because
ownership has not been transferred
to the buyer.
of
Sale
Agreement to sell
State the rights of seller against the buyer personality.

In addition to the rights against the goods, an unpaid seller has the following rights against the buyer
personality:
i)
Suit for price

Where under a contract of sale, the property in the goods has passed to the buyer and the buyer
wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may
sue him for the price of goods.
Where under a contract of sale, the price is payable on a certain day irrespective of the delivery and the
buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the
property in goods has not been passed and the goods have not been appropriated to the contract.
Syed M Hoq, ACCA
Page 32
Q.101.
ii)
Suit for damages for reputation of the contract section 60

Where the buyer repudiates the contract before the due date of delivery, the seller may both treat the
contract as subsisting and wait till the due date of delivery or he may treat the contract as rescinded and
sue for damages for the breach.
iii)
Suit for damages for non-acceptance section 56

Where buyer wrongfully neglects or refuses to accept the goods and pay for the goods, the seller may sue
him for damages due to non acceptance of the goods.
iv)
Suit for interest section 61 (2)

In case of breach of contract on the part of the buyer, while filing a suit for the price, the seller may sue the
buyer for interest from the date of the tender of the goods or from the date on which the price was
payable.
State the rights of a buyer.

Rights of buyer are discussed below:
Q.102.
i)
Suit for damages for non-delivery section 57

Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue the
seller for damage due to non-delivery of goods.
ii)
Suit for specific performance section 58

In case of any suit for breach of contract to deliver specific or ascertained goods, the court may order for
specific performance.
iii)
Suit for breach of warranty section 59

Where there is a breach of warranty by the seller or where the buyer agrees to treat a breach of condition
on the part of the seller as breach of warranty, the buyer cannot reject the goods but he may:
a) Set up against the seller the breach of warranty in diminution or execution of the price; or
b) Sue the seller for damages for breach of warranty.
iv)
Repudiation of contract by seller before due date section 60

Where the seller repudiates the contract before the date of delivery, the buyer may either treat the
contract subsisting and wait till the due date of delivery or he may treat the contract rescinded and sue for
damages for the breach.
v)
Suit for interest section 61 (2)

In case of breach on the part of the seller, the buyer may sue the seller for interest from the date on which
the payment was made.
Who is an unpaid seller? Discuss the rights of unpaid seller.

As per section 45 (1) of sales of goods Act, 1930 an unpaid seller means any seller who has not been paid full
value of goods or the value paid by Negotiable Instrument which has been dishonoured and the terms of
payment has not been fulfilled. Rights of an unpaid seller or his agent may be discussed under the following
heads:
1)
Against the goods:

Rights of an unpaid seller against the goods:
a) Lien of unpaid seller on goods sold to buyer
The unpaid seller who is in possession of the goods is entitled to retain the possession until payment
of price or tender where the goods:
i) Have been sold without stipulation as credit;
ii) Have been sold on credit but the term of credit has expired; and
Syed M Hoq, ACCA
Page 33

iii)
The buyer has become insolvent.
b) Right of stoppage of goods in transport

Where the buyer of goods becomes insolvent and the goods are in transit to the buyer, the seller can
take possession of the goods from the carrier.
c) Right of re-sale of goods
The unpaid seller who has retained possession of the goods in exercise of his right of lien or who has
resumed possession from the carrier upon the insolvency of the buyer can resell the goods.
2)
Q.103.
Against the buyer personality: suit for price, damages and interest.
When an agreement to sell becomes sales?

An agreement to sell becomes a sale when the prescribed time elapses or the conditions, subject to which the
property in the goods is to be transferred, are fulfilled.
Q.104.
State the consequences of breach of conditions and breach of warranty.

The consequences of breach of condition and warranty may be as under:
Breach of condition:
i) If a condition is broken there arises a right to treat the contract of sale repudiated (i.e. terminated)
ii) A condition can be treated as a warranty when a buyer accepts performance of the contract and sue for
damages instead of treating it as a breach of condition, if he has suffered any loss. Where a contract of sale
is not separable and the buyer has accepted the goods or part thereof, he cannot repudiate (reject) the
contract but can only sue for damages, unless these is a contract to the contrary.
iii) While either party repudiate the contract before the date of delivery, the other may treat the contract as
subsisting and wait till the date of delivery, or he may treat the contract as rescinded and sue for damages
for the breach.
Breach of warranty:
i) A breach of warranty gives rise to claim for damages but not to a right to reject the goods and treat the
contract as repudiated.
ii) Under certain circumstances a condition is to be treated as warranty.
iii) Nothing in section 13 shall affect the case of any condition or warranty fulfilment of which is excused by
law by reason of impossibility or otherwise. It merely saves the rights of the seller, in appropriate cases, to
rely upon the impossibility as an excuse to him, if sued by the buyer.
iv) Remedy for breach of warranty: where there is a breach of warranty by seller, or where the buyer elects or
is compelled to treat any breach of condition on the part of the seller as a breach of warranty, the buyer is
not only by reason of such breach of warranty entitled to reject the goods, but he may:
a) Set up against the seller, the breach of warranty in reduction or enhancement of the price. This set up
for a breach of warranty does not prevent him from suing for the same breach of warranty if he has
suffered further damages; or
b) Sue the seller for damages for breach of warranty.
Q.105.
No seller can give the buyer a better title of goods than he himself has explain with exception to this rule.
Only owner can transfer the title or ownership to the purchaser. If any goods are purchased with due
consideration and honestly from any person who is not the owner or one having no right to sell the goods, the
purchaser will not get the title/ownership of the goods. This is because the holders right over the goods owned
by him is limited to the title that he has. He cannot transfer the right that he does not have.
The exception to this rule is described in question # 97.
Syed M Hoq, ACCA
Page 34

Q.106.
When does the property and the risks of goods passes from the seller to the buyer in a contract for sale of
goods?
In case of sale of goods, the title of the goods is transferred to the purchaser from the seller at the time of
delivery of goods. The title of the goods may be transferred after a certain period on some terms and condition
in case of agreement to sale.
Q.107.
Under what circumstances a breach of condition is to be treated as a breach of warranty?

In the following conditions, the breach of a condition is treated as a breach of a warranty:
Q.108.
i)
Voluntary waiver of a condition:

Where a contract for sale is subject to fulfilment of certain conditions by the seller, the buyer may
voluntarily waive the condition by treating the condition as a warrantee and can claim damages, if any,
suffered by him, without going to apply his right to terminate the contract. Once a condition is waived by
the buyer, he cannot insist on its fulfilment.
ii)
Where goods accepted without repudiation:

Where the buyer claim damages without repudiating the contract
iii)
When the contract is not severable:

When the contract is not severable and the buyer has accepted the goods or part thereof, in that case the
breach of any condition by the seller can be treated as a breach of warranty.
Distinguish between sale and hire purchase agreement.

A higher-purchase agreement is one under which a person takes delivery of goods promising to pay the price by
a certain number of instalments and until full payment is made, to pay higher charges for using the goods.
As contained in section 4 (3) of sale of goods Act 1930, sale is the transfer of title/ownership of goods from
seller to buyer.
Syed M Hoq, ACCA
Page 35

Try to solve the following questions. These are also important for the exam
Q.109.
Q.110.
Q.111.
Q.112.
Q.113.
Q.114.
Q.115.
Q.116.
Q.117.
Q.118.
Q.119.
Q.120.
Q.121.
Q.122.
Q.123.
Q.124.
Q.125.
Q.126.
Q.127.
Q.128.
Q.129.
State the rules regarding sub-sale or pledge by a buyer.

In a contract of sale of goods, the buyer has to bear the risk comment.
Distinguish between sub-sale or pledge and auction sale.
Risk prima facio passes with property comment.
Distinguish between sale and contract for work and labour with example.
What are the rights of unpaid seller in case of transfer of document by way of pledge?
A sells to B 100 bags of wheat which are locked up in a godown. A hands over to B the key of the godown. Does
it constitute delivery of the goods to B?
Can a contract of sale be made for future goods?
Mr. X contracts to sell Java Sugar according to sample produced by him. On the delivery of the same to Mr. Y,
the buyer, it appears that the sugar agrees with the sample, but it is not Java Sugar. Will Mr. Y be entitled to
any remedies?
An advertisement to sell a thing by using auction is i) an offer, ii) an invitation iii) no offer at all what is the
best alternative? Give short answers.
A supplies food to C who is a lunatic. C has assets worth Tk. One lac. On non-repayment, can A proceed against
the assets of C? Would your answer be the same if C instead of being lunatic is an infant?
Mr. Rahman purchases two chocolate from a Departmental store. One of the chocolates contains a poisonous
substance and as a result, his daughter who has eaten it falls seriously ill. What remedy is available to Mr.
Rahman against the proprietor of the Departmental store?
A agreed to sell B 1200 tons of coal to be delivered in monthly instalments of 100 ton each. After three
instalments had been delivered, A refused to deliver any further coal under the contract. Discuss the rights of A
and B after the refusal.
The question as when property passes from the seller to the buyer is important. Why?
There was sale of 45 tons of sugar March/April shipment. The seller shipped 35 tons in April and 10 tons in May.
Can the buyer reject the whole of the 45 tons?
Differentiate between right of lien and right of stoppage in transit.
In what circumstances an unpaid seller can exercise his rights of stoppage in transit?
Explain sellers lien and venders lien and distinguish between them.
What are the circumstances under which the same person can be both a purchaser and a seller?
Why determination of time is necessary for transfer of goods?
What are the factors that determine whether a particular contract is to be governed by sales law rather than by
general contract law?
Syed M Hoq, ACCA
Page 36
THE TRADE MARKS ACT 1940

Q.130.
Write short note on Trade Marks.

Trade Mark means a mark used or proposed to be used in relation to goods for the purpose of indicating or so
as to indicate a connection in the course of trade between the goods and some person having the right, either
as proprietor or as registered user, to use the trade mark whether with or without any indication of the identify
of that person.
Q.131.
State the marks or symbols that can be registered as a trade mark.

Mark includes a device, brand heading, name, signature, word, letter or numerical or any combination thereof.
Q.132.
State the prohibition in respect of registration of a trade mark.

No trade mark nor part of a trade mark shall be registered which consists of or contains, any scandalous design,
or any matter the use of which would:
a) by reason of its being likely to deceive or to cause confusion or otherwise, be disentitled to protection in a
court of Justice; or
b) be likely to hurt the religious susceptibilities of any class of the citizens of Bangladesh; or
c) be contrary to any law for the time being in force or to morality.
Q.133.
State the difference between trade mark and patent. Why trademark is essential?
Q.134.
What is associated Trade Marks? Distinguish between the registration of the assignments and the
registration of transmission of Trade Marks?
Q.135.
Describe the provision related to distinctiveness requisite for registration as per Trade Mark Act 1940.
Syed M Hoq, ACCA
Page 37
THE COPY RIGHT ACT 2000

Q.136.
Write short note on Copy Right.

Copy right means the exclusive right to do certain thing. Copy right exists only in works which includes literary,
dramatic, musical, artistic and cinematographic work and record. Normally the duration of Copy Right is for
sixty years from the date or events specified in the Act.
Q.137.
Mention in what type of work has copy right as per Copy Right Act, 2000.
Copy right exists only in works which includes literary, dramatic, musical, artistic and cinematographic work and
record.
Q.138.
Discuss the power and functions of Copy Right Board as per Copy Right Act 2000.
Q.139.
Why Copy Right is essential for manufacturing company?

THE PATENTS AND DESIGN ACT 1911

Q.140.
Write short note on patent and design

Patent:
Patent denotes a monopoly right in respect of an invention.
Design:
Any feature of shape, configuration, pattern or ornament when applied to an article is termed as a design.
Novelty and originality is one of the important features of a design without which no design would be treated
to be registered by the authority.
Q.141.
State the salient features of patent.

The salient features of patent are:
i)
ii)
iii)
iv)
v)
Q.142.
The patent must be in respect of an invention and not a discovery.

In respect of one single invention there must be one single patent.
Patent must be in respect of a substance or in respect of a process.
In order to have a complete patent, the specifications and the claims must be clearly and distinctly
mentioned.
It is the claims and claims alone which constitute the patent.
Describe the law related to application for and grant of patent as per Patent and Design Act 1911.
See relevant Act for details.
Q.143.
Describe the law related to specification of nature of invention as per Patent and Design Act 1911.
See relevant Act for details.
Syed M Hoq, ACCA
Page 38
THE ARBITRATION ACT 1940

Q.144.
What is arbitration? State the essential elements of arbitration.

Settlement of dispute by referring to third person is known as Arbitration.
Essential elements of arbitration agreement are:
1)
2)
3)
4)
5)
6)
7)
Q.145.
An arbitration agreement must be in writing to be valid and binding.

Signatures of the parties are not necessary but it must be shown that they agreed to the settlement of
disputes by arbitration. It is not necessary that the agreement should be contained in a formal document.
The record of such an agreement in a clause in the contract or in a letter of memorandum is enough.
It is not necessary that the name of the person who will act as the arbitrator should be mentioned in the
agreement.
The agreement may be to refer present difference or probable future differences to arbitration.
When there is an arbitration clause in a contract and the contract comes to an end owing to frustration or
is avoided on the ground of fraud or mis-representation, the arbitration clause may continue to be binding
(case ref state of Bombay v Adamjee). But if the parties are not ad-idem i.e. if there was no contract at all,
the arbitration clause is not binding (case ref Tolaram v Birala Jute Mfg. Co.)
The agreement to refer disputes to Arbitration is not valid if it lacks the essential elements of a contract
e.g. if it was made by fraud or coercion.
The construction of an arbitration agreement is not to be thwarted by narrow pedantic interpretation.
State the different type of arbitration. What are the cases which can be referred to arbitration?
The different types of arbitration are as follows:
i) Arbitration without the intervention of court section 3-25
Such arbitration proceedings take place outside the court. There is no suit pending but the award of the
arbitration can be filed in the court and executed through the court as if it was a decree of the court.
ii)
Arbitration through court when no suit is pending

Where there is an arbitration agreement, the parties may proceed with the arbitration independently of
any court. When there is an arbitration agreement but no suit is pending, any of the parties may apply to
the court for filing the arbitration agreement. The court thereupon issues notice to the other parties
requiring them to show cause why the agreement should not be filed. Where no sufficient cause is shown,
the court shall order the agreement to be filed and shall make an order of reference to arbitrators
appointed in the manner laid down in the agreement or where the parties cannot agree upon an
arbitrator, to an arbitrator appointed by the court.
iii)
Arbitration after suit

After a suit is filed, the parties may decide to settle the matter by arbitration. Where in any suit, the
parties agree to settle the matter through Arbitration they may at any time before pronouncement of the
judgment apply to the court for reference of the matter to Arbitration. The Arbitrator shall be appointed in
the manner agreed upon by the parties. The parties may also agree to make the judge himself as the
Arbitrator. In such case his judgement will be treated as an award and is appeal-able. There may be
reference of part of the matter in issue of the suit, provided such part can be dealt with separately. After
reference the matter is settled in the manner of arbitration without intervention of the court.
Issues/matters which can be referred to Arbitration:

Subject to the examples noted below, all disputes which can be decided by a civil court can also be decided by
Arbitration.
Syed M Hoq, ACCA
Page 39

Examples:
a) Dispute over property or money, amount of damages payable for breach of contract, maintenance payable
to wife, terms of separation between husband and wife, question of law.
b) Matters of personal right (i.e. right to hold office of Pujari in temple) and dispute regarding compliment or
dignity which cannot be decided by the civil courts, can nevertheless be decided by Arbitration.
i) Matrimonial matter like divorce or restitution of conjugal rights
ii) Testamentary matters like the validity of a will
iii) Insolvency matters e.g. the adjudication of a person as insolvent
iv) Matters relating to guardianship of a minor or of a lunatic or declaring a person insane
v) Criminal case: whether a person is guilty of an offence or not cannot be decided by Arbitration.
vi) Questions relating to charities or charitable trust cannot be referred to Arbitration except with
consent of the concerned public office.
Q.146.
State the cases which cannot be referred to arbitration.

Q.147.
What is an award? What are its essential elements? On what ground can an award be set aside?
The award means decision of the arbitrator or the umpire.
The essential elements of award are:
i) In writing
The award must be in writing in such form and such language as the umpire or arbitrators may think fit.
ii)
Date of signature
The award must be signed and dated.
iii)
Notice
The arbitrators shall give notice in writing of making the award to all the parties
iv)
Fees and charges

The arbitrators shall state the amount of fees and charges payable in respect of the arbitration and the
award.
v)
Legality
The award must be in conformity with the submission. It must be certain and final and give a decision on
all matter referred. It must not say anything outside the reference.
The court can set aside an award only in the following cases:
i) If an award is made after issue of an order of the court superseding the arbitration proceedings have
become invalid. The court can supersede arbitration when an award becomes void or has been set aside.
Arbitration proceeding become invalid when a suit or legal proceeding have been commenced relating to
the subject-matter of the reference, notice of the same has been given to the arbitrator or umpire and
none of the parties have asked for stay of the suit or legal proceedings. An award made under the
aforesaid circumstances can be set aside by the court.
ii)
When an award has been improperly procured or is otherwise invalid. An award becomes otherwise
invalid for a variety of reasons. Some examples are given below: when the existence of the arbitration
agreement cannot be proved; when the consent of a party to a arbitration agreement has been procured
by fraud; when the arbitrators or the umpire has not been appointed in proper manner; etc.
iii)
In case of error of law. The umpire as sole arbitrator is not bound to give a reasoned award and if in
passing the award he makes a mistake of law or of fact, there is no ground for challenging the validity of
the award, it is only when an erroneous proposition of law is stated in the award and which is the basis of
Syed M Hoq, ACCA
Page 40

the award, can the award be set aside or remitted on the ground of error of law apparent on the face of
the record.
Q.148.
An award is an instrument of offense and defence discuss.

An award by the arbitrator is final and binding on the parties to the dispute. There can be no appeal except in
some specified cases. Any of the parties to the dispute can enforce it by a decree of the court. The award,
therefore, may be termed as an instrument of offense.
Any award if given validly cannot be re-opened. A suit on such matter is liable to be dismissed by court. So the
award is also an instrument of defence.
Q.149.
What are the powers and duties of an Arbitrator/Umpire?

Unless a contrary intention is expressed in the agreement, the arbitrator or umpire shall have the following
powers:
i) To administer oath to the parties and witness appearing.
ii) To state a special case for the opinion of the court on any question of law involved or states the award,
wholly or in part, in the form of a special case of such question for the opinion of the court.
iii) Make the award conditional or in the alternative.
iv) Correct in an award any clerical mistake or error arising from any accidental slip or omission.
v) Administer any party to the arbitration such interrogation (question in writing) as may be in the opinion of
the arbitrators or umpire, be necessary.
Q.150.
Briefly explain arbitral proceedings as discussed in the Arbitration Act 2001.

Q.151.
What are the main objectives of Arbitration and Conciliation Act 1995?
Q.152.
What is an arbitration agreement?

An arbitration agreement means, a written agreement to submit present/future differences to arbitration,
whether an arbitrator is named therein or not (section 2 (a)).
Q.153.
Write short notes on arbitrators and umpire.

Q.154.
Enumerate the power of the court to appoint arbitrator or umpire.

The need for appointing an arbitrator or umpire by the court may arise in the following cases:
Q.155.
i)
Where the agreement provides that the arbitrator or arbitrators shall be appointed by consent of all the
parties and all parties do not concur in the appointment.
ii)
If any appointed arbitrator or umpire neglect or refuses to work or is incapable of acting or dies and the
arbitration agreement does not show that it was intended that the vacancy should not be supplied, and
the parties or the arbitrators as the case may be, do not fill up the vacancy.
iii)
Where the parties or the arbitrators are required to appoint an umpire and do not appoint him.
Who has the competent power to submit arbitration on behalf of i) minor and ii) a person of unsound mind.
The court may pass order to appoint guardian for minor or insane to conduct on his/her behalf arbitral
proceedings.
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Page 41

Q.156.
Who may refer disputes to arbitration?

Q.157.
Explain the misconduct of the umpire or arbitrator.

Q.158.
What conditions are implied in arbitration agreement?

Section 3 and the first schedule of the Act provide that an Arbitration agreement, unless a different intention is
expresses therein, shall be deemed to include the following terms:
i)
ii)
Unless otherwise expressly provided, the reference shall be to a sole arbitrator.

If the reference is to an even number of Arbitrators, the Arbitrators shall appoint an umpire not later thatn
one month from the latest date of their respective appointment.
iii) The Arbitrators shall make their award within 4 months after entering on the reference or after having
been called upon to act by notice in writing by any party to the arbitration agreement or within such
extended time as the court may allow.
iv) If the Arbitrators do not make an award within the time mentioned above or if they notify any of the
parties or the umpire that they cannot agree, the umpire must forth with enter ton the reference in lieu of
the Arbitrators.
v) The umpire shall make his award within two months of entering into the reference or such extended time
as the court may allow.
vi) The parties to the reference and all person claiming under them must, if so required by the Arbitrators or
the umpire, submit to be examined by them upon oath or affirmation and must produce before them all
necessary books, papers and documents and do all other things which, during the reference, the
arbitrators or umpire may require.
vii) The award shall be final and binding on the parties and persons claiming under them respectively.
viii) The costs of the reference and award shall be in the discretion of the Arbitrators or umpire who may direct
to and by whom and in what manner, such costs or any part thereof shall be paid. The Arbitrators or the
umpire may settle the amount of costs to be paid or any part thereof and may award costs to be paid as
between legal practitioner and client.
Q.159.
Under what circumstances the judicial authority may refer the parties to arbitration.
Q.160.
Under what circumstances can the court set aside an award made by the arbitration?
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Page 42
THE NEGOTIABLE INSTRUMENT ACT 1881

Q.161.
What is a negotiable instrument? State the characteristics of a negotiable instrument.

A negotiable instrument means a promissory note, bill of exchange or cheque either to or to bearer. A
document is negotiable if by custom of the money market it is transferable as it was cash and is bonafide
transferee obtains a good title though his transferee had none.
Thus a promissory note, bill of exchange or cheque is payable to order which is expressed to be so payable to a
particular person and does not contain words prohibiting transfer or indicating an intention that it shall not be
transferable.
Essential features of negotiable instruments are:
i)
Mode of preparation
These instruments must be in writing and signed by the maker as rules laid down for each instrument viz
promissory note, bill of exchange, cheque.
ii)
Payment in money
These instruments are payable in legal tender money of Bangladesh.
iii)
Negotiability
It can be transferred from one person to another in simple way. In case of bearer instrument mere delivery
is sufficient to affect valid transfer. In case of order instrument endorsement and delivery is necessary. It
may be made non-transferable by use of say pay to X only.
iv)
Title
The transferee acquires a valid title even though the transferors title was defective if the transferee
receives it in good faith.
v)
Notice
No notice of transfer is necessary. The transferee can sue in his own name.
vi)
Presumption
Certain presumptions are implied to all instruments. So it is not necessary to write for value received in a
promissory note as the consideration behind is implied.
vii)
Special procedure for legal action

A special procedure is provided for obtaining a decree on a promissory note or bill of exchange. So, legal
process is expeditious.
viii) Popularity
Because of its easy transferability and general acceptance by custom and usage these are popular in use.
ix)
Q.162.
Evidence
An instrument which fails to quality as negotiable instrument can be presented as an evidence of
indebtedness.
Write short notes on i) Negotiation, ii) Negotiable instruments, iii) Endorsement, iv) Holder in due course.
Negotiation
When a promissory note, bill of exchange or cheque is transferred to any person so as to constitute that the
person is the holder thereof, the instrument is said to be negotiated.
Negotiable instruments
A negotiable instrument means a promissory note, bill of exchange or cheque either to or to bearer. A
document is negotiable if by custom of the money market it is transferable as it was cash and is bonafide
transferee obtains a good title though his transferee had none.
Syed M Hoq, ACCA
Page 43

Endorsement
When the maker or holder of a negotiable instrument signs the same, otherwise that as such maker, for the
purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto or sign for the same
purpose a stamped intended to be completed as a negotiable instrument, he is said to endorse the same and is
called the endorser.
Holder in due course
Holder in due course mean any person who for consideration become the possessor of a promissory note, bill
of exchange or cheque, if payable to bearer, or the payee or endorse thereof, if payable to order, before
overdue without notice that the title of the person from whom he derived, his own title was defective.
Q.163.
What is a cheque? Is an account payee cheque a negotiable instrument? State the different type of crossing
of a cheque.
A cheque is a bill of exchange drawn on a specified banker and not expresses to be payable otherwise than on
demand. A cheque is under the law a negotiable instrument. Its negotiability can be destroyed only if it marked
as not negotiable on its face. It is not destroyed by its simply being crossed whether generally or specially.
No, account payee cheque is not a negotiable instrument.
Crossing of cheque
The different type of crossing of cheque is as follows:
Q.164.
i)
Cheque crossed generally

Where a cheque bears across its face an addition of the words and company or any abbreviation thereof,
between two parallel transverse lines or of two parallel/transverse lines simply either with or without the
words not negotiable that addition shall be deemed a crossing and the cheque shall be deemed to be
crossed generally.
ii)
Cheque crossed account payee

Where a cheque crossed generally bears across its face an addition of the words accounts payee
between the two parallel transverse lines constituting the general crossing, the cheque besides being
crossed generally, is said to be crossed account payee.
iii)
Cheque crossed specially

Where a cheque bears across its face an addition of the name of a banker, either with or without the word
not negotiable that addition shall be deemed a crossing and the cheque shall be deemed to be crossed
specially and to be cashed to that bank.
What is promissory note? What are its essential elements?

A promissory note is an instrument in writing (not being a bank note or a currency note) containing an
unconditional undertaking, signed by the maker, to pay (on demand or at fixed or determinable future time) a
certain sum of money only to, or to the order of a certain person, or to the bearer of the instrument.
Essential elements of promissory note therefore are:
i)
ii)
iii)
iv)
An unconditional undertaking to pay;

The sum should be sum of money and should be certain;
The payment should be to or to the order of a person who is certain, or to the bearer of the instrument;
and
The maker should sign it.
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Q.165.
What is bill of exchange? What are its essential elements?

A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing
a certain person to pay (on demand or at a fixed or determinable future time) a certain sum of money only to,
or to the order of a certain person or to the bearer of the instrument.
The essential elements of a bill of exchange are to those of promissory notes. These are however giver below:
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
Q.166.
The instrument must be in writing;

It must be signed by the drawer;
It must contain an order to pay, express and unconditional;
All the three parties viz the drawer, drawee and payee must be certain and definite person;
The amount must be certain;
The payment must be in money;
The amount must be payable to a definite person or according to his order;
It must be properly stamped; and
The bill may be made payable on demand or after a definite period of time.
What is a cheque? What are its essential elements?

A cheque is a bill of exchange drawn on a specified banker and not expresses to be payable otherwise than on
demand. A cheque is under the law a negotiable instrument. Its negotiability can be destroyed only if it marked
as not negotiable on its face. It is not destroyed by its simply being crossed whether generally or specially.
Essential elements of a cheque are as follows:
i)
ii)
iii)
A cheque must fulfil all the essential requirement of a bill of exchange;

A cheque may be payable to bearer or to order but in either case it must be payable on demand;
The banker named must pay it when it is presented at his office during the usual office hours, provided the
cheque is validly drawn and the drawer has sufficient fund to his credit;
iv) Bill and notes may be written entirely by hand. There is no legal bar to cheques being hand written.
Usually, however, banks provide their customers with printed cheque forms which are filled up and signed
by the drawer;
v) The signature must tally with the specimen signature kept under custody of the bank;
vi) A cheque must be dated. A banker is entitled to refuse to pay a cheque which is not dated. A cheque
becomes due for payment on the date specified on it;
vii) A cheque drawn with a future date is valid but it is payable on and after the date specified. Such cheques
are called post dated cheques; and
viii) A cheque may be presented for payment after the due date but if there is too much delay, the bank is
entitled to consider the circumstances and refuse to honour the cheque. In our country a cheque becomes
too old after six months from the date appearing on the face of the cheque.
Q.167.
State the difference between promissory note and bill of exchange.

The differences between promissory note and bill of exchange are as follows:
S.I.
Element of difference
Promissory note
Bill of exchange
Number of party
There are two parties; the maker and

the payee.
There are three parties; the drawer,

drawee and the payee.
Nature of direction
There is a promise to pay.
There is an order to pay.
Acceptance
The person signing is liable to pay and

hence no acceptance is necessary.
Generally, a bill of exchange is

required to be accepted by the
drawee before it is binding upon him.
Liability
The maker is primarily liable on the
The drawer is liable only when the
Syed M Hoq, ACCA
Page 45
Q.168.
instrument.
drawee does not accept or pay the

money due.
Relationship
Markers relationship with the payee

is direct.
The
drawer
has
immediate
relationship with the acceptor.
Notice
No notice of dishonour is necessary.
In case of non-acceptance or non

payment, notice must be given to all
parties liable.
State the difference between bill of exchange and cheque.

The differences are shown as follows:
Q.169.
S.I.
Elements of difference
Bill of exchange
Cheque
Drawal
A bill of exchange may be drawn on

any person including a bank.
A cheque may be drawn only upon a

bank. All cheques are bill of exchange.
Acceptance
In general, a bill of exchange

requires acceptance.
A cheque do not require acceptance.
Payment
There is a grace time of 3 days after

the maturity of the bill to make the
payment.
A cheque is payable on demand.
Discharge of liability
The drawer is discharged from

liability if the bill is not presented to
the acceptor for payment at the due
time.
The drawer is discharged from liability

only if he suffers damage owing to
delay in presenting the cheque for
payment.
Notice of dishonour
Except in certain case, a notice of

dishonour is necessary.
If the bank fails to pay, no notice to

drawer is necessary to make him
liable to compensate.
Crossing
No provision for crossing.
A cheque may be crossed.
Countermanding
The
payment
countermanded.
Requirement of stamp
It must be stamped.
cannot
be
A cheque may be countermanded by

the drawer for payment.
Does not require any stamp.
What is dishonour of cheque? What is the remedy for the payee for dishonour of a cheque on the ground of
insufficiency of fund in the account of the drawer?
Dishonour of cheques means rejecting to pay a cheque by the banker.
A section under 138 was added to the N-1 Act 1881 in 1994 by Act No. XIX which was amended in 2000 by Act
No. XIII. The provision under this Act runs, Where any cheque drawn by a person on an account maintained by
him with a banker for payment of money to another person from out of that account is returned by the bank
unpaid, either because of the amount of money standing to the credit of that account is insufficient to honor
cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that
bank, such person shall be deemed to have committed an offense and shall without prejudice to any other
provisions of this Act, be punished with imprisonment for a term which may extend to one year, or with fine
which may extend to (twice) the amount of the cheque or with both.
Q.170.
Discuss the proposes, meaning and types of crossing a cheque.

A cheque is said to be crossed when two parallel transverse lines, with or without any words, are drawn on the
left hand top corner of the cheque.
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Q.171.
Distinguish between negotiation and assignment.

The various points of distinction be-tween negotiation and assignment are stated below:
1. Formalities:
Negotiation requires mere delivery of a bearer instrument and endorsement and delivery of an order
instrument to effectuate a transfer. Assignment requires a written document signed by the transferor
irrespective of whether the instrument is a bearer or order one.
2. Notice of transfer:
In the case of assignment a notice of transfer of debt is required to be given by the assignee to the debtor in
order to complete his title. No such notice is required to be given in the case of negotiation.
3. Title:
In the case of negotiation if the transferee takes the negotiable instrument for value and in good faith, i.e., as
holder in due course, he takes it free from all defects in the title of the previous transferors. But in the case of
assignment the assignee takes the instrument subject to the defects in the title of his assignor, even though he
took the assignment for value and in good faith.
4. Consideration:
Consideration is always presumed in the case of transfer by negotiation, whereas there is no such presumption
in the case of transfer by assignment, where the burden of proof of consideration lies upon the assignee.
Q.172.
Who is the holder and who is the holder in due course of a cheque? Discuss the various privileges of a holder
in due course.
The holder of a promissory note, bill of exchange or cheque means the payee or endorsee who is in possession
of it or the bearer thereof but does not include a beneficial owner claiming through a benamidar.
Holder in due course mean any person who for consideration become the possessor of a promissory note, bill
of exchange or cheque, if payable to bearer, or the payee or endorse thereof, if payable to order, before
overdue without notice that the title of the person from whom he derived, his own title was defective.
53A. A holder in due course holds the negotiable instrument free from any defect of title of prior parties, and
free from defences available to prior parties among themselves, and may enforce payment of the instrument
for the full amount thereof against all parties liable thereon.
Q.173.
What is the difference between a general crossing and a special crossing of a cheque?
Q.174.
Discuss the provisions of time for presenting a negotiable instrument.

As per the Negotiable Instrument Act, 1881, the negotiable instrument must be presented within a period of six
months from the date on which it is drawn or within the period of its validity whichever is earlier.
Q.175.
State with reasons whether Bill of Exchange, Bill of Lading, Postal order and Hundis are negotiable
instrument or not?
Q.176.
What are the differences between charter party and bill of lading?
A bill of lading is a document confirming the receipt of the goods to be carried issued to shipper by the carrier,
or the master of the ship or the agent of the carrier.
Syed M Hoq, ACCA
Page 47

The bill of lading possesses some characteristics of negotiable instrument. The title to the goods can be
transferred by endorsement and delivery. But it is not a negotiable instrument for the following reasons:
i) It is not included in the definition of the negotiable instrument.
ii) The transferee gets title of the transferor. It the title of the transferor is defective, the transferee gets a
defective title.
A charter party is a contract between the shipper and the carrier for carriage of goods stating therein the terms
and conditions of carriage.
The contract generally includes the name of the parties, the nationality of the ship, the seaworthiness of the
ship, carrying capacity of the ships excepted perils, lay days, the mode of cancellation, penalties for noncompliance etc.
Q.177.
Why are bill of exchange, promissory notes and cheques called Negotiable Instruments?
Q.178.
What are the basic requirements under sections 138 & 140 of the Negotiable Instruments Act, 1881 against a
dishonoured cheque?
Q.179.
Describe the presentation of bill of exchange with exception.

64. Subject to the provisions of section 76, promissory notes, bills of exchange and cheques must be presented
for payment to the maker, acceptor or drawee thereof respectively, by or on behalf of the holder as hereinafter
provided. In default of such presentment, the other parties thereto are not liable thereon to such holder.
Exception - Where a promissory note is payable on demand and is not payable at a specified place, no
presentment is necessary in order to charge the maker thereof nor is presentment necessary to charge the
acceptor of a bill of exchange.
The provisions of this section are without prejudice to the provisions relating to presentment or acceptance in
the case of a bill of exchange.
131F. A bill of exchange, in order to fix the acceptor with liability, must be presented for acceptance before it is
presented for payment.
131G. Presentment for acceptance is excused, and a bill of exchange may be treated as dishonoured by nonacceptance(a) where the drawee is dead or is insolvent or is a fictitious person or a person not having capacity to contract
by bill of exchange;
(b) where, at the due date for presentment, the drawee cannot, after reasonable search, be found at the place
at which the bill is to be presented;
(c) where, after the exercise of reasonable diligence such, presentment cannot be effected;
(d) where, although the presentment has been irregular, acceptance has been refused on some other ground.
Q.180.
Discuss the rights and liabilities of the different parties to a negotiable instrument.
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Q.181.
What is meant by the acceptance of honour? When is a bill of exchange dishonoured? What should the
holder do when it is dishonoured?
Acceptance of honour:
When a bill of exchange has been noted or protested for non-acceptance or for better security, any person not
being a party already liable thereon may, with the consent of the holder, by writing on the bill, accept the same
for the honour of any party thereto (108).
Dishonoured of Bill of Exchange:
Dishonours are:
1) Dishonour by non-acceptance:
91. A bill of exchange is said to be dishonoured by non-acceptance when the drawee, or one of several drawees
not being partners, makes default in acceptance upon being duly required to accept the bill, or where
presentment is excused and the bill is not accepted. Where the drawee is incompetent to contract, or the
acceptance is qualified, the bill may be treated as dishonoured.
2) Dishonour by non-payment:
92. A promissory note, bill of exchange or cheque is said to be dishonoured by non-payment when the maker of
the note, acceptor of the bill or drawee of the cheque makes default in payment upon being duly required to
pay the same.
117. The compensation payable in case of dishonour of a promissory note, bill of exchange or cheque, by any
party liable to the holder or any indorsee, shall be determined by the following rules:(a) the holder is entitled to the amount due upon the instrument, together with the expenses properly
incurred in presenting, noting and protesting it;
(b) when the person charged resides at a place different from that at which the instrument was payable, the
holder is entitled to receive such sum at the current rate of exchange between the two places;
(c) an indorser who, being liable, has paid the amount due on the same is entitled to the amount so paid with
interest at six per centum per annum from the date of payment until tender or realisation thereof,
together with all expenses caused by the dishonour and payment;
(d) when the person charged and such indorser reside at different places, the indorser is entitled to receive
such sum at the current rate of exchange between the two places;
(e) the party entitled to compensation may draw a bill upon the party liable to compensate him, payable at
sight or on demand, for the amount due to him, together with all expenses properly incurred by him. Such
bill must be accompanied by the instrument dishonoured and the protest thereof (if any). If such bill is
dishonoured, the party dishonouring the same is liable to make compensation thereof in the same manner
as in the case of the original bill.
Q.182.
A sells goods to B. B pays to A through a cheque. Before B could obtain the delivery of goods, his cheque has
been dishonoured by the bank. A therefore refuses to give delivery of the goods until paid. Is As action
justified?
The question should be answered in respect of the rights of unpaid seller. See sale of goods Act for more
information.
Q.183.
What are the causes a cheque may be bounced or dishonoured?

A cheque may be dishonoured due to:
i)
Dishonour by non-acceptance
A bill of exchange is said to be dishonoured by non-acceptance when the drawee or one of several
drawees not being partners, makes default in acceptance upon being duly required to accept the bill
where presentment is executed and the bill is not accepted. Where the drawee is incompetent to contract,
or the acceptance is qualified, the bill may be treated as dishonoured.
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ii)
Q.184.
Dishonour by non-payment
A promissory note, bill of exchange or cheque is said to be dishonoured by non-payment when the maker
of the note, acceptor of the bill or drawee of the cheque makes default in payment upon being duly
required to pay the same.
Distinguish between assignability and negotiability of an instrument.

Meaning of Negotiation: According to Section 14 of the Negotiable Instrument Act, 1881 when a promissorynote, bill of exchange or cheque is transferred to any person so as to constitute that person the holder thereof,
the instrument is said to be negotiated.
A negotiable instrument may be transferred in either of two ways, viz.
1. By negotiation under this Act (Section 14, 46, 47, 48). A negotiable instrument may be negotiated either by
delivery, when it is payable to bearer or by endorsement and delivery when it is payable to order; or
2. By assignment of the instrument: When a person transfers his right to receive the payment of a debt,
'assignment of the debt' lakes place. Thus where the holder of an instrument transfers it to another so as to
confer a right on the transferee to receive the payment of the instrument, transfer by assignment takes
place. (The Negotiable Instruments Act does not deal with transfer of negotiable instruments by
assignment).
Differences between negotiability and assignability:
The following are the differences between Negotiability and Assignability.
1. In negotiation consideration is presumed. In assignment consideration must be proved.
2. In case of transfer by negotiation, the transferee acquires all the rights of a holder in due course; where tile
case of transfer by assignment, the assignee does not acquire the rights of a holder in due course, but has
only the right of his assignor.
3. Notice of transfer to the debtor by the transferee is not necessary. The acceptor of a bill and the maker of a
note are liable on maturity to the holder in due course of the assignment in case of negotiation. In
assignment it does not bind the debtor unless notice of the assignment has been given by the assignee to
the debtor, and the debtor has, expressly or implied, assented to it.
4. In negotiation the instruments payable to bearer are negotiated by mere delivery and instruments payable
to order are negotiated by endorsement and delivery. In an assignment it can be made only in writing
either on the instrument itself or in a separate document transferring to the assignee the transferor's rights
in the instrument.
Q.185.
When do you think a banker i) may refuse or ii) must refuse to pay a cheque?
Q.186.
What are the provisions relating to presentation for acceptance of negotiable instrument?
Presentment for acceptance:
61. A bill of exchange payable after sight must, if no time or place is specified therein for presentment, be
presented to the drawee thereof for acceptance, if he can, after reasonable search, be found, by a person
entitled to demand acceptance, within a reasonable time after it is drawn, and in business hours on a business
day. In default of such presentment, no party thereto is liable thereon to the person making such default.
If the drawee cannot, after reasonable search, be found, the bill is dishonoured.
If the bill is directed to the drawee at a particular place, it must be presented at that place; and if at the due
date for presentment he cannot, after reasonable search, be found there, the bill is dishonoured.
Where authorised by agreement or usage, a presentment through the post office by means of a registered
letter is sufficient.
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Q.187.
Discuss protection to paying banker and collecting banker.

Q.188.
Discuss various kinds of endorsement with reference to qualified endorsement.

Endorsement:
15. When the maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the
purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the
same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to endorse the
same, and is called the endorser
Indorsement in blank and in full Indorsee:
16. (1) If the indorser signs his name only, the indorsement is said to be in blank, and if he adds a direction to
pay the amount mentioned in the instrument to, or to the order of, a specified person, the indorsement is said
to be in full, and the person so specified is called the indorsee of the instrument.
(2) The provisions of this Act relating to a payee shall apply with the necessary modifications to an indorsee.
Effect of indorsement:
50.(1) Subject to the provisions of this Act relating to restrictive, conditional and qualified indorsement, the
indorsement of a negotiable instrument followed by delivery transfers to the indorsee the property therein
with the right of further negotiation.
(2) An indorsement is restrictive which either(a) restricts or excludes the right to further negotiate the instrument; or
(b) constitutes the indorsee an agent of the indorser to indorse the instrument or to receive its contents for
the indorser or for some other specified person:
Provided that the mere absence of words implying right to negotiate does not make
the indorsement restrictive.
Who may negotiate:
51. Every sole maker, drawer, payee or indorsee, or all of several joint makers, drawers, payees or indorsees, of
a negotiable instrument may, if the negotiability of such instrument has not been restricted or excluded as
mentioned in section 50, indorse and negotiate the same.
Explanation - Nothing in this section enables a maker or drawer to indorse or negotiate an instrument, unless
he is in lawful possession or is holder thereof; or enables a payee or indorsee to indorse or negotiate an
instrument, unless he is holder thereof.
Indorser who excludes his own liability or makes it conditional:
52. The indorser of a negotiable instrument may, by express words in the indorsement, exclude his own liability
thereon, or make such liability or the right of the indorsee to receive the amount due thereon depend upon the
happening of a specified event, although such event may never happen.
Where an indorser so excludes his liability and afterwards becomes the holder of the instrument, all
intermediate indorsers are liable to him. Where the right of an indorsee to receive the amount due on the
negotiable instrument is made dependent in the aforesaid manner the condition is valid only as between the
indorser and the indorsee.
Where the indorsement of a negotiable instrument purports to be conditional, the payer may disregard the
condition, and payment to the indorsee is valid whether the condition has been fulfilled or not.
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Q.189.
What is notice of dishonour?

By and to whom notice should be given:
93. When a promissory note, bill of exchange or cheque is dishonoured by non-acceptance or non-payment, the
holder thereof, or some party thereto who remains liable thereon, must give notice that the instrument has
been so dishonoured to all other parties whom the holder seeks to make severally liable thereon, and to some
one of several parties whom he seeks to make jointly liable thereon.
When a bill of exchange is dishonoured by non-acceptance the drawer or any indorser to whom such notice is
not given is discharged; but the rights of a holder in due course subsequent to the omission to give notice shall
not be prejudiced by that omission.
When a bill of exchange is dishonoured by non-acceptance and due notice of dishonour is given, it shall not be
necessary to give notice of a subsequent dishonour by non-payment, unless the bill shall, in the meantime,
have been accepted.
Nothing in this section renders it necessary to give notice to the maker of the dishonoured promissory note or
the drawee or acceptor of the dishonoured bill of exchange or cheque.
Mode in which notice may be given:
94. Notice of dishonour may be given to a duly authorised agent of the person to whom it is required to be
given, or, where he has died, to his legal representative, or, where he has been declared an insolvent, to his
assignee; may be oral or written; may, if written, be sent by post; and may be in any form; but it must inform
the party to whom it is given, either in express terms or by reasonable intendment, that the instrument has
been dishonoured, and in what way, and that he will be held liable thereon; and it must be given within a
reasonable time after dishonour, at the place of business or (in case such party has no place of business) at the
residence of the party for whom it is intended.
When notice of dishonour is unnecessary:
98. No notice of dishonour is necessary(a) when it is dispensed with by the party entitled thereto;
(b) in order to charge the drawer when he has countermanded payment;
(c) when the party charged could not suffer damage for want of notice;
(d) when the party entitled to notice cannot after due search be found; or the party bound to give notice is,
for any other reason, unable without any fault of his own to give it;
(e) to charge the drawers when the acceptor is also a drawer;
(f) in the case of a promissory note which is not negotiable;
(g) when the party entitled to notice, knowing the facts, promises unconditionally to pay the amount due on
the instrument.
Q.190.
How negotiation is affected by ordinary assignment?

Q.191.
When the presentation for acceptance of a bill of exchange is not necessary?

When presentment unnecessary:
76. No presentment for payment is necessary, and the instrument shall be deemed to be dishonoured at the
due date for presentment, in any of the following cases:(a) if the maker, drawee or acceptor intentionally prevents the presentment of the instrument, or, if the
instrument being payable at his place of business, he closes such place on a business day during the usual
business hours, or, if the instrument being payable at some other specified place, neither he nor any
person authorised to pay it attends at such place during the usual business hours, or, if the instrument not
being payable at any specified place, he cannot after due search be found;
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(b)
(c)
(d)
(e)
(f)
(g)
as against any party sought to be charged therewith, if he has engaged to pay notwithstanding nonpresentment;
as against any party if, after maturity, with knowledge that the instrument has not been presented- he
makes a part payment on account of the amount due on the instrument, or promises to pay the amount
due thereon in whole or in part, or otherwise waives his right to take advantage of any default in
presentment for payment;
as against the drawer, if the drawer could not suffer damage from the want of such presentment;
where the drawee is a fictitious person;
as regards an indorser, where the negotiable instrument was made, drawn or accepted for the
accommodation of that indorser and he had reason to expect that the instrument would not be paid if
presented; and
where, after the exercise of reasonable diligence, presentment as required by this Act cannot be effected.
Explanation - The fact that holder has reason to believe that the negotiable instrument will, on presentment, be
dishonoured does not dispense with the necessity for presentment.
Q.192.
What do you understand by clean and qualified bill of lading?

See ICMAB manual page 93.
Q.193.
What are the objectives of the law of bankruptcy?

Out of syllabus question
Q.194.
Distinguish between crossing a cheque with the words i) Not negotiable and ii) Account payee only.
Cheque crossed account- payee:
123A. (1) Where a cheque crossed generally bears across its face an addition of the words account payee
between the two parallel transverse lines constituting the general crossing, the cheque, besides being crossed
generally, is said to be crossed account payee. Cheque crossed account payee
(2) When a cheque is crossed account payee(a) it shall cease to be negotiable; and
(b) it shall be the duty of the banker collecting payment of the cheque to credit the proceeds thereof only
to the account of the payee named in the cheque.
Cheque bearing not negotiable:
130. A person taking a cheque crossed generally or specially, bearing in either case the words not negotiable,
shall not have, and shall not be capable of giving, a better title to the cheque than that which the person from
whom he took it had.
Q.195.
Indicate the importance of delivery in the matter of negotiation.

Delivery:
46. The making, acceptance or indorsement of a promissory note, bill of exchange or cheque is completed by
delivery, actual or constructive.
As between parties standing in immediate relation, delivery to be effectual must be made by the party making,
accepting or indorsing the instrument or by a person authorised by him in that behalf.
As between such parties and any holder of the instrument other than a holder in due course, it may be shown
that the instrument was delivered conditionally or for a special purpose only, and not for the purpose of
transferring absolutely the property therein.
A promissory note, bill of exchange or cheque payable to bearer is negotiable by the delivery thereof.
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A promissory note, bill of exchange or cheque payable to order is negotiable by the holder by indorsement and
delivery thereof.
Q.196.
Once a bearer instrument always a bearer instrument discuss.

A bearer instruments means an instrument, the ownership in which can be transferred from one person to
another by mere delivery of the instrument. The instrument can be made originally payable to the bearer or it
may be made bearer subsequently by holder making a blank indorsement. The bearer character of the
instrument will not be lost ever in those cases where a blank indorsement is followed by a full indorsement.
The instrument continues to be transferable by mere delivery in all such cases. However, under Section-50,
bearer instrument can legally be changed to an order one by a restrictive indorsement. In such a case the
relations between indorser and indorsee are substantially those of principal and agent. The indorsee gets a
right to receive payment of the instrument and to sue and party to the instrument that the indorser could have
sued, but has no power to transfer his right to any other person unless he is expressly authorised to do so.
Q.197.
Consideration in negotiable instruments is presumed Discuss.

118. Until the contrary is proved, the following presumptions shall be made:
(a) that every negotiable instrument was made or drawn for consideration, and that every such instrument,
when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or
transferred for consideration;
(b) that every negotiable instrument bearing a date was made or drawn on such date;
(c) that every accepted bill of exchange was accepted within a reasonable time after its date and before its
maturity;
(d) that every transfer of a negotiable instrument was made before its maturity;
(e) that the indorsements appearing upon a negotiable instrument were made in the order in which they
appear thereon;
(f) that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that the holder of a negotiable instrument is a holder in due course: provided that, where the instrument
has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an
offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or
fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies
upon him.
Q.198.
Distinguish between i) ambiguous instrument and ii) inchoate instrument.

Ambiguous instruments:
17. Where an instrument may be construed either as a promissory note or bill of exchange, the holder may at
his election treat it as either, and the instrument shall be thenceforward treated accordingly.
Inchoate instrument:
20.(1) Where one person signs and delivers to another a paper stamped in accordance with the law relating to
stamp duty chargeable on negotiable instruments, either wholly blank or having written thereon an incomplete
negotiable instrument, in order that it may be made, or completed into a negotiable instrument he thereby
gives prima facie authority to the person who receives that paper to make or complete it, as the case may be,
into a negotiable instrument for the amount, if any, specified therein, or, where no amount is specified for any
amount, not exceeding, in either case, the amount covered by the stamp.
(2) The person so signing shall, subject to the provisions of sub-section (3), be liable upon such instrument, in
the capacity in which he signed the same, to any holder in due course, for the amount specified in the
instrument or filled up therein:
Provided that no person other than a holder in due course shall receive from the person so
signing the paper anything in excess of the amount intended by him to be paid thereunder.
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(3) In order that any such instrument may on completion be enforceable against any person who became a
party thereto before such completion, it must be filled up within a reasonable time and strictly in accordance
with the authority given:
Provided that if any such instrument after completion is negotiated to a holder in due course,
it shall be valid and effectual for all purposes in his hands, and he may enforce it as if it had been
filled up within a reasonable time and strictly in accordance with the authority given.
Q.199.
Who can cross a cheque?

Drawee of the cheque can cross a cheque generally or specially. The holder of a cheque may cross it generally
or specially, if it is uncrossed or may cross it specially if it is crossed generally or may add the words not
negotiable in case of both the types of crossing. A holder, however, cannot convert special crossing into
general crossing, because such alteration is a material alternation and needs confirmation by the drawer. The
bank to whom the cheque is crossed specially may again cross it specially to another bank who acts as his agent
for collection.
Q.200.
Discuss the provision of law for crossing a cheque after issue.

Crossing after issue:
125. Where a cheque is uncrossed, the holder may cross it generally or specially.
Crossing after issue
Where a cheque is crossed generally, the holder may cross it specially.
Where a cheque is crossed generally or specially, the holder may add the words "not negotiable".
Where a cheque is crossed specially, the banker to whom it is crossed may again cross it specially to
another banker, his agent, for collection.
When an uncrossed cheque, or a cheque crossed generally, is sent to a banker for collection, he may
cross it specially to himself.
Q.201.
Write short note on forged instruments.

"Forged instrument" means a written instrument which has been falsely made, completed or altered.
Q.202.
Under what circumstances a suit may be brought against the issuer of a cheque when the cheque has been
dishonoured by a bank for insufficiency of fund in the respective account.
Notwithstanding anything contained in sub- section (1) and (2), the holder of the cheque shall retain his right to
establish his claim through civil Court if whole or any part of the value of the cheque remains unrealized
{Section 138 (3)}.
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LAW OF AGENCY (CONTRACT ACT 1872)

Q.203.
What is agency? How an agency is created?

If a person has the capacity to create contractual relationship between the principal and a third party thereby
binding the principal by his acts, an agency is said to exist.
Agency may be created in different ways as discussed here under:
Q.204.
i)
Agency by express authority

An agency may be created by express authority in words spoken or written. The usual course is that such
express authority is documented by appointing agents through power of attorney or stamped deeds
specifying the terms and conditions between the principal and the agent.
ii)
Agency by implied authority

The agencies which are understood by the conduct and behaviour of the parties are called implied
agencies.
iii)
Agency by estoppels
When a person by his words or behaviour induces others to believe that a certain person is working as his
agent, he is subsequently stopped or prevented from denying the truth of agency.
iv)
Agency by holding out

Agency by holding out is almost similar to that of agency by estoppels. Such agency arises when a person
by his past activity leading to believe that someone was acting in the affairs of the business on his behalf.
v)
Agency by necessity
Where there was an actual and definite necessity on behalf of the principal and it is impossible to
communicate with the principal to obtain his consent. The act must have been done in the best interest of
the principal.
vi)
Agency by ratification
When a person on whose behalf some acts have been done without his knowledge and authority,
subsequently accepts the acts expressly or impliedly, it is said to be ratifies and agency thus is created by
ratification.
vii)
Agency by operation of law:

Agency by operation of law is said to be created where the laws treats one person as an agent of another.
State in brief the different kinds of agents.

There are different classes of agents which are discussed below:
i)
Broker
A broker is one who brings buyers/sellers to contract with each other. His duties draw an end when parties
are brought together. The contract is executed by the buyers and sellers direct. The broker does not keep
the goods or property of the principal in his possession.
ii)
Factor
A factor is a mercantile agent under whose custody goods are kept for sale. He possesses the authority to
execute contract for sale with the third party. He has a general lien even the goods for money due to him
as agent.
Commission agent
A commission agent secures buyers for a seller of goods for commission on the good sold. The commission
agent may have possession of goods or not. His position is similar to that of a broker.
iii)
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Q.205.
iv)
Auctioneer
An auctioneer is one who is authorized to sell the goods of his principal by auction. He has a particular lien
over the goods for his remuneration.
v)
Del credre agent

A del credre agent is one who, for extra commission guarantees the performance of the contract by the
other party. If the other party fails to pay the price or otherwise cause damage to the principal, the del
credre agent compensate the principal.
vi)
General agent and particular agent

A general agent is one who represents the principal in matters concerning a particular business. A
particular agent is one who is appointed for a particular purpose. Factors and commission agents are
usually general agents.
Is consideration necessary for creating agency? State the difference between sub-agent and co-agent.
No consideration is necessary to create an agency. It is an exception to the general rule that no contract is valid
unless there is a consideration for it.
A sub-agent is a person employed by and acting under control of the original agent in the business of agency.
(Section 191)
A co-agent is a person appointed by the agent according to the express or implied authority of the principal to
act on behalf of the principal in business of the agency. Such a person is an agent of the principal and
responsible to him.
Q.206.
Can an agent delegate authority? What are the exceptions where an agent can delegate authority?
The general rule is that an agent cannot appoint an agent (Delegatus non Potest delegare). Section 190 of the
Act states, An agent cannot lawfully employ another to perform acts which he has expressly or impliedly
undertaken to perform personally.
But there are some exceptions:
i) When it is permitted by custom of the trade e.g. Articled clerks employed by Chartered Accountants.
ii) Where the nature of the agency requires delegation.
iii) Where the principal permits delegation.
iv) Where the principal knows the intention of the agent to delegate but does not object.
v) Where an agency requires delegation.
vi) Where the duties of the agent do not require any personalized skill, confidence or discretion and the work
involved is of routine nature.
Q.207.
What is substituted agent? State the rights of an agent.

A substituted agent is a person who is nominated by the agent having express or implied authority to nominate
so to act for the principal in the business of the agency. Such person is not a sub-agent but the agent of the
principal for performing that part of the work entrusted to him.
Rights of agent:
Rights of agent are discussed below:
i) Right of retainer
An agent has the right to retain out of any sum received on account of the principal in the business of the
agency, all money due to himself in respect of the following:
a) Advance made by him
b) Expenses properly incurred by him in conducting business of the agency
c) Such remuneration as may be payable to him for acting as an agent.
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Q.208.
ii)
Right to receive remuneration

The agent has the right to have contracted remuneration as per custom of the trade.
iii)
Right of lien
In the absence of any contract to the contrary, an agent has the right to retain goods, papers or properties
of the principal under his custody till his dues are paid or accounted for him.
iv)
Right to be indemnified against consequence of lawful acts

The principal of an agent is liable to indemnify him against the consequence of any lawful action done by
him under authority of the principal.
v)
Right to be indemnified against consequence of acts done in good faith (Sec 223)
Where one person employs another to do an act and the person so employed does the act in good faith,
the employer is liable to indemnify agent for the consequence of doing so.
vi)
Right to receive compensation for injury caused by principals neglect (Sec 225)
The principal must compensate the agent for any loss caused to the agent for principals neglect.
State the duties of an agent.

The duties of an agent are given below:
i) Duty to act according to the directions or customs of trade (Section 211)
An agent is bound to act according to the directions of the principal or the customs of the trade.
ii)
Duty to act with reasonable care and skill (Section 212)

The agent is bound to act with reasonable care and skill.
iii)
Duty to render accounts (Section 213)

An agent is bound to render proper accounts to the principal on demand.
iv)
Duty to communicate with principal (Section 214)

An agent is bound to make reasonable communication with the principal to obtain necessary instructions.
v)
Duty to disclose all material circumstances and to obtain principals consent in personal dealings (Section
215, 216)
An agent is bound to disclose all material facts which have come to his knowledge on the subject and
obtain consent of the principal on any personal dealings.
vi)
Duty to pay sum received for principal (Section 218)

The agent is bound to pay all sum to the principal received on account of the principal. He, however, may
retain sum due to him on account of advance made or expenses incurred in the conduct of the business.
vii)
Duty to protect and preserve the interest of the Principal (Section 209)
Where the agency is terminated because of death of the principal or the principal becoming unsound, the
agent is bound to take all reasonable steps to protect the interest of the late principal.
viii) Duty not to delegate authority (Section 190)

The agent must not delegate the authority which he personally undertaken to execute unless custom of
the trade or circumstances so necessitate.
Q.209.
What is irrevocable agency? State the circumstances under which an agency cannot be revoked.
The agencies that cannot be revoked by the principal are irrevocable agency. The circumstances under which
the agency cannot be revoked are discussed below:
i)
Where the agency is coupled with interest (Section 202)

The agency created with the object of securing some benefit to the agent in addition to his remuneration,
such agency is termed as agency coupled with interest. The agencies under the following circumstances
cannot be termed as agency coupled with interest:
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a) Where the interest of the agent arises after the creation of the agency.
b) Where the agency secures a benefit to the agent incidentally though the agency was not created for
this purpose.
Q.210.
ii)
Where the agent has partly exercised his authority

The principal cannot revoke the authority where the agent has partly exercised the authority.
iii)
Where the agent has incurred a personal liability

The principal cannot revoke the authority of the agent where in exercise of the authority, the agent
already incurred some personal liability.
What do you mean by an agency coupled with interest?

The agency created with the object of securing some benefit to the agent in addition to his remuneration, such
agency is termed as agency coupled with interest. The agencies under the following circumstances cannot be
termed as agency coupled with interest:
a) Where the interest of the agent arises after the creation of the agency.
b) Where the agency secures a benefit to the agent incidentally though the agency was not created for this
purpose.
c) Where the agent himself has an interest in the property which forms the subject matter of the agency. The
agency cannot, in the absence of express contract, be terminated to the prejudice of such interest.
Q.211.
Write short note on Del Credere Agent.

A del credre agent is one who, for extra commission guarantees the performance of the contract by the other
party. If the other party fails to pay the price or otherwise cause damage to the principal, the del credre agent
compensate the principal.
Q.212.
Define principle and agent as per the provision of the Law of Contract. What happen when the agent exceeds
his authority?
When a person is not able to do everything by himself, he may delegate some of the functions to be done to
some other persons. Such other person is called an agent and person appointing such agent is called the
principal.
As per section 182, an agent is a person employed to do any act for another to represent another in dealing
with third person. Thus an agent establishes a contract between such another person and the third person.
Q.213.
What are the essential contents of an agency agreement?

Q.214.
Under what circumstances an agency may be terminated.

Termination of agency may be made by acts of the parties or by operation of law. These are discussed below:
i)
Termination of agency by acts of parties:

Termination by acts of parties may be made in the following manner:
a) By mutual agreement
An agency may be terminated by mutual agreement of the principal and the agent.
b) By revocation of authority by the principal
The agency may be terminated if the principal revokes the authority. But such revocation must be
made before exercising the authority by the agent hereby binding the principal.
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c) By renunciation of the agency by the agent
The agency may be terminated if the agent himself renounces the business of the agency.
ii)
Termination of agency by operation of law:

The termination of the agency by operation of law may be made in the following manner:
a) On completion of the business of the agency (Section 201)
An agency is automatically terminated when the contracted business of the agency is completed.
b) On death/or in becoming of unsound mind of principal/Agent (Section 201)
The agency is automatically terminated when the principal or agent dies or become of unsound mind.
c) On insolvency of the principal (Section 207)
On the principal becoming insolvent, the agency is automatically terminated because an insolvent
person cannot make contract.
d) On expiry of fixed period
On expiry of the fixed period, the agency is automatically terminated thought the business is not
complete.
e) On destruction of the subject matter
The agency is automatically terminated when the subject matter of the contract cease to exist.
f)
On winding up of company
The agency is terminated automatically when the principal or the agent is a company and the
company is wound up.
g) On principal becoming an alien enemy

An agency is terminated when the principal and the agent are of two different countries and a war
broke out between these two countries.
Q.215.
State the agency relationship between husband and wife.

The general rule is that the wife is not the agent of her husband and the husband is not he agent of his wife. But
one of them may be agent of the other by express appointment, by holding out, by ratification or because of
necessity. The question as to what extent the wife can pledge her husbands credit are discussed below:
a) Where wife lies with her husband
There is a legal presumption that a wife has authority to pledge her husbands credit for necessaries. But
the legal presumption can be rebutted in the following cases:
i) Where the goods purchased on credit are not necessaries
ii) Where the wife is given sufficient money for purchasing necessaries
iii) Where the wife in forbidden for purchasing anything on credit or contracting debt.
iv) Where the trader has been expressly warned not to give credit to his wife.
b) Where the wife lives apart for no fault on her part
A wife has authority to pledge her husbands credit for necessaries. This legal presumption can be rebutted
only in case (i) & (ii) above and not in case (iii) & (iv).
c) Where the wife lives apart for no fault on her husbands part
A wife has no authority to pledge her husbands credit for necessaries.
Q.216.
What are the essentials of relationship of agency?

Q.217.
He who does through another, does by himself explain this statement according to the law of agency.
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This means that the acts of the agent is the act of the principal.
Q.218.
Distinguish between agency by ratification and agency by ostensible authority.

Q.219.
As per the law how the relationship of principle and agent be created?
THE CARRIAGE OF AIR ACT 1934

Q.220.
Write short notes on i) Warsaw convention, ii) Hague protocol, iii) Passenger Ticket and iv) Luggage Ticket.
Warsaw Convention:
It refers to the international conference held in 1929 in Warsaw wherein the delegates/representatives of the
attending States drafted a uniform convention to regulate the international carriage by air. This convention was
given effect in the sub-continent by carriage of Air Act 1934 which has been adopted in Bangladesh.
Hague Protocol:
A diplomatic conference under the auspices of international civil aviation organization was held at Hogue in
September, 1955 which adopted a protocol to amend the protocol of the Warsaw Convention.
Passenger Ticket:
3. (l) For the carriage of passengers the carrier must deliver a passenger ticket which shall contain the following
particulars;
(a) the place and the date of issue;
(b) the place of departure, and of destination;
(c) the agreed stopping places provided, that the carrier may reserve the right to alter the stopping places in
case of necessity, and that if he exercises that right, the alteration, shall not have the effect of depriving
the carriage of its international character;
(d) the name and address of carrier or carriers;
(e) a statement that the carriage is subjects to the rules relating to liability contained in this Schedule.
(2)The absence, irregularity or loss of the passenger ticket does not affect the existence or the validity of the
contract of carriage, which shall none the less be subject to these rules. Nevertheless, if the carrier accepts a
passenger without a passenger ticket having been delivered he shall not be entitled to avail himself of those
provisions of this Schedule which exclude or limit his liability.
Luggage Ticket
4. (I) For the carriage of luggage, other than small personal objects of which the passenger takes charge himself;
the carrier must deliver a luggage ticket
(2) The luggage ticket shall be made out in duplicate, one part for the passenger and the other part for the
carrier.
(3) The luggage ticket shall contain following particulars: (a) the place and the date of issue;
(b) the place of departure and of destination;
(c) the name and the address of the carrier or carriers;
(d) the number of the passenger ticket;
(e) a statement that delivery of the luggage will be made to the bearer of the luggage ticket;
(f) the member and weight of the packages;
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(g) the amount of the value declared in accordance with rule 22 (2);
(h) a statement that the carriage is subject to the rules relating to liability contained in the Schedule.
(4) The absence, irregularity or loss of the luggage ticket does nor (does not) effect the existence or the validity
of the contract of carriage, which shall none the less be subject to these rules. Nevertheless, if the carrier
accepts luggage without a luggage ticket having been delivered, or if the luggage ticket does not contain the
particulars set out at (d), (f) and (h) of sub-rule (3), the carrier shall not be entitled to avail himself of those
provisions of this Schedule which exclude or limit his liability.
Q.221.
What is an air consignment note? What are its contents?

5.-(1) Every carrier of goods has the right to require the consignor to make out and hand over to him a
document called an air consignment note; every consignor has the right to require the carrier to accept the
document.
(2) The absence, irregularity or loss of this document dose(does) not affect the existence or the validity of the
contract of carriage which shall, subject to the provisions of rule 9, be none the less governed by these rules.
6.- (1) The air consignment note shall be made out by the consignor in three original parts and be handed over
with the goods.
(2) The first part shall be marked for the carrier; and shall be signed by the consignor. The second part shall
be marked for the consignee; it shall be signed by the consignor and by the carrier and shall accompany the
goods. The third part shall be signed by the carrier and handed by him to the consignor after the goods have
been accepted.
(3) The carrier shall sign an acceptance of the goods.
(4) The signature of the carrier may be stamped: that of the consignor may be printed or stamped.
(5) If, at the request of the consignor, the carrier makes out the air consignment note, he shall be deemed,
subject to proof to the contrary to have done so on behalf of the consignor.
8. The air consignment note shall contain the following particulars:
(a) the place and the date of its execution;
(b) the place of departure and of destination;
(c) the agreed stopping places, provided that the carrier may reserve the right to alter the stopping places in
case of necessity, and that if he exercise that right the alteration shall not have the effect of depriving the
carriage of international character;
(d) the name and address of the consignor;
(e) the name and address of the first carrier;
(f) the name and address of the consignee, if the case so requires
(g) the nature of the goods;
(h) the number of the packages, the method of packing and the particular marks or number upon them;
(i) the weight, the quantity and the volume or dimensions of the goods;
(j) the apparent condition of the goods and of the packing;
(k) the freight, if it has been agreed upon, the date and place of payment and the person who is to pay it;
(l) if the goods are sent for payment on delivery, the price of the goods and, if the case so requires, the
amount of the expenses incurred;
(m) the amount of the value declared in accordance with rule 22(2);
(n) the number of parts of the air consignment note;
(o) the documents handed to the carrier to accompany the air consignment note;
(p) the time fixed for the completion of the carriage and a brief note of the route to be followed ; if these
matters have been agreed upon;
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(q) a statement that the carriage is subject to the rules relating to liability contained in this Schedule.
THE CARRIERS ACT 1865

Q.222.
Who are common carriers? What are the characteristics of a common carrier?
A common carrier is a person other than a government who is engaged in the business of transportation of
property from place to place by land or inland navigation without discrimination for consideration known as
fare.
The characteristics of a common carrier are:
i)
ii)
iii)
iv)
v)
Q.223.
It may be a firm, and individual or a company. Government is excluded from this category. The postal
department is not a common carrier though it carries parcels, letters etc. from place to place as it is
regulated by Post Office Act.
Only carriers of goods are included in the definition and carriers of passengers are not included.
A common carrier carries goods on hire regularly. Occasional carriers are not common carriers. The
carrying of goods free of charge is not also come under purview of common carrier.
A common carrier carries goods on any person without any discrimination.
Common carrying by a common carrier includes only carriage by land and over inland waterways.
State the circumstances under which a common carrier can refuse to carry the goods.
A common carrier can refuse to carry goods under the following circumstances:
i) If the customer is not willing to pay prescribed charges for carriage.
ii) If there is no accommodation for carriage.
iii) If the goods are dangerous or of a type which the carrier is not accustomed to carry.
iv) If the carrier is not familiar with the route of the destination of carriage.
Q.224.
State the rights and duties/obligations of a common carrier.

Duties of a common carrier:
i) Carry of goods without discrimination
He must carry goods without any discrimination if there is available accommodation, if the consignor
agrees to pay reasonable charges, if the goods are not of dangerous nature and the route is not unfamiliar
for routine carriage.
ii)
Delivery at reasonable time and appropriate place

The carrier must deliver the goods at the contracted place within agreed or reasonable time.
iii)
Carrying with safety

The goods must be carried with utmost precaution for safety over usual and ordinary route.
iv)
Indemnifying the loss

According to English common law the carrier of the goods is an insurer i.e. he is bound to indemnify the
owner for loss or damage to the goods in course of carriage. However, damages by act of good like storm,
earth quake, damages by enemies at the time of war, damages due to inherent defect of the goods or
negligence of consignor, special agreement limiting the liability and damages after arrival of goods at
destination are excepted.
v)
Deviation in prescribed rules/charges

The carrier must not deviate from the prescribed rules or charges unless special circumstances necessitate.
Rights of a common carrier:

i) Circumstances when not bound to carry
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A common carrier is not bound to carry goods when there is not available space, when the goods are of
dangerous nature, when the carrier is accustomed to carry such goods and when the routes for carriage is
not an ordinary one.
Q.225.
ii)
Entitlement of reasonable charge

He is entitled to get reasonable charge for the carriage. He may, however, allow concessional rate from
some customers but cannot charge unreasonably high payment from any customer.
iii)
Lien on goods
He has lien over goods for recovering of his charge for the carriage. He can refuse to delivery of goods until
his dues are paid. This is called carriers lien.
iv)
Steps in case of refusal to take delivery

If the consignee refuses to take the delivery of the goods, the carrier can take such steps as considered
reasonable and prudent. He can recover all charges in connection with carriage from the party with whom
the contract of carriage was made.
v)
Recovery of damage from consignor for goods of dangerous nature

If the goods carried are of dangerous nature and so packed which inflicted loss to the carrier, the carrier
may recover losses from the consignor.
vi)
Exemption
The carrier can make contract with the consignor limiting his liability.
Differentiate between common carrier and a private carrier.

fare.
A private carrier is one who does not do regular business as a carrier but occasionally carries goods for money.
Q.226.
What is the difference between gratuitous carrier and a common carrier?

fare.
A gratuitous carrier is one who carries goods without any charge.
Q.227.
Under what circumstances a person is liable as a common carrier?

8. Notwithstanding anything hereinbefore contained, every common carrier shall be liable to the owner for loss
of or damage to any property delivered to such carrier to be carried where such loss or damage shall have
arisen from the criminal act of the carrier or any of his agents or servants and shall also be liable to the owner
for loss or damage to any such property other than property to which the provisions of section 3 apply and in
respect of which the declaration required by that section has not been made, where such loss or damage has
arisen from the negligence of the carrier or any of his agents or servants.
Q.228.
To what extent does Bangladesh Railway discharges the duties of a common carrier?
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THE CARRIAGE OF GOODS BY SEA ACT 1925

Q.229.
What is a charter party? What are the usual terms of a charter party?
A charter party is a contract between the shipper and the carrier for carriage of goods stating therein the terms
and conditions of carriage.
The contract generally includes the name of the parties, the nationality of the ship, the seaworthiness of the
ship, carrying capacity of the ships excepted perils, lay days, the mode of cancellation, penalties for noncompliance etc.
Q.230.
What is bill of lading? Is it a negotiable instrument? What are its characteristics?

A bill of lading is a document confirming the receipt of the goods to be carried issued to shipper by the carrier,
or the master of the ship or the agent of the carrier.
The bill of lading possesses some characteristics of negotiable instrument. The title to the goods can be
transferred by endorsement and delivery. But it is not a negotiable instrument for the following reasons:
iii) It is not included in the definition of the negotiable instrument.
iv) The transferee gets title of the transferor. It the title of the transferor is defective, the transferee gets a
defective title.
The characteristics of bill of lading are as follows:
i) Signature
It is signed by ship owner or its agent. Usually, the master of the ship or the agent of the ship owner signs
it.
Q.231.
ii)
Evidence
It is an evidence of the goods received by the ship owner for carriage.
iii)
Description of goods
It contains the description of goods as prescribed by carriage of goods Act 1925.
iv)
Acknowledgement
The bill of lading is a prima-facie evidence of the goods received by the ship owner.
v)
Document of title
The bill of lading is a document of the goods covered by the bill.
What is the difference between a charter party and a bill of lading?

See question # Q.229 & Q.230
Q.232.
What are the main differences between noting and protest and what are the contents of protest?
Noting:
Section 99 of Negotiable Instruments Act, 1881: When a promissory note or bill of exchange has been
dishonoured by non-acceptance or non-payment, the holder may cause such dishonour to be noted by a notary
public upon the instrument, or upon a paper attached thereto, or partly upon each.
Such note must be made within a reasonable time after dishonour, and must specify the date of dishonour, the
reason, if any, assigned for such dishonour, or, if the instrument has not been expressly dishonoured, the
reason why the holder treats it as dishonoured, and the notary's charges.
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Protest:
Section 100 of Negotiable Instruments Act, 1881: When a promissory note or bill of exchange has been
dishonoured by non-acceptance or non-payment, the holder may, within a reasonable time, cause such
dishonour to be noted and certified by a notary public. Such certificate is called a protest.
Contents of protest:
101. A protest under section 100 must contain(a) either the instrument itself, or a literal transcript of the instrument and of everything written or printed
thereupon;
(b) the name of the person for whom and against whom the instrument has been protested;
(c) a statement that payment or acceptance, or better security, as the case may be, has been demanded of
such person by the notary public; the terms of his answer, if any, or a statement that he gave no answer or
that he could not be found;
(d) when the note or bill has been dishonoured, the place and time of dishonour, and, when better security
has been refused, the place and time of refusal;
(e) the subscription of the notary public making the protest;
(f) in the event of an acceptance for honour or of a payment for honour, the name of the person by whom, of
the person for whom, and the manner in which, such acceptance or payment was offered and effected.
A notary public may make the demand mentioned in clause (c) of this section either in person or by his clerk or,
where authorised by agreement or usage, by registered letter.
Notice of protest:
102. When a promissory note or bill of exchange is required by law to be protested, notice of such protest must
be given instead of notice of dishonour, in the same manner and subject to the same conditions; but the notice
may be given by the notary public who makes the protest.
Protest for better security:
When the acceptor of a bill of exchange has become insolvent, or his credit has been publicly impeached,
before the maturity of the bill, the holder may, within a reasonable time, cause a notary public to demand
better security of the acceptor, and on its being refused may, within a reasonable time, cause such facts to be
noted and certified as aforesaid. Such certificate is called a protest for better security.
Protest for non-payment after dishonour by non-acceptance:
103. All bills of exchange drawn payable at some other place than the place mentioned as the residence of the
drawee, and which are dishonoured by non-acceptance, may, without further presentment to the drawee, be
protested for non-payment in the place specified for payment, unless paid before or at maturity.
Protest of foreign bills:
104. Foreign bills of exchange must be protested for dishonour when such protest is required by the law of the
place where they are drawn.
When noting equivalent to protest:
104A. For the purposes of this Act, where a bill or note is required to be protested within a specified time or
before some further proceeding is taken, it is sufficient that the bill has been noted for protest before the
expiration of the specified time or the taking of the proceeding; and the formal protest may be extended at any
time thereafter as of the date of the noting.
Q.233.
Describe the duties and liabilities of a carrier by sea. What are the immunities of a carrier by sea?
See Article III & IV of the Act.
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Q.234.
What is a contract affreightment? What are the differences between charter by demise and without demise?
It is a binding agreement which sets forth the obligations and rights of the owner of a vessel (aircraft or ship)
and a merchant. The vessel owner undertakes to provide cargo-space (at a specified time and for a specified
freight) to the merchant who is liable for payment whether or not the cargo is ready for shipment. This contract
addresses issues associated specifically with a vessel, its crew, and the routes on which it will be plied.
Q.235.
Distinguish between i) pledge, ii) Bailment, and iii) Hypothecation

Bailment:
148. A "bailment" is the delivery of goods by one person to another for some purpose, upon a contract that
they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions
of the person delivering them. The person delivering the goods is called the "bailor". The person to whom they
are delivered is called the "bailee".
Pledge:
172. The bailment of goods as security for payment of a debt or performance of a promise is called "pledge".
The bailor is in this case called the "pawnor". The bailee is called the "pawnee".
Hypothecation:
Hypothecation is a form of transfer of property in goods. Hypothecation agreement is a document by
which legal property in goods passes to the person who lends money on them, but the possession does not
pass. This form of transfer is not regulated in Bangladesh.
Q.236.
Write short notes on

i) Mates receipt
It is a receipt issued by the mate, an officer under captain confirming primary receipt of the goods for
carriage. This is subsequently exchanged by regular bill of lading.
ii)
Clean bill of lading

The bill of lading stating that the goods are in good order and conditions, this is called a clean bill of lading.
iii)
Perils of sea
The term includes the dangers which have to be faced on course of voyage by sea such as storm, collision
with sunken rock etc.
iv)
Barratry
Barratry means wilful act of damages done by the crew in course of a mutiny or fight with the captian or
the ship owner or among themselves.
v)
Jettison
Jettison means to through out goods. Goods may be jettisoned during a voyage in order to avoid the
danger of the ship sinking or heeling during storm. Goods may also be jettisoned if they are of dangerous
in nature.
vi)
Primage
It is an extra remuneration to the captain in addition to freight for care and diligence.
vii) Particular average

Goods may be lost in course of a voyage by accident or by deliberate intent. In some cases loss has to be
borne by the owner of the goods lost. This type of loss is called a particular average loss.
viii) General average
In some cases the loss of the owner has to be made up by contributions from the owners of the remaining
cargo. This type of loss is called a general average loss.
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ix)
Bottomry bond
A bond by which the ship and the freight are pledged for the repayment is called a bottomry bond.
x)
Respondent bond
The ship owner or the captain of a ship may find it necessary to borrow money on the security of the ship
or the cargo or the freight. A bond by which the cargo only is pledged for the repayment of the money is
called respondent bond.
The money due on a bottomry and respondentia bond are payable only if the ship reaches the destination
safely.
xi)
Escrow
A bill delivered conditionally is called escrow. A bill may be endorsed or delivered to a person subject to
the understanding that it will be payable only if certain conditions are fulfilled.
In case of an escrow, there is no liability to pay unless the conditions agreed upon are fulfilled. But the
rights of a holder in due course are not affected.
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INDUSTRIAL LAW
BANGLADESH LABOUR ACT 2006
Q.237.
Give a brief history over the Industrial/Labour Law in Bangladesh.

See manual page # 101 & 102.
Q.238.
What do you mean by:

i) Retirement
It means normal termination of employment of a worker on attaining the age of 57 years. Provided that
retirement shall also include voluntary retirement from service on completion of 25 years of service in any
establishment.
ii)
Retrenchment
It means the termination by the employer of services of workers, not as a matter of punishment but on the
ground of redundancy.
iii)
Discharge
It means the termination of services of a worker by the employer for reasons of physical or mental
incapacity or continued ill health of a worker.
iv)
Dismissal
It means the termination of services of a worker by the employer for misconduct.
v)
Termination
vi)
Lay off
It means the failure, refusal or inability of an employer on account of shortage of coal, power or raw
material or accumulation of stock or the break-down of machinery to give employment of a worker.
vii) Go slow
It means an organized, deliberate and purposeful slowing down of normal output of a work by a body of
workers in concerted manner and which is not due to any mechanical defect, breakdown of machinery,
failure or defect in power supply or in the supply of normal material and spare parts of machinery.
viii) Strike
It means cessation of work by a body of persons employed in any establishment acting in combination or
concerted refusal or refusal under a common understanding of any number of persons who are or have
been so employed to continue to work or to accept employment.
ix)
Lock out
It means the closing of a place of employment or part of such place or the suspension, wholly or partly of
work by an employer, or refusal, absolute or conditional by an employer to continue to employ any
number of workers employed by him, where such closing, suspension or refusal occurs in connection with
the industrial dispute or is intended for the purpose of compelling workers employed to accept certain
terms and conditions of or affecting employment.
x)
Factory
It means any premises including the precincts thereof where on five or more workers ordinarily work on
any day of the year and in part of which a manufactory process is being carried on, but does not include a
mine.
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xi)
Workshop
Workshop means any premise including the precincts thereof, wherein any industrial process is carried on.
xii) Shop
It means any premise used wholly or in part for the whole sale or retail sale of commodities or articles
either for cash or credit or where services are rendered to customers and includes an office, store room,
godown, warehouse, or work place whether in the same premise or elsewhere, mainly used in connection
with such trade or business and such other premises as the govt. may by notification in the official gazette
declared to a shop under this Act.
xiii) Worker
It means any person including an apprentice employed in any establishment or industry, either directly or
through a contractor, to do any skilled, unskilled, manual, technical, trade promotional, or clerical work for
hire or reward, whether the terms of employment be expresses or implied but does not include a person
employed mainly in a managerial or administrative capacity.
xiv) Adult
It means a person who has completed eighteenth years of age.
xv)
Adolescent
It means a person who has completed his fourteenth year but has not completed eighteenth year of age.
xvi) Child
It means a person who has not completed his fourteenth years of age.
xvii) Young person
Q.239.
Discuss the different types of workers.

Workers employed in an establishment shall be classified in any of the following classes according to the nature
and condition of work (Section 4).
i) Apprentice
A worker shall be called an apprentice if he is employed in an establishment as a learner and is paid an
allowance during the period of his training.
ii)
Badli
A worker shall be called a badli if he is employed in an establishment in the post of a permanent worker or
a probationer during the period who is temporarily absent.
iii)
Casual
A worker shall be called a casual if his employment in an establishment is of casual nature.
iv)
Temporary
A worker shall be called a temporary worker if he is employed in an establishment for work which is
essentially of temporary nature, and likely to be finished within a limited period.
v)
Probationer
A worker shall be called a probationer if he is provisionally employed in an establishment to fill a
permanent vacancy in a post and has not completed the period of his probation.
vi)
Permanent
A worker shall be called a permanent worker if he is employed in an establishment on a permanent basis
and he has satisfactorily completed the period of his probation in the establishment.
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Q.240.
Narrate the provision of Bangladesh Labour Act 2006 on:

i) Letter of appointment
No employer shall employ any worker without giving such worker a letter of appointment and every such
employed worker shall be provided with an identity card with photograph (Section 5).
ii)
Service book
As per section 6 of BLA 2006,
1) Every employer shall at his own cost, provide a service book for every worker employed by him.
2) Such service book shall be kept under the custody of the employer.
3) Before employing a worker, the employer shall require from him the previous service book if the
worker claims that he has been previously in employment under any other employer.
4) If such worker has any service book, it shall be handed over to the new employer by him and shall be
kept in the custody of the employer, for which a receipt shall be given to him.
5) If such worker has no service book, a service book shall be provided under sub-section (1).
6) If the worker desires to keep and maintain a duplicate copy of his service book, he may do it on his
own cost.
7) The employer shall handover the service book to the worker on the termination of the workers
service with him.
8) If the service book handed over to the worker or the duplicate thereof maintained by him is lost by
the worker, the employer shall provide him with a duplicate service book at the cost of the worker.
9) Nothing in this section shall apply to an apprentice, badli or casual worker.
Form of service book Section 7
1) The service book shall be of such size and in such form as may be prescribed and a photograph of the
worker shall be affixed to it.
2) The service book shall contain the following particulars, namely;
a) Name of the worker, name of mother and father and address of the worker (in appropriate case
name of husband/wife shall be written).
b) Date of birth
c) Particulars necessary for identification
d) Name and address of the employer under whom previously employed, if any
e) Period of employment
f) Occupation or designation
g) Wages and allowance, if any
h) Leave availed and
i) Conduct of the worker.
Entries in the service book Section 8
The employer shall at the commencement of the employment, and during continuance of the same, make
such entries therein from time to time as are required by chapter-II and the Rules and both the employer
and the worker shall sign the entries as they are made.
iii)
Register of workers
As per Section 9 of BLA, 2006
1) The employer of every establishment shall maintain a register of workers to be available to the
Inspector at all time during working hours.
2) The register of workers shall contain the following:
a) Name and date of birth of each worker in the establishment
b) Date of appointment
c) The nature of his work
d) Period of work fixed for him
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e)
f)
g)
h)
iv)
The intervals for rest to which he is entitled

The group, if any, in which he is included
Where his group works on shifts, the shift he relates to
Such other particulars as may be prescribed by rules.
Procedure for obtaining leave

As per Section 10 of BLA, 2006
1) A worker who desires to obtain leave of absence shall apply to the employer for the same in writing
stating his leave address therein.
2)
The employer or his authorized officer shall issue orders on the application within 7 days of the
application or two days prior to commencement of leave applied for whichever is earlier;
Provided that, if, due to urgent reasons the leave applied for is to commence in the date of
application or within 3 days thereof, the order shall be given on the same day.
Q.241.
3)
If the leave asked for is granted, a leave pass shall be issued to the worker.
4)
If the leave asked for is refused or postponed, the fact of such refusal or postponement, and the
reason thereof shall be communicated to the worker before that date on which the leave was
expected to be commenced and shall be recorded in the register to be maintained by the employer
for the purpose.
5)
If the worker, after commencing of leave desires an extension thereof, he shall, if such leave is due to
him, apply sufficiently in advance before the expiry of the leave to the employer who shall, as far as
practicable send a written reply either granting or refusing extension of leave.
State the circumstances under which an employer may order stoppage of work. What are the provision in the
Act for regulating the attendance and payment of wages in case of such stoppage?
The employer may, at any time, in the event of fire, catastrophe, breakdown of machinery, or stoppage of
power supply, epidemics, civil commotion or any other cause beyond his control, stop any section, or section of
the establishment, wholly or partly for such period as the cause for such stoppage continues to exist {Section 12
(1)}.
As per Section 12 (2-4) of BLA, 2006;
2)
3)
4)
In the event of such stoppage occurring at any time beyond working hours, the employer shall notify the
workers affected, by notice posted on the notice board in the section or department concerned or at a
conspicuous place in such establishment before the work is due to begin next.
In the notice mentioned in sub-section (2) direction shall be given indicating as to when the work will be
resumed and whether such workers are to remain at their place of worker at any time before the actual
resumption.
In the event of such stoppage occurring at any time during working hours, the workers affected shall be
notified, as soon as practicable, in the manner specified in sub-section (2) indicating as to when the work
will be resumed and whether such workers are to leave or remain at their place of work.
Provision for payment of wages during such stoppage:

i) In the case where workers have been directed to stay at their place of work following such stoppage, the
workers so detained may not be paid for the period of such detention if it does not exceed one hour, and
workers so detained shall be paid wages for the whole period of such detention if it exceeds one hour
{Section 12 (5)}.
ii) If the period of stoppage of work does not exceed one working day, a worker, unless entitled to wages
under sub-section (5) may not be paid any wages {Section 12 (6)}.
Syed M Hoq, ACCA
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iii)
iv)
v)
vi)
Q.242.
If the period of stoppage of work continues for more than a working day, a worker affected other than a
casual or badli worker, shall be paid wages for day or days by which it will exceed one working day {Section
12 (7)}.
If the period of stoppage of work extends beyond three working days, the workers may be laid off in
accordance with the provisions of Section 16. {Section 12 (8)}
A lay off mentioned in sub-section (8) shall be effective from the day of stoppage of work and any wages
paid to a worker for the first three days may be adjusted against the compensation payable for such
subsequent lay off. {Section 12 (9)}
For the piece rate workers affected, their average daily earning in the previous month shall be taken to be
the daily wages for the purpose of the sub-section. {Section 12 (10)}
What is lay off? What are the provision of Act regarding payment of compensation to the laid off workers?
Discuss the rate of compensation for lay off.
Lay off means the failure, refusal or inability of an employer on account of shortage of coal, power or raw
material or accumulation of stock or the break-down of machinery to give employment of a worker.
Whenever a worker, other than a badli or casual worker, whose name is borne on the muster rolls of an
establishment and who has completed not less than one year of continuous service under the employer is laid
off, he shall be paid compensation by the employer for all days during which he is so laid off, except for such
weekly holidays as may intervene. {Section 16 (1)}
A badli worker whose name is borne on the muster roll of an establishment shall cease to be regarded as badli
for the purpose of this section, if he has completed one year of continuous service in the establishment.
{Section 16 (3)}
The amount of compensation shall be equal to half of the total of the basic wages and dearness allowance and
adhoc or interim pay, if any and the full amount of housing allowance if any would be payable to the worker
{Section 16 (2)}. No worker shall, unless there is an agreement to the contrary between the worker and the
employer, be entitled to the payment of compensation under this section for more than forty five days during
any calendar year {Section 16 (4)}.
Notwithstanding anything contained in sub-section (4), if during a calendar year a worker is laid off for more
than forty five days whether continuously or intermittently, and the laid off after the expiry of the first forty five
days comprises period or periods of fifteen days or more, the worker shall, unless there is an agreement to the
contrary between the worker and the employer, be paid compensation for all the days comprised in every
subsequent period of lay off for fifteen days or more {Section 16 (5)}.
The amount of compensation as mentioned in sub-section (5) shall be equal to one fourth of the total of the
basic wages and dearness allowances, and adhoc or interim pay, if any, and the full amount of housing
allowance, if any. {Section 16 (6)}
In any case where, during a calendar year, a worker is to be laid off after the first forty five days as aforesaid,
for any continuous period of fifteen days or more, the employer may, instead of laying off such a worker
retrench him under section 20 {Section 16 (7)}.
Q.243.
State the circumstances under which a laid off worker is not entitled to compensation.
As per section 18
1) Notwithstanding anything contained elsewhere in this chapter, no compensation shall be payable to a
worker who has laid off
a) if he refuses to accept on the same wages, any alternative employment not requiring any special skill
or previous experience, in the same establishment for which he has been laid off or any other
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b)
Q.244.
establishment belonging to the same employer and situated in the same town or village or situated
within a radius of eight kilometres from the establishment;
if he does not present himself for work at the establishment at the appointed time during normal
working hours at least once a day if so required by the employer.
2)
For the purpose of sub-section 1(b) every laid off worker who presents himself for work at the
establishment at the time appointed for the purpose during normal working hours on any day and is not
given employment by the employer within two hours of his so presenting himself shall be deemed to have
been laid off for that day within the meaning of this section.
3)
If a laid off worker who presents himself for work as mentioned in sub-section (2), instead of being given
employment at the commencement of any shift for any day, is asked to present himself for the purpose
during the second half of the shift for the day, and if he so presents himself, he shall be deemed to have
been laid off only for one half of that day, the other half being treated as on duty, irrespective of the fact
whether he is given work or not.
What is retrenchment? State the rules of retrenchment.

Retrenchment means the termination by the employer of services of workers, not as a matter of punishment
but on the ground of redundancy.
Rules of retrenchment Section 20:
1) A worker employed in an establishment may be retrenched from service on the ground of redundancy.
Q.245.
2)
No worker who has been in continuous service for not less than one year under an employer shall be
retrenched by the employer unless
a) the worker has been given one months notice in writing indicating the reasons for retrenchment, or
the worker has been paid in lieu of such notice, wages for the period of notice.
b) A copy of the notice is sent to the Chief Inspector or any other officer authorized by him and also the
collective bargaining agent in the establishment, if any, and
c) He has been paid compensation which shall be equivalent to thirty days wages or gratuity for every
completed year of service, if any, whichever is higher.
3)
Notwithstanding anything contained in sub-section (2), in the case of retrenchment of a worker under
section 16 (7), no notice as mentioned in sub-section 2 (a) shall be necessary but the worker so retrenched,
shall be paid fifteen days wages in addition to the compensation or gratuity, as the case may be, which
may be payable to him under sub-section 2 (c).
4)
When any worker belonging to a particular category of workers is to be retrenched, the employer shall, in
the absence of any agreement between him and the worker in this behalf, retrench the worker who was
the last person to be employed in the category.
What is misconduct? State the grounds of misconduct.

The following acts and omissions shall be treated as misconduct (Section 23-4):
a) wilful insubordination or disobedience, whether alone, or in combination with other to any lawful or
reasonable order of a superior;
b) theft, fraud or dishonesty in connection with the employers business or property;
c) taking or giving bribe in connection with his or any other workers employment under the employer;
d) habitual absence without leave or absence without leave for more than ten days;
e) habitual late attendance;
f) habitual breach of any law or rule or regulation applicable to the establishment;
g) riotous or disorderly behaviour in the establishment or any act subversive of discipline;
h) habitual negligence of work;
Syed M Hoq, ACCA
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i)
j)
Q.246.
habitual breach of any rule of employment, including conduct or discipline approved by the Chief
Inspector; and
falsifying, tempering with, damaging or causing loss of employers official record.
State the procedure for punishment

Procedure for punishment (Section 24)
1) No order of punishment under section 23 shall be made against a worker unless
a) the allegation against him are recorded in writing;
b) he is given a copy thereof and not less than seven days time to explain;
c) he is given an opportunity of being heard;
d) he is found guilty after enquiry; and
e) the employer or the manager approves of such order.
2)
A worker charged for misconduct may be suspended pending enquiry into the charges against him and
unless the matter is pending before any court, the period of such suspension shall not exceed sixty days.
Provided that during the period of such suspension a worker shall be paid by his employer a subsistence
allowance equivalent to half of his average wages and dearness allowance and adhoc or interim pay, if any.
3)
An order of suspension shall be in writing and shall take effect immediately on delivery to the worker.
4)
In an enquiry the accused worker may be helped by any person nominated by him who is employed in the
establishment.
5)
If in an enquiry, any oral evidence is given on behalf of any party, the party against whom the evidence is
given may cross examine the witness.
6)
If, on enquiry, a worker is found guilty and is punished under section 23 (1) he shall not be entitled to his
wages for any period of suspension but shall be entitled to the subsistence allowance for such period.
7)
If the charges against the worker are not proved in the enquiry, he shall be deemed to have been on duty
for the period of suspension for enquiry, if any and shall be entitled to his wages for such period of
suspension and the subsistence allowance shall be adjusted accordingly.
8)
In case of punishment, a copy of the order inflicting such punishment shall be supplied to the worker
concerned.
9)
If a worker refuses to accept any notice, letter, charge sheet, order or any other document addressed to
him by the employer, it shall be deemed that such notice, letter, charge sheet, order, or the document has
been delivered to him, if a copy of the same has been exhibited on the notice board and another copy has
been sent to the address of the worker as available from the records of the employer by registered post.
10) In awarding punishment, the employer shall take into account the previous record of the worker
concerned, the gravity of the misconduct and any other that may exist.
Q.247.
State the procedure for grievance against punishment.

Grievance procedure (Section 33)
1) Any worker, including a worker who has been laid off, retrenched, discharged, dismissed, removed or
otherwise removed from employment, who has grievance in respect of any matter and intends to seek
redress thereof under this section, shall submit his grievance to his employer, in writing by registered post
within thirty days of being informed of the cause of such grievance. Provided that if the employer
acknowledges receipt of the grievance, in that case the service by registered post shall not be essential.
2)
The employer shall within fifteen days of receipt of such grievance, enquire into the matter, give the
worker an opportunity of being heard, and communicate his decision in writing to him.
Syed M Hoq, ACCA
Page 75
Q.248.
3)
If the employer fails to give a decision under sub-section (2) or if the worker is dissatisfied with such
decision, he may make a complain in writing to the labour court within thirty days from the last date under
sub-section (2) or within thirty days from the date of the decision as the case may be.
4)
The labour court shall, on receipt of the complaint, hear the parties after giving notice to them and make
such orders as it may deem just and proper.
5)
The labour court, may amongst other relief, direct reinstatement of the complaint in service, either with or
without back wages and convert the order of dismissal, removal or discharge to any other lesser
punishment specified in section 23 (2).
6)
Any aggrieved by an order of the labour court may within thirty days of the order prefer an appeal to the
tribunal, and the decision of the tribunal on such appeal shall be final.
7)
No court fees shall be payable for lodging complaint or appeal under this section.
8)
No complaint under this section shall amount to prosecution under this Act.
9)
Notwithstanding anything contained in this section, no complaint shall lie against an order of termination
of employment of a worker under section 26, unless such order is alleged to have been made for his trade
union activities or passed motivatively or unless the worker concerned has been deprived of the benefits
specified in this section.
State the different type of punishments for conviction and misconduct. How can a worker be dismissed
without prior notice?
A worker may be dismissed without prior notice or pay in lieu thereof if he is (Section 23-1):
a) Convicted for any criminal offence, or
b) He is found guilty of misconduct under section 24.
Any worker found guilty of misconduct may, instead of being dismissed under sub-section (1), in consideration
of any extenuating circumstances, be awarded any of the following punishments, namely:
a) Removal
b) Reduction to a lower post, grade or scale of pay for a period not exceeding one year
c) Stoppage of promotion for a period not exceeding one year
d) Withholding in increment for a period not exceeding one year
e) Fine
f) Suspension without wages and subsistence allowance for a period not exceeding seven days
g) Censure or warning.
Q.249.
State the procedure of termination of service of a worker. Do you think that a termination showing ground of
irregular attendance is proper? If not why?
Termination of employment by employers otherwise than by dismissal etc. (Section 26)
1) The employment of a permanent worker may be terminated by the employer, otherwise than the manner
provided elsewhere in this chapter by giving to him in writing;
a) One hundred and twenty days notice, if he is a monthly rated worker;
b) Sixty days notice, in case of other worker.
2)
The employment of a temporary worker may be terminated by the employer, otherwise than in the
manner provided elsewhere in this chapter and if it is not due to the completion, cessation, abolition or
discontinuance of the temporary work for which he was appointed by giving to him in writing:
a) Thirty days notice, if he is a monthly rated worker;
b) Fourteen days notice in case of other worker.
Syed M Hoq, ACCA
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3)
Where an employer intends to terminate the employment of a worker without any notice, he may do so by
paying to the worker, wages in lieu of the notice, which is required to be given under sub-section 1 & 2 as
the case may be.
4)
Where the employment of a permanent worker is terminated under this section, he shall be paid, by the
employer compensation at the rate of thirty days wages for every completed year of service or gratuity, if
any whichever is higher, in addition to any other benefit to which he may be entitled under the Act.
Termination of employment by workers (Section 27)

1) A permanent worker may resign from his service by giving sixty days notice in writing to the employer.
Q.250.
2)
A temporary worker may resign from his service by giving to the employer in writing
a) Thirty days notice if he is a monthly rated worker
b) Fourteen days notice in case of other worker.
3)
Where a worker intends to resign from his service without under any notice, he may do so by paying to the
employer wages in lieu of the notice which is required to be given under sub-section 1 & 2 as the case may
be.
4)
Where a permanent worker resigns from his service under this section, he shall be paid by the employer
compensation;
a) at the rate of fourteen days wages for every completed year of service, if he has completed five years
of continuous service or more but less than ten years
b) at the rate of thirty days wages for every completed year of service, if he has completed ten years of
continuous service or more or gratuity, if any whichever is higher in addition to any other benefit to
which he may be entitled under the Act.
What do you mean by compensatory weekly holiday? Describe the different types of leave admissible to the
workers. How will you treat the holidays in the midst of leave? Can a sanctioned leave discontinue the
continuity of service of a worker?
Where as a result of the passing of an order or the making of a rule under the provision of the Act exempting an
establishment or the workers therein from the provision of section 103, Weekly holiday, a worker is deprived of
any weekly holidays provided for in that section, he shall be allowed, as soon as circumstances permit,
compensatory holidays of equal number to the holidays so deprived of (Section 104).
The following leaves are admissible to the worker:
i) Causal leave (Section 115)
Every worker shall be entitled to casual leave with full wages for ten days in a calendar year and such leave
shall not be accumulated and carried forward to the succeeding year. Provided that nothing in this section
shall apply to a worker employed in a tea plantation.
ii)
Sick leave (Section 116)

Every worker other than a newspaper worker shall be entitled to sick leave with full wages for fourteen
days in a calendar year (1). Every newspaper worker shall be entitled to sick leave with half wages for not
less than one eighteenth of the period of services (2). Such leave shall not be accumulated and carried
forward to the succeeding year (3).
iii)
Annual leave with wages (Section 117)

1) Every adult worker, who has completed one year of continuous service in an establishment, shall be
allowed during the subsequent period of twelve months leave with wages for a number of days
calculated at the rate of one day.
a) in the case of shop or commercial or industrial establishment or factory or road transport service,
for every eighteen days of work;
b) in the case of tea plantation, for every twenty two days of work;
Syed M Hoq, ACCA
Page 77

c) in the case of news paper worker, for every eleven days of work, performed by him during the
previous period of twelve months.
2)
Every worker, who is not an adult, who has completed one year of continuous service in an
establishment shall be allowed during the subsequent period of twelve months, leave with wages for
a number of days calculated at the rate of one day.
a) in the case of a factory, for every fifteen days of work;
b) in the case of tea plantation, for every eighteen days of work;
c) in the case of shop or commercial or industrial establishment, for every fourteen days of work
performed by him during the previous period of twelve months.
3)
A period of leave allowed under this section shall be inclusive of any holiday which may occur during
such period.
If a worker does not, in any period of twelve months, take the leave to which he is entitled under subsection (1) or (2), either in whole or in part any such leave not taken by him shall be added to the
leave to be allowed to him, in the succeeding period of twelve months.
4)
Q.251.
If a worker is required to work on a festival holiday under order of the employer, what will be his
compensation there against?
As per section 118 (3), a worker may be required to work in any festival holiday, but two days additional
compensatory holidays with full pay and a substitute holiday shall be provided for him in accordance with the
provisions of section 103.
Q.252.
What are the provisions in the Act for fixation of wages period and time of payment of wages? State the
deductions which may be made from the wages of the workers.
Fixation of wages period section 122
1) Every person responsible for the payment of wages under section 121 shall fix periods, to be called wages
periods, in respect of which such wages are payable.
2) No wage period shall exceed one month.
Time of payment of wages section 123
1) The wages of every worker shall be paid before the expiry of the seventh day after the last day of the wage
period in respect of which the wages are payable.
2) Where the employment of any worker id terminated by retirement or by the employer, whether by way of
retrenchment, discharge, removal, dismissal or otherwise, the wages payable to him shall be paid before
the expiry of the seventh working day from the day on which his employment is so terminated.
3) All payment of wages shall be made on a working day.
Deductions from wages section 125
1) No deduction shall be made from the wages of a worker except those authorized by or under the Act.
2) Deductions from the wages of a worker shall be made only in accordance with the provisions of he Act,
and may be of the following kinds only;
a) fines imposed;
b) deductions for absence from duty;
c) deductions for damage to or loss of goods expressly entrusted to the worker for custody, or for loss of
money for which he is required to account, where such damage or loss is directly attributable to his
neglect of default;
d) deduction for house accommodation supplied by the employer;
e) deduction for such amenities and services, other than tools and raw materials required for the
purpose of employment, supplied by the employer as the government may, by general or special
order, authorize;
Syed M Hoq, ACCA
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f)
deduction for recovery of advances or loans of whatever nature in adjustment of over payment of
wages;
g) deduction of income tax payable by the worker;
h) deduction required to be made by order of a court or other authority competent to make such order;
i) deduction for subscription to, and for repayment of advances from any provident fund to which the
provident fund Act 1925 applies or any other recognized provident fund as defined in the income tax
ordinance 1984 or any provident fund approved in this behalf by the government, during the
continuance of such approval;
j) deductions for payment to any co-operative society approved by the government or to a scheme of
insurance maintained by any government insurance company or Bangladesh Postal department;
k) deductions, made with the written authorization of the workers for the contribution to any fund or
scheme constituted or framed by the employer, with the approval of the government, for the welfare
of the workers or the members of their families or both; and
l) deduction for subscription for the CBA union through check off system.
Q.253.
What are the provisions in the Act regarding deduction from wages for absence from duty? State the
provisions of employment of children and adolescent.
Deductions for absence from duty section 126
1) Deductions may be made under section 125 (2) only on account of the absence of a worker from the place
where by the terms of his employment, he is required to work, such absence being for the whole or any
part of the period during which he is required to work.
2) The amount of such deduction shall, in no case bear to the wages payable to the worker in respect of the
wage period for which the deduction is made a larger proportion, he was required to work.
Provided that, subject to any rules in this behalf by the government, if ten or more workers acting in
concert absent themselves without due notice and without reasonable cause, such deduction from any
such worker may include such amount not exceeding his wages for eight days as may, by the terms his
employment, be due to the employer in lieu of due notice.
Provision of employment of children and adolescent Section 34
1) No child shall be employed or permitted to work in any occupation or establishment.
2) No adolescent shall be employed or permitted to work in any occupation or establishment unless
a) a certificate of fitness in the prescribed form and granted to him by a registered medical practitioner
is in custody of the employer; and
b) he carries, while at work, a token giving reference to such certificate.
3) Nothing in this sub-section (2) shall apply to the employment of any adolescent in nay occupation or
establishment either as an apprentice or for the purpose of receiving vocational training therein.
4) The government may, where it is of opinion that an emergency has arisen and public interest so requires,
by notification in the official gazette, declare that the provisions of this sub-section (2) shall not be in
operation for such period as may be specified, in the notification.
Q.254.
State in brief the provision in the Act on health and hygiene.

51. Cleanliness: Every establishment shall be kept clean and free from effluvia arising from any drain, privy or
other nuisance, and in particular(a) accumulation of dirt and refuge shall be removed daily by sweeping or by any other effective method from
the floors and benches of work-rooms and from staircases and passage and disposed of in a suitable
manner;
(b) the floor of every work-room shall be cleaned at least once in every week by washing, using disinfectant
where necessary or by some other effective method;
(c) where the floor is liable to become wet in the course of any manufacturing process to such extent as is
capable of being drained, effective means of drainage shall be provided and maintained;
Syed M Hoq, ACCA
Page 79

(d) all inside walls and partitions, all ceilings, or tops of rooms, and walls, side and tops or passages an
staircases shalli) where they are painted or varnished, be repainted or re varnished at least once in every three years,
ii) where they are painted or varnished and have smooth imperious surface, be cleaned at least once in
every fourteenth months, by such methods as may be prescribed,
iii) in any other case, be kept white-washed or color-washed and the white-washing or colorwashing shall
be carried out at least once in every fourteen months; and
(e) the date on which the processes required by clause (d) are carried out shall be entered in the prescribed
register.
52. Ventilation and temperature:
(1) Effective and suitable provisions shall be made in every establishment for securing and maintaining in
every work-room adequate ventilation by the circulation of fresh air;
(2) such temperature as will secure to workers therein reasonable conditions of comfort and prevent injury to
health.
(3) the walls and roofs, as required by sub-section (2), shall be of such material and so designed that such
temperature shall not be exceeded but kept as low as practicable;
(4) where the nature of the work carried on in the establishment involves, or is likely to involve, the
production of excessively high temperature, such adequate measures as are practicable, shall be taken to
protect the workers there from by separating the process which produces such temperature from the
work-room by insulation the hot parts or by other effective means.
(5) If it appears to the government that in any establishment or class or description of establishments
excessively high temperature can be reduced by such methods as white-washing, spraying or insulating
and screening outside walls or roofs or windows or by raising the level of the roof, or by insulating the roof
either by an air space and double roof or by the use of insulating roof materials, or by other methods, it
may prescribe such of those or those or other methods to be adopted in the establishment.
53. Dust and fume:
(1) In every establishment in which, by reason of any manufacturing process carried on, there is given off any
dust or fume or other impurity of such a nature and to such an extent as is likely to be injurious or
offensive to the workers employed therein, effective measures shall be taken to prevent its accumulation
in any work-room and it inhalation by workers, and if any exhaust appliance is necessary for this purpose,
it shall he applied as near as possible to the point of origin of the dust, fume or other impurity, and such
point shall be enclosed so far as possible.
(2) In any establishment no stationary internal combustion engine shall be operated unless the exhaust is
conducted into open air, and no internal combustion engine shall be operated in any room unless effective
measures have been taken to prevent such accumulation of fumes there from as are likely to be injurious
to the workers employed in the work-room.
54. Disposal of wastes and effluents: Effective arrangements shall be made in every establishment for disposal
of wastes and effluents due to the manufacturing process carried on therein.
55. Artificial humidification:
(1) In any establishment in which the humidity of the air is artificially increased, the water used for the
purpose shall be taken from a public supply, or other source of drinking water, or shall be effectively
purified before it is so used.
(2) If it appears to an Inspector that the water used in an establishment for increasing humidity which is
required to be effectively purified under sub-section (1) is not effectively purified, he may serve on the
employer of the establishment an order in writing, specifying the measures which, in his opinion, should
be adopted, and requiring them to be carried out before a specified date.
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56. Overcrowding:
(1) No work-room in any establishment shall be overcrowded to an extent injurious to the health of the
workers employed therein.
(2) Without prejudice to the generality of the provisions of sub-section (1), there shall be provided for every
worker employed in a work-room at least 9.5 cubic metre of space in the establishment.
Explanation: For the purpose of this sub-section no account shall be taken of a space which is more
than 4.25 metre above the level of the floor of the room.
(3) If the chief Inspector by order in writing so requires, there shall be posted in each work-room of an
establishment a notice specifying the maximum number of workers who may, in compliance with the
provisions of this section, be employed in the room.
(4) The chief Inspector may, by order in writing, exempt, subject to such conditions as he may think fit to
impose, any work-room from the provisions of this section if he is satisfied that compliance therewith in
respect of such room is not necessary for the purpose of health of the workers employed therein.
57. Lighting:
(1) In every part of an establishment where workers are working or passing, there shall be provided and
maintained sufficient and suitable lighting, natural or artificial, or both.
(2) In every establishment all glazed windows and skylights used for the lighting of the work-room shall be
kept clean on both the outer and inner surfaces and free from obstruction as far as possible.
(3) In every establishment effective provisions shall, so far as in practicable, be made for the prevention of(a) glare either directly from any surface of light or by reflection from or polished surface, and
(b) the formation of shadows to such an extent as to cause eye strain or risk of accident to any worker.
58. Drinking water:
(1) In every establishment effective arrangement shall be made to provide and maintain at a suitable point
conveniently situated for all workers employed therein, a sufficient supply of wholesome drinking water.
(2) All such points where water is supplied shall be legibly marked Drinking water in Bangla.
(3) In every establishment wherein two hundred fifty or more workers are ordinarily employed, provision shall
be made for cooling the drinking water during the hot weather by effective means and for distribution
thereof.
(4) Where dehydration occurs in the body of workers due to work near machineries creation excessive heat,
there workers shall be provided with oral re-hydration therapy.
59. Latrines and urinals: In every establishment(a) sufficient latrines and urinals of prescribed types shall be provided conveniently situated and accessible to
workers at all times while they are in the establishment.
(b) such latrines and urinals shall be provided separately for male and female workers;
(c) such latrines and urinals shall be adequately lighted and ventilated;
(d) all such latrines and urinals shall be maintained in a clean and sanitary condition at all times with suitable
detergents and disinfectants.
60. Dust bean and spittoon:
(1) In every establishment there shall be provided, at convenient places, sufficient number of dust beans and
spittoons which shall be maintained in a clean and hygienic condition.
(2) No person shall throw any dirt or spit within the premises of an establishment except in the dust beans
and spittoons provided for the purpose.
(3) A notice containing this provision and the penalty for its violation shall be prominently displayed at
suitable places in the premises.
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Q.255.
What is maternity benefit? State the provisions in the Act prohibiting employment of women workers.
Maternity benefit means the sum of money payable under the provisions of chapter IV to a woman worker
with leave.
45. Employment of women worker prohibited during certain period:
(1) No employer shall knowingly employ a woman in his establishment during the eight weeks immediately
following the day of her delivery.
(2) No woman shall work in any establishment during the eight weeks immediately following the day of her
delivery.
(3) No employer shall employ any woman for doing any work which is of an arduous nature or which involves
long hours of standing or which is likely to adversely affect her health; if
(a) she has reason to believe or if she has informed him that she is likely to be delivered of a child within
ten weeks;
(b) she has to the knowledge of the employer been delivered of a child within the preceding ten weeks:
Provided that in case of tea plantation worker, a woman worker can undertake light work if and for
so long as the medical practitioner of the concerned tea estate certifies that she is physically fit to do so; and,
for the days that she does such work, she shall be paid at the prevailing rate of pay for such work, and such
pay shall be paid to her in addition to the maternity benefit which she may be entitled to receive under existing
this Act.
Q.256.
State the procedure for payment of maternity benefit.

47. Procedure regarding payment of maternity benefit:
(1) Any pregnant woman entitled to maternity benefit under this act may, on any day, give notice either orally
or in writing to her employer that she expects to be confined within eight weeks next following and may
therein nominate a person for purposes of receiving payment of maternity benefit in case of her death.
(2) Any woman who has not given such notice and has been delivered of a child, shall within seven days, give
similar notice to her employer that she has given birth to a child.
(3) When a notice referred to in sub-section (1) or (2) is received, the employer shall permit the women to
absent herself from work(a) from the day following the date of notice in the case mentioned in sub-section (1);
(b) from the day of delivery in the case mentioned in sub-section (2) until eight weeks after the day of
delivery.
(4) An employer shall pay maternity benefit to a woman entitled thereto in such one of the following ways as
the woman desire, namely:
(a) for eight weeks, within three working days of the production of a certificate signed by registered
medical practitioner stating that the woman is expected to be confined within eight weeks of the date
of the certificate, and for the remainder of the period for which she is entitled to maternity benefit
under this act within three working days of the production of proof that she has given birth to a child;
or
(b) for the said period up to and including the day of delivery, within three working days of the
production of proof that she has given birth to a child, and for the remainder of the said period, within
eight weeks of the production of such proof; or
(c) for the whole of the said period, within three working days of the production of proof that she has
given birth to a child:
Provided that a woman shall not be entitled to any maternity benefit or any part thereof, the
payment of which is dependent upon the production of proof under this sub-section that she has given
birth to a child, unless such proof is produced within three month s of the day of her delivery.
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(5) The proof required to be produced under sub-section (4) shall be either a certified extract from a birth
register under the births and deaths registration act, 2004 (XXIX of 2004) or a certificate signed by a
registered medical practitioner or such other proof as may be accepted by the employer.
Q.257.
State at least 6 safety measures provided by the Act.

61. Safety of building and machinery:
(1) If it appears to the Inspector that any building or part of a building or any part of the ways, machinery or
plant in an establishment is in such a conditions that it is dangerous to human life or safety, he may serve
on the employer of the establishment an order in writing specifying the measures which, in his opinion,
should be adopted, and requiring them to be carried out before a specified date.
(2) If it appears to the Inspector that the use of any building or part of a building or of any part of the ways,
machinery or plant in the establishment involves imminent danger to human life or safety, he may serve
on the employer of the establishment an order in writing prohibiting its use until it has been properly
repaired or altered.
62. Precaution in case of fire:
(1) Every establishment shall be provided with at least one alternative connection stairway with each floor
and such means of escape in case of fire and fire fighting apparatus, as may be prescribed by rules.
(2) If it appears to the inspector that any establishment is not provided with the means of escape prescribed
under sub-section (1) he may serve on the employer of the establishment an order in writing specifying the
measures which in his opinion, should be adopted before a date specified in the order.
(3) In every establishment the doors affording exit from any room shall not be locked or fastened so that they
can be easily and immediately opened from inside while any person is within the room and all such doors,
unless they are of the sliding type, shall be constructed to open outwards or where the door is between
two rooms, and all such doors, unless they are of the sliding type, shall be constructed to open outwards
or where the door is between two rooms, in the direction of the nearest exit from the building and no such
door shall be locked or obstructed while work is being carried on in the room.
(4) In every establishment every window, or other exit affording means of escape in case of fire, other than
the means of exit in ordinary use, shall be distinctively marked in Bangla and in red letters of adequate size
or by some other effective and clearly understood sign.
(5) In every establishment every window, door, or other exit affording means of escape in case of fire to every
person employed therein.
(6) A free passage-way giving access to each means of escape in case of fire shall be maintained for the use of
all workers in every room of the establishment.
(7) In every establishment wherein more than ten workers are ordinarily employed in any place above the
ground floor, or explosive or highly inflammable materials are used or stored, effective measures shall be
taken to ensure that all the workers are familiar with the means of escape in case of fire and have been
adequately trained in the routine to be followed in such case.
(8) In factories wherein fifty or more workers and employees are employed shall arrange at least once in a
year a mock fire-fighting and the employer shall maintain a book of records in this regards.
63. Fencing of machinery:
(1) In every establishment the following shall be securely fenced by the safeguards of substantial construction
which shall be kept in position while the part of machinery required to be fenced are in mention or in use,
namely(a) every moving part of a prime mover, and every fly wheel connected to a prime mover;
(b) the head-race and tail-race of every water wheel and water turbine;
(c) any part of a stock-bar which projects beyond the head stock of a lathe; and
(d) unless they are in such position or of such construction as to be as safe to every person employed in
the establishment as they would be if they were securely fencedi) every part of an electric generator,- a motor or rotary converter,
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(2)
ii) every part of transmission machinery, and

iii) every dangerous part of any machinery: Provided that, for the purpose of determining whether
any part of machinery is safe as aforesaid, account shall not be taken of any occasion when it
being necessary to make an examination of the machinery while it is in motion, such examination
or operation is made or carried in accordance with the provisions of section 64.
without prejudice to any other provision of this Act relation to the fencing o machinery, every set
screw, bolt and key on any revolving shaft, spindle wheel or pinion and all spur, worm and other
toothed or friction gearing in motion with which such worker would otherwise be liable to come into
contact, shall be securely fenced, to prevent such contact.
64. Work on or near machinery in motion:

(1) Where in any establishment it becomes necessary to examine any part of machinery referred to in
section 61 while the machinery is in motion or as a result o such examination to carry out any mounting
or shipping of belts, Lubrication or other adjusting operation while the machinery is in motion such
examination or operation shall be made or carried out only by a specially trained adult male worker
wearing tight-fitting clothing whose name has been recorded in the register prescribed in this behalf
and while he so engaged such worker shall not handle a belt at a moving pulley unless the belt is less
than fifteen centimeters in width and unless the belt-joint is either laced or flush with the belt.
(2) The Government may, by notification in the official Gazette, prohibit, in any specified establishment,
the cleaning, lubricating, or adjusting by any person of specified part of machinery when those parts
are in motion.
65. Striking gear and devices for cutting off power:
(1) In every establishment(a) suitable striking gear or other efficient mechanical appliance shall be provided and maintained and
used to move driving belts to and from fast and loose pulleys which from part of the transmission
machinery, and such gear or appliances shall be so constructed, placed and maintained as to prevent
the belt from cropping back on the first pulleys;
(b) driving belts when not in use shall not be allowed to rest or ride upon shafting in motion.
(2) In every establishment suitable devices for cutting off power in emergencies from running machinery shall
be provided and maintained in every work-room.
66. Self-action machines:
No traversing part of a self-acting machine in any establishment and no material carried thereon shall, if the
space over which it runs is a space over which any person is liable to pass whether in the course of his
employment or other distance of forty five centimeters from any fixed structure which is not part of the
machine: Provided that the chief Inspector may permit the continued use of a machine installed before the
commencement of this Act which does not comply with the requirements of this section on such conditions for
ensuring safety as he may think fit to impose.
67. Casing of new machinery:
In all machinery driven by power and installed in any establishment after the commencement of this Act(a) every set screw, belt or key or any revolving shaft, spindle wheel or pinion shall be so, sunk, encased or
otherwise effectively guarded to prevent danger; and
(b) all spur, worm and other toothed or friction gearing which does not require frequent adjustment while in
motion shall be completely encased unless it is so situated as to be as safe it would be if it were be if were
completely encased.
68. Cranes and other lifting machinery:
The following provisions shall apply in(a) every part thereof, including the working gear, whether fixed or movable, ropes and chains and anchoring
and fixing appliances shall beSyed M Hoq, ACCA
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i)
ii)
iii)
of good construction, sound material and adequate strength,

properly maintained,
thoroughly examined by a competent person at least once in every period of twelve months and a
register shall be kept containing the prescribed particulars of every such examination;
(b) no such machinery shall be loaded beyond the safe working load which shall be plainly marked thereon;
and
(c) while any person is employed or working on or near the wheel-tract of a travelling crane in any place,
where he would be liable to be struck by the crane, effective measures shall be taken to ensure that crane
does not approach within six meter of that place.
69. Hoists and lifts:
In every establishment every hoist and lift shall be(a) of good mechanical construction, sound material and adequate strength,
(b) properly maintained,
(c) shall be thoroughly examined by competent person at least once in every period of six months, and a
register shall be kept containing the prescribed particulars of every such examination;
70. Revolving machinery:
(1) In every room in an establishment in which the process of grinding is carried on, there shall be permanently
affixed to, or placed near, each machine in use a notice indicating the following(a) maximum safe working peripheral speed of every grind stone or abrasive wheel:
(b) the speed of the shaft or spindle upon which the wheel is mounted;
(c) the diameter of the pulley upon such shaft or spindle necessary to secure such safe working peripheral
speed.
(2) The speeds indicated in notices under sub-section (1) shall not be exceeded.
(3) Effective measures shall be taken in every revolving vessel, cage, basket, flywheel, pulley dice or similar
appliance driven by power is not exceeded.
71. Pressure plant: If in any establishment any part of the plant or machinery used in manufacturing process is
operated at a pressure above atmospheric pressure, effective measures shall be taken to ensure that the safe
working pressure of such part is not exceeded.
72. Floors, stairs and means of access:
In every establishment (a) all floors, stairs, passages and gangways shall be of sound construction and properly maintained and where
it is necessary to ensure safety steps, stairs, passages and gangways shall be provided with substantial
handrails;
(b) there shall, so far as is reasonably practicable, be provided and maintained safe means of access to every
place at which any person is, at any time, required to work; and
(c) all floors, ways and stairways shall be clean, wide and clear of all obstructions.
73. Pits, sumps, opening in floors, etc.:
(1) In every establishment, every fixed vessel, sump, tank, pit or opening in the ground or in a floor which, by
reason of its depth, situation, construction or contents is or may be a source of danger, shall be either securely
covered or securely fenced.
74. Excessive weights:
No person shall be employed in any establishment to lift, carry or move any load so heavy as to be likely to
cause him injury.
75. Protection of eyes: The Government may, in respect of any manufacturing process carried on in any
establishment, by rules, require that effective screens of suitable goggles shall be provided for the protection of
persons employed on, or in the immediate vicinity of a process which involves
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(a) risk of injury to the eyes from particles or fragments thrown off in the course of the process, or
(b) risk to the eyes by reason of exposure to excessive light or heat.
76. Powers to require specifications of defective parts or tests of stability:
If it appears to the inspector that any building or part of a building or any part of the ways, machinery or plant
in an establishment, is in such a condition that it may be danger us to human life or safety, he may serve on the
employer of the establishment an order in writing, requiring him before a specified date
(a) to furnish such drawings, specifications and other particulars as may be necessary to determine whether
such building, ways, machinery or plant can e used with safety, or
(b) to carry out such tests as may be necessary to determine the strength or quality or any specified parts and
to inform the Inspector of the result thereof.
77. Precautions against dangerous fumes:
(1) In any establishment no person shall enter or be permitted to enter any chamber, tank, vat pit, pipe, flue
or other confined space in which dangerous fumes are likely to be present to such an extent as to involve
risks of persons being overcome thereby, unless it is provided with a manhole of such size, as may be
prescribed or other effective means of egress.
(2) No portable electric light of voltage exceeding twenty-four volts shall be permitted in any establishment
for use inside any confined space such as is referred to in sub-section (1) and where the fumes present are
likely to be permitted to be used in such confined space.
(3) No person in any establishment shall enter or be permitted to enter any such confined space until all
practicable means have been taken to remove any fumes which may be present and to prevent any ingress
of fume and unless either(a) a certificate in writing has been given by a competent person, based on a test carried out by himself,
that the space is from dangerous fumes and fit for persons to enter, or
(b) the worker is wearing suitable breathing apparatus and a belt securely attached to a rope, the free
end of which is held by a person standing outside the confined space.
(4) Suitable breathing apparatus, reviving apparatus and belts and ropes shall, in every establishment, be kept
ready for instant use beside any such confined space. As aforesaid which any person as entered, and all
such apparatus shall be periodically examined and certified by a competent person to be fit for use; and a
sufficient number of persons employed in every establishment shall be trained and practiced in the use of
all such apparatus and in the method of restoring respiration.
(5) No person shall be permitted to enter in any establishment, any boiler furnace, boiler, flue chamber, tank,
at, pipe or other confined space for the purpose of working or making any examination therein until it has
been sufficiently cooled by ventilation or otherwise to be safe for persons to enter.
78. Explosive or inflammable dust, gas, etc.:
(1) where in any establishment any manufacturing process produces dust, gas, fume or vapour of such
character and to such extent as to be likely to explode on ignition, all practicable measures shall be taken
to prevent any such explosion by
(a) effective enclosure of the plant or machinery used in the process;
(b) removal or prevention of the accumulation of such dust, gas, fume or vapour;
(c) Exclusion or effective enclosure of all possible sources of ignition.
(2) Where in any establishment the plant or machinery used in a process is not so constructed as to withstand
the probable pressure which such an explosion as aforesaid would produce, all practicable measure shall
be taken to restrict the spread and effects of the explosion by the provision in the plant or machinery of
chokes,
(3) Where any part of the plant or machinery in an establishment contains any explosive or inflammable gas
or vapour under pressure greater than atmospheric pressure, that part shall not be opened except in
accordance with the following provisions, namely
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(a) before the fastening of any joint of any pipe connected with the part of the fastening of the cover of
any opening into the part is loosened, any flow of the gas or vapour into the part or any such pipe
shall be effectively stopped by a stop-valve or other means;
(b) before any such fastening as aforesaid is removed, all practicable measures shall be taken to reduce
to pressure of the gas or vapour in the part or pipe to atmospheric pressure;
(c) where any such fastening, as aforesaid, has been loosened or removed, effective measures shall be
taken to prevent any explosive or inflammable gas or vapour from entering the part or pipe until the
fastening has been secured; or as the case may be, securely replaced: Provided that the provisions of
this sub-section shall not apply in the case of plant or machinery installed in the open air.
(4) No plant, tank or vessel which contains or has contained any explosive or inflammable substance shall be
subjected in any establishment to any welding, brazing, soldering or cutting operation which involves the
application of heat unless adequate measures have been first taken to remove such substance and any
fumes arising there from o to render such substance shall be allowed to enter such plant, tank or vessel
after any such operation until the mental has cooled sufficiently to prevent any risk of igniting the
substance.
Q.258.
State briefly the following welfare measures provided by the Act:

i) First aid facility section 89
1) The Act provides maintenance for first aid facilities to all person employed in working hours.
2) The prescribed box or cupboard will not be less than one for every one hundred fifty workers.
3) Each box or cupboard will be kept under a person trained for the purpose.
4) The person in charge of the first aid appliances should wear a badge for identification whose name is
to be notified.
5) Every establishment employing three hundred or more workers is to maintain a sick rook equipped
with prescribed medical appliances and trained staff.
ii)
Washing facility section 91

Every establishment is required to maintain washing and bathing facilities. Separate and adequately
screened facilities are to be provided for male and female workers. Such places shall be conveniently
accessible to all workers and kept clean.
iii)
Canteen section 92
Every establishment employing more than one hundred workers shall maintain adequate number of
canteens for workers. The government may make rule providing for equipments and management of the
canteen.
iv)
Shelters section 93
In every establishment employing more than fifty workers adequate and suitable shelters or rest rooms
and suitable lunch rooms with provision of drinking water is to be provided. Any canteen maintained shall
be treated as part of this arrangement. Where there is provision for lunch room, the workers will not take
lunch in work room. The shelter and rest room shall be adequately lighted and properly ventilated. Where
is more than twenty five female workers are working, separate shelter for them shall be maintained and
where the female workers are less than 25, separate and screened arrangement is to be made.
v)
Room for children section 94

Where in forty or more female workers are working, suitable room/rooms shall be provided for children
under age of six years of these female workers. Such room shall be maintained in the manner provided in
the Act.
vi)
Recreational and education facilities in tea plantation section 95
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Where the children of the tea plantation workers between the ages of six and twelve exceed twenty five in
number, the govt. may make rules requiring the employers to make provision for educational facilities for
the children in such manner prescribed in the Act. In every tea plantation, there shall be adequate medical
centre for the workers and their children.
vii) Compulsory group insurance section 99
Government may provide rules for group insurance in establishment employing 200 workers at the
minimum.
viii) Housing facilities in tea plantation section 96
Every employer in tea plantation is required to provide for residential accommodation of the workers and
family residing in the tea plantation.
Q.259.
State the circumstances under which the employers are liable to pay compensation to the workers for injury.
What are the grounds for which an employer is not liable to pay compensation to the workers for injury?
As per section 150 (1), an employer shall e liable to pay compensation to a worker for injury caused by an
accident arising out of and in course of employment in the manner prescribed in the schedule.
The employer shall not be liable for payment of compensation (Section 150 (2)):
a) if the disablement does not exceed three days
b) in respect of any injury resulting in death, caused by accident directly attributable to
i) the worker at the time of accident was under influence of drink or drugs.
ii) Wilful disobedience of any rule expressly framed for safety of the worker
iii) Wilful removal or disregard to any safety measure prescribed for workers.
Q.260.
Differentiate between trade union and CBA. State the requirements for registration of a trade union.
Requirements for registration Section 179
1) A trade union shall not be entitled to registration under this chapter unless the constitution thereof
provides for the following matters:
a) The name and address of the trade union;
b) The object for which the trade union has been formed;
c) The manner in which a worker may become a member of the trade union specifying thereon that no
worker shall be enrolled as its member unless he applies in the form set out in the constitution
declaring that he is not a member of any other trade union;
d) The source of the fund of the trade union and statement of the purposes for which such fund shall
applicable;
e) The condition under which a member shall be entitled to any benefits assured by the constitution of
the trade union and under which any fine or forfeiture may be imposed on him;
f) The maintenance of a list of the member of the trade union and if adequate facilities for the
inspection thereof by the officers and members if the trade union;
g) The manner in which the constitution shall be amended, varied or rescinded;
h) The safe custody of the funds of trade union, its annual audit, the manner of audit and adequate
facilities for inspection of the books of account by officers and members of trade union;
i) The manner in which the trade union may be dissolved;
j) The manner of election of officers by the general body of the trade union and term, exceeding two
years for which an officer may hold office;
k) The number of members of the executive which shall not be less than five and more than thirty five as
may be prescribed by rules;
l) The procedure for expressing want of confidence in any office of the trade union; and
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m) The meetings of the executive and of the general body of the trade union, so that the executive shall
meet at least once in every three months and the general body at least once every year.
2)
3)
4)
5)
Q.261.
A trade union of workers shall not be entitled to registration under this chapter unless it has a minimum
membership of thirty percent of the total number of workers employed. Provided that more than one
establishments under the employer, which are allied to and connected with the another for purpose of
carrying out the same industry irrespective of their place of situation, shall be deemed to be one
establishment for the purpose of this subjection.
Where any doubt or dispute arises as to whether any two or more establishments are under the same
employer or whether they are allied to or connected with one another for the purpose of carrying on the
same industry, the matter may be referred to the Director of Labour for decision.
Any person aggrieved by a decision of the Director of Labour under sub-section (3) may, within thirty days
of the decision, prefer an appeal to the labour court; and decision of the labour court shall be final.
Not more than three trade unions shall be registered.
What do you mean by unfair labour practice? State the unfair practise on the part of the employers.
195. Unfair labour practices on the part of employers:
No employer or trade union of employers and no person acting on their behalf shall(a) impose any condition in a contract of employment seeking to restrain the right of a person who is a party
to such contract to join a trade union or continue his membership of a trade union ; or
(b) refuse to employ or refuse to continue to employ any person on the ground that such person is, or is not, a
member or officer of a trade union; or
(c) discriminate against any person in regard to any employment, promotion, condition of employment or
working condition on the ground that such person is, or is not, a member or officer of a trade union; or
(d) dismiss, discharge, remove from employment or threaten to dismiss, discharge or remove from
employment a worker or injure or threaten to injure him in respect of his employment by reason that the
worker is or proposes to become, or seeks to persuade any other person to become a member or officer of
a trade union, or participates in the promotion; or
(e) induce any person to refrain from becoming, or to cease to be a member or officer of a trade union, by
conferring or offering to confer any advantage on, or by procuring or offering to procure any advantage for
such person or any other person; or
(f) compel or attempt to compel any officer of the collective bargaining agent to sing a memorandum o
settlement or arrive at a settlement, by using intimidation, coercion, pressure, threat, confinement to a
place, physical injury, disconnection of water, power and telephone facilities and such other methods.
(g) interfere with, or in any way influence the election provided for in section 202;
(h) recruit any new worker during the period of strike under section 211 or during the currency or a strike
which is not illegal, except where the conciliator has, being satisfied that complete cessation of work is
likely to cause serious damage to the machinery or installation, permitted temporary employment or a
limited number of workers, in the section where the damage is likely to occur;
(i) deliberately fails to take measures recommended by the participation committee;
(j) fails to give reply to any communications made by the collective bargaining agent in respect of any
industrial dispute;
(k) transfer the president, general secretary, organizing secretary or treasurer of any registered trade union in
contravention of section 187;
(l) commence, continue, instigate or incite others to take part in an illegal lockout.
Q.262.
State the grounds for cancelation of registration of a trade union.

Cancellation of registration section 190
1) Subjects of the other provisions of this section, the registration of a trade union may be cancelled by the
Director of Labour if the trade union has
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a)
b)
c)
d)
e)
f)
g)
2)
3)
4)
Q.263.
Applied for cancellation of registration;

Ceased to exist;
Obtain registration by fraud or by misrepresentation of facts;
Contravened any of the basic provisions of the constitution;
Committed any unfair labour practice;
Membership which has fallen short of the number of membership required by the Act;
Contravened any of the provisions of the Act.
Where the Director of Labour is satisfied on enquiry that the registration of a trade union should be
cancelled he shall submit an application to the Labour Court praying for permission to cancel such
registration.
The Director of Labour shall cancel the registration of a trade union within thirty days from the date of
receipt of a permission from the labour court.
The registration of a trade union shall not be cancelled on the ground mentioned in 1(e) if the unfair
labour practice is not committed within three months prior to the date of submission of the application to
the labour court.
State the unfair labour practices on the part of the workers.

196. Unfair labour practices on the part of workers:
(1) No worker shall engage himself in any trade union activities during his office hours without the permission
of his employer: Provided that nothing in this sub-section shall apply to the trade union activities of the
president or the General Secretary of a trade union which is the collective any committee, negotiation,
conciliation, arbitration or proceeding under this Act, and the employer has been duly informed of such
activities.
(2) No worker or trade union of workers and no person acting on behalf of such trade union shall(a) intimidate any person to become, or refrain from becoming, or to continue to be, or to cease to be a
member or officer of a trade union; or
(b) induce any person to refrain from becoming, or cease to be a member or officer of a trade union, by
conferring or offering to confer any advantage on, or by procuring or offering to procure any
advantage for, such person or any other person; or
(c) compel or attempt to compel any worker to pay, or refrain from paying, any subscription towards the
fund or any trade union by using intimidation, coercion, pressure, threat, confinement to a place,
physical injury, disconnection of telephone, water or power facilities or such other methods; or
(d) compel or attempt to compel the employer to sign a memorandum of settlement or to accept or
agree to any demand by using intimidation, coercion, pressure, threat, confinement to or ouster from
a place, dispossession, assault, physical injury, disconnection of telephone, water or power facilities or
such other methods; or
(e) commence, continue an illegal strike or a go-slow; or instigate or incite others to take part in an illegal
strike or a go-slow; or
(f) resort to gherao, obstruction to transport or communications system or destruction of any property in
furtherance of any demand or object of a trade union,
(3) It shall be an unfair practice for a trade union to interfere with a ballot held under section 202 by the
exercise of undue influence, intimidation, impersonation or bribery through its executive or through any
other person acting on its behalf.
Q.264.
What are the functions of a collective bargaining agent? State the provision of the Act regarding constitution
of participation committee.
The collective bargaining agent in relation to an establishment shall be entitled to (Section 202 (24))
a) Undertake collective bargaining with the employer in matters connected with the employment, non
employment, the term of employment or the condition of work;
Syed M Hoq, ACCA
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b) Represent all or any of the workers in any proceeding;
c) Give notice of and declare, a strike in accordance with the provisions of the Act;
d) Nominate representatives of workers on the board of trustees of any welfare institutions or provident fund
and of the workers participation fund; and
e) To conduct case on behalf of any individual worker or group of workers.
Participation committee Section 205
The employer of an establishment ordinarily employing fifty or more workers shall constitute in prescribed
manner a participation committee with equal representations from the employer and the trade unions to
promote relations between workers and employers.
Q.265.
What do you mean by industrial dispute? State the procedure for settlement of industrial dispute. What are
the ingredients of an industrial dispute?
Industrial dispute means any dispute or difference between employers and employers or between employers
and workers or between workers and workers which is connected with the employment or non-employment or
the terms of employment or the conditions of work of any person;
209. Raising of industrial disputes:
No industrial dispute shall be deemed to exist, unless it has been raised in accordance with this chapter by a
collective bargaining agent or an employer.
210. Settlement of industrial disputes:
(1) If, at any time an employer or a collective bargaining agent finds that an industrial dispute is likely to arise
between the employer and workers or any of the workers, the employer, or, as the case may be, the
collective bargaining agent shall communicate his or its views in writing to the other party.
(2) Within fifteen days of the receipt of a communication under sub-section (1), the party receiving it shall, in
consultation with the representatives of the other party, arrange a meeting for collective bargaining on the
issue raised in the communication with a view to reaching an agreement thereon, and such meeting may
be held with the representatives of the parties authorized in this behalf.
(3) If the parties reach a settlement on the issues discussed, a memorandum of settlement shall be recorded
in writing and signed by both the parties and a copy thereof shall be forwarded by the employer to the
Government, the Director of Labour and the Conciliator.
(4) If
(a) the party receiving a communication under sub-section (1) fails to arrange a meeting with the
representatives of the other party for collective bargaining within the time specified in sub-section (2),
the other party, or
(b) no settlement is reached through dialogue within a period of one month from the date of the first
meeting for negotiation, or, such further period as may be agreed upon in writing by the parties, any
of the parties, may, within fifteen days from the expiry of the period mentioned in sub-section (2) or
clause (b) of this sub-section, as the case may be, report the matter to the conciliator and request him
in writing to conciliate in the dispute and the conciliator shall, within ten days of receipt of such
request, proceed to conciliate in the dispute.
(5) The Government shall, for the purposes of this chapter, by notification in the official Gazette, appoint such
number of persons as it considers necessary, as conciliator for such specific area or any industrial
establishment or industry, and the conciliator shall take up the conciliation to whom the request shall be
made for conciliation under sub-section (4),
(6) The conciliator, upon receipt of the request as aforesaid, shall star conciliation and shall call a meeting of
the parties to the dispute for the purpose of bringing about a settlement.
(7) The parties to the dispute shall appear before the conciliator in person or shall be represented before him
by person nominated by them and authorized to negotiate and enter into an agreement binding on the
parties.
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(8) If any settlement of the dispute is arrived at in the course of the proceedings before him, the conciliator
shall send a report thereof to the Government together with a memorandum of settlement signed by the
parties to the dispute.
(9) If no settlement is arrived at within the period of thirty days of receipt of request under subsection (4) by
the conciliator, the conciliation proceedings shall fail or the conciliation may be continued for such further
period as may be agreed upon in writing by the parties.
(10) If the conciliation proceeding fails, the conciliator shall try to persuade the parties to agree to refer the
dispute to an Arbitrator.
(11) If the parties do not agree to refer the dispute to an Arbitrator, the conciliator shall, within three days of
failure of the conciliation proceedings, issue a certificate to the parties to the dispute to the effect that
such proceedings have failed.
(12) If the parties agree to refer the dispute to an arbitrator, they shall make a joint request in writing for
reference of the dispute to an arbitrator agreed upon by them.
(13) The arbitrator, to whom a dispute is referred under sub-section (12), may be a person borne on a panel to
be maintained by the Government or any other person agreed upon by the parties.
(14) The Arbitrator shall give award within a period of thirty days from the date on which the dispute is referred
to him or such further period as may be agreed upon in writing by the parties to the dispute.
(15) After he has made an award, the arbitrator shall forward a copy thereof to the parties and to the
Government.
(16) The award of the arbitrator shall be final and no appeal shall lie against it.
(17) An award shall be valid for a period not exceeding two years as may be fixed by the arbitrator.
(18) The Director of Labour may, if he deems fit in the interest of settlement of a dispute, at any time, take over
any conciliation proceedings pending before any conciliator and proceed to conciliate in the dispute
himself or transfer such proceedings to any other conciliator, and the provisions of the preceding
subsections shall apply to such proceedings.
(19) Notwithstanding anything contained in this section, collective bargaining agent in the establishments in
respect of which trade union of employers or federation of trade unions of employers have been
registered shall communicate with such trade union or federation regarding any industrial dispute and a
settlement between them shall be binding upon all the employers and workers of those establishments.
Q.266.
State the composition and functions of Labour Appellate Tribunal.

218. Labour appellate tribunal:
(1) For the purpose of this act there shall be a labour appellate tribunal which shall consist of a chairman, and
if the government so deems fit, such number of other members as the government may appoint from time
to time.
(2) The chairman and the members, if any, of the tribunal shall be appointed by the government by
notification in the official gazette on such terms and conditions as the Government may determine.
(3) The chairman of the tribunal shall be a person who is or was a judge or an additional judge of the supreme
court, and a member of the tribunal shall be a person who is or was a judge or an additional judge of the
supreme court or who is or was a District judge for not less than three years.
(4) If the chairman is absent or unable to discharge his functions for any reason, the senior member of the
tribunal, if any, shall perform the functions o the chairman.
(5) Where members are appointed in the tribunal, the chairman may for the efficient performance of the
functions of the tribunal, constitute as many benches of the tribunal, consisting of one or more members
of the tribunal, including himself where necessary, as he may deem fit.
(6) An appeal or any matter before the tribunal may be heard and disposed of by the tribunal sitting in full
bench or by any bench there of
(7) Subject to this act, the tribunal shall follow as nearly as possible such procedure as are prescribed under
the code of civil procedure, for hearing of appeal by an appellate court from original decrees.
(8) If the members of a bench differ in opinion as to the decision to be given on any point-
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(a)
(b)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
Q.267.
the matter shall be decided according to the opinion of the majority, if any; and
if the members are equally divided, they shall state the point on which they differ and the case
shall be referred by them to the chairman for hearing on such point by the chairman himself if he
is not a member of the bench, or by one or more of the other members of the tribunal and such
point shall be decided according to the opinion of the chairman or member or majority of the
members hearing the point, as the case may be.
Where a bench includes the chairman of the tribunal as one o its members and there is a different of
opinion among the members and the members are equally divided, the decision of the chairman shall
prevail and the decision of the bench shall be expressed in terms of the chairman.
The tribunal may, on appeal, confirm, set aside, very or modify the award, decision or sentence or remand
a case to the labour court for re-hearing; and shall, save otherwise provided, exercise all the powers
conferred by this act on the labour court.
The decision of the tribunal shall be delivered, within a period of sixty days following the fling of the
appeal.
The tribunal shall have authority to punish for contempts of its authority, or that of any labour court, as if
it were a high court division of the Supreme Court.
Any person convicted and sentenced by the tribunal under sub-section (12) to imprisonment for any
period, or to pay a fine exceeding two exceeding two hundred taka, may prefer an appeal to the high court
division.
The tribunal may, on its own motion or on the application of a party, transfer any application or
proceeding from a labour court to any other labour court.
The tribunal shall have superintendence and control over all labor courts.
State the provisions of the Act for establishment of Participation Fund and Welfare Fund. What are the
provisions of the Act for their management?
234. Establishment of Participation Fund and welfare fund:
(1) Every Company to which this chapter applies shall(a) establish a workers Participation Fund and a workers Welfare Fund in accordance with this chapter
within one month of the date of which the chapter becomes applicable to it; and
(b) pay every to the participation fund, and the welfare fund, not later than nine months from the close
of that year, five percent of its net profits during such year, the proportion of the payment to the
participation Fund and the welfare fund being 80:20.
(2) The amount paid to the Funds under sub-section (1) (b) in relation to a year shall be deemed to have been
allocated to the funds on the first day of the next succeeding that year.
235. Management of Funds:
(1) As soon as may be, after the establishment of the participation fund and the welfare fund, there shall
be constituted a board of trustees, consisting of the following members namely;
(a) two persons nominated by the collective bargaining agent and if there be no collective bargaining
agent in the company, two persons elected by the workers of the company from amongst
themselves; and
(b) two persons nominated by the management of the company of whom at least one shall be a person
from the accounts branch of the company.
(2) The member shall elect for one year a person to be the chairman of the board alternately from
amongst the members under sub-section (1) (a) and under sub-section (1) (b) the first chairman being
from amongst the members under sub-section (1) (b).
(3) The board shall manage and administer the funds in accordance with the provisions of this chapter and
any rules made in this behalf.
(4) The board shall, in the exercise of its powers and performance of its functions, be subject to such
directions by the Government as may, from time to time, give.
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(5)
The Government, if it is of opinion that the board or a member of the board has been persistently
failing in the perfomance of his or its functions or has generally been acting in a manner inconsistent
with the objects and interests of the funds may after giving such member or, as the case may be, the
board an opportunity of showing case against it, by order(a) remove such member from his office or direct that the board shall stand superseded for such period
as may be specified in the order, and
(b) direct that, pending the election or nomination of a person in place of the members removed from
office or, as the case may be the reconstitution of the board, shall be exercised and performed by a
person specified in the order
(6) Upon the super session of a board under sub-section (5) the members in that board shall cease to hold
office and references to the board in this chapter and the rules shall be construed as references to the
officer specified in the order.
(7) Before the expiry of the period of suppression, the board shall be re-constituted in accordance with the
provisions of this chapter so as to enable it be take over its functions upon the expiry so such period.
Q.268.
State the provision regarding investment and utilization of participation fund.

240. Investment of Participation Fund:
(1) The amount allocated or accruing to the participant in fund shall be available to the company for its
business operation.
(2) The company may request the board to utilize the amount in the Participation fund for investment under
sub-section (11) and the board may decide to so invest the amount.
(7) If, at any time after the establishment of the participation fund, the company raises any additional capital
otherwise than through the issue of bonus or bonus shares, the Participation fund shall have the first
option to convert any amount available to the company under sub-section (1), or any of the assets of the
participation fund into ordinary equity capital up to a ceiling of twenty percent of the paid-up capital,
whichever is less.
(11) The amount in the participation fund which, under sub-section (2) the company has requested to be
utilized for investment under this sub-section may be invested by the board for the purchase of any of the
following, namely:
(a) I.C.B Mutual Fund Certificates;
(b) I.C.B Unit Certificates;
(c) Government securities including Defence and postal saving Certificate;
(d) Any other securities approved for the purpose by the Government.
242. Utilization of participation fund:
(1) Of the total amount deposited in the participation fund every year, two-thirds shall be distributed in equal
proportion to all workers in cash and one-third shall be invested in accordance with the provisions to all
workers.
(2) If a worker voluntarily leaves the employment of the company he shall receive benefits of the participation
fund and the welfare fund as admissible to him under this chapter.
(3) A worker whose services are terminated otherwise than by way of dismissal shall be at per with a worker
who retires from the service of the company.
(4) A worker who is dismissed from service shall forfeit his share in the funds.
(5) In the event of transfer of a worker from one office or unit of a company to another office or unit of that
company, he benefit accrued to the worker shall be transferred to the funds of the office or unit to which
he is transferred and his service in the previous office or unit shall be counted towards his entitlement to
the benefits of the funds of the office or unit to which he is transferred.
A worker in the event of his retirement or his nominated beneficiary, in the event of his earth while in the
employment of the company, shall receive full benefit of this chapter
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Q.269.
Differentiate between closures, strikes and lockout.

Q.270.
Discuss the provision of entitlement of benefits if a worker dies while in service.

9. Death benefit: If a worker dies while in service after a continuous service of not less than three years, his
nominee or in the absence of an nominee, his dependant shall be paid by the employer a compensation at the
rate of thirty days wages for every completed year of service, or for any part thereof in excess of six months or
gratuity, if any, whichever is higher, in addition to any other benefit to which the deceased worker would have
been entitled had he retired from service:
Provided that if such worker is covered by any compulsory insurance scheme of the establishment,
or, if any compensation is payable for such death under chapter XII, the worker shall be entitled to whichever is
higher.
Q.271.
Discuss the provisions of safety and security as per Bangladesh Labour Act 2006:
i) Fire
ii) Heavy machinery at upper stairs
iii) Crane and lift
Q.272.
What do you mean by public utility service? How it differs from commercial establishment?
Public utility service means
(a) the generation, production, manufacture, or supply of electricity, gas, oil or water to the public,
(b) any system of public conservancy o sanitation,
(c) hospitals and ambulance service,
(d) fire-fighting service,
(e) postal, telegraph or telephone service,
(f) railways, airways, road and river transport,
(g) ports,
(h) watch and ward staff and security services maintained in any establishment,
(i) oxygen acetylene, and
(j) banking;
Commercial establishment means an establishment in which the business of advertising, commission or
forwarding is conducted or which is a commercial agency, and includes
(a) a clerical department of a factory or of any industrial or commercial undertaking,
(b) the office establishment of a person who for the purpose of fulfilling a contract with any commercial
establishment or industrial establishment employs workers,
(c) a unit of a joint-stock company,
(d) an insurance company, a banking company or a bank,
(e) a brokers office
(f) a stock exchange,
(g) a club, a hotel or a restaurant or an eating house,
(h) a cinema or theatre,
(i) such other establishment or class thereof as the Government may, by notification in the official Gazette,
declare to be a commercial establishment for the purpose of this Act;
Q.273.
Is it compulsory to maintain service book for the workers? What are the contents of a service book?
Syed M Hoq, ACCA
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Q.274.
In what circumstances the employer may resort to stop of work and what are its procedures?
Q.275.
How the relationship of an employer and an employee can be determined as per BLA 2006?
Q.276.
Can a probationer be reverted to his former post?

Section 4 of Labour Act, 2006:
(8) The period of probation for a worker whose function is of clerical nature shall be six months and for other
workers such period shall be three month: Provided that in the case of a skilled worker, the period of
probation may be extended by an additional period of three months if, for any circumstances, it has not
been possible to determine the quality of his work within the first three months period of his probation.
(9) If any worker, whose service has been terminated during his probationary period, including the extended
period, is again appointed by the same employer within a period of three years, he shall, unless appointed
on a permanent basis, be deemed to a probationer and the period or periods of his earlier probation shall
be counted for determining his total period of probation.
(10) If a permanent worker is employed as a probationer in a new post, he may at any time during the
probationary period, be reverted to his old permanent post.
Q.277.
What will be the impact in the garment factory for enhancement of maternity leave?
Q.278.
What are the precautions to be taken in case of fire and precautions to be taken against dangerous fumes in
a factory?
Precaution in case of fire Section 62
1) Every establishment shall be provided with at least one alternative connecting stairway with each floor and
such means of escape in case of fire and fire fighting apparatus, as may be prescribed by rules.
2) If it appears to the Inspector that any establishment is not provided with the means of escape prescribed
under subsection (1) he may serve on the employer of the establishment an order in writing specifying the
measures which, in his opinion, should be adopted before a date specified in the order.
3) In every establishment the door affording exit from any room shall not be locked or fastened so that they
can be easily and immediately opened from inside while any person us within the room and such doors,
unless they are of sliding type, shall be constructed to open outwards and where the room is between two
rooms and all such doors, unless they are of sliding type shall be constructed to open out words, or where
the room is between the two rooms in the direction of the nearest exit from the building and no such door
shall be locked or obstructed while work is being carried on in the room.
4) In every establishment every window, door or other exit affording means of escape in case of fire, other
than the means of exit in ordinary use distinctly marked in Bangla and in red letters of adequate size or by
some other effective and clearly understood sign.
5) In every establishment there shall be provided effective and clearly audible means of giving warning in
case of fire to every person employed therein.
6) A free passage way giving access to each means of escape in case of fire shall be maintained for the use of
all workers in every room of the establishment.
7) In every establishment wherein more than ten workers are ordinarily employed in any place above the
ground floor, or explosive or highly inflammable materials are used or stored, effective measures shall be
taken to ensure that all the workers are familiar with the means of escape in case of fire and have been
adequately trained in the routine to be followed in such case.
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8)
In factories wherein fifty or more workers are employees are employed shall arrange at least once in a year
a mock fire fighting and the employer shall maintain a book of records in this respect.
Precautions against dangerous fumes Section 77

The Act provides for safeguarding the person employed from dangerous fumes. [See Q.257]
Q.279.
State the provisions of welfare of workers as described in the Bangladesh Labour Act, 2006.
i)
First aid facility section 89

1) The Act provides maintenance for first aid facilities to all person employed in working hours.
2) The prescribed box or cupboard will not be less than one for every one hundred fifty workers.
3) Each box or cupboard will be kept under a person trained for the purpose.
4) The person in charge of the first aid appliances should wear a badge for identification whose name is
to be notified.
5) Every establishment employing three hundred or more workers is to maintain a sick rook equipped
with prescribed medical appliances and trained staff.
ii)
Maintenance of safety record book Section 90

Every establishment employing more than twenty five workers shall compulsorily maintain a safety record
book.
iii)
Washing facility section 91

Every establishment is required to maintain washing and bathing facilities. Separate and adequately
screened facilities are to be provided for male and female workers. Such places shall be conveniently
accessible to all workers and kept clean.
iv)
Canteen section 92
Every establishment employing more than one hundred workers shall maintain adequate number of
canteens for workers. The government may make rule providing for equipments and management of the
canteen.
v)
Shelters section 93
In every establishment employing more than fifty workers adequate and suitable shelters or rest rooms
and suitable lunch rooms with provision of drinking water is to be provided. Any canteen maintained shall
be treated as part of this arrangement. Where there is provision for lunch room, the workers will not take
lunch in work room. The shelter and rest room shall be adequately lighted and properly ventilated. Where
is more than twenty five female workers are working, separate shelter for them shall be maintained and
where the female workers are less than 25, separate and screened arrangement is to be made.
vi)
Room for children section 94

Where in forty or more female workers are working, suitable room/rooms shall be provided for children
under age of six years of these female workers. Such room shall be maintained in the manner provided in
the Act.
vii) Recreational and education facilities in tea plantation section 95

Where the children of the tea plantation workers between the ages of six and twelve exceed twenty five in
number, the govt. may make rules requiring the employers to make provision for educational facilities for
the children in such manner prescribed in the Act. In every tea plantation, there shall be adequate medical
centre for the workers and their children.
viii) Housing facilities in tea plantation section 96
Every employer in tea plantation is required to provide for residential accommodation of the workers and
family residing in the tea plantation.
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Q.280.
ix)
Facilities for daily necessities etc. in tea plantation section 97

Every employer is required to provide facilities within easy reach to have daily necessities of life.
x)
Medical care for news paper workers section 98

Every news paper worker and his family is entitled to medical care at the cost of the employer.
xi)
Compulsory group insurance section 99

Government may provide rules for group insurance in establishment employing 200 workers at the
minimum.
Discuss the provisions of closure of shops with exception as per the BLA, 2006.
13. Closure of establishment:
(1) The employer may, in the event of an illegal strike by any section or department of any establishment,
close down either wholly or partly such section or department and the workers participated in the illegal
strike hall not be paid any wages for such closure.
(2) Where by reason of closing down of any section or department of any establishment under subsection (1)
any other section or department is so affected that it is not possible to keep that section or department
open, that section or department may also be closed down and the workers affected thereby shall be paid
wages as in the case of lay-off for a period of three days and thereafter they may not be paid any wages for
such closure.
(3) The fact of such closure shall be notified by the employer, as soon as practicable, by notice posted on the
notice board in the section or department concerned or at a conspicuous place in the establishment and
the fact of resumption of work, following such closure, shall likewise be notified.
Q.281.
State the causes of weal trade union movement in Bangladesh? What are your suggestions to improve in this
regard?
Q.282.
Discuss the provisions of leave and holidays under BLA, 2006.

Q.283.
Differentiate between the followings:

i) Commercial establishments and industrial establishments
Commercial establishment means an establishment in which the business of advertising, commission or
forwarding is conducted or which is a commercial agency, and includes
(a) a clerical department of a factory or of any industrial or commercial undertaking,
(b) the office establishment of a person who for the purpose of fulfilling a contract with any commercial
establishment or industrial establishment employs workers,
(c) a unit of a joint-stock company,
(d) an insurance company, a banking company or a bank,
(e) a brokers office
(f) a stock exchange,
(g) a club, a hotel or a restaurant or an eating house,
(h) a cinema or theatre,
(i) such other establishment or class thereof as the Government may, by notification in the official
Gazette, declare to be a commercial establishment for the purpose of this Act;
Industrial establishment means any workshop or other establishment in which articles are produced,
adapted or manufactured or where the work of making, altering, repairing, ornamenting, finishing or
packing or otherwise treating any article or substance, with a view to their use, transport, sale, delivery or
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Page 98

disposal, is carried on or such other class of establishments which the Government may, by notification in
the official Gazette, declare to be an industrial establishment of the purpose of this Act, and includes any(a) road transport service or railway transport service,
(b) river transport service,
(c) airlines,
(d) dock, wharf or jetty,
(e) mine, quarry, gas-field or oil field,
(f) plantation,
(g) factory,
(h) newspaper establishment;
(i) contractors or sub-contractors establishment for the purpose of construction, reconstruction, repair,
alteration or demolition of any building, road, tunnel, drain, canal or bridge or ship-breaking or
rebuilding or loading or unloading of cargo into vessel or carrying thereof;
ii)
Ventilation and temperature

iii)
Casual leave and sick leave.

iv)
Participation fund and welfare fund

Q.284.
Discuss the rights of laid off workers for compensation as per law.
Q.285.
Discuss the procedures for appointment, election and determination of collective bargaining agent.
02. Collective bargaining agent:
(1) Where there is only one trade union in an establishment, that trade union shall, be deemed to be
collective bargaining agent for such for such establishment.
(2) Where there are more trade unions than one in an establishment, the Director of Labour shall, upon an
application made in this behalf by any such trade union or by the employer, hold a secret ballot, within a
period of not more than one hundred and twenty days from the date of receipt of such application, to
determine as to which one of such trade unions shall be the collective bargaining agent for the
establishment.
(3) Upon receipt of an application under sub-section (2) the director of Labour shall, by notice in writing call
upon every trade union in the establishment to which the application relates to indicate, within such time,
not exceeding fifteen days, as may be specified in the notice, whether it desires to be a contestant in the
secret ballot to be held for determining the collective bargaining agent in relation to the establishment.
(4) If a trade union fails to indicate, within the time specified in the notice, its desire to be a contestant in the
secret ballot, it shall be presumed that it shall not be a contestant in such ballot.
(5) If no trade union indicates, within the time specified in the notice, its desire to be a contestant in the
secret ballot, the trade union which has made the application shall be declared to be the collective
bargaining agent in relation to the establishment concerned, provided it has as its members not less than
one-third of the total number of workers employed in the establishment.
(6) Every employer shall on being so required by the Director of labour, submit to him a list of all workers
employed in the establishment for not less than a period of three months in the establishment excluding
those who are casual or badly workers, and the list shall contain the following particulars; namely:
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(7) on being so required Director of Labour, every employer shall submit to the Director of Labour requisite
number of additional copies of the list of workers mentioned in sub-section (6) and shall provide such
facilities for verification of the list submitted by him.
(8) On receipt of the list of workers from the employer, the director of Labour shall send a copy of the list to
each of the contesting trade unions and shall also affix a coy there of in a conspicuous part of his office and
another copy of the list in a conspicuous part of the establishment concerned, together with a notice
inviting objections, if any, to be submitted to him within such time as may be specified by him.
(9) The objections, if any, received by the director of Labour within the specified time shall be disposed of by
him after necessary enquiry.
(10) The Director of labour shall make such amendments, alterations or modifications in the list of workers
submitted by the employer as may be required by any decision given by him on objections under subsection (9).
(11) After amendments, alteration of modification, if any, made under sub-section (10), or where no objections
are received by the director of Labour within the specified time the director of Labour shall prepare a list
of worker employed in the establishment concerned duly certified and send copies thereof to the
employer and such of the contesting trade unions at least seven days prior to the date fixed for poll.
(12) The list of workers prepared and certified under sub-section (11), shall be deemed to be the list of voters,
and every worker whose name appears in that list shall be entitled to vote in the poll to determine the
collective bargaining agent.
(13) Every employer shall provide all such facilities in his establishment as may be required by the director of
labour for the conduct of the poll but shall not interfere with, or in any way influence the voting.
(14) No person shall canvas for vote within a radius of forty-five meters of the polling stations.
(15) For the purpose of holding secret ballot to determine the collective bargaining agent, the Director of
Labour shall
(a) fix the date for the poll and intimate the same to each of the contesting trade unions and also to
every employer;
(b) on the date fixed for the poll to place in the polling station set up for the purpose the ballot boxes
which shall be sealed in the presence of the representatives of the contesting trade unions as to
receive the ballot papers.
(c) Conduct the poll at the polling stations at which the representatives of the contesting trade unions
shall have the right to be present;
(d) After the conclusion of the poll and in the presence of such of the representatives of the contesting
trade unions as may be present, open the ballot boxes and count the votes; and
(e) After the conclusion of the count, declare the trade union which has received the highest number of
votes to be the collective bargaining agent;
Provided that no trade union shall be declared to be the collective bargaining agent for an
establishment unless the number of bots received by it is not less than one third of the total number of
workers employed in such establishment.
(24) The collective bargaining agent in relation to an establishment shall be entitled to
(a) undertake collective bargaining with the employer on matters connected with the employment, nonemployment, non-employment, the term of employment or the conditions of work;
(b) represent all or any of the workers in any proceedings;
(c) give notice of, and declare, a strike in accordance with the provisions of this chapter; and
(d) nominate representatives of workers on the board of trustees of any welfare institutions or provident
funds, and of the workers participation fund established under chapter XV,
(e) to conduct cases on behalf of any individual worker or group of workers.
Syed M Hoq, ACCA
Page 100

Q.286.
What are the objectives of trade union?

176. Trade unions of workers and employers: Subject to the provisions of this Chapter,(a) workers, without distinction whatsoever, shall have the right to form trade union primarily for the purpose
of regulating the relations between workers and employers or workers and workers and, subject to the
constitution of the union concerned, to joint trade union of their own choosing;
(b) Employers, without distinction whatsoever, shall have the right form trade union primarily for the purpose
of regulating the relations between employers and workers or employers and employers and, subject to
the constitution of the union concerned, to join trade union of their own choosing; and
(c) Trade unions of workers and employers shall have the right to form and join federations and any such
union and federation shall have the right to affiliate with any international organization and confederation
of workers or employers organization.
(d) Trade unions and employers associations shall have the right to draw up their constitutions and rules, to
elect their representatives in full freedom, to organize their administration and activities and to formulate
their programmers;
Q.287.
Discuss the composition, functions and jurisdiction of Labour Court of Bangladesh.

214. Labour courts:
(1) For the purposes of this Act, the Government shall, by notification in the official Gazette, establish as many
labour courts as it considers necessary.
(2) Where more than one labour court is established under sub-section (1), the Government shall specify in
the notification the territorial limits within which each one of them shall exercise jurisdiction under this
act.
(3) A labour court shall consist of a chairman and two members to advise him, but in case of trial of any
offence or in disposal of any matter under chapter X and XII it shall be constituted with the chairman only.
(4) The chairman of the labour court shall be appointed by the Government from amongst the District judges
or an additional district judges.
(5) The terms and conditions of appointment of the chairman of the labour court shall be determined by the
Government.
(6) One of the two members of the labour court shall be the representative of employers and the other shall
be the representatives of the workers and they shall be appointed in the manner hereinafter provided in
sub-section (9).
(7) The Government shall constitute, in the manner prescribed by rules, by notification in the official Gazette,
two panels, one of which shall consist of six representatives of employers and the other of six
representatives of the workers.
(8) The panel of members prepared under sub-section 99) shall be reconstituted after every two years,
notwithstanding the expiry of the said period of two years, The members shall continue on the panels till
the new panels are constituted and notified in the official Gazette.
(9) The chairman of the labour court shall, for hearing or disposal of a case relating to a specific industrial
dispute, select one person from each of the two panels constituted under sub-section (7), and persons so
selected, together with the chairman, shall be deemed to have constituted the labour court in respect of
that specific industrial dispute: provided that the chairman may select any member from either of the
panels as a member of the labour court in respect of more than one such case pending before the labour
court.
(10) A labour court shall have exclusive jurisdiction to
(a) adjudicate and determine and industrial dispute or any other dispute or any question which may be or
has been referred to or brought before it under this Act.
(b) enquire into and adjudicate any matter relating to the implementation or violation of a settlement
which is referred to it by the government;
(c) try offences under this Act; and
Syed M Hoq, ACCA
Page 101

(d)
exercise and perform such other powers and functions as are or may be conferred upon or assigned
to it by or under this act or any other law.
(11) If any member of the Labour court is absent at the time of its constitution or is absent at the time of its
constitution or absent from or is absent at the time of its constitution or absent from or is otherwise
unable to attend, any sitting of the court, whether at the beginning of the hearing of a case or during the
continuance of the hearing thereof, the proceedings of the court may begin or continue, as me case may
be, in his absence and the decision or award of the court may be given in the absence of such member;
and no act, proceeding decision or award of the court shall be invalid or be called in question merely on
the ground of such absence or on the ground of any vacancy in, or any defect in the constitution of, the
labour court.
Provided that if any member informs the chairman beforehand of his absence, the chairman shall
nominate another member from the panel of the concerned parties: Provided further that the opinions of
the members of both the sides shall be mentioned in the judgment.
(12) The provisions of chapter XXXV of the code of criminal procedure, 1898 (V of 1898) shall apply to a labour
court shall be deemed to be a civil court.
(13) All labour courts shall be subordinate to the Tribunal.
Q.288.
What are the procedures of retrenchment? Is an employer under any obligation has to re-employ a
retrenched worker?
20. Retrenchment:
(1) A worker employed in an establishment may be retrenched from service on the ground of redundancy.
(2) No worker who has been in continuous service for not less than one year under an employer shall be
retrenched by the employer unless(a) The worker has been given one months notice in writing, indicating the reasons for retrenchment, or
the worker has been paid in lieu of such notice, wages for the period of notice;
(b) a copy of the notice is sent to the chief Inspector or any other officer authorized by him and also to
the collective bargaining agent in the establishment, if any; and
(c) he has been paid, compensation which shall be equivalent to thirty days wages or gratuity for every
completed year of service if any, whichever is higher.
(3) Notwithstanding anything contained in sub-section (2), in the case of retrenchment of a worker under
section 16(7), no notice as mentioned in sub-section (2) (a) shall be necessary; but the worker so
retrenched, shall be paid fifteen days wages in addition to the compensation or gratuity, as the case may
be, which may be payable to him under sub-section (2) (c).
(4) Where any worker belonging to a particular category of workers is to be retrenched, the employer shall, in
the absence of any agreement between him and the worker in this behalf, retrench the worker who was
the last person to be employed in that category.
21. Re-employment of retrenched workers:
Where any number of workers are retrenched, and the employer proposes to take into his employ any worker
within a period of one year from the date of such retrenchment, he shall give an opportunity to the retrenched
workers belonging to the particular category concerned by sending a notice to their last known addresses, to
offer themselves for employment, and the retrenched workers who so offer themselves for re-employment
shall have preference over other retrenched workers, each having priority according to the length of his service
under the employer.
Syed M Hoq, ACCA
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Q.289.
Briefly discuss the provisions in the Bangladesh Labour Act, 2006 for the provision of the interest of the
children.
34. Prohibition of employment of children and adolescent:
(1) No child shall be employed or permitted to work in any occupation or establishment.
(2) No adolescent shall be employed or permitted to work in any occupation or establishment unless(a) a certificate of fitness in the prescribed form and granted to him by a registered medical practitioner
is in the custody of the employer ; and
(b) he carries , while at work, a token giving a reference to such certificate.
(3) Nothing in this sub-section (2), shall apply to the employment of any adolescent in any occupation or
establishment either as an apprentice or or the purpose or receiving vocational training therein.
(4) The Government may, where it is of opinion that an emergency has arisen and the public interest so
requires, by notification in the official Gazette, declare that the provisions of this sub-section (2), shall not
be in operation for such period as may be specified in the notification.
35. Prohibition of certain agreement in respect of children:
Subject to the provisions of this chapter, no person, being the parent or guardian of a child, shall make an
agreement, to allow the service of the child to be utilized in any employment.
44. Exception in certain cases of employment of children:
(1) Notwithstanding anything contained in this chapter, a child who has completed twelve years of age, may
be employed in such light work as not to endanger his health and development or interfere with his
education; Provided that the hours of work of such child, where he is school going, shall be so arranged
that they do not interfere with is school attendance.
(2) All provisions applicable to an adolescent workers under this chapter shall mutatis-mutandis apply to such
child workers.
Q.290.
Describe the grievance handling procedures as laid in the BLA, 2006.

Q.291.
Write short notes on the following:

i) Unfair labour policy
See Manual for details.
ii)
Minimum wage board

138. Establishment of Minimum wages Board:
(1) The Government shall establish a board to be called the minimum wages board.
(2) the minimum wages board, hereinafter referred to in this chapter as the wages board, shall consist of(a) a chairman; (b) one independent member; (c) one member to represent the employers, and (d)
one member to represent the workers.
(3) For the purpose of discharging the functions specified in section 139, the wages board shall also
include- (a) one member to represent the employers of the industry concerned; and (b) one member
to represent the workers engaged in such industry.
(4) The chairman and the other members of the wages board shall be appointed by the Government.
(5) The chairman and the independent member of the wages board shall be appointed from persons with
adequate knowledge of industrial labour and economic conditions of the country who are not
connected with any industry or associated with any trade union of workers or employers.
(6) The member to represent the employers and the member to represent the workers under subsection
(2) or (3) shall be appointed after considering nominations, if any, of such organizations as the
Syed M Hoq, ACCA
Page 103

Government considers to be representative organizations of such employers and workers
respectively.
Provided that, if no nomination is received for the representatives of the employers or workers inspite
of more than one effort, the Government appoint such persons whom the Government considers to
be fit in its opinion to be representative of such employers and workers respectively.
iii)
Power and function of Chief Inspector

318. Chief Inspector, etc.:
(1) The Government may by notification in the official gazette, appoint a chief Inspector and requisite
number of deputy chief Inspectors, assistant chief Inspectors or Inspectors as it thinks fit for the
Purposes of this act.
(2) Where Deputy chief Inspectors, Assistant chief Inspectors or Inspectors are appointed, the
Government shall specify in the notification the area within which and the class of establishments in
respect of which each one o them shall exercise power and perform functions.
(3) The chief Inspector shall, in addition to the powers conferred on him under this act, have the powers
of an Inspector throughout the country.
(4) The chief Inspector shall also have powers of supervision and control over deputy chief Inspectors,
Assistant chief and Inspectors.
(5) The chief Inspector may, by general or special order in writing, direct that all or any of his powers and
function may, be also exercisable by any deputy chief Inspector, Assistant chief Inspector and
Inspector.
(6) All principal officers of the mercantile marine department shall be Inspectors ex-officio for the
purpose of regulations made under chapter VI within the limit of their charge.
319. Powers of chief Inspector, etc.:
(1) for carrying out the purposes of this act, the chief Inspector, a deputy chief Inspector, an assistant
chief Inspector or Inspector, shall have the following powers and responsibilities within the area for
which he is appointed
(a) with such assistants, if any, as he thinks fit, enter, inspect and examine any place, premises,
vessel or vehicle, at any reasonable time, which is, or which he has reason to believe to be, an
establishment or used for an establishment;
(b) require the production of the registers, records, certificates, notices and other documents kept
or maintained in pursuance of this act or the rules, regulations, orders or schemes and seize,
inspect, examine and copy any of them;
(c) make such examination and enquiry as may be necessary to ascertain whether the provisions of
this Act or the rules, regulations, orders or schemes in respect of any establishment or any
worker employed therein are complied with;
(d) examine in respect of matters pertaining to this act or the rules, regulations, orders or schemes
any person whom he finds in any establishment or whom he reason to believe to be or to have
been within the preceding two months employed in any establishment;
(e) require every person so examined to sign the record of such examination by way of verification;
(f) require such explanation from the employer or any person employed by him in respect of any
registers, record, certificates, notices or other documents kept or maintained by him as he deems
necessary;
(g) exercise such other powers and functions as are conferred by this act or may be prescribed.
iv)
Dock workers management board.

254. Dock workers Management Boards:
Syed M Hoq, ACCA
Page 104

(1) The Government shall, by notification in the official Gazette, constitute separately for chittagong and
mongla port a board to be called the dock workers management board for the purposes of this
chapter.
(2) A Dock Workers Management board, hereinafter in this chapter referred to as the board shall be a
body corporate having perpetual succession and a common dispose of property, both movale and
immovable, and to contract, and shall by its name sue and be sued.
255. Composition of a board:
(1) A board shall consist of the following members namely(a) a chairman;
(b) a vice-chairman;
(c) two members representing the Government, of whom one shall be from the Ministry of
Labour and Man power;
(d) one member representing the chittagong port authority or the port of chalna Authority as the
case may be;
(e) two members representing the employers;
(f) two members representing the ship owners and shipping agents ; and
(g) four members representing the dock workers.
(2) All member other than and the chairman, shall be appointed by the Government.
(3) The chairman of the chittagong port authority or the port authority or the port of chalna authority, as
the case may be, shall ex-officio be the chairman of a board.
(4) A member of a board, other than its chairman and vice-chairman, shall, unless removed earlier, hold
office for a period of two years from the date of his appointment, and shall be eligible for
reappointment.
(5) The vice-chairman of a board shall(a) hold office on such terms and conditions as the Government may determine;
(b) perform such duties as may be specified in the scheme or as may be assigned to him by the
board or as may be prescribed.
(6) A member of a board, other than the chairman and the vice-chairman, may resign from office by
writing under his hand addressed to the chairman
v)
Illegal lockout
Illegal lock-out means a lock-out means a lock-out declared, commenced or continued otherwise than in
accordance with the provisions of chapter XIV.
vi)
Occupational disease.
vii) Compensatory weekly holiday

104. Compensatory weekly holiday: Where, as a result of the passing of an order or the making of a rule
under the provisions of this act exempting an establishment or the workers therein from the provisions of
section 103, a worker is deprived of any of the weekly holidays provided for in that section, he shall be
allowed, as soon as circumstances permit, compensatory holidays, of equal number to the holidays so
deprived of.
viii) Partial disablement and total disablement
Partial disablement means, where the disablement is of temporary nature, such disablement as reduces
the earning capacity of a worker in any employment in which he was engaged at the time of the accident
resulting in the disablement, and, where the disablement is of a permanent nature, such disablement as
reduces his earning capacity in every employment which he was capable of undertaking at that time:
Syed M Hoq, ACCA
Page 105

Provided that every injury specified in the First Schedule shall be deemed to result in permanent partial
disablement;
Total disablement means such disablement, whether of a temporary or permanent nature, as
incapacitates a worker for all work which he was capable of performing at the time of the accident
resulting in such disablement; Provided that permanent total disablement shall be deemed to result from
the permanent total loss of the sight of both eyes or from any combination of injuries specified in the First
Schedule where the aggregate percentage of the loss of earning capacity as specified in that schedule
against those injuries, amounts to one hundred percent;
Q.292.
What is dismissal? What are the grounds of dismissal?

Dismissal means the termination of services of a worker by the employer for misconduct.
A worker may be dismissed without prior notice or pay in lieu thereof if he is (Section 23-1):
a) Convicted for any criminal offence, or
b) He is found guilty of misconduct under section 24.
Q.293.
Under what circumstances an employer can stop any section or sections of the establishment and for that
what procedures he has to follow as per the BLA, 2006?
Q.294.
Define the following as per BLA, 2006:

i) Manufacturing process
Manufacturing process means any of the following processes(a) for making, altering, repairing, ornamenting, painting, washing, finishing, packing or otherwise
treating any articles or substance with a view to its use, sale, transport, delivery, display or
disposal,
(b) for pumping, oil, gas water, sewerage or other fluids or slurries,
(c) for generating, transforming or transmitting power or gas,
(d) for constructing, reconstructing, repairing, refitting, finishing or breaking up of ships or vessels, or
(e) for printing by letter press, lithography, photogravure, computer, photocompose, offset or other
similar work or book-binding which is carried on by way or trade or for purposes of gain or
incidental to another business so carried on;
Q.295.
What are the objectives of Industrial Law? Discuss the necessity of Industrial Police in the context of
Bangladesh.
Q.296.
Discuss the employers responsibility for payment of compensation as per the BLA, 2006.
150. Employers Liability for compensation:
(1) If personal injury is caused to a worker by accident arising out of and in the course of his employment, his
employer shall be liable to pay compensation in accordance with the provisions of this chapter.
(2) The employer shall not be liable to pay compensation(a) in respect of any injury which does not result in the total or partial disablement of the worker for a
period exceeding three days;
(b) in respect of any injury, not resulting in death, caused by an accident which indirectly attributable to
i) the worker having been at the time thereof under the influence of drink or drugs, or
ii) the wilful disobedience of the worker to an order expressly given, or to a rule expressly framed,
for the purpose of securing the safety of worker, or
Syed M Hoq, ACCA
Page 106

iii) the wilful removal or disregard by the worker of any safety guard or other device which he knew
to have been provided for the purpose of securing the safety or worker.
(3) If
(a) worker employed in any employment specified in part-A of the third Schedule, attacked with any
disease specified therein as an occupational disease peculiar to that of employment, or
(b) a worker, whilst in the service of an employer in whose service he has been employed for a
continuous period of not less than six months in any employment specified in part- B of the Third
schedule, contracts any disease specified therein as an occupational disease peculiar to that
employment, the contracting of the disease shall be deemed to be an injury by accident within the
meaning of this section, and, unless the employer proves the contrary, the accident shall be deemed
to have arisen out of and in the course of the employment.
Explanation: For the purposes of this sub-section, a period of service shall be deemed to be
continuous which has not included a period of service under any other employer in the same kind of
employment.
Q.297.
Discuss the provisions of providing drinking water as per BLA, 2006.

Drinking water Section 58
1) In every establishment effective arrangement shall be made to provide and maintain at a suitable point
conveniently situated for all workers employed therein a sufficient supply of whole some drinking water.
2) All such points where water is situated shall be legibly marked Drinking Water in Bangla.
3) In every establishment wherein 250 or more workers are ordinarily employed, provision shall be made for
cooling the drinking water during the hot weather by effective means and for distribution thereof.
4) Where dehydration occurs in the body of workers due to work near machineries creating excessive heat,
those workers shall be provided with oral dehydration therapy.
Q.298.
Briefly discuss the importance of industrial law in an export-oriented industry.

Q.299.
Describe the conditions of employment as per the BLA, 2006.

3. Conditions of employment:
(1) In every establishment employment of workers and other matters incidental thereto shall be regulated in
accordance with the provisions of this chapter: Provided that any establishment may have its own rules
regulating employment of workers, but no such rules shall be less favorable to any worker than the
provisions of this chapter.
(2) The service rules in any establishment as mentioned in the proviso to sub-section (1) shall be submitted for
approval by the employer of such establishment to the chief inspector who shall, within six months of the
receipt thereof make such order therein as he deems fit.
(3) No service rules as mentioned in sub-section (2) shall be put into effect except with the approval of the
chief Inspector.
(4) Any person aggrieved by the order of the chief Inspector may, within thirty days of the receipt of the
order, may prefer appeal to the Government and the order of the Government on such appeal shall be
final.
(5) Nothing provided in sub-section (2) shall apply to an establishment which is owned by or under
management or control the Government.
Q.300.
When does an individual dispute become an industrial dispute? How a participation committee is
constituted?
Syed M Hoq, ACCA
Page 107

Q.301.
An individual worker having been aggrieved by his dismissal from service intends to seek redress. What
procedures are to be followed by him?
See ICMAB manual page # 114 (Grievance Procedure).
Q.302.
State shortly the provisions related to working hour and leave as per BLA, 2006.
Q.303.
Discuss the right and liability for payment of maternity benefit. How the amount of maternity benefit is
calculated?
46. Right to, and liability for, payment of maternity benefit:
(1) every woman employed in an establishment shall be entitled to and her employer shall be liable for, the
payment of maternity benefit in respect of the period of eight weeks preceding the expected day of her
delivery and eight weeks immediately following the day of her delivery: Provided that a woman shall not
be entitled to such maternity benefit unless she has worked under the employer, for a period of not less
than six month immediately preceding the day of her delivery.
(2) No maternity benefit shall be payable to any woman if at the time of her confinement she has two or more
surviving children, but in that case she shall be entitled to the leave to which she would otherwise be
entitled.
48. Amount of maternity benefit:
(1) The maternity benefit which is payable under this act shall be payable at the rate of daily, weekly or
monthly average wages, as the case may be, calculated in the manner laid down in sub-section (2), and
such payment shall be made wholly in cash.
(2) For the purpose of sub-section (1) the daily, weekly or monthly average wages, as the case may be, shall be
calculated by dividing the total wages earned by the woman during the three months immediately
preceding the date on which she gives notice under this act by the number of day she actually worked
during the period.
Q.304.
In which places is the employment to work of a woman worker prohibited under the Bangladesh Labour Act,
2006?
Q.305.
Discuss the provision of Provident Fund for workers of non-government establishment.

Q.306.
Discuss the provisions related to the following:

i) Penalty for employment of child and adolescent
284. Penalty for employment of child and adolescent: whoever employs any child or adolescent or permits
any child or adolescent to work in contravention of any provision of this act; shall be punishable with fine
which may extend to five thousand taka.
ii)
Penalty for payment of wages which is below the minimum rate of wages
289. Penalty for payment or wages at a rate below the minimum rate of wages:
(1) Any employer who pays any worker wages at a rate lower than the rate declared under chapter XI to
be the minimum rate of wages shall be punishable with imprisonment for a term which may extend to
one year, or with fine which may extend to five thousand taka, or with both.
Syed M Hoq, ACCA
Page 108

(2) Where the court imposes penalty under sub-section (1), while passing judgment order that the
employer shall also pay to the worker concerned such sum to represent the differences between the
amount actually paid to such worker and the amount which would have been paid to him had there
been no such contravention.
iii)
Penalty for unfair labour practice

291. Penalty for unfair labour practices:
(1) Whoever contravenes any provision of section 195, shall be punishable with imprisonment for a term
which may extend to two years, or with fine which may extend to ten thousand taka, or with both.
(2) Any worker who contravenes any provision of section 196 shall be punishable with imprisonment for
a term which may extend to one year, or with fine which may extend to five thousand taka, or with
both.
(3) Any trade union which or any person, other than a worker, who, contravenes any provision of section
196, shall be punishable with imprisonment for a term which may extend to two years or with fine
which extend to ten thousand taka, or with both.
iv)
Penalty for illegal strike or lock-out

294. Penalty for illegal strike or lock-out:
(1) Any worker who commences, continues or otherwise acts in furtherance of an illegal strike shall be
punishable with imprisonment for a term which may extend to one year or with fine which may
extend to five thousand taka, or with both.
(2) Any employer who commences continues or otherwise acts in furtherance of an illegal lock-out shall
be punishable with imprisonment for a term which may extend to one year, or with fine which may
extend to five thousand taka, or with both.
Q.307.
Discuss the functions of an inspector and a certifying surgeon under the labour act 2006.
Q.308.
What are the causes of industrial dispute? How the disputes can be minimized? Give your advice.
Q.309.
Discuss the provisions of weekly holidays as laid in the BLA, 2006.

103. Weekly holiday:
An adult worker employed in an establishment
(a) which is a shop or commercial establishment, or industrial establishment, shall be allowed in each week
one and half days holiday and in factory and establishment one day in a week;
(b) which is a road transport service, shall be allowed in each week one days holiday of twenty four
consecutive hours; and no deduction on account of such holidays shall be made from the wages of any
such worker.
Q.310.
What are the exceptions of the rule that every shops and establishment will remain close one and half days
in a week?
Q.311.
The management of XYZ Company decided to discharge Mr. P, a worker who is serving for three years. On
what ground and how the management can discharge Mr. P?
Syed M Hoq, ACCA
Page 109

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