B. Law - Din Islam Miah, FCA

By: Md.
Din Islam Miah, FCA
Lecture 01: Contract Act 1872
1. Definition of Contract
As per section 2(h) of contract Act 1872, “An agreement enforceable by law is a
contract.”
As per section 2(g), “An agreement not enforceable by law is void.”
Essential elements of a Contract:
An agreement becomes enforceable by law when it fulfills certain conditions.

These conditions are called the essential elements of a Contract. The conditions
are as follows:
i. Offer and acceptance

ii. Intention to legal relationship
iii. Lawful consideration
iv. Capacity of parties
v. Free consent
vi. Legality of object
vii. Certainty
viii. Possibility of performance
ix. Writing, registration and legal formalities
The elements mention above must all be present. If any one of them is absent, the
agreement does not become a contract. An agreement which fulfills all the above
essential elements is enforceable by law and is called a contract.
From this, it is said that “All contracts are agreement but all agreements are not
contracts.”
Proposal:
A proposal is also called an offer. A proposal is defined 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 a proposal” 2(a)
Acceptance:
When the person to whom the proposal is made signifies assent thereto, the
proposal is said to be accepted. A proposal when accepted becomes a promise.
Thursday, 27 February, 2014 Page 1 of 27

By: Md. Din Islam Miah, FCA
Specific offer:
When an offer is made to a specific person(s) is called a specific offer. X offers to

sell his car to Y at Tk. 1 million.
A offers to reward Tk. 1000 to any student who finds out and returns a book lost
in the college.
General offer:
A transport Company runs buses in the streets. This is an offer by the company to
carry passengers at the scheduled fares.
Effect of an offer and acceptance:

Offer alone and acceptance alone are inactive and powerless. An offer together
with acceptance leads to a contract which is enforceable by court subject to the
elements of the contact exists.
An offer and an acceptance are like a lighted match and a bucketful of gunpowder.
Rules regarding Offer:
i. An offer may be expressed or may be implied from the circumstances.

ii. An offer may be made to a definite person, class of person or to anybody
in the world.( general and specific)
iii. Legal relationship is required
iv. The terms of the offer must be certain, definite not vague
v. A mere statement of intention is not an offer
vi. An offer must be communicated to the offeree
vii. An offer may be conditional

Acceptance:
An offer can be accepted only by the person or persons for whom the offer is
intended.
Rules regarding Acceptance:
i. Acceptance must be absolute and unqualified

ii. Conditional Acceptance is no acceptance
(Counter proposal/offer)
iii. Seeking clarification is not a counter offer
iv. Acceptance must be expressed in some usual or reasonable manner (word
of mouth, Telephone, etc.)
v. Mental acceptance or un communicated assent does not result in a
contract( It must be communicated to the offeror or shown by conduct)
vi. Mode of acceptance ( As required by the offeree)
vii. Time of acceptance( specific or reasonable time)
viii. Acceptance is completed when it is communicated
ix. Acceptance must be made while the offer is in force
Communication of offer and acceptance:
The communication of an offer is completed when it comes to the knowledge of the

person to whom it is made. The Acceptance is communicated when it is put in
transmission to the offeror.
Example:
X proposes to sell a house to Y at Tk. 10 million by a letter. Communication of the

proposal is completed when Y receives the letter.
Y accepts X’s proposal by a letter sent by post. The communication of the acceptance
is complete as against X, when the letter is posted, as against Y, when the letter is
received by X.
Offer and acceptance through:
Telephone, Fax, Telegraph, Microphone (claptraps of politics)

Revocation of an offer. When does an offer lapses?
i. By notice( before acceptances)

ii. By lapse of time
iii. After expiry of reasonable time
iv. By failure of a condition precedent
v. By death or insanity (before acceptance)
vi. Counter offer
vii. By refusal
Revocation of acceptance
An acceptance can be revoked any time before the acceptance comes to the
knowledge of the proposer but not afterwards.
Example:
A makes a proposal to B. B sends a letter of acceptance to A. Subsequently B

revokes his acceptance by telegram. B’s revocation is complete, as against B, when
the telegram is dispatched, and as against A , when it reaches to him.

Consideration
Section 2(d) of contract act defines consideration as follows:
“When, at the desire of the promisor, the promisee or any other person has done or
abstained from doing or does or abstains from doing or promises to do or to abstain
from doing something, such act or abstinence or promise is called a consideration for
the promise.”
Types of consideration:
i. Past consideration
ii. Present consideration
iii. Future consideration
Rules of consideration:
i. Desire (request) of the promisor is essential

ii. The consideration must be real
iii. Public duty is not a consideration
iv. Consideration need not be adequate (free consent? )
v. The consideration must not be illegal, immoral or opposed to public policy
vi. It may be past, present or future
vii. It may move from promisee or from others
“No consideration no contract”
Exceptions:
i. Natural love and affection:
(a) The agreement is made by a written document

(b) The document is registered
(c) The agreement is made on account of natural love and affection
(d) The parties are near relation to each other
ii. Voluntary consideration

iii. Time Barred debt
iv. Agency
v. Completed gift

Can a stranger to a contract sue?
A stranger to the contract cannot file a suit to enforce it.
Exceptions:
i. Beneficiaries of trust
ii. Provision of marriage settlement of Minor
iii. Assignee of a contract
iv. Family settlement( by any members)
v. Acknowledgement as an agent
Valid Contract:
An agreement which satisfies all the essential elements of a contract, and which is
enforceable through the court is called valid contract.
Void agreement:
An agreement not enforceable by law is said to be void. A void agreement has no legal
effect. It creates no right / obligation on any person to the agreement.
Avoidable agreement:
An agreement can be avoided by some of the parties to it. Until it is avoided it is a
good contract. As per section 2(i) “An agreement which is enforceable by law at the
option of one or more of the parties thereto, but not at the option of other or others,
is a voidable contract. Agreement done by coercion, undue influence, etc.
Unenforceable Agreement:
An agreement which cannot be enforced in a court of law because of some technical
defect. eg: want of registration, non payment of requisite stamp duty, etc.
Illegal agreement:
The agreement which is against a law in force in the country. An agreement to commit
murder, robbery, cheating, etc.

Capacity to contract:
- A minor
- An unsound mind
- A disqualified person by any law
The law regarding Minors:
1. Minor’s agreement is void

2. Minor’s liability for the necessities valid
3. Law regarding compensation void
4. No estoppel
5. No ratification
6. No specific performance
7. No insolvency
8. Partnership by minor- To get benefit only
9. A minor can be an agent
10. Company’s share of minor- Void
Free consent:
The consent is not free if it is caused by:
( i) Coercion ( Threatening)
Exceptions:
(a) Prosecution
(b) High price, high rate of interest
(c) A threat to commit suicide
(ii) Undue influence (Father/Son, daughter, Doctor /patient, etc)

(iii) Fraud- (Silence is not fraud)
(iv) Misrepresentation
(v) Mistake
Contract required to be made in writing:
i. A contract without consideration for natural love

ii. Payment of time barred debt
iii. M/A, A/A of a Company under CA 1994
iv. Sale, mortgage, gift, lease of immoveable property
v. Creation of a trust
etc.

Contingent contract (insurance),
Quasi Contract (Supply of necessities to a minor),
Wagering (no insurable interest, Gambling, one party gains other party losses)
Contracts which need not to be performed:
i. Novation- The parties agreed to substitute a new contract for the old one,
May be also change of parties.
ii. Recession-Declined by one party, may rescind by other party.
iii. Remission-Acceptance of less what was contracted.
iv. Alteration- alteration of terms under mutual agreement
v. Accord and satisfaction
Methods of Termination of contracts:

When the obligation to a contract come to an end, the contract is said to be
terminated/discharged
Methods of termination:
i. By performance
ii. By mutual consent canceling the agreement or novation
iii. By Supervening impossibility
iv. By operation of law such as : Death, insolvency, merger
v. By lapse of time- limitation
vi. By material alteration without consent of other parties
vii. By Breach of contract
Subsequent or supervening impossibility:

i. Destruction of an object
ii. Change of law
iii. Failure of Pre-condition
iv. Death or incapacity for personal service
v. Outbreak of war
Exception:
i. Difficulty of performance
ii. Commercial impossibility
iii. Strikes, lock out, riots etc
iv. Failure of one of the object

Effect of supervening impossibility:
i. The Contract becomes Void

ii. Payback the benefit received
Doctrine of frustration:
When the common object of a contract can no longer be carried out, the court may
declare the contract to be at an end. This is known as doctrine of frustration.
Remedies of breach of a contract:
The aggrieved person has the following remedies:

i. Rescission of the contract
ii. Suit for damages
iii. Suit upon quantum merit
iv. Specific performance
v. Injunction
Damages:
i. Nominal/contemptuous damages
ii. Compensatory damages
iii. Special damages
iv. Exemplary/punitive damages
v. Liquidated damage

Lecture 02: Law of Agency

Definition:
An agent is a person employed to do any act for another or to represent another in

dealings with third persons
The person for whom such act is done or who is so represented is called the principal.
X appoints Y to buy rice on his behalf. X is the principal and Y is the agent. Agreement
between the two is called agency.
A dealer, who purchased petrol from a company and sold the petrol on commission,
is not an agent.
Who can appoint an agent?

Any person who is the age of majority according to the law to which he is subject, and
who is of sound mind, may employ an agent.
Who may be an agent?

Any person may be an agent, even a minor. A minor acting as agent can bind the
principal to third parties. But a minor is not liable to his principal.
Methods of Creating Agency:
i. Agency by expressed Agreement

ii. Agency by implied agreement
(a) Agency by estopel or by holding out

1. more authority applied
2. after the agency is ceased
(b) Agency of necessity

1. Impossible to get principal’s instruction
2. There must be an actual necessity for acting on his behalf
3. Honesty in the interest of parties concerned
iii. Agency by ratification
Wife and husband- agency-All of above in the circumstances.

Agent’s duty to principal:
i. Agent’s duty in conducting principal’s business

ii. Skill and diligence required from agent
iii. Agent’s duty to render accounts
iv. Agent’s duty to communicate to principal
v. Agent not to deal on his own account
vi. Principal to get benefit of agent’s dealings
vii. Agent’s duty to pay sums received for principal
viii. Principal’s death or insanity
ix. Misc.
Principal’s duty to an agent:
i. Remuneration
ii. Lien
iii. Indemnification
iv. Compensation
Principal’s rights:
i. Compensation
ii. Agent’s duties
iii. Revocation
Agent’s rights:
i. Principal’s duties
ii. etc.
Termination of agency:
i. Revocation of authority by principal

ii. Business of the company being completed
iii. By agent renouncing the agency
iv. By death or insanity of the Agent or principal
v. Bankruptcy of the principal

Lecture 03: Indemnity, guarantee and bailment
Definition of the Contract of Indemnity:
A contract of indemnity is a “contract by which one party promises to save the other
from loss caused to him by the conduct of the promisor himself or by the conduct of
any other person”
The person promises to save from loss is called Indemnifier. The person who is saved
by the indemnifier is called indemnity holder.
Definition of the contract of Guarantee:
A contract of guarantee is a “contract to perform the promise or discharge the liability

of a third person in case of his default.”
The person who guarantees is called the surety. The person on whose default the
guarantee is given is called the principal debtor and the person to whom the guarantee
is given is called the creditor.
Distinguished between indemnity and guarantee:

i. In the contract of indemnity, there are two parties and in the contract of
guarantee there are three parties
ii. In an indemnity the indemnifier is primary liable and there is no secondary
liability and in the contract of guarantee, the liability of the surety is
secondary
iii. In the indemnity, the indemnifier has personal stake in the contract but in
the guarantee the connection is only through the guarantee.
Continuing Guarantee:
A continuing is a guarantee which extends to a series of transactions. It comes to an
end under the following ways:
i. By notice of revocation
ii. Death of surety
When surety is discharged from liability:

i. Notice of revocation
ii. Death of surety
iii. Variation of contract(principal debtors & creditors)
iv. Release or discharge of principal debtors
v. Loss of Security

Guarantee when invalid:
i. Misrepresentation by the creditors

ii. Silence about material circumstances
iii. If contingent upon another person joining as co-surety and other person
does not join
iv. Lack of essential elements
Surety’s right
i. Right of subrogation
ii. Right to indemnity
iii. Right of security
Law of Bailment:
A bailment is the delivery of goods by one person to another for some purpose upon
a contract that they shall, when the purpose accomplished by returned or otherwise
disposed of according to the directions of the persons delivering them”
The person delivering the goods is called the bailor, the person to whom they are
delivered is called the bailee. The transaction is called bailment.
Characteristics of Bailment:
i. Delivery
ii. purpose
iii. return
iv. contract
v. ownership
vi. Moveable goods
vii. Possession
Duties of the Bailee

i. Duty of reasonable care
ii. Bailee’s liability for negligence
iii. Unauthorized used to goods
iv. Mixture of bailors goods with the bailies
v. Duties of returning goods
vi. Accretion to the goods bailed
Duties of Bailor:
i. Duty to disclose faults in goods bailed
ii. Payment of damages

Right of Bailee:
i. Recovery of losses for non disclosure of fact

ii. Delivery of goods to any of the joint owners
iii. Right to retain goods till he is paid due remuneration
iv. Right to sue against third person who does wrong to the goods
Right and duties of finder of goods:
A finder of goods is in the position of a bailee if he takes charge of the goods.
i. Possession-Not an owner
ii. Compensation- For trouble, expenses, find out expenses, lien
iii. Reward-Claim
iv. Sale-for special type

Lecture 04: Sale of Goods Act-1930
Sale
Where under a contract of sale the title/property in goods (the ownership) is

transferred from the seller to the buyer
Agreement to sell
When the ownership is transferred at a future time or subject to some conditions to
be fulfilled later, the contract is called an agreement to sell
Difference between Sale and Agreement to sell
1. Transfer of property/ownership
2. Transfer of risk
3. Nature of contract ( Executed and executor)
The Essential elements of a contract for sale of goods
1. Moveable goods
2. Moveable goods for money
3. Two parties-Buyer and seller
4. A contract of sale
5. Terms and condition as per negotiation
6. Other essential elements of a contract
Hire-Purchase Agreements
From its definition it is said that a Hire-Purchase Agreement is a bailment and an
agreement to sell.
Condition
A condition is stipulation/terms essential to the main purpose of contract, the
breach of which gives rise to right to treat the contract as repudiated/rejected.
Warranty
A warranty is stipulation/terms collateral ( subsidiary to main purpose) to the
main purpose of contract, the breach of which gives rise to claim for damages
but not a right to reject the goods and treat the contract as repudiated.
When a condition can be treated as a warranty

1. Voluntary waiver of a condition
2. Compulsory waiver of a condition: Goods partly accepted/consumed

Implied conditions
1. Condition as to tile
2. Sale by description
3. Sale by sample
4. Sale by sample and description
5. Condition as to fitness or quality
The Doctrine of CAVEAT EMPTOR

-Buyers beware
Ordinarily a buyer must buy goods after satisfying himself of quality of goods and
fitness. If he makes a bad choice he cannot blame the seller or recover damages from
him.
Exceptions:
1. When the buyer relies upon the skill and judgment of seller
2. Where by custom an implied condition of fitness is annexed to a contract of
sale
3. Where there is a sale of goods by description, there is an implied condition
that the goods are fit for sale
4. Where the seller is a guilty of fraud (Free consent?)
Implied Warranties
1. The buyer must get quiet possession
2. The goods must be free from encumbrance
3. Fitness of goods
Transfer of Title by non-owner
The owner of goods can sell the goods. No one can convey to a transferee a better
title than he himself has. Generally, if a person transfers articles not belonging him,
the transferee gets no title. This rule applies to both moveable and immoveable
property. But as regards moveable goods, it is subject to certain exceptions.
1. Estoppel
2. Sale by a mercantile agent
3. Sale by one of several joint owners
4. An unpaid seller
5. Sale under the Contract Act( Finder of a goods, a pawnee)
Duties of seller of goods

1. Delivery of goods
2. Damages for non delivery
3. Specific performance

Duties of buyer
1. Payment of price
2. Compensation for non acceptance of goods
3. Liability /compensation/charge for not taking delivery of goods
4. Interest and special damages
Un-paid seller
-When the whole of the price has not been paid; and, or
- When a bill of exchange or other negotiable instrument has been received as
conditional payment and the condition was not fulfilled by dishonoring the instrument
or otherwise.
Unpaid Sellers’ Rights
1. Sellers’ Lien on goods

2. The right of Stoppage in transit
3. The right of resale
4. Suit for the price
5. Suit for damages( for not taking delivery and payment)
6. Claim for interest and special damages

Lecture 05: Partnership Act 1932
Definition:
Partnership is the relation between persons who have agreed to share the profits of a
business carried on by all or any of them acting for all.
Essential elements:
i. Voluntary agreement
ii. Sharing of profits of a business
iii. Mutual agency
Who can/cannot be a partner?

i. A person who has capacity to a contract- can
ii. A minor-cannot but in an existing partnership, a minor can be admitted in
to a firm if all the partners of the firm agree.
iii. An unsound mind- cannot
iv. A woman-can
v. A Company-Cannot
vi. An alien enemy-Cannot
Classes of Partners:
i. Active partners
ii. Dormant, sleeping partners
iii. Nominal partners
Classes of Partnership:
i. Partnership at will- not for a fixed period, no provision for winding up
ii. Particular Partnership
Consequences for non-registration of Partnership:
i. A Partner of an unregistered firm cannot file a suit ( against the firm or any
partner thereof) for the purpose of enforcing right arising from contract or
a right conferred by the partnership Act
ii. No suit can be filed on behalf of an unregistered firm against any third party
of the purpose of enforcing a right arising from a contract
iii. An unregistered firm cannot claim a set-off in a suit.

Right of partners:
i. Conduct of business
ii. Can express opinion
iii. Access, inspection, Copy
iv. Equality of profit
v. Interest on capital
vi. Interest on advance
vii. To get indemnity
viii. Application of property of firm
ix. Reconstitution of firm- Death, Retirement, admission
x. Dissolution
Duties of partners
i. Justice, faith, true accounts, full information to all partners
ii. To pay indemnity
iii. To attend diligently
iv. No remuneration
v. Equality of losses
vi. To pay indemnity for willful neglect
vii. No Personal benefit
viii. To account for secret Profit
ix. No secret profit
x. Unlimited liability
Partnership by holding out/Estoppels:
A person may under certain circumstances be liable for the debts of a firm
although he is not a partner. If a person, by words spoken or written or conduct
represents himself or knowingly permits himself to be represented to be partner
in the firm, he is liable as a partner in that firm to any one who has on the faith of
any such representation given credit the firm.
Example: Partners: X, Y. Z may a partner of Holding out.

Dissolution of firm:
i. By agreement
ii. Compulsory dissolution

a. By the adjudication of all the partner or of all the partners but one as insolvent
b. By the happening of any event which makes the business of the firm unlawful
iii. On the happening of certain Contingencies

a. If constituted for fixed term and it expires
b. By the death of a partner
c. By the adjudication of a partner
d. By the adjudication of a partner as an insolvent
iv. By notice
In case of a partnership of will
v. Dissolution by the court
a. Insanity
b. Permanent incapacity
c. Guilty of misconduct
d. Persistent Breach of contract
e. Transfer of whole interest
f. Loss of firm is high
g. Just and equitable.

Lecture 06: Bankruptcy Act 1997
When a person can be declared insolvent/Bankrupt:
i. If he is a Debtor
and
ii. He has committed an act of bankruptcy
Objects of Bankruptcy regulation:
i. To ensure fair distribution of asset/property of the bankrupt among the

creditors
ii. To relieve of the burden of the debt and start a fresh life
iii. To prevent abuse of the Process
Acts of bankruptcy:
i. Transfer of all or substantially all his property for the benefit of creditors
ii. Transfer of property with intent to defeat/delay creditors
iii. Transfer of property which would be void as fraudulent preference
iv. If with intent to defeat/delay creditors :
(a) Remains out of BD;
(b) Departs from dwelling house or usual place of business;
(c) Secludes himself so as to deprive his creditors of the means of
communicating with him.
v. If any of the property has been sold in execution of a decree for money
vi. If he petitions to be adjudged as bankrupt
vii. If he notifies his creditors that he has suspended payment of debts
viii. If he is imprisoned in execution of decree for money
When creditors can apply (plaints):
i. The debt owning by the debtor to the creditor(s) amounts to Tk. 5,00,000
ii. The debt is a liquidated sum payable either immediately or at a certain
future time
iii. The act of bankruptcy has occurred with in last one year
When debtors can apply:
i. His debts is amount to Tk.20,000

ii. He has been arrested/imprisoned for payment of money
iii. An order of attachment in execution of a decree has been made

Dismissal of Plaint:
i. if the court is not satisfied relating to:
- Creditors right to present plaint

- Act of bankruptcy
ii. the debtor can satisfy the court:

- He is able to pay his debt
- He is not a willful defaulter
iii. the court is satisfied that for any reason, no order of adjudication should
be made
Effect of an order of adjudication:
i. The bankrupt shall assist in realization of his property

ii. All the properties shall stand vested to the receiver(except exempted
property)
iii. Secured creditors’ right will be continued
iv. Order of adjudication shall be effect from the date of plaint.
Discharge/releases from Debt:
An order of the court shall release of all debts except the following:
i. Any debt payable to the Govt.
ii. Debt of fraud himself/a party
iii. Liability under an order of maintenance( wife, child)
Exempted property:
Following properties are exempted from the liquidation process:

i. The tools used by the debtor himself
ii. Wearing apparels and household furnishing of like accessories of spouse,
himself and children
iii. Un-mortgaged dwelling place. ( 2500 sft at urban and 5000 sft at others),
value is maximum Tk. 3,00,000/-

Disqualification of an undercharged insolvent:
He shall not be illegible for the followings:
i. Election as a member of Parliament, Legal authority, statutory body, or

sitting or voting in the proceeding
ii. Appointment as a judge, magistrate, other office in service of the republic
iii. Appointment as a receiver
iv. Loan from bank/FIs

Lecture 07: Arbitration Act 2001
Matters which can/cannot be referred to Arbitration
Subject to the exceptions noted below, all disputes which can be decided by a civil suit
can also be decided by arbitration. Matters of personal right and disputes regarding
dignity which cannot be decided by civil courts can nevertheless be decided by
arbitration.
Following matters cannot be referred to arbitration:
1. Matrimonial Matters like divorce or restitution of conjugal rights;

2. Testamentary matters like the validity of a will;
3. Insolvency matters like adjudication of a person as insolvent
4. Matters relating to the guardianship of a minor or of a lunatic or declaring a
person of insanity
5. Criminal matters.
6. Question relating to charities or charitable trust cannot be referred to
arbitration.

Lecture 08: Negotiable Act 1881 (Amendment 2006, 2000)
“Negotiable 13.(1) A “negotiable instrument” means a promissory note, bill of

instrument” exchange or cheque payable either to order or to bearer.
“Promissory 4. A “promissory note” is an instrument in writing (not being a

note” bank-note or a currency-note) containing an unconditional
undertaking, signed by the maker, 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.
(a) “I promise to pay B or order Taka 500.”
(b) “I acknowledge myself to be indebted to B in Taka 1,000 to be

paid on demand, for value received.”
“Bill of A “bill of exchange” is an instrument in writing containing an

exchange” unconditional order, signed by the maker, directing a certain person 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.
“Holder in due “Holder” in due course” means any person who for consideration
course” becomes the possessor of a promissory note, bill of exchange or
cheque if payable to bearer, or the payee or indorsee thereof, if
payable to order, before it became overdue, without notice that the title
of the person from whom he derived his own title was defective.
Discharge from The maker, acceptor or indorser respectively of a

liability- negotiable instrument is discharged from liability
thereon-
(a) by (a) to a holder thereof who cancels such acceptor's or

cancellation indorser's name with intent to discharge him, and to all
parties claiming under such holder;
(b) by release (b) to a holder thereof who otherwise discharges such

maker, acceptor or indorser, and to all parties deriving
title under such holder after notice of such discharge;

(c) by payment (c) to all parties thereto, if the instrument is payable to

bearer, or has been indorsed in blank, and such maker,
acceptor or indorser makes payment in due course of
the amount due thereon.
Dishonour by A bill of exchange is said to be dishonored by non-

non-acceptance 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.
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.
Acceptance for When a bill of exchange has been noted or protested for non-
honour 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.
Drawee in case Where a drawee in case of need is named in a bill of exchange or

of need in any indorsement thereon, the bill is not dishonored until it has
been dishonoured by such drawee.
Cheque crossed (1) Where a cheque crossed generally bears across its
“account- face an addition of the words “account payee” between
payee” 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 crossed Where a cheque bears across its face an

specially addition of the name of a banker, either with or
without the words “not negotiable”, that
addition shall be deemed a crossing, and the
cheque shall be deemed to be crossed specially,
and to be crossed to that banker.
Cheque” A “cheque” is a bill of exchange drawn on a specified

banker and not expressed to be payable otherwise than
on demand.
“Drawer” “Drawee” “Drawee in The maker of a bill of exchange or cheque is called

case of need” “Acceptor” the “drawer;” the person thereby directed to pay is
“Acceptor for honour” “Payee” called the “drawee.”
When in the bill or in any indorsement thereon the

name of any person is given in additional to the
drawee to be resorted to in case of need, such
person is called a “drawee in case of need.”
After the drawee of a bill has signed his assent

upon the bill, or, if there are more parts thereof
than one, upon one of such parts, and delivered the
same, or given notice of such signing to the holder
or to some person on his behalf, he is called the
“acceptor”.
When a bill of exchange has been noted or

protested for non-acceptance or for better security,
and any person accepts it supra protest for honour
of the drawer or of any one of the indorsers, such
person is called an “acceptor for honour.” “Acceptor
for honour”
The person named in the instrument, to whom or to

whose order the money is by the instrument
directed to be paid, is called the “payee”.
“Holder” “Payee”
The “holder” of a promissory note, bill of exchange
or cheque means the payee or indorsee who is in
possession of it or the bearer thereof.

B. Law - Din Islam Miah, FCA

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B. Law - Din Islam Miah, FCA

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By: Md.

Din Islam Miah, FCA

Lecture 01: Contract Act 1872

As per section 2(g), “An agreement not enforceable by law is void.”

Essential elements of a Contract:

An agreement becomes enforceable by law when it fulfills certain conditions.

i. Offer and acceptance

A proposal is also called an offer. A proposal is defined as “When one person

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When an offer is made to a specific person(s) is called a specific offer. X offers to

Effect of an offer and acceptance:

Rules regarding Offer:

i. An offer may be expressed or may be implied from the circumstances.

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Rules regarding Acceptance:

i. Acceptance must be absolute and unqualified

Communication of offer and acceptance:

The communication of an offer is completed when it comes to the knowledge of the

X proposes to sell a house to Y at Tk. 10 million by a letter. Communication of the

Offer and acceptance through:

Telephone, Fax, Telegraph, Microphone (claptraps of politics)

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Revocation of an offer. When does an offer lapses?

i. By notice( before acceptances)

A makes a proposal to B. B sends a letter of acceptance to A. Subsequently B

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Section 2(d) of contract act defines consideration as follows:

i. Desire (request) of the promisor is essential

“No consideration no contract”

i. Natural love and affection:

(a) The agreement is made by a written document

ii. Voluntary consideration

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Can a stranger to a contract sue?

A stranger to the contract cannot file a suit to enforce it.

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The law regarding Minors:

1. Minor’s agreement is void

The consent is not free if it is caused by:

(ii) Undue influence (Father/Son, daughter, Doctor /patient, etc)

Contract required to be made in writing:

i. A contract without consideration for natural love

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Contingent contract (insurance),

Quasi Contract (Supply of necessities to a minor),

Contracts which need not to be performed:

Methods of Termination of contracts:

Subsequent or supervening impossibility:

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Effect of supervening impossibility:

i. The Contract becomes Void

Remedies of breach of a contract:

The aggrieved person has the following remedies:

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Lecture 02: Law of Agency

An agent is a person employed to do any act for another or to represent another in

Who can appoint an agent?

Who may be an agent?

Methods of Creating Agency:

i. Agency by expressed Agreement

(a) Agency by estopel or by holding out

(b) Agency of necessity

iii. Agency by ratification

Wife and husband- agency-All of above in the circumstances.