AMERICAN INTERNATIONAL UNIVERSITYBANGLADESH

(AIUB)
PROGRAM: MBA
SPRING SEMESTER 2016
LECTURER:

Khan Mohammad Bilal

COURSE OUTLINE
Course Code and Title:
MBA-5103, Business Law &
Corporate Social Responsibility

OBJECTIVE

This describes the coverage of the course of the

Main objectives of the contract law which
includes the formation of the contract, the
validity of the contract, the performance of the
contract, the termination of the contract, after
effect of the termination of the contract, the law
relating to the Sale of Goods Act, the concept
and the implementation of the corporate social
responsibility, the law regarding partnership,
the law relating to agency, the law of negotiable
instrument, the law of company, etc.
3

TOPICS TO BE COVERED
Lesson

Topics

Lesson-01
Lawof
Contract:
Offer,
Acceptance&
Consideration

Specific Objective(s)
1.1.Discussionregardingthemeaningof
LegalEnvironmentinBusiness.
1.2:DefinitionofContract
1.3:EssentialElementsofcontracts
1.4:Offer&Acceptance
1.5:RulesRegardingOffer&Acceptance
1.6:CommunicationofOffer&Acceptance
1.7:Consideration
1.8RulesRegardingConsideration
1.9NoConsiderationNoContractwith
exception

Time
Frame

1stWeek

TOPICS TO BE COVERED
Lesson
Lesson-02

Topics
Typesof
Contracts,
Capacityof
Parties&Free
Consent

Specific Objective(s)
2.1Void&Voidable

2.2IllegalAgreement

2.3UnenforceableAgreement

Time
Frame

2ndWeek

2.4CapacityofPartiestoContract
2.5FreeConsent

TOPICS
TO
BE
COVERED
Lesson
Topics
Specific Objective(s)

Time
Frame

Lesson-03

Performance
&Terminationof
Contracts

3.1DefinitionofPerformance
3.2OffertoPerform
3.3BywhomisaContractto
bePerformed
3rd&4thweek
3.4Contractswhichneednot
bePerformed
3.5MethodsofTermination

TOPICS
TO
BE
COVERED
Lesson
Topics Specific Objective(s)

Time

Lesson-04

Law&

Agency

Frame

4.1DefinitionofAgency
4.2MethodsofCreating
Agency
5th&6thWeek
4.3TerminationofAgency
4.4Agentsdutiestoprincipal
4.5PrincipalsdutiestoAgent
4.6PrincipalsRights
4.7AgentsRights

TOPICS TO BE COVERED
Lesson

Topics

Specific Objective(s)

5.1Definition
5.2Conditions&Warranties
GoodsAct 5.3TransferofOwnership
5.4PerformanceoftheContractof
Sale
5.5UnpaidSeller
5.6RightsofUnpaid

Time
Frame

Lesson-05

Saleof

7thWeek

TOPICS TO BE COVERED
Lesson

Lesson-06

Topics
PartnershipAct

Specific Objective(s)
6.1Definition
6.2TheEssentialElements
ofaPartnership
6.3WhocanbeaPartner
6.4RegistrationofFirms
6.5RelationsofPartnersto
oneAnother
6.6RightsofPartners
6.7DutiesofPartners

Time
Frame
8th&9thWeek

TOPICS TO BE COVERED
Lesson

Lesson-07

Topics
Company

Law

Specific Objective(s)
7.1DefinitionofaCompany
7.2MemorandumofAssociation
7.3ArticlesofAssociation
7.4FormationofACompany
7.5CompanyManagement
7.6WindingUp

Time
Frame
10thWeek

10

TOPICS TO BE COVERED
Lesson

Topics

Specific Objective(s)

8.1Definition
CorporateSocial 8.2Justification
Lesson-08 Responsibility
8.3CaseStudy
8.4Other

Time
Frame
11thWeek

11

TOPICS TO BE COVERED
Lecture

Lesson-09

Topics
Lawrelatingto
Negotiable
Instruments

Specific Objective(s)
9.1Definition
9.2Dishonourofanegotiable
instrument
9.3Others

Time
Frame
12thWeek

12

TOPICS TO BE COVERED
Lesson

Lesson-10

Topics
Lawof
Insolvency

Specific Objective(s)
10.1Definition
10.2Proceedingsbefore
andafteradjudication
10.3Discharge

Time
Frame
13thWeek

13

Lesson

Lesson-11

TOPICS TO BE COVERED
Topics

Lawof
Arbitration

Specific Objective(s)

11.1Definition
11.2GeneralProvisions
11.3Withoutinterventionofthe
court.

Time
Frame
14thWeek

14

EVALUATION

For the Mid-Term Examination 40% marks will

be allocated.
For the Final Term Examination 60% marks will
be allocated.
For both the Mid-Term Examination and Final
Term Examination the given criteria will be
followed.
15

EVALUATION

Attendance-----------------------there will be 5 marks & it will

be counted as 10%
Quizzes ----------------------there will be 15 marks & it will
be counted as 20%
Term paper/Report writing/Presentation-------------------there will be 15 marks & it will be counted as 20%

Written Examination----------there will be 60 marks & it

will be counted as 50%
---------------------16
100%

MBA-5103: BUSINESS LAW &

CORPORATE SOCIAL
RESPONSIBILITY
LESSON-01: LAW OF CONTRACT

Lecturer:
Khan Mohammad Bilal

WHAT IS LAW?

Law is a system of rules that are enforced

through social institutions to govern behavior.

MOST USEABLE LAWS

Code

of Criminal Procedure
Land Law
Land Survey
ICT Law
Consumer Protection Law

19

20

CODE OF CRIMINAL PROCEDURE

An Act to consolidate and amend the law relating

to the Criminal Procedure.
This Act may be called the Code of Criminal
Procedure,1898; and it shall come into force on
the first day of July, 1898.

21

CODE OF CRIMINAL PROCEDURE

The Code contains provisions regarding summons
to the accused and witnesses,
warrants for the arrest of the accused and
witnesses,
proclamation for and attachment of property of
absconding accused,
search warrants,
discovery of persons wrongfully confined,
general provisions relating to searches, prevention
of unlawful assemblies,
public nuisances, breach of peace, dispute as to
possession of immovable properties,

22

CODE OF CRIMINAL PROCEDURE

power of police to prevent offences and to arrest
offenders, information to the police about
commission of offence and their power to
investigate and prosecute the offenders,
cognizance of offences by the magistrate on the
basis of a police report or private complaint or his
own knowledge, place of inquiry, trial of cases by
the magistrates and courts of session,
summary trial of cases, general provisions as to
inquiries and trials, delivery of judgment,
submission of sentence of death for confirmation
by the high court Division

23

CODE OF CRIMINAL PROCEDURE

execution of judgments and orders, suspension,
remission and commutation of sentences, effect of
previous acquittals or convictions, appeals
against judgments, orders and sentences,
reference and revision, trial of lunatics,
proceedings in case of offences affecting the
administration of justice, maintenance of wives
and children, directions on the nature of habeas
corpus for release of detenus from police or
private custody,
24

CODE OF CRIMINAL PROCEDURE

appointment and function of public prosecutors,
bail of accused, commission for examination of
witnesses, special rules of evidence, bonds,
disposal of property, transfer of cases from one
court to another, irregular proceedings and
miscellaneous matters such as local inspection,
power of the court to summon a material witness
or examine a person present in court, language of
the court, inherent power of the High Court
Division etc.
25

CODE OF CRIMINAL PROCEDURE

Sec. 54. When Police may arrest without warrant :

Any Police-officer may, without an order from a Magistrate and without a
warrant, arrest,1. Any person who has been concerned in any cognizable offence or
against whom a reasonable complaint has been made or credible
information has been received or a reasonable suspicion exists of his
having been so concerned ;
2. Any person having in his possession without lawful excuse, the burden
of proving which excuse shall lie on such person, any implement of housebreaking;
3. Any person who has been proclaimed as an offender either under this
Code or by order of the Government;

26

CODE OF CRIMINAL PROCEDURE

Sec. 54. When Police may arrest without warrant :

4. Any person in whose possession anything is found which may
reasonably be suspected to be stolen property and who may
reasonably be suspected of having committed an offence with
reference to such thing;
5. Any person who obstructs a Police-officer while in the execution
of his duty, or who has escaped, or attempts to escape, from lawful
custody;
6. Any person reasonably suspected of being a deserter from the
armed forces of Bangladesh;
.

27

CODE OF CRIMINAL PROCEDURE

7. Any person who has been concerned in, or against whom a reasonable
complaint has been made or credible information has been received or a
reasonable suspicion exists of his having been concerned in, any act
committed at any place out of Bangladesh, which, if committed in
Bangladesh, would have been punishable as an offence, and for which he is,
under any law relating to extradition or under the Fugitive Offenders Act,
1881, or otherwise, liable to be apprehended or detained in custody in
Bangladesh;
8. Any released convict committing a breach of any rule made under section
565, sub-section (3);
9. Any person for whose arrest a requisition has been received from another
police-officer, provided that the requisition specified the person to be arrested
and the offence or other cause for which the arrest is to be made and it appears
therefrom that the person might lawfully be arrested without a warrant by the
officer who issued the requisition

28

CODE OF CRIMINAL PROCEDURE

How to Apply for a General Diary (GD) in Police Station

Where to Apply?
Generally you will have to apply for the GD in the Police Station of the
area where the incident or matter of interest took place.
What to include in the Application?
For GD the application has to be addressed TO The Officer in Charge
(OC). The rest of the format is similar to other applications the address
of the Police Station, Subject (this should include the reason for the
GD), then elaborate description of the incident or reason for the general
diary and in the end provide name, present address, permanent address
and contact number. You can also collect the GD Application format
from Service Delivery Officer at the Police Station.
Points to be noted, there are no fees to apply for a GD. If you cannot
write one then the Service Delivery Officer will assist you in writing it.
For this there is no service charge. After completing the application the
Officer in Charge will set the GD number and date and enlist in the
register.

29

CODE OF CRIMINAL PROCEDURE

First Information Report(:FIR)

Essentially both FIR and complaint are means of receiving the
information of the crime. FIR and complaint are the most essential and
beginning points of the jurisprudence of the criminal justice of
administration.
The provisions regarding the first information report are contained in
Section 154 of the code of criminal procedure.
FIR is basically an abbreviation for First Information Report. It is a
written document recorded or registered by the police when they receive
any sort of information about the commission of a cognizable offence.
Anyone can report the commission of a cognizable offence either orally
or in writing to the police. Even a telephonic message can be treated as
an FIR. It is the earliest record of the alleged offence. From the point of
view of the prosecution and the defense it legal importance. FIR is not
in the nature of a formal charge. So no judgment can be passed on the
basis of FIR.

30

31

LAND LAW

Purchase of Land & Registration:

Verify the record of rights from the Land Office (also known as Land
Revenue Office)
Parties check that land tax payments are up to date. The Land
Administration system in Bangladesh separates Records of Ownership
and Records on Revenue as such:
(a) Land Records Office for land records, surveys, publication and
maintenance of records under the directorate of land records and survey
(Ministry of Land).
(b) Land Office or Land Revenue Office under Ministry of Land. There are
11 administrative offices in each upajela (sub district)
(c) There are 64 districts in Bangladesh but 61 registration districts. 3 hill
districts do not have registration centres. In Dhaka, the district land
registration office has 13 subregistrar offices under the Ministry of Law.

Agency: Land Office or Land Revenue Office

32

LAND LAW

Purchase of Land and registration:

Conduct RS Mutation on property

Since the last survey on Dhaka was done, transfers of property titles
created before then must be converted (mutated) to the new survey.
Since January 2012 in Dhaka instead of conducting RS Mutation, City
surveys are conducted. This is done by the Assistant Commissioner of
Lands (Tahsil) and Specific Tahsil Office. In order to obtain this, an
application is required to be made to the concerned Assistant
Commissioner of Land with particulars of the property. The Assistant
Commissioner forwards the same to the Tahsil Office, who are
responsible for conducting the relevant survey and providing a report to
Assistant Commissioner of Land. Upon receiving the report, the
Assistant Commissioner of Land renders the mutation certificate. The
inspection is noted in Procedure 3. From January, 1 2012 all properties
automatically come under City Survey Khatian.
Agency: Assistant Commissioner of Lands (Tahsil)

33

LAND LAW

Purchase of Land & registration:

Obtain inspection for RS Mutation

The permission is only mandatory when the property is under the
control of either the Ministry of Works (National Housing Authority) or
RAJUK (Dhaka Improvement Trust since 1952 until it was renamed
Rajdhani Unnayan Kartripakkh RAJUK in 1982). Although the
permission is usually always granted, unofficial payments are still paid
in order to expedite the process and guarantee approval, which amount
to BDT 20,000. The buyer also checks that the property is up to date
with payments to the City Corporation Revenue Department, gas utility
service, electricity utility service, and the water utility service to make
sure that there is no outstanding dues payable so that the those liabilities
do not transfer to him. Each of these checks will cost around BDT 625.
These are standard steps customary in Bangladesh and not mandatory
for registration.

Agency: Assistant Commissioner of Lands (Tahsil)

34

LAND LAW

Purchase of Land & Registration:

Obtain the non-encumbrance certificate from the relevant Subregistry office:

The buyer checks the legal status of the land (mortgaged or leased
or ownership) at the relevant Sub-registry. From January 2012 both
Sub-registry and Land Revenue Office provide non-encumbrance
certificate. Sometimes land report is required. A land report gives an
idea about the current situation and ownership of the land that may
include chain of ownership, land tax, land record, registry status etc.
Whereas a non-encumbrance certificate is used in property
transactions as an evidence of free title/ownership.

Agency: Sub-registry and Land Revenue Office

35

LAND LAW

Purchase of Land & Registration:

Pay capital gains tax, registration fee, VAT and other taxes at a
designated bank
Registration fee = 2%
Local Government Tax = 1%
The 2% registration fee is payable to the Bank in favor of the subregistry office and the receipt is to be presented at the moment of
applying for registration.
Also, Capital Gains Tax = 2% (Not applicable in rural areas for
agriculture.
Applicable to land above 100 000 Takas, irrespective of when the
transfer was made) and VAT = 1.5% (Applicable only for municipal
corporation area payable by private housing and flat developers and
commercial businesses) have to be paid at this stage.
Agency: Designated Bank

36

LAND LAW

Purchase of Land & Registration:

Apply for registration at the relevant Sub-registry

The buyer applies for registration at the Municipal Deed Registry
Office, presenting the receipts of payment for the registration fees
obtained in Procedure 6.
A certified registration document is obtained within a week for the
buyers record. The original sale deed/certificate requires about 6
months to be obtained.

Agency: Municipal Deed Registry Office

37

LAND LAW

Purchase of Land & Registration:

Register the change in ownership at the Land Revenue Office (Mutation

& ROR)
The change of ownership must be registered in the Land Revenue
Office. The property is recorded under the name of the new owner, who
is responsible for paying the land taxes from the day it is transferred.

Agency: Land Revenue Office

38

39

CYBER LAW : ICT LAW OF

BANGLADESH
Cyber

crime means an unlawful act wherein the

computer is either a tool or a target or both.
Virtually, there is no distinction between cyber
crime and conventional crime.

40

CYBER LAW : ICT LAW OF

BANGLADESH

The most committed cyber crimes worldwide are

Cyber Pornography,
Piracy,
Hacking,
Virus or Worm Attack,
Spam, Cyber Terrorism,
Financial Crime,
Sale of Illegal Articles,
Online Gambling,
Intellectual Property Crime,
Email Spoofing, Forgery,
Cyber Defamation,
Cyber Stalking,
E-Mail Bombing,
Data Diddling,
Logic Bomb, Trojan Attack, Web Jacking Etc.

41

CYBER LAW : ICT LAW OF

BANGLADESH

Enactment for combating cyber crime in Bangladesh

In order to facilitate e-commerce and encourage the

growth of information technology, the ICT Act,
2006 was enacted making provisions with a
maximum punishment of 10 years imprisonment or
fine up to taka 10 million or with both.

Recently our Parliament amended the ICT Act

2006, raising penalties for cyber crimes setting a
minimum of 7 years imprisonment and a maximum
of 14 years or a fine of Tk. 1 crore or both.
42

CYBER LAW : ICT LAW OF

BANGLADESH

The bill made offences under sections 54, 56, 57 and 61

of the ICT Act, 2006 cognizable and non-bail able,
empowering law enforcers to arrest anyone accused of
violating the law without a warrant, by invoking section
54 of the Code of Criminal Procedure. All such offences
were non-cognizable in the ICT Act, 2006. However, all
concerned apprehend of the misuse of the power by the
police.

The ICT Act, 2006 as amended in 2013 is obviously a

brilliant achievement of Bangladesh in the field of cyber
law.

43

44

CONSUMER PROTECTION LAWS

Consumer protection laws are a form of

government regulation, which aim to protect the
rights of consumers. For example, a government
may require businesses to disclose detailed
information about productsparticularly in
areas where safety or public health is an issue,
such as food.

45

CONSUMER PROTECTION LAWS

Consumer means any person who:
i) purchases any product by payment of a price or promise
to pay off a price;
ii) Purchases any product by partly paid and partly
promised;
or
iii) Purchases any product with the promise of paying price
in extended term or by installments;
46

CONSUMER LAW
Consumer Protection Law Bangladesh
The Bangladeshi laws provides for the establishments of different
organizations to protect the rights of the consumers including various
Courts or Tribunals such as(i)
Consumer Rights Protection Department;
(ii) National Consumer Rights Protection Council;
(iii) Special Tribunal;
(iv) Mobile Court (can work/ function under various Laws; It may be
constituted by a special executive order);
(v) Drug Court;
(vi) Food Special Court;
(vii) Ordinary Criminal Courts;
(viii) Ordinary Civil Courts;
(ix) Marine Courts;
(x) BSTI;
(xi) Claims Tribunal etc

47

CONSUMER LAW

Consumer Protection Law Bangladesh

There are also several laws available if those are

enforced effectively then the consumer will get best
quality of services from their desired products.
Such as1. The Consumer Rights Protection Act, 2009;
2.Bangladesh Standard Testing Institute Ordinance (BSTI), 1985;
3.The Customs Act, 1969;
4. The Drug Control Ordinance, 1982;
5.The Fish and Fish Products Ordinance, 1983;
6. The Pure Food Ordinance, 1959;
7. The Trade marks Act, 2009;
8. The sale of goods Act, 1930;

48

CONSUMER PROTECTION LAW

BANGLADESH
9. The Control of Essential Commodities Act, 1956;
10. The Medical and Dental Council Act, 1980;
11. The Bangladesh Energy Regulatory Commission Act,
2003;
12. The Bangladesh Telecommunication Act, 2001;
13. The Right to Information Act, 2009;
14. The Food (Special Courts) Act, 1956;
15. The Mobile Court Ordinance, 2007 (now repealed);
16. The Iodine Deficiency Disorders Prevention Act, 1989;
17. The Standards of Weights and Measures Ordinance
(Amendment) Act,2001;
18. The Import of Goods (Price Equalization Surcharge) Act,
1967; etc.

49

Class-2

50

WHY LAW IN BUSINESS

It is very important, if you want to run a legal
and successful business. Even if you own a small
business, you still need to know the process of
how to get your business started in the first place
(licensing, certification etc...). Once you got your
business running, you will need to know how to
protect your business from things like lawsuits,
creditors, the NBR (Tax ), and other government
agencies etc...

THE BEGINNING ???

Law of Contract

CONTRACT ACT, 1872

The law relating to the contract is contained in

the Contract Act, 1872. It is that branch of law
which lays down
the essentials of a valid contract,
the different modes of discharging the contract
and the remedies available to the aggrieved parts in the
case of breach on contract.

The law of contract is one of the major and vital

parts of every transaction. We may not go or pass
any day without applying contract. The laws
relation to contract in our country is controlled
and regulated by the contract Act 1872.

DEFINITION OF CONTRACT

According to section 2(h) of the contract Act 1872 and

agreement enforced by law is a contract.
According to the Prof Salmond The contract is an
agreement creating and defining obligation between
prates.
According to Sir Fedric Pollock Every agreement and
promises enforceable act is a contract.
According to Anson A contract is an agreement
enforce at law made between two or person by which
right are acquired by one or more to act or
forbearance on the part of the other.

EXAMPLE

EXAMPLE

EXAMPLE

EXAMPLE

EXAMPLE

EXAMPLE

EXAMPLE

NOW YOUR TURN???

FINALLY CONTRACT IS?

OFFER :
A proposal is also called an offer; the term
proposal is define in the section 2 sub-section a
of the contract act 1872 says that ..
When one person signifies to another his
willingness to do or to abstain form doing
something with a view to obtaining the assent of
that other to such act or abstinence he is said to
make a proposal.
The person making the offer is called the offerer
and the person to home the offer is made is called
offeree.

RULES RELATING TO OFFER

An offer may be express or implied.

It must be specific.
It may be made to a define person or a class of person or for all.
It must be one which is capable of creating a legal relationship and
obligation.
The terms of it must be certain, define, unambiguous and not
vague.
A mere statement of intention is not offer.
It must be communicated to the offeree.
It may be conditional.
Primary negotiation is not an offer.
Counter offer destroy the main offer and create a new offer.
Ignorance of offer no creates any contractual right.
An offer may be revoked before acceptance.
An offer stands till a regional time.
Standing offer is open for all time.

REVOCATION OF OFFER
An offer may be revoked by the any one of the
flowing ways ..

An offer may be revoked by the offerer before

acceptance.

After expiration of the satisfied time mention

in the offer.

In absence of any specified time minting in the

offer, after expiration of a reasonable time.

If the offerer died before acceptance.

If the offerer fail to fulfill any pre-requirement

condition of the offer.

If the offer is not accepted by the offeree.

ACCEPTANCE

Acceptance:
"acceptance" is the assent given to a proposal and this has to flow
from the person to whom the offer is made. Section 2 (B) defines in
the following terms:
When the person to whom the proposal is made signifies his assent
thereto, the proposal is said to be accepted.

The acceptance has the effect of converting the proposal into promise.
Example:
Mr. Habib says to Mr. Kumar, I want to sell my house at Dhaka and
the price thereof is fixed at
TK 10,000/-.
Mr. Kumar says to Mr. Habib I want to buy your said house at the
price you quoted.

RULES REGARDING
ACCEPTANCE

Essential of valid Acceptance:

A.

Acceptance must be communicated in usual and reasonable

manner. It may be made by express words, spoken or written
or by conduct of the parties. Any method can be prescribed for
the communication of acceptance. But silence can never be
prescribed as a method of communication;

B.

Communication of acceptance may be warded by the offeror.

C.

Acceptance should be made before the offer lapses or is

revoked or is received;

D.

Acceptance must be absolute and unconditional and should

correspond with the terms of the offeror. Otherwise it amounts
to counter offer which may be accepted by the offeror;

E.

Acceptance once made, concludes the contract.

CONSIDERATION

Meaning of Consideration :
Consideration means something in return for something.
Section 2 of the Contract Act defines When at the desire of
the promisor, the promisee or any other 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. Section 2 (d)
of the Act. Any act or abstinence by the promisee not connected
with the proposal may not be treated as a consideration for
the promise.

RULES REGARDING
CONSIDERATION

Consideration at he desire of the promisor:

Consideration must proceed at the request of the promisor.
Hence Acts done voluntarily or at the request of third parties
do not constitute a valid consecration.
Case Law: Durga Prashad vs. Baldev: 1880 3 All 221.
A built a market at the request of the Collector of the place B
promised to pay. A commission on the articles sold in the
market. It was held that the promise to pay commission did
not amount to a contract for want of consideration, because A
(the promisee) had constructed the market not at the desire of
the shopkeepers (the promisors) but at the desire of the
Collector of the District to please him.

RULES REGARDING
CONSIDERATION

Rules regarding Consideration are:

1. must move at the desire of the promisor;

2. may move from the promisee or any other
person;
i.e.a stranger to consideration may maintain a
suit.
3. A stranger to a contract cannot maintain a
suit;
4. may be past, present or future;
5. must be something of value; need not be
adequate..
6. must be legal.

 NO CONSIDERATION NO
CONTRACT EXCEPTIONS

An agreement made without consideration

is void:

No consideration No contract Exceptions:

1.Natural love and affection.
2.Compensation for past voluntary service.
3.To pay time-barred debt.
4.Completed Gift.
5.Contract of Agency.
6.Remission by promisee of performance
7.Contribution to Charity.

ESSENTIAL ELEMENT OF
CONTRACT

1. Parties to contract
2. capacity of the prates
3.Lawful offer
4. Lawful acceptance
5.Lawful consideration
6.Free consent
7. Intention to create legal relation
8.Lawful purpose and object
9. certainty
10. specific subject matter
11. possibilities of performance
12. Not declared as void
13. Formalities

ESSENTIAL ELEMENT OF
CONTRACT

1. Parties to contract: There must be two or more

parties to make a contract.
2. Capacity of the prates: All the parties to the
contract must be major under the majority act 1885.
Under this act a person becomes major in the age of
18. On the other hand he may be a person of sound
mind and a person of unsound mind may not enter in
to a contract.
3. Lawful offer: There must be an offer to make a
contract. Here lawful offer means an offer which is
supported by the contract Act 1872.
4. Lawful acceptance: There must be a lawful
acceptance to make a contract. Here lawful acceptance
means an acceptance which is supported by the
contract Act 1872.

ESSENTIAL ELEMENT OF
CONTRACT

5. Lawful consideration: There must be a lawful consideration

to make a contract. Here lawful consideration means an offer
which is supported by the contract Act 1872.
6. Free consent: To make contract it is essential that the
consent of the parties to enter in to the contract is free. Here
free consent means the consent which is not affected by
coercion, undue influence, mistake, misrepresentation, and
fraud.
7. Intention to create legal relation: By a contract the
Intention of the parties must be expressed they are creating a
legal relationship.
8. Lawful purpose and object: A contract must be made to
lawful purpose and object. Here lawful object means the object
which is supported all existing laws of Bangladesh.

ESSENTIAL ELEMENT OF
CONTRACT

9. Certainty: The language and expression of the

contract must be certain by which the actual intention
of the parties is expressed.
10. Specific subject matter: In every case the subject
matter of the contract must be specific.
11. Possibilities of performance: A contract may not be
for such a form which is impossible to perform.
12. Not declared as void: A contract must be a form
which is not declared as void with any relevant loss.
13. Formalities: A contract may be writer or oral and
registered or none registered according to the
provision of relevant to loss.

HOW AN OFFER IS CONVENED TO A

CONTRACT
1. Offer

2. Promise

3. Agreement

4.Contract

Proposal

Proposal

Proposal

Proposal

One person

Two or more
person

Two or more
person

Two or more
person

Acceptation of
the proposal

Acceptation of
the proposal

Acceptation of
the proposal

Consideration

Consideration

Enforceable by
law

79

80