Business law studytext ICAP

ICAP Study Text P Business Law First edition published by Emile Woolf International Bracknell Enterprise & Innovation Hub Ocean House, 12th Floor, The Ring Bracknell, Berkshire, RG12 1AX United Kingdom Email: info@ewiglobal.com www.emilewoolf.com © Emile Woolf International, November 2013 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, without the prior permission in writing of Emile Woolf International, or as expressly permitted by law, or under the terms agreed with the appropriate reprographics rights organisation You must not circulate this book in any other binding or cover and you must impose the same condition on any acquirer Notice Emile Woolf International has made every effort to ensure that at the time of writing the contents of this study text are accurate, but neither Emile Woolf International nor its directors or employees shall be under any liability whatsoever for any inaccurate or misleading information this work could contain © Emile Woolf International ii The Institute of Chartered Accountants of Pakistan Certificate in Accounting and Finance Business Law C Contents Page Syllabus objective and learning outcomes v Section A: Mercantile Law Chapter Introduction to the legal system Introduction to the law of contract 25 Offer and acceptance 37 Capacity of parties 47 Consideration 55 Free consent 65 Legality of object and consideration and agreements opposed to public policy 85 Void agreements 93 Contingent contracts 103 10 Quasi contracts 109 11 Performance of a contract 117 12 Discharge of a contract 137 13 Remedies for breach of contract 153 14 Indemnity and guarantee 163 15 Bailment and pledge 181 16 Agency 203 17 Partnership Act 229 © Emile Woolf International iii The Institute of Chartered Accountants of Pakistan Business Law Page 18 Negotiable instruments Act 255 Section B: Company Law Chapter 19 Company 291 20 Incorporation of Company 305 21 Share Capital – Types and Variations 325 22 Share Capital – Prospectus 335 23 Mortgages and Charges 347 24 Meetings 359 25 Management 375 26 Investments and dividends 393 27 Accounts and Audit 403 Index © Emile Woolf International 419 iv The Institute of Chartered Accountants of Pakistan Certificate in Accounting and Finance Business Law S Syllabus objective and learning outcomes CERTIFICATE IN ACCOUNTING AND FINANCE BUSINESS LAW Objective To give students an understanding of the legal system and commercial laws; and build a knowledge base of corporate laws Learning Outcome The candidate will be able to demonstrate: Basic knowledge of the legal environment Comprehension of law governing contracts, partnership and negotiable instruments Knowledge of the legal terminology of company law and the basics of company incorporation Familiarity with the provisions governing the issuance of shares Knowledge of the management of companies Familiarity with investment by companies, financial accounts and distribution of profit Knowledge of the appointment of auditors and their responsibilities and duties © Emile Woolf International v The Institute of C hartere d Accountants of Pakistan Business Law Grid Weighting Introduction to legal system Mercantile law Contract Act 1872 15 Partnership Act 1932 10 Negotiable Instrument Act 1881 10 Companies Ordinance 1984 Sections to 51 of the Companies Ordinance, 1984 10 Sections 52 to 136 of the Companies Ordinance, 1984 15 Sections 142 to 204A of the Companies Ordinance, 1984 15 Sections 208 to 251 of the Companies Ordinance, 1984 10 Sections 252 to 257 of the Companies Ordinance, 1984 10 Total 100   Syllabus Ref A Contents Level Learning Outcome Introduction to the Legal System Sources and process of legislation Sources of law and an introduction to the Constitution of Pakistan Process of legislation and legal system in Pakistan LO 1.1.1: Briefly describe sources of law in Pakistan LO 1.1.2: Describe the basic structure of the constitution of the Islamic Republic of Pakistan LO 1.2.1: Define legislation and describe its forms LO 1.2.2: Briefly describe the process of legislation as per the Constitution LO 1.2.3: Identify the structure of the courts in Pakistan B Mercantile law Contract Act 1872 All sections LO 2.1.1: Discuss the provisions of the act with respect to the following and demonstrate comprehension in simple scenario based problems)  communication, acceptance and revocation of proposals © Emile Woolf International vi The Institute of Chartered Accountants of Pakistan Syllabus objective and learning outcomes Syllabus Ref Contents Level Learning Outcome contracts, voidable contracts and void agreements Contingent contracts performance of contracts breach of contract indemnity and guarantee bailment and pledge contract of agency C Partnership Act 1932 Chapter I – Preliminary LO 2.2.1: Define the terms Chapter II - The nature of partnership LO 2.3.1: Understand and describe the partnership relationship and its creation and identify which mode determines existence of a partnership Chapter III - Relations of partners to one another LO 2.4.1: Determine the rights and duties of partners of the firm over property of the firm in given situations Chapter IV - Relations of partners to third parties LO 2.5.1: Describe the relationship of partners with third parties LO 2.5.2: Identify the implied authority of the partner in relation to third parties, liability of a partner for acts of the firm and liability of the firm for wrongful acts of a partner in given situations LO 2.5.3: Identify the rights and liabilities of a minor admitted to the benefits of partnership: D Negotiable Instruments Act 1881 Definitions and meanings (Section to 25) LO 2.6.1: Define and explain terms LO 2.6.2: Explain types of negotiable instruments Discharge of liability (Section 82 to 90) LO 2.7.1: Identify how the maker of a negotiable instrument is discharged from his liability under given scenarios Provisions relating to cheques (Section 122A to 131C) LO 2.8.1: Describe crossing of cheques © Emile Woolf International LO 2.8.2: Differentiate between a cheque crossed generally and a cheque crossed specially and their payment modes vii The Institute of Chartered Accountants of Pakistan Business Law Syllabus Ref E Contents Level Learning Outcome Companies Ordinance 1984 Preliminary and incorporation (Sections to 51) Definitions (Section 2) LO 3.1.1: Define the terms which are relevant to the areas covered in the syllabus Meaning of "subsidiary" and "holding company" (Section 3) LO 3.2.1: Explain subsidiary and holding company and when a company becomes a subsidiary or holding company of another company LO 3.2.2: Apply the concept of subsidiary in simple scenarios Powers and functions of the Commission (Section 12) LO 3.3.1: Demonstrate familiarity with the powers and functions of the Commission Memorandum of association (Section 15 to 25) LO 3.4.1: Describe the memorandum of association and state its purpose LO 3.4.2: List the clauses of memorandums of association of various types of companies LO 3.4.3: Describe the purpose and procedure of alteration to different clauses of a memorandum of association Articles of association (Section 26) LO 3.5.1: Define the articles of association and state its purpose LO 3.5.2: State the information which should be contained in the articles of various companies Registration of memorandum and articles of association (Section 30 to 36) Provisions with respect to names of companies (Section 37 to 41) LO 3.6.1: Describe the procedure of registration of the memorandum and articles of association LO 3.6.2: Describe the effects of registration of the memorandum and articles of association LO 3.7.1: Describe with examples the prohibitions with regard to the selection of the name of a company LO 3.7.2: Identify the actions and procedures needed to be taken by company and registrar, if a company is registered by a prohibited name © Emile Woolf International viii The Institute of Chartered Accountants of Pakistan Syllabus objective and learning outcomes Syllabus Ref F Contents Level Learning Outcome Association not for profit (Section 42) LO 3.8.1: Comprehend the nature of association not for profit Companies limited by guarantee (Section 43) LO 3.9.1: Understand the provisions regarding divisible profit and dividing the undertaking into shares or interest Allotment of shares, registration of charge etc (Sections 52 to 136) Prospectus, allotment, issue and transfer of shares and debentures, deposits, etc (Section 52 to 57) LO 4.1.1: Define a prospectus and explain its purpose LO 4.1.2: Understand the requirements relating to a prospectus as laid down in Section 52, 53 (1), (5) and (8) LO 4.1.3 Describe the matters that are to be specified in a a prospectus as required under clause to and 17, 18 19, 24, 26 and 27 of Section of Part I of Second Schedule LO 4.1.4: Describe the reports that are to be included in a prospectus as required under Section of Part I of Second Schedule LO 4.1.5: Understand the provisions regarding statement and consent of expert Share capital and debentures (Section 89 to 95 and 108) LO 4.2.1: Describe the nature of shares and share certificates LO 4.2.2: Describe the classes and kinds of shares LO 4.2.3: Describe with simple example the condition of fully paid shares LO 4.2.4: State with simple examples the kinds of alterations can be made to the share capital LO 4.2.5: State the rules on prohibition of purchase of a company’s own or its holding company’s shares LO 4.2.6: Understand the meaning of variation of shareholders’ right LO 4.2.7: Demonstrate familiarity with the procedure for cancellation of variation of shareholders’ right © Emile Woolf International ix The Institute of Chartered Accountants of Pakistan Section B: Company Law - Chapter 27: Accounts and Audit CHAPTER REVIEW Chapter review Before concluding your studies of this chapter check that you now know: What books of account are required to be maintained by the company What are the requirements for presentation of accounts by the company What are the contents of a directors report How auditors are appointed, what power and obligations they have and what they report © Emile Woolf International 417 The Institute of C hartere d Accountants of Pakistan Business Law © Emile Woolf International 418 The Institute of Chartered Accountants of Pakistan Certificate in Accounting and Finance Business Law I Index Agreement to create monopoly 90 Agreement, the consideration or object of which is partly unlawful 60, 87, 89 Agreements by persons of unsound mind 50 Agreements contingent on impossible events 100 Agreements contingent upon impossible events 107 Agreements in restraint of legal proceedings 99 Agreements in restraint of marriage 99 Agreements in restraint of trade 96 Agreements opposed to public policy 89 Agreements to impossible acts 100 Agreements to enter into an agreement in the future 100 Agreements with a minor 49 Agreements with persons disqualified by law 52 Allotted share capital 328 Alteration 142, 175 Alterations permitted by the Act 268 Alternate Dispute Resolution 21 Alternative promise being illegal 89, 131 Ambiguous Instrument 265 Amount on negotiable instrument 266 Annual accounts 406 Annual General Meeting (AGM) 364 Anticipatory breach of contract 150 Apparent authority 213 a Acceptance 42 Acceptor for honour 260 Act of firm 231 Act or omission 176 Active concealment 73 Actual authority 245 Actual breach of contract 149 Actual or ostensible partner 235 Actual performance 119, 140 Additional District Judge 19 Additional Sessions Judges 18 Advantages and disadvantages of binding precedent Advantages of ADR 22 Advantages of delegated legislation 13 Agency by estoppel 210 Agency by express appointment 209 Agency by necessity 211 Agency by operation of law 211 Agency by ratification 209 Agency coupled with interest 219 Agent - Definition 205 Agent of the firm 245 Agent: authority 212 Agent’s authority and the power to bind the principal 212 Agreement 4, 27, 232 © Emile Woolf International 419 The Institute of Chartered Accountants of Pakistan Business Law Business Law – Definition Appeal 22 Appeal to Supreme Court 21 Applicability of law 22 Appointment and remuneration of auditors 411 Appropriation of payment 132, 133 Arbitration 22 Arbitration in Islamic way 23 Areas of jurisdiction of the High Court 17 Arrangement 176 Articles of association 319 Artificial person 294 Associated company/Associated Undertaking 395 Association not for profit 300 Association of two or more persons 232 Association or subscription clause 315 Attempted performance 119, 140 Auctioneer 206 Audit 238, 293, 297, 300, 302, 337, 343, 349, 353, 411 Auditors’ report 414 Authentication of accounts 407 Authentication of directors’ report 410 Authorised capital clause 315 Authorised share capital 328 Authority of Partners 245 c Carrying on business 233 Cases where time is essence 127 Casual vacancy 412 Certiorari 17 Characteristics of contingent contracts 105 Characteristics of Negotiable Instrument 257 Charge 352 Charitable subscription 62 Cheaper and Flexible 22 Cheque 278 Chief executive 388 Circumstances in which a banker may refuse to honour cheque 283, 284 Circumstances where agent is personally liable 225 Circumstances where object or consideration is unlawful 87 Circumstances where surety is not discharged 177 Civil court Appeals 19 Civil Courts 19 Civil law Civil law and criminal law Classifications of contract 33 Coercion 68 Commencement of business 321 Commercial agent 206 Commission’s approval 317 Common law remedies 155 Communication of revocation 44 Companies 293 Company Courts 20 Company directors 206 Company limited by guarantee 297 Company limited by shares 297 Company meetings 361 Company Secretary 390 Competent to contract 49 Composition of Federal Shariat Court 21 Composition of National Assembly 11 b Bailee not responsible on re-delivery to bailor without title 193 Bailment on the basis of benefit 186 Bailment on the basis of reward 185 Bearer instrument 262 Bilateral mistake 80 Bilateral mistake as to the possibility of performance 81 Bilateral mistake as to the subject matter 81 Bill of Exchange 274 Blank or general endorsement 266 Body corporate 297 Books of accounts 405 Broker 206 Burden of proof 8, 51 © Emile Woolf International 274 420 The Institute of Chartered Accountants of Pakistan Index Criminal law or civil law? Criteria to be Judge of High Court Criteria to be Judge of Supreme Court Crossing of a cheque after issue Custom Customs Conciliation 22 Condition precedent to surety’s liability 171 Conditions to be holder in due course 261 Consent 67 Consent of parties 168 Consequences of Actual Breach 149 Consequences of treating contract as operative 151 Consequences where time is essence 127 Consequences where time is not essence 127 Consideration – Definition 57 Consistency in judicial decisions Contingent contract 105 Contract - Definition 27 Continuing guarantee 169 Contract of agency 62 Contract of guarantee 62, 167 Contract of indemnity 165 Contracts contingent upon the future conduct of a living person 106 Contracts contingent upon the happening of an uncertain future event 105 Contracts contingent upon the happening of an uncertain specified event within a fixed time 106 Contracts contingent upon the nonhappening of a certain future event 106 Contracts contingent upon the nonhappening, of an uncertain specified event within a fixed time 106 Contracts without consideration 61 Control over delegated legislation 13 Counter offer 45 Course of performance 149 Court 303 Court regards it as immoral or opposed to public policy 88 Creation of agency 209 Creditor 167 Criminal Act 226 Criminal court Appeals 18 Criminal Courts 17 Criminal law © Emile Woolf International 16 16 282 225 d Damages 156 Damages for inconvenience and uneasiness 160 Death 143 Death of surety 170, 175 Debenture 338, 349 Debt to be discharged is indicated 132 Debt to be discharged is not indicated 132 Declared act 74 Defeats the provisions of any law 88 Delay 23 Delegated Legislation 13 Demand for poll 369 Demand Instrument 262 Devolution of joint rights 125 Difference between contingent contract and wagering agreement 107 Difference between pledge and bailment 199 Direct Representation 249 Directors 377 Directors Report 409 Disabilities of Transferee 250 Disabled to perform promise 150 Disadvantages Disadvantages of ADR 22 Disadvantages of delegated legislation 14 Discharge by breach 149 Discharge by impossibility of performance 145 Discharge by lapse of time 148 Discharge by mutual agreement 141 Discharge by operation of law 143 Discharge by performance 140 Discharge of a contract 139 421 The Institute of Chartered Accountants of Pakistan Business Law Duty to indemnify for loss caused by fraud Duty to indemnify for wilful neglect Duty to provide full information Duty to receive back the goods Duty to render true accounts Duty to return increase Duty to return the goods Duty to use firm’s property exclusively for the firm Discharge of liability 285 Discharge of party or parties 286 Discharge of surety 174 Discharge of surety by invalidation of contract 176 Discharge of surety by revocation 175 Discharge of surety by the conduct of the creditor 175 Discharge of the negotiable instrument 285 Disclosure of directors’ interest 386 Disqualification of auditors 413 District Magistrate 18 Dividend warrants 401 Dividends 399 delay in payment 401 Doctrine of binding precedent Doctrine of corporate personality 293 Drawee in case of need 260 Duties of Agent 214 Bailee 189 Bailor 188 finder of goods 195 Principal 216 Duty in case of emergency 240 Duty not to assign his interest 241 Duty not to compete with the business of the firm 241 Duty not to make any unauthorized use of goods 190 Duty not to mix the goods bailed with his own goods 190 Duty not to set up an adverse title 190 Duty to account for personal profits derived 241 Duty to act within authority 240 Duty to attend diligently to his duties 240 Duty to be just and faithful 239 Duty to be liable jointly and severally – unlimited liability 239 Duty to bear the risk of loss 189 Duty to carry on business to the greatest common advantage 239 Duty to contribute to the losses 240 Duty to disclose faults 188, 192 Duty to indemnify bailee for loss in case of early termination of gratuitous bailment 189 © Emile Woolf International 239 240 239 189 239 191 191 241 e Effect of absence of consent 67 Effect of absence of free consent 67 Effect of admissions by a partner 249 Effect of general crossing 281 Effect of material alteration 268 Effect of notice to an active partner 249 Effect of ratification 210 Effect of refusal to perform 122 Effect of restrictive crossing 282 Effect of special crossing 281 Effect of undue influence 71, 72 Effect on agreement collateral to void agreement 95 Effects of coercion 68 Effects of fraud 75 Effects of misrepresentation 79 Effects of supervening impossibility 145 Effects of Wagering Agreement 98 Election of directors 379 Eligibility to act as director 381 Empty promise 73 Endorsement 266 Endorsement in full or special endorsement 266 Enforceability 28 Enforceability of void agreements 95 Equitable remedies 155 Essential elements of a cheque 280 Essential elements of a partnership 232 Essential elements of a Promissory Note 271 Essential elements of Bailment 184 422 The Institute of Chartered Accountants of Pakistan Index Forfeiture of Security Deposit (or Earnest Money) 160 Fraud 73, 74, 169 Fraudulent 88 Free consent – Definition 67 Fresh election of directors 380 Future consideration 59 Essential elements of Bill of exchange 276 Essentials of a contract 168 Essentials of a contract of guarantee 168 Essentials of a valid contract 29 Essentials of a valid tender 121 Essentials of acceptance 42 Essentials of an offer 39 Essentials of consideration 58 Essentials of misrepresentation 78 Essentials of valid endorsement 266 Estoppel 210 Examples of applications of holding out partner 250 Exceptions of agreements in restraint of trade 96 Exceptions of holding out 250 Exceptions to rescind the contract 75, 79 Exemplary damages 159 Existence of a debt 168 Expensive 22 Expert 343 Express authority 212 Extraordinary General Meeting (EGM) 365 g General Crossing General duties of partner General meetings Gifts Goods being inseparable Grounds of supervening impossibility h High Courts Holder Holder in Due Course Holding Company Holding out How can precedents be altered or avoided? f Failure of co-surety to join surety False assertion Family Courts Federal Shariat Court Fiduciary relationship Filing of accounts Final dividend Financial Institution Finder of goods Firm and partners First chief executive First directors Fitted act Fixed charge Flexibility in the law Floating charge Forbidden by law Foreign Instrument © Emile Woolf International 281 239 361 62 190 145 177 73 20 20 377 407 399 337 195 231 388 378 74 352 352 87 264 16 261 261 299 249 i Implied authority Inchoate instrument Indemnified / Indemnity holder (Promisee) Indemnifier (Promisor) Indirect Representation Industrial Tribunal Initiation surety’s liability Injunction Inland Instrument Insolvency Inspection of books of accounts Interested director not to vote 423 212, 245 265 165 165 249 20 171 157 264 143 406 387 The Institute of Chartered Accountants of Pakistan Business Law Liability of a partner for acts of a firm Liability of the firm for wrongful acts of a partner Liability to account for personal profits Liability to account for profit of competing business Liability to indemnify for wilful neglect Liability to share losses Limitation of surety’s liability Limitation period Limited liability Liquidated damages Loans to directors Lunatic Interim dividend 399 Introduction of contract act 27 Introduction of legal system Investment 396 Investment in associated company 395 Investment properties 400 Investments of company 395 Investments of Company to be held in its own name 397 Involves or implies injury 88 Irrevocable agency 219 Issued share capital 328, 329 j Joint and several liability of joint promisors Judiciary makes the law Jurisdiction of Supreme Court 248 248 248 248 170 148 294 160 385 51 Magistrates’ courts 18 Maintenance and champerty 90 Making a distinction between cases Mandamus 16 Marriage brokerage agreement 90 Material alteration 143, 268 Maturity of Negotiable instrument 263 Meaning of acceptance 42 Meaning of agreements in restraint of trade 96 Meaning of appropriation of payment 132, 133 Meaning of Bailment 183 Meaning of Crossing 281 Meaning of discharge 139 Meaning of performance 119 Meaning of Quasi contract 111 Meaning of reciprocal promises 129 Meaning of remedy 155 Meaning of sound mind 50 Meaning of undisclosed agency 223 Meaning of void agreement 95 Meaning of wagering agreement 98 Mediation 22 Memorandum of association 313 Mercantile agent 206 Minimum Subscription 339 111, 113 158 266 169 249 l Lapse of an offer 44 Large number of precedents Law – Definition Legality of object and consideration 87 Legality of object, consideration and agreements opposed to public policy 87 Legislation Legislation Liabilities of partner and firm 247 Liability clause 314 Liability for misapplication by partners 248 © Emile Woolf International 247 m 125 15 k Kind of Quasi Contracts Kinds of damages Kinds of endorsements Kinds of guarantee Knowledge of the third party 247 424 The Institute of Chartered Accountants of Pakistan Index Not an excuse of supervening impossibility Not Negotiable Crossing Note Notice Notice of meeting Novation Minors admission to the benefits of partnership 251 Minutes 371 Misrepresentation 77, 169 Misrepresentation / Fraud 176 Mistake 80 Mistake of foreign law 80 Mistake of Pakistan law 80 Mixture without Bailor’s consent 190 Modarba 395 Modes of discharge of a contract 139 Modes of negotiation 267 Money bills 12 Mortgage 351 Must have relied on the existence of the agency relationship 211 Mutual agency 234 Mutual and concurrent 129 Mutual and dependent 129 Mutual and independent 129 Mutual Rights and Liabilities 243 o Object clause Obligations of parties to contracts Offer On due date of performance Options to the aggrieved party Order instrument Order of performance Ordinary business Ordinary Damages Ordinary shares Ostensible authority Other modes of revocation of continuing guarantee Other VOID agreements Overruling a precedent n Name clause 314 Name of a company 310 National Assembly 10 Natural love and affection 61 Nature of bailment 183 Nature of partnership 231 Nature of relationship 70 Nature of surety’s liability 170 Nature of surety’s liability - it is coextensive 170 Negotiable Instrument – Definition 257 Negotiation 22, 267 Negotiation by endorsement and delivery 267 Negotiation by mere delivery 267 Neither party makes an appropriation 132 Nominal Damages 159 Nominal partner 236 Nominal value of shares 327 Non-performance in case of mutual and dependent reciprocal promises 130 © Emile Woolf International 146 282 198 170, 175 367 141, 175 314 119 39 149 151 262 130 367 158 330 213 170 99 p Participatory Redeemable Capital 353 Particular partnership 235 Particular state of things ceases to exist or occur 146 Parties in a contract of guarantee 167 Parties in a contract of indemnity 165 Parties to a Bill of Exchange 274 Parties to a Cheque 279 Parties to a Promissory Note 270 Parties to Negotiable Instruments 260 Partner by estoppel or holding out 236 Partner in profits only 236 Partnership 231, 293 Partnership property 243 Partnership-at-will 235 Past consideration 59 425 The Institute of Chartered Accountants of Pakistan Business Law Preventing the performance 130 Prime Minister Principal debtor 167 Privacy 22 Private companies 298 Process 21 Process of Legislation 11, 13 Prohibited names 310 Prohibition 16 Prohibition of financial assistance 332 Promise 27 Promise to compensate 61 Promise to legal and illegal things 89, 131 Promisee prescribes the manner or time 126 Promisee’s refusal / neglects 142 Promissory Note 270 Proposal 28 Proposal / offer – Definition 39 Prospectus 337 Protection to the Collecting Banker 283 Proxies 370 Public company 298 Purpose of Crossing 281 Payable to bearer 258 Payable to order 258 Payment by interested person 111 Payment by mistake or under coercion 112 Payment for Honour 261 Payment in due course 268 Penalty 160 Performance of a contract 119 Perpetual existence 296 Person enjoying benefit of nongratuitous act / goods 112, 114 Personal liability of an agent 225 Persons who can demand performance 124 Persons who can perform 123 Persons who can perform and demand performance 122 Persuasive authority Place for performance is not specified 126 Place for performance is specified 126 Pledge 186, 196, 350 Pledge by buyer in possession before sale 199 Pledge by co-owner in possession 199 Pledge by mercantile agent 198 Pledge by person in possession under voidable contract 198 Pledge by seller in possession after sale 198 Pledged by non-owners 198 Position of a minor before attaining majority 251 Position of a minor on attaining majority 251 Position of a person who is usually of sound mind but occasionally of unsound mind 51 Position of a person who is usually of unsound mind but occasionally of sound mind 51 Position of agreements by a minor 49 Position of agreements with a person of unsound mind 51 Powers of directors 384 Precedent Preference shares 330 Present consideration 59 President © Emile Woolf International q Qualification of auditors 413 Qualification to be an arbitrator 23 Qualified duties of partner 240 Quantum Meruit 111, 113, 158 Quantum meruit claim 155 Quasi contract 111 Quorum of meeting 368 r Reasons of alteration in Object and registered office clause Reciprocal promises Rectification of names Redeemable Capital Refusal to perform promise 426 316 129 310 353 150 The Institute of Chartered Accountants of Pakistan Index Right to claim damages in case of negligence 191 Right to claim set off 172 Right to deliver goods in case of several joint owners 193 Right to demand increase 192 Right to demand return of goods 192 Right to have access to the books 242 Right to indemnity 171, 242 Right to interest on advances 242 Right to interest on capital 242 Right to recover loss in case of bailor’s defective title 192 Right to recover loss in case of bailor’s refusal to take the goods back 192 Right to retire 242 Right to share the profits 242 Right to subrogation 171 Right to take part in the conduct of the business 242 Rights after reconstitution of firm 243 Rights against co-sureties 173 Rights against creditor 172 Rights against principal debtor 171 Rights and liabilities of acceptor for honour 260 Rights of agent 215 Rights of bailor and bailee against wrong-doer 193 Rights of Holder against Banker 283 Rights of indemnity holder 165 Rights of partner 242 Rights of Pawnee 196 Rights of Pawnor 198 Rights of Principal 217 Rights of surety 171 Rights of Transferee 250 Rights of transferee of a partner’s interest 250 Rights to securities 172 Role of an agent 205 Rules for calculating maturity 263 Rules regarding amount of damages 160 Rules regarding appropriation of payment 132, 133 Rules regarding contingent contracts 105 Rules regarding performance of reciprocal promises 129 Registered office clause 314 Registrar 302 Registration of a company 308 Registration of mortgage or charge 354 Release of one joint promisor 125 Release of principal debtor 175 Remedies for breach 155 Remedies for breach of contract 155 Remission 142 Remoteness of damages 161 Removal of chief executive 389 Reports to be set out in the prospectus 340 Representation at meetings 371 Representation to others 211 Rescission 141 Rescission of Contract 156 Restitution 156 Restraint of parental rights 90 Restraint of personal liberty 90 Restrictions by partnership deed 247 Restrictions on the implied authority of a partner 246 Restrictive crossing 282 Revocation of a continuing guarantee 170 Revocation of offer and acceptance 44 Right and duties of the agent and principal 214 Right of acceptor for honour 260 Right of bailee 192 Right of bailor 191 Right of finder of goods 195 Right of outgoing partner to share in the subsequent profits 243 Right of particular lien 193 Right of payer for honour 261 Right to be consulted 242 Right to be indemnified in case of early termination of gratuitous bailment 192 Right to claim compensation in case of unauthorized mixture of goods 191 Right to claim compensation in case of unauthorized retention of goods 192 Right to claim compensation in case of unauthorized use 191 Right to claim contribution 125, 173 © Emile Woolf International 427 The Institute of Chartered Accountants of Pakistan Business Law Rules regarding the performance of joint promise Steps of registration Stifling prosecution Stipulation for Interest Stranger to contract Structure of courts in Pakistan Sub-Bailment Subordinate Magistrate Sub-partner Subscription lists Subsequent chief executive Subsidiary Company Supervening illegality Supervening Impossibility Supply of necessaries Supreme Court Surety 124 s Sale of public offices Same identity Satisfaction of mortgage or charge Save time and expense Scenario 1: Scenario 2: Scenario 3: Scenario 4: Senate Separate legal personality Service of an expert Session Judge Share capital Share certificates Share registrar Shares in companies Sharing of loss in contribution Sharing of profits Silence as to fraud Silent partner Simultaneous performance Single Member Company Sleeping or dormant partner Sole trader Some terms to remember Sources of law in Pakistan Special business Special Contract Special crossing Special Damages Special resolution Specific guarantee Specific Offer Specific Performance Specific persons Specimen of a Bill of Exchange Specimen of a Cheque Specimen of a Promissory Note Statutory meeting Statutory report Statutory restrictions © Emile Woolf International 90 144 355 11 11 11 11 294 22 18 327 328 390 327 125 233 75 236 129 298 235 293 20 367 226 281 159 311 169 41 157 50 275 279 271 362 363 246 308 89 160 60 15 186 18 236 339 389 299 147 145 111 15 167 t Tender of goods or services Tender of money Termination by act of parties Termination by operation of law Termination of agency Termination of all contract of bailment Termination of gratuitous bailment Test of partnership Third party Time and place of performance Time as essence of contract Time for performance is not specified Time for performance is specified Time Instrument Time is essence Time is not essence Time of commencement of the indemnifier’s liability Timing of revocation Trading with enemy Tripartite agreement Types of agent Types of Bailment Types of crossing Types of Instrument Types of mistakes Types of offer 428 120 120 221 222 221 194 194 234 231 126 127 126 126 263 149 150 166 44 89 168 206 185 281 262 80 41 The Institute of Chartered Accountants of Pakistan Index Types of partners Types of partnership Types of performance Types of precedent Types of reciprocal promises Types of tender 235 235 119 129 120 v Vacation of office Variation in rights Variation in share capital Void agreements Voting in meetings u Ultra-Vires Borrowings Uncertain agreements Underwriter Undisclosed agency Undue influence Unilateral mistake Unjust precedents Unlimited company     © Emile Woolf International 382 333 331 95 368 w 349 99 341 223 70 82 298 Wagering agreement Waiver Where such person elects not to become a partner Where such person elects to become a partner Where to apply law in practical life Who are competent to contract? Why Chartered Accountants study law Withholding of dividends 98 142 252 252 49 401   429 The Institute of Chartered Accountants of Pakistan Business Law   © Emile Woolf International 430 The Institute of Chartered Accountants of Pakistan ... adjective to give it a more clear meaning e.g Civil Law, Criminal Law, Business Law etc 1.2 Definition of Mercantile Law Business Law is the part of civil law which deals with the rights and obligations... established law 1.7 Civil law and criminal law There are several branches of the law Each deals with a different area of law and legal relationships Two major branches of the law are:  criminal law. .. Accountants study law  Where to apply law in practical life  Sources of law in Pakistan  Doctrine of Binding Precedent  Civil law and criminal law 1.1 Definition of Law Law means a set of rules or a