The document provides information about business law and the legal system. It defines key terms like business, law, and business law. It also outlines some major components of the legal system like institutions, laws, and people. It discusses different types of business contracts and the purposes and sources of business law. It provides examples of business and labor laws in Pakistan and how business operations are affected by laws. It also includes case studies on different types of contracts to illustrate contract law concepts.

3. AN INTRO TO LEGAL SYSTEM
• The law does not operate in a vacuum. It is
part of system commonly referred to as the
‘legal system’.
The term can be defined broadly as including
the components set out below:

4. AN INTRO TO LEGAL SYSTEM
Institutions Laws People
 Parliament
 Courts
 Government
Departments
 Correctional
Institutions
 Statue Law
 Common Law
 Equity
 Delegated
Legislation
 Members of
Parliament
 Judges
 Magistrates
 Barristers
 Solicitors
 Court Officials
 Correctional
Service Officers

5. BUSINESS LAW
Definition of Business
Today's business means:
“Exchange of goods, services or money for
mutual benefit or profit.”
Definition of Law
Law can be defined as:
“A standard or rule established by the
society to oversee the behavior of its
members".

6. BUSINESS LAW
Definition Business Law
The business law can be defined as:
“Business Law is the body of law that
governs business and commercial
transactions.”
Business law lays down the rights, duties
and obligations owed by parties to a contract.
It will define the areas of law relevant to the
world of business, and the rights of people
who engaged with in it.

7. BUSINESS LAW
Type of Business Contracts
o Contracts of Consumer Credit
o Contracts for sale of Goods and Services
o Contracts of agency
o Employment Contracts
o Contracts of Lease
o Contracts to purchase goods
o Contracts for mortgage of land
o Contracts to insure property

8. BUSINESS LAW
Purposes of Business Law
o Business Laws Exist To Create Reliable
Standards For Companies To Follow.
o Business Laws Create Consistent,
Predictable Standards.
o Some Most Important Purpose Are: Uniform
Commercial Code Uniformity Enforcement
Predictability
o Enforcement Provide Enforcement That
Allows Contractual Relationships To Stay
Intact.

9. BUSINESS LAW
Purposes of Business Law
o Predictability Allow People In Business To
Enter Into Multiple Transactions With
Certain Protection.
o Uniformity When Business Owners Rely On
The Same Laws To Conduct Business, They
Need To Know That State Agencies And
Courts Apply The Laws In A Uniform
Fashion.
o Uniform Commercial Code Extensive set of
Law Governing Commercial Transactions
between Businesses.

10. BUSINESS LAW
Sources of Business Law
Common Law:
Is known when a law is created through the court
decisions by judges. It’s mostly based on tradition,
usage and court rulings.
Statutory Law:
A law created by parliament, constitution, law
commission or agreement is called statue. Most laws
created today are statues. A statutory law is made up
by various legislative endorsed bodies
Administrative Law:
Laws troubled with the rules and tasks of the
executive branch of the government, its organizations,
their interrelations with each other, citizens and the
non-governmental entities.

11. BUSINESS LAW
Business Being Affected By Different Laws
o Several and different laws control the actions
of all the businesses and each person
involved in the business, from the manager
the employee and even the owner.
o Some major business law categories are as
follows:
The Law of Tort
Intentional Torts
Negligence Torts

12. BUSINESS LAW
Business Being Affected By Different Laws
 The Law of Contract
Law of Sales
The Law of Agency
The Law of Property
The Law of Bankruptcy
The Law of Negotiable Instruments

13. BUSINESS LAW
How Business Laws Effect Business Operations
o The Legal system of a country provides a
progressive legal framework to the organization
to operate their business in manner that it will be
mutually beneficial for the society and their
ownself.

14. BUSINESS LAW
Business & Labour Laws Prevailing In Pakistan
Following are some prominent business laws exist in
Pakistan:
Bill of lading Act 1856
Contract Act 1872
Indemnity & Guarantee
Pledge and Bailment
Agency
Negotiable Instruments Act 1881
Carriage of Goods
Trust Act 1882
Carriage of Goods By Sea Act 1925
Sales of Goods Act 1930
Partnership Act 1932

15. BUSINESS LAW
Business & Labour Laws Prevailing In Pakistan
Companies Ordinance 1984
Insurance Law
Labour Laws
Workmen Compensation Act 1923
Factories Act 1934
Payment of Wages Act 1936
Industrial & Commercial Establishment (Standing Order)
Ordinance 1968
Social Security Act 1968
Employees’ Old Age Benefit Act
Industrial Relations Act 2008

16. BUSINESS LAW
Law of Contract 1872
• The law relating to contracts in Pakistan is adopted from the
law existing during the British era. The contract law of 1872
has been enforced in Pakistan with some necessary
amendments. It extends to the whole of Pakistan and deals
with the following:
General Principles governing all types of contracts,
including:
– Contracts of indemnity
– Contact of Guarantee
– Contract of Bailment
– Contract of Pledge
– Contract of Agency

17. BUSINESS LAW
Definition of Contract
• A contact is an agreement between two more
persons to carry out a specified work or to
accomplish a task for monetary or non
monetary benefits. We can classify the
agreements into following three categories:
Social Agreements
Domestic Agreements
Business Agreements

18. BUSINESS LAW
Definition of Contract
According to Section 2(h):
“An agreement enforceable by law is a
contract.”
This simple definition consists of following
elements:
1) An Agreement
2) The agreement enforceable by law

19. BUSINESS LAW
Classification of Contracts:
The contracts can be classified in to following
broader categories:
According to Enforceability / Validity
According to Formation
According to Performance
According to Parties

20. BUSINESS LAW
According to Enforceability / Validity
In this category the contracts can be divided in to
following:
o Valid Contract
o Void Contract
o Voidable Contract
o Unenforceable
According to Formation
According to formation a contract has following
three kinds:
o Express Contract
o Implied Contract
oQuasi Contract

21. BUSINESS LAW
According to Performance
According to performance a contract is of the
following two kinds:
o Executed Contract
o Executory Contract
According to Parties
According to parties a contract may be of the
following two kinds:
o Unilateral Contract
o Bilateral Contract

22. BUSINESS LAW
Further Classification of Contract
Contract can also be classified into following:
Formal Contracts:
o Contract of Record
o Contract of Under Seals(Deeds)
Simple Contracts:

23. BUSINESS LAW
Case Studies of Types of Contracts
Following are the four selective case studies
which help to understand the contract and its
types.

24. BUSINESS LAW
Case Study 1
Mr. S purchased a Triumph ‘Spitfire’ sports car
from Mr. T who claimed that the car was part of
a limited series released in the mid-1960s. At a
Triumph car show Mr. S is advised by a number
of experts that the Triumph is a later model
with some of the trimmings associated with the
earlier model. Mr. S wishes to know whether the
elements necessary to give rise to a valid
contract are present.
Advise Mr. S on this point and outline his
potential options.

25. BUSINESS LAW
Case Study 1
Facts:
• Mr. S has purchased a Sports Car ‘Spitfire’ of
Triumph, from Mr. T.
• The special characteristic of this sale contract was
the unique quality of the Car that it belongs to the
limited edition of the mid-1960, released by the
Triumph.
• In a Triumph car show it has been revealed to Mr. S
that the Car does not belong to the mid-1960’s
special edition released by Triumph. This Car is the
later version the same series.

26. BUSINESS LAW
Case Study 1
Common Law:
• General rules that applicable to every kind of sales
and purchase activity that seller will liable disclose
all necessary facts that will help the buyer to make
effective decision for the purchase of good.
Law:
• The Law of Contract 1872 defines the parameters
that make an agreement valid. According to act a
contract is voidable when one of its essential is
missing in the contract. From the above facts we
can extract two assumptions:

27. BUSINESS LAW
Law:
– Mr. T has misrepresent the facts, or
– Mr. T has an intention to make a fraud
• The section 14 of the Contract Act 1872 emphasize
that a consent will be free if it has not been affected
one of following elements:
– Coercion
– Undue influence
– Fraud
– Misrepresentation
– Mistake

28. BUSINESS LAW
Conclusion:
The following remedies available to the Mr. S:
• Mr. S can avoid the contract and can contact with the
court for the revocation of the contract.
• If fraud or misrepresentation is proved Mr. S will be
eligible to recover his amount from Mr. T paid against
the purchase of car.
• Mr. S can sue for damages and recover the access
amount paid for the unique characteristics of the car.
• Mr. S can plea the court for the specific performance
of the contract and Mr. T will liable provide him the
prescribed car.

29. BUSINESS LAW
Case Study 2
Mr. G has agreed verbally to pay Rs. 15,000/= for
Mr. T’s collection of Literature. Before the matter
can proceed any further Mr. T is involved in a
serious car accident that results in him entering a
coma. It is uncertain whether Mr. T will regain
consciousness. Worried about Mr. T but still eager
to purchase the Literature, Mr. G consults you to
ascertain what essential elements required to give
rise to valid contract.
Advise Mr. G on this point and explain what facts
may prevent the existence of a valid contract.

30. BUSINESS LAW
Case Study 2
Facts:
• Mr. G was interested to purchase Literature from
Mr. T amounted Rs. 15,000/=.
• There is verbal agreement between them.
• Before the performance of the contract Mr. T has got
an accident and went into the coma.
• There is lesser chance that Mr. T will regain his
state of consciousness.

31. BUSINESS LAW
Case Study 2
Common Law:
• A general rule is that, when an agreement has been
formed with the mutual consents of the parties and the
process of formal offer and acceptance has been performed
whether verbally or in written, the legal heirs or
representative of the parties will liable to perform the
contract.
Law:
• Section 2(a) and Section (b) of the Contract Act 1872 has
defined offer and acceptance. When the offer and
acceptance has been taken place in defined manner
between the parties then, it will become a valid contract.

32. BUSINESS LAW
Case Study 2
Conclusion:
• Mr. G can ask the legal heirs or representatives of
the Mr. T for the performance of the contract.

33. BUSINESS LAW
Case Study 3
• Mr. B owns a large yatch, which he moors at Island.
Upon turning eighty years of age, he reluctantly
decides to sell his beloved possession. After an
existence period of advertising Mr. B finds a willing
purchaser in his home town, Mr. A. At the time of
contract, unbeknown to either of them, the yatch
had been wrecked. The yatch was wrecked by storm
the day before the agreement was made.
• What is the status of this contract?

34. BUSINESS LAW
Case Study 3
Facts:
• Mr. B owns a yatch which moors at Island. He had
decided to sell out his collection.
• He has made an advertisement for the same and got a
tentative buyer Mr. A for the same.
• A storm has destructed the yatch the day before they
are going to make a contract of sales.
Common Law:
• A general rule is that if the subject matter is
destructed due to the reason beyond the control of the
parties then the sales agreement stands enforceable.

35. BUSINESS LAW
Case Study 3
Law:
• Section (56) of the Contract Act 1872, explains that
a contract will become void when the subject matter
has been destructed or after the formation of the
contract without the fault of the promisor or
promisee.
Conclusion:
• The destruction of the yatch, due to the storm, has
discharged Mr. B and Mr. A from their obligations
under the contract.

36. BUSINESS LAW
Case Study 4
• Mr. T owns two motorbikes, a Suzuki and a BMW.
He agrees to sell his BMW to Mr. C for Rs.
200,000/=. Mr. C thinks that he is buying the
Suzuki.
• Does a contract exist between the parties?

37. BUSINESS LAW
Case Study 4
Facts:
• Mr. T owns two motorbikes of two different brands
Suzuki and BMW.
• Mr. C agrees to purchase one of his bikes.
• Mr. T is intended to sale his BMW to Mr. C.
• Mr. C has an intention to purchase Suzuki.

38. BUSINESS LAW
Case Study 4
Common Law:
• The general rules say that it is duty of the seller to
clearly define the specification of the product (s) and
its characteristics to the buyer and buyer has the
responsibility to make all necessary investigation
about the product that will help him to make
buying decision and to avoid any misconception
regarding the product (s).

39. BUSINESS LAW
Case Study 4
Law:
• Section (14) of the Contract Act 1872, defines
the free consent which make the contract
valid. If a contract is free from of the
following elements:
– Coercion
– Undue influence
– Fraud
– Misrepresentation
– Mistake

40. BUSINESS LAW
Case Study 4
Law:
• Law further explains that if parties give their
consent under any error, there is no agreement. It
means that there should be consensus ad-idem.
Mistake can be divided into:
– Mistake of Fact
– Mistake by law
• Mistake of fact further divided into following:
– Bilateral Mistake
– Unilateral Mistake

41. BUSINESS LAW
Case Study 4
Law:
• According to Section (22). “A contract is not voidable
merely because it was caused by one of the parties
to it being under a mistake as to a matter of fact.”
Conclusion:
• The contract between Mr. T and Mr. C is a valid
contract if it is the negligence of the Mr. C to
understand the subject matter.
• Mr. C can avoid the contract or can sue for the
cancellation of the contract if he proves the fraud or
misrepresentation at the end of Mr. T.

42. Questions
and
Answers

43. Thank You