Business law

BUSINESS LAW

VOID AGREEMENT, VOID AND A VOIDABLE CONTRACT

Presented by

Affan Bajwa

Ayesha Sharif

Sundas Amjad

CONTRACT

An agreement that can be enforced in court.

It is made between two or more parties

Promisor The person making the proposal is called ‘promisor

Promisee The person accepting the proposal is called ‘promisee’.

ELEMENTS OF A CONTRACT

1. Agreement

2. Consideration

3. Contractual Capacity

4. Legality

AGREEMENT

Every promise and every set of promises, forming the consideration for each other, is an agreement.

WHAT AGREEMENTS ARE CONTRACTS?

All agreements are contracts if they are made by the free consent of parties competent to contract, with the law of consideration and with a lawful object.

CONTRACTUAL CAPACITY

Contractual Capacity maintains that the law must recognize parties as possessing characteristics that qualify them as competent.

WHO ARE COMPETENT TO CONTRACTUAL CAPACITY

1. Age of Majority

2. Persons of Sound Mind

3. Persons NOT Disqualified

AGE OF MAJORITY

This is now regulated by the Majority Act, 1875. Section 3 of the Act declares that every person domiciled in Pakistan shall be deemed to have attained his majority when he shall have completed his age of eighteen years, and not before.

SOUND MIND The person is said to be sound mind

for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it, and of forming a rational judgment as to its effect upon his interest.

DISQUALIFIED PERSONSThis section deals with personal

capacity in three distinct branches:

PoliticalProfessionalLegal Statute

VOID CONTRACT

A contract which ceases to enforceable by law becomes void when it ceases to be enforceable

VOID AGREEMENT

An agreement not enforceable by law is void agreement.

CONSIDERATION

Consideration is defined as something of value received or promised to convince a person to make a deal.

FACTORS IN CONSIDERATION

Forbidden by LawInjury to Person and PropertyImmoral and Applied to Public PolicyUnlawfulFraudulent

FORBIDDEN BY LAW

An act or undertaking is equally forbidden by law whether it violates a prohibitory enactment of the Legislature or a principle of unwritten law.

INJURY TO PERSON AND PROPERTY

A comprehensive term for any wrong or harm done by one individual to another individual's body, rights, reputation, or property. Any interference with an individual's legally protected interest.

IMMORAL AND APPLIED TO PUBLIC POLICY

UNLAWFULAn action which is in violation of a

statute, federal or state constitution, or established legal precedents (against the law)

FRAUDULENT

The description of a willful act commenced with the specific intent to deceive or cheat, in order to cause some financial detriment to another and to engender personal financial gain.

VOIDABLE CONTRACT

An agreement which is enforceable by law at the option of the one or more of the parties thereto, but not at the option of the other or others, is a voidable contract.

REVOKE CONTRACT

A voidable agreement can be revoke if one of the party has free consent.

CONSENT:Two or more persons are said to consent

when they agree upon the same thing in the same sense.

FREE CONSENT

Consent is said to be free when it is not caused by

COERCION FRAUD MISREPRESENTATION UNDUE INFLUENCE

Relation of parties to dominate the will Fiduciary, age and health Unconscionable transaction

COERCION

Coercion is the committing or threatening to commit, any act forbidden by the Pakistan Penal Code or the unlawful detaining, or threatening to detain any property or life, with the intention of causing any person to enter into an agreement.

FRAUD Fraud means and includes any of the following

acts committed by a party to contract , or to induce him to enter into the contract…The suggestion, as to a fact, of that which is not

true, by one who does not believe it to be true.The active concealment of a fact by one having

knowledge or belief of the fact.A promise made without any intention of

performing it.Any other act fitted to deceiveAny such act or omission as the law specially

declares to be fraudulent.

MISREPRESENTATIONThe misrepresentation must be made with

the intention of influencing the other person to act upon it

The misrepresentation or concealment must induce action and cause injury to the other party

UNDUE INFLUENCE DUE TORELATION OF PARTIES TO DOMINATE THE WILL A contract is said to be induced by “undue influence”

where the relations subsisting between the parties such that one of the parties is in a position to dominate the will of the others, and uses that position to obtain an unfair advantage over the other.

FIDUCIARY, AGE AND HEALTH In particular and without prejudice to the generality of

the foregoing principle, a person is deemed to be in a position to dominate the will of another ---

Where he holds, a real or apparent authority over the other, or where he stands in Fiduciary relation to the other

Where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of Age, Illness, or Mental or Bodily distress

UNCONSCIONABLE TRANSACTION

Where a person who is in a position to dominate the will of another, enters into contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other

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