Business Law (BBA)

Unit -1 Introduction of  Law and Business Law

Law can be understood as a system of rules, enforced through social institutions that govern behavior within a society. It encompasses a wide range of regulations and guidelines that are enforced by government institutions or other entities authorized to do so. Some key characteristics of law:

1.     Rules and Regulations: Laws consist of explicit rules and regulations that prescribe and proscribe certain behaviors. They outline what individuals can or cannot do within a society.

2.     Authority: Laws derive their authority from legitimate sources such as constitutions, statutes, judicial decisions, or recognized customs and traditions. This authority gives them binding force over individuals and entities within a jurisdiction.

3.     Enforceability: One of the distinguishing features of law is its enforceability. Laws are enforced through various means, including sanctions, penalties, and legal consequences for non-compliance.

4.     Protection and Order: Laws aim to maintain order and stability within society by resolving disputes, protecting individual rights and liberties, and ensuring public safety.

5.     Dynamic and Evolving: The body of law is not static; it evolves over time in response to societal changes, technological advancements, and shifting moral standards.

6.     Uniformity and Consistency: Laws are designed to be applied uniformly and consistently across a jurisdiction, providing predictability and fairness in their application.

7.     Adjudication: Disputes regarding the interpretation or application of laws are resolved through adjudication in courts or other legal forums, ensuring fair and impartial decision-making.

Laws can be classified into different types based on their origin, scope, and application. Similarly, their sources vary depending on the legal system of a particular country or region. The types and sources of law:

Types of Law:

1. Substantive Law:
• Civil Law: Governs private disputes between individuals or organizations, typically codified in statutes or written codes.
• Criminal Law: Deals with offenses against the state or society, defining crimes and prescribing punishments.
2. Procedural Law:
• Civil Procedure: Rules governing how civil cases are conducted in courts.
• Criminal Procedure: Rules governing the prosecution and defense of criminal cases.
3. Public Law:
• Constitutional Law: Establishes the framework of government, defines the powers of branches, and protects fundamental rights.
• Administrative Law: Regulates administrative agencies, their procedures, and interactions with citizens.
4. Private Law:
• Contract Law: Governs agreements between individuals or entities.
• Property Law: Deals with ownership and use of property.
• Tort Law: Addresses civil wrongs and provides remedies for harm caused to individuals or their property.
5. International Law:
• Governs relations between countries, international organizations, and individuals across borders.

Sources of Law:

1. Constitutions:
• Fundamental legal documents that establish the framework for government and guarantee fundamental rights and freedoms (e.g., the United States Constitution).
2. Legislation:
• Laws enacted by legislatures at the federal, state/provincial, or local levels (e.g., statutes, acts, ordinances).
3. Common Law:
• Legal principles and rules derived from judicial decisions and precedents (case law), developed over centuries in countries with common law traditions (e.g., UK, USA).
4. Customary Law:
• Practices and norms that have developed over time within a particular community and are recognized as legally binding (e.g., customary international law).
5. Treaties and International Agreements:
• Binding agreements between countries or international organizations, governing their relations and interactions.
6. Regulations and Administrative Rules:
• Rules and regulations adopted by administrative agencies to implement and enforce statutes enacted by legislatures.
7. Legal Principles and Maxims:
• General principles of law that guide legal interpretation and decision-making (e.g., equity, fairness, justice).
8. Religious Law:
• Legal systems based on religious texts and doctrines (e.g., Islamic Sharia law, Jewish Halakha).

Business Law: The term 'business law' may be defined as that branch of law, which comprises laws concerning trade, industry and commerce. It is an ever-growing branch of law with the changing circumstances of trade and commerce. With the increasing complexities of the modern business world, the scope of mercantile law enormously widened. It is generally understood to include the laws relating to contracts, sale of goods, partnership, companies, negotiable instruments, insurance, insolvency, carriage of goods, and arbitration. -Business law encompasses the law governing contract, sales, commercial paper, agency and employment law, business organizations, property and bailment's. Other popular area is insurance, will and estate planning, and consumer and creditor protection.

Business law may include issues such as starting selling or buying a small business or large business managing a business, dealing with employees or dealing with contracts among others. -business law covers the trade, industry and commerce. -Mercantile law may be defined as that branch of law, which deals with the rights, obligations of mercantile persons arising out of mercantile transactions in respect of mercantile property. An individual, a partnership or a company, carrying on business, is a mercantile person. This law in turn is founded on the law of contracts. For example, the laws of agency, suretyship, sale of goods, negotiable instruments, partnership, etc. which constitute special branches of mercantile law, are only specialized fields of contracts.

 

Definition of business law.

According to M.C.Shukla- Mercantile law may be defined as that branch of law with deal with the rights and obligations of mercantile persons arising out of mercantile transaction in respect of mercantile property.

M.C.Kuchhal- The term mercantile law may be defined as that branch of law, which comprises laws concerning trade, industry and commerce.

A.K.Sundaran- Business law provides legitimacy, security, control and incentives to business activities. It also protects rights interests of consumers of labor business and society.

 Sources of the Business law

1. custom and usage- muluki Ain 2020

2. legislation/statutes- parliament made law, contract law, company law, IEA, FITTA and

Arbitration law etc.

3. precedent/judicial decision. supreme court decision

4. English Mercantile law-

5. Professional opinion

6. treaty/business agreement/conventions-GATT,WTO,EU,SAFTA et

 

Some current issues in business law within the Nepalese context include:

1. Investment and Commercial Law Reforms: Nepal has been working on reforms to its investment and commercial laws to attract foreign investment and improve the ease of doing business. This includes amendments to company law, taxation regulations, and simplifying procedures for business registration and operation.
2. Contract Enforcement and Dispute Resolution: There have been ongoing challenges with contract enforcement and dispute resolution mechanisms in Nepal. Improving efficiency and transparency in the judicial system, particularly in commercial matters, is a key concern for businesses.
3. Labor Law and Employment Regulations: Ensuring compliance with labor laws, addressing issues related to employment contracts, wages, working conditions, and occupational safety remains crucial for businesses operating in Nepal.
4. Taxation and Regulatory Compliance: Businesses often face complexities in taxation and regulatory compliance. Streamlining tax policies, reducing bureaucratic hurdles, and ensuring fair and predictable tax administration are critical for fostering a conducive business environment.
5. Corruption and Governance: Addressing issues related to corruption and enhancing corporate governance practices are essential for promoting transparency, accountability, and ethical business conduct in Nepal.
6. Infrastructure and Energy Regulations: Infrastructure development and energy regulations are significant concerns for businesses, particularly in sectors such as tourism, manufacturing, and transportation. Improving infrastructure and ensuring reliable energy supply are crucial for business operations.
7. Intellectual Property Rights (IPR): Strengthening intellectual property rights protection and enforcement is essential for promoting innovation and creativity in Nepal. This includes reforms in copyright, trademark, and patent laws to align with international standards.
8. Environmental Regulations: Increasing awareness and compliance with environmental regulations, particularly in industries with potential environmental impacts, such as manufacturing and tourism, are becoming increasingly important.

 Unit 2: General Law of contract

Meaning of contract: A contract is a legally binding agreement between two or more parties that creates obligations that are enforceable by law. It typically involves the exchange of goods, services, money, or promises of any of these. Here's a more detailed definition and explanation:

1. Based on Formation:

·        Express Contracts: These contracts are explicitly agreed upon by all parties, either verbally or in writing.

·        Implied Contracts: These contracts are inferred from the conduct of the parties or the circumstances of the situation, rather than being explicitly stated.

2. Based on Enforceability:

·        Valid Contract: A contract that meets all the legal requirements for enforceability (e.g., offer, acceptance, consideration, legal capacity, consent).

·        Void Contract: A contract that is not legally binding and has no legal effect from the outset, typically because it violates the law or public policy.

·        Voidable Contract: A contract that one party has the option to enforce or terminate, typically due to a defect in formation (e.g., lack of capacity, mistake, fraud).

3. Based on Performance:

·        Executed Contract: A contract where both parties have fulfilled their obligations.

·        Executory Contract: A contract where one or more parties have yet to fulfill their obligations.

4. Based on Nature:

·        Bilateral Contract: A contract where both parties exchange promises to perform (e.g., sale of goods).

·        Unilateral Contract: A contract where one party makes a promise in exchange for the performance of an act by the other party (e.g., reward contracts).

5. Special Types of Contracts:

·        Adhesion Contract (Standard Form Contract): A contract where one party dictates the terms to the other party, who typically has little or no ability to negotiate (e.g., insurance contracts, software licenses).

·        Aleatory Contract: A contract where the performance and obligation of the parties depend on an uncertain event (e.g., insurance contracts, gambling contracts).

6. Based on Mode of Creation:

·        Oral Contract: A contract formed through spoken words and not necessarily reduced to writing.

·        Written Contract: A contract that is formalized and recorded in writing.

 

A valid contract must contain certain essential elements to be enforceable under the law. These elements ensure that the agreement is legally binding and that all parties understand their rights and obligations. Here are the essential elements of a valid contract:

1. Offer and Acceptance:

• Offer: One party (offeror) must clearly communicate their willingness to enter into an agreement on specific terms.
• Acceptance: The other party (offeree) must unconditionally agree to the terms of the offer. Acceptance must be communicated in the manner specified or implied by the offeror.

2. Intention to Create Legal Relations:

• Both parties must intend for the agreement to create legal obligations and be legally binding. Contracts made in a social or domestic context may lack this intention.

3. Consideration:

• Consideration is something of value exchanged between the parties to a contract. It can be a promise, act, forbearance (refraining from doing something), or a monetary payment. Consideration ensures that each party gains a benefit or suffers a detriment as a result of the contract.

4. Legal Capacity:

                                                           

• Both parties must have the legal capacity to enter into the contract. This means they must be of legal age (usually 18 years old or older) and of sound mind. Minors, mentally incapacitated individuals, and intoxicated persons may lack legal capacity to enter into contracts.

5. Consent:

• Consent involves the parties agreeing to the terms of the contract freely and voluntarily, without any undue influence, duress, fraud, or misrepresentation. Consent ensures that the agreement reflects the genuine intentions of the parties.

Definition of Contract:

A contract is an agreement between two or more parties that creates legally enforceable obligations. Contracts are fundamental to business and legal transactions because they ensure that parties to an agreement understand their rights and obligations.

 

Top of Form

Bottom of Form

Contracts can be classified into various types based on different criteria such as their formation, enforceability, performance, and nature. Common classifications of contracts:

6. Lawful Object:

• The object (purpose) of the contract must be lawful. Contracts with illegal purposes or that violate public policy (e.g., contracts for illegal activities) are void and unenforceable.

7. Certainty and Possibility of Performance:

• The terms of the contract must be clear and definite enough for a court to enforce them. Additionally, the performance of the contract must be possible and not dependent on speculative events.

8. Form (if required):

• Some contracts must be in writing to be enforceable under the law. This requirement depends on the type of contract and local legal regulations (e.g., contracts for the sale of land, contracts that cannot be performed within one year).

 

Difference between agreement and Contract.

Contract.

-All agreements are not contracts.

-limited or certain scope.

-create legal obligations

-legal remedy

-it is emerges from an agreement

-it is based on contract law

-all contracts are enforceable by law

- Essential elements must be present.

-determined by the law.

 

Agreement

-all contracts are agreements

-wider scope

-no legal remedy

-not create legal obligation

-it is emerges from consent of the parties

-it isn't based on contract law

- all agreement are not enforceable by law

- the elements of a contract are not necessary

- it is not determined by the law

Contingent contracts are governed by specific rules and principles that vary somewhat across legal systems, but generally include the following:

1.     Definition and Formation: A contingent contract is an agreement that depends on the happening or non-happening of a future uncertain event. For example, A promises to pay B a sum of money if B's house is destroyed by fire.

2.     Nature of Contingency: The contingency must be uncertain. If the event is certain to happen or not happen, the contract is not contingent. The uncertainty must relate to a future event, not a past event or something happening at the time of the contract.

3.     Performance Condition: The obligation to perform under a contingent contract arises only if the specified event occurs or does not occur as agreed upon.

4.     Void if Event Becomes Impossible: If the event becomes impossible (e.g., due to destruction of subject matter), the contract is void unless it was intended to deal with the consequences of that impossibility.

5.     Communication of Event: The party benefiting from the contingency must communicate the occurrence or non-occurrence of the event to the other party. This is crucial because it triggers the obligation to perform.

6.     Enforceability: Contingent contracts are enforceable provided they meet all the essential elements of a valid contract (e.g., offer, acceptance, consideration, capacity, legality).

7.     Insurance and Contingent Contracts: Often, contingent contracts resemble insurance contracts where the insurer promises to pay upon the occurrence of a specified event (e.g., death, accident, loss).

8.     Legal Interpretation: Courts interpret contingent contracts strictly according to their terms. The terms specifying the contingency must be clear and unambiguous.

9.     Mutual Consent: Like any contract, a contingent contract requires mutual consent of the parties involved. Both parties must understand and agree to the terms related to the contingent event.

10.  Remedies for Breach: If a party fails to perform upon the happening of the specified event (assuming all conditions are met), the non-breaching party may be entitled to remedies such as damages or specific performance.

Quasi- contract

A quasi contract is a contract in the eyes of law. it is based on the latin maxim 'nemo debet locuplatari ex liena justua' which means no one must grow rich out of  another's cost\ expense' h;sf] cy{ sf]xL kgL c?sf] nfut jf vr{af6 wgL aGg kfpFb]g eGg] xf] . It is based on the principle of equity that no person shall be allowed to unjustly enrich himself at the expense of another. Generally, contract are created by an agreement between two or more than two parties. the agreement, which fulfils certain essential elements, is called a contract. But certain cases create a contract without any essential elements of a valid contract; it is called a quasi  contract.

 

A quasi contract is not created by the meeting of mind or consensus of the parties. it comes into existence when one of the parties act activities the law. In such a contract, there is no offer and acceptance, no free consent, no intention to create a legal relationship and no intention of the parties to enter into a contract. Therefore, quasi contract is not a contract in the strict sense. The law of quasi contract is also known as the law of restitution. A quasi contract is therefore, called an implied contract and also termed as constructive contract under English law. the Indian contract act terms quasi contract as certain relations resembling those created by law. Similarly NCA has named as an indirect contract according to se.11.se.11 of NCA has mentioned the notwithstanding anything contained elsewhere in this act, a contract shall be deemed to have been concluded in the certain circumstances.

such a contract is based on the doctrine unjust enrichment and it is equitable relief.

 

Rules regarding Quasi-contract

1. Maintain the Basic needs(cfwf/ e't cfj:ostfsf] Joj:y fug{_ se.11 a:- A supplier of necessities to an incapable person has a right to claim for a reasonable price for the goods supplied or services provide. i.e. a minor or lunatic agreement makes them liable to pay a reasonable price for the goods supplied to fulfill their necessaries.

2. payment by a related person ;/f]sf/ jfnfn] lt/]s]f /sd se.11 b:-If a person is interested to pay what another is bound by law to pay and who therefore pays it, it is entitled to be reimbursed lkmtf{lbg' by the other. i.e. A the landlord, has to pay tax to the government B the tenent has paid for that to save the property. the payment is to be reimbursed by the landlord.(Tulsa kunwar vs. jageshar Prasad 1906)

3. payment of remuneration for any act s'g}kgL sfdsf] kfl/>lds lbg' se.11 c:- where a person has given something to another or has ordered for some job given free, the price of the goods or remuneration for the service is to be paid by the person who has received it.

4. goods must be keep as bail by finder dfn kfpg] Joltmn] gf;f] ;/x /fVg'kg]{ se.11d:- where a person possesses any property of another lawfully, he should keep that property as a bailment. in the same way, a finder of the lost goods of another person also has to fulfill his duty as a bailee. i.e. A the owner of a motorbike, transfers it to B's workshop for the purpose of servicing . B as a baille has to take care of this bike until A doesn't come with the payment of service.

5. refund if payment by mistake e'nn] lbPsf] /sd lkmtf{ ug'{kg]{ se.11 e:- where a person gives a sum of money by mistake or under coercion to another, the receiver has to return the sum to the giver. such a liability also comes under a quasi-contract. this rule is based on the principle of ownership. i.e. if a certain amount of sales tax is paid to the office by a business firm by mistake it is mistake of law as well as mistake of fact. the tax amount is to be returned to the business firm by the tax office.(sales tax officer, banaras vs. kanhiya lal Mukunda lal saraf AIR 1965 SC 13

 

Contractual capacity

Every person is presumed by law to be competent to enter into contract, and if any one claims exemption from liability on the ground of incapacity to contract, he must strictly prove such incapacity. The term contractual capacity means the legal capacity of the contracting parties to contract. The parties who enter into a contract must have the capacity to do so. Capacity here means competence of the parties to enter into a valid contract.

According to s.3 of NCA, Any person other than those mentioned below may conclude

contracts:

-One who has not attained 16 years of age (minors?)

-One who is of unsound mind?

-One who is disqualified by the law?

According to s.11 of ICA, Person is competent to contract who

-Who has attained 16 years of age,

-who is sound mind and,

-who is not disqualified from contracting by any law, to which is subject.

The age bar of a minor differs from different purpose and in different country. In India a person is adult if he has attained 18 years, In England 21 years and in Nepal 16 years of age. According to the Nepalese contract Act, sec.3 the person who has attained 16 years of age is capable to enter into a contract. Under the age of 16 years is called minor. This age bar differs law to law 14 years by labor law, 2048, 18 years by election Act, and 20 years by provision of marriage of country code of Nepal.

NCA s.13(j) mention that contract with minor is void.

 

Rules regarding the agreement with a minor.

1.Validity of contract:- Because of incompetence to contract an agreement is void from the beginning if it is created with or by a minor party. It has no legal effect. i.e. the privy council has upheld this view in Mohiri Bibi vs.Dharmodas Ghose 1903(minor mortgaged  house case) ljljn] cfkmgf] 3/ gfjfns 5bf @),))) df aGbsL lbPsf] lyof] p ;fjfns ePkl5 d'4f rNof]  gfjfns x'Fbf ePsf] s/f/n] dfGotf gkfpg] u/L cbfntn] lg0f{o u/of].

2. The ratification after attaining the age of majority is not valid(pd]/ k'u]k5Lsf] cg'df]bg kgL dfGo x'b}g) :- Ratification means the subsequent adoption and acceptance of an act or agreement. A minor's agreement being a nullity and void ab initio has no existence in the eye of law.

3. No estoppels against minor (ljjGwgsf] l;4fGt gfjfnsnfO nfUb}g_:-This rule does not apply to a minor's agreement. Liability arisen by the rule of estoppel on the ground of misrepresentation of his age is not to be fulfilled by the minor party.(Gadigeppa bhimppa mets vs.balangowda bhimangowda AIR 1913 Bombay- kxLnf gjfnsn] d ;fjfns egL eg]kgL k5L p gfjfns ePsf] /x]5 eg] kgL ljjGwg gnfug]_

4.the minor as a partner(gfjfns ;fem]bf/ ePsf]df_ :- a minor can be admitted to the benefits of the partnership business but be cannot be a partner legally.

5.No performance:- a contract with a minor is absolutely void from the beginning void ab initio. there can be no question of specific performance of such an act from the minor party.

6. Insolvant:-minor can not be declared insolvent person until he becomes an adult.  Minor cannot be adjudicated insolvent because he is incapable of contracting debts.

7.minor can be a beneficiary or promise(gfjfns lxtu|fxL jf arg u|xLt x'g;S5_ a contract is not void by the law if it is beneficial to the minor.the other party has to fulfil his liability to the minor party. but the contract created liability for minor becomes void, because the law protects the rights of a minor.i.e.the American insurance co.ltd vs.madanlal sonu lal 1935 bombay.(gfjfnsn] cfkmgf] ;fdfg OG;of}/]G; u/]sf]df ;fdfg Iflt eof] gfjfnssf] tkm{ af6 ljdf sDkgL ;Fu ljdf bfjL u/of] t/ ljdf sDkgLn] gfjfnsn] u/]sf] ljdf j}w x'Gg t;y{ ljdf /sd lbg OGsf/ u/]sf]df cbfntn] ljdf/sd lbg' k5{ egL xLtsf/L ?kdf JofVof u/of] .

8.The minor as a shareholder:- according to Nepalese law a minor can be shareholder of a company with the signature of the guardian in the share subscription application but the cannot be the director of a public copany.

9. The minor as a agent:- The minor is not personally liable for his acts during the course of dealings, a minor binds the principals by his acts because the minor is not the party of contract.

10. Contract by minor and major jointly: - If an agreement is made by a minor jointly with a major person the minor is not liable under the agreement but the major person is fully liable and the agreement can be enforced against him. i.e. sain das v. Ram chand 1923 Lakhanuw.

11. contract for necessaries:- The person supllying necessaries or vendering services to minor or anyone whom he is legally bound to support is entitled to get reimbursement(wgsf] jfk;L_ from the property of such minor i.e. father mother and the dependent on him the minor is liable to pay out of his property for them.(sec.11(1) of the

NCA)

12.Minor cannot be adjudicated insolvent:- Minor cannot be adjudicated insolvent because he is incapable of contracting debts.

Persons of unsound mind.

sound mind is one of the essential element of a valid contract. If an agreement is made with a person of unsound minds, it will be void from the very beginning. Law protects the person who is weak to rational judgment. Sec.12 of Indian contract Act, defines sound mind for the purpose of contracting. A person is said to be of sound mind for the purpose of making contract, if at the time when he makes it is capable of understanding it and forming a rational judgment as to its effect upon his interest.

Unsound mind may arise differently. That may arise from,

a. Idiey: it is god given and permanent, with no interval of soundness. The mental powers of an idiot are completely absent because of lack of development of brain.

b. Lunacy or insanity:- It is a disease of the brain. A lunatic loose the use of his reason due to some mental strain

c. Drunkenness:- it produces temporary incapacity, till the drunkard is under the effect of intoxication provided it is so excessive as to suspend the reason for a time and creates impotence of mind.

d. hypotnism:- it also produce temporary incapacity, till the person is under the influence of artificially induced sleep.

e. Mental decay:- One account of old age etc.

 

Disqualified person

Disqualified persons refer to those person, who can not make a contract due to some reasons. Infact, a minor or person of unsound mind too can not enter into contract, but they are not supposed as disqualified person. So disqualified persons should refer to those persons, who are not capable to enter into contract due to the reason other than minority and insanity. the persons who are supposed to be disqualified by law to make contracts are;

 

Foreign sovereign:- It refers to foreign government, foreign ambassador and other diplomatic persons working in foreign embassy. Foreign diplomats can enjoy diplomatic privileges; the court of a country can not ask or compel them to attend it. The citizens of a country cannot directly enter into contract with them. If needed, they should make contract with their representatives of authorized agents.

b. Alien enemy:- Alien is a citizen of foreign country. The citizens of country cannot enter into the contract with Alien enemy.

c. corporation:- a corporation is capable to enter into a contract but the corporation should make contract within the limitations fixed by law or by its memorandum and or article of associations.

d. Drunkard:- It refers to a person at intoxicated position because of too much drinking of drugs, beer and wine.

e. Insolvent person:- law presumes that an insolvent person is also disqualified for making contract.

f. Married woman:- As a major, married women can enter into a contract. So far as the sale of her immovable property is concerned, she needs to take the permission from her husband.

g. Professional persons:- professional persons like doctors, engineers, Advocates and professors cannot enter into a contract in England. In Nepal and India, there is no any legal provision for professional disqualification.

h. Trade union:- It is capable of suing or being sued in its own name. At common law, a member of a trade union who is improperly expelled from the union in breach of union rules or in defiance of the rules of natural justice can bring an action for breach of contract against the union and recover damages.

 

 

FREE CONSENT

INTRODUCTION

The English term 'consent' was derived from Latin word 'consentire'. It means 'permission' or agrees to do or agreement. Free consent provides for a contract, meeting of mind, enforceability and legal remedy for an aggrieved party.

People who enter into contract must give their free consent. The consent of the parties is said to be free when they are of same mind on all material terms of contract. It is essential to the creation of a contract that the parties have consenus ad idem i.e. meeting of the mind. They must agree upon same thing in the same sense at the same time and their consent is free and real. As Salmond said that if any error in consensus ad idem or meeting of the mind of the parties, then there is no contract.

 

S.2 (c) of the Nepalese contract Act defines consent as" consent given by a person in the same sense in which the offeror has taken the substance of the proposal presented by him to the former".

 

s.13 of the I.C.A. defines consent as "two or more persons are said to consent when they upon the same thing in the same sense."b'O{ jf ;f] eGbf al9 JolQmx? Pp6} s'/fdf Ps} cy{n] d~h'/ ePdf lt JolQmx?ljr ;xdlt ePsf] dflgG5.

S.14 of the I.C.A defines free consent: consent is said to be free when it is not caused by-

1. Coercion

2. Undue influence

3. Fraud

4. Misrepresentation

s;}sf] s/sfk cg'lrt k|efj hnf;fh ldYofj0f{g jf e"nsf sf/0f glbPsf] ;xdlt :jtGq ;xdlt x'g5 . s/sfk cg'lrt k|efj hfn;fh ldYof j0f{g jf e"naf6 d'QmeO{ cyf{t s'g} kgL k|sf/sf] zfl/l/s jf dfgl;s bjfj ljgf cfkm'v'l; / yfxf kfO{ jf hfgL a'emL s/f/sf ;Dk'0f{ dxTjk"0f{ zt{x?df Pp6} cy{df ;xdlt hgfOG5 eg] To:tf] ;xdltnfO{ :jtGq ;xdlt elgG5 .

If the contract is made undue influence, fraud and misrepresentation, then the contract will be avoidable at the option of the aggrieved party. If both parties are mistaken as the matter of fact then the agreement would be void.

effect of the agreement of absence of consent, void-ab-initio (void from the very beginning. Result is no legal

effect i.e.Bala devi vs.Santi Mazumdar AIR1956-dfOh' efGhL s]; efGhfn] Joxf]/f gk9L dfOh' nfO sfuh u/fPsf] df

cbfntdf d'4fk/] k5L ab/_

 

1. COERCION

a) Meaning of coercion

The term coercion means compelling a person to do something or to force or threaten somebody to do something. Coercion is the act of forcing someone by pressure to commit a crime or to do something against law. Sec.14 of N.C.A.2056, says- consent is said to be caused by coercion when it is obtained by pressure exerted or against the will of party by either of following techniques.

- committing or threatening to commit any act forbidden by the current Nepal law. (Threat to life and prestige)

-Unlawfully detaining or threatening to detain any property.

s'g} JolQmnfO{ lghsf] OR5f lj?4s'g} s/f/ u/fpg] dg;fon] lghsf] ;Dklt /f]Ssf/fVf]s]f jf /fVg] wDsL lbPsf] jf lghsf] lhp Hofg jf OHhtdf wSsf k'/ofpg] wDsL lbPsf] jf k|rlnt g]kfn sfg"g ljkl/t cGo s'g} sfd u/]s]f jf ug{ wDsL lbPsf] eP s/sfk u/]s]f ;Demg'kb{5 .

coercion is the committing or threatening to commit, any act forbidden by indian penal code, or the unlawful detaining, or threatening to detain, any property to the prejudice of any person whatever with the intention of causing any person to enter into an agreement .s/sfk eg]sf] s'g} JolQnfO{ s/f/ ug{ afWo ug]{ p2]Zon] ef/lto b08 ljwfgsf] ljkl/t s'g} sfo{ ug'{ jf ug]{ wDsL lbg' cyjf u}/ sfg"gL tl/sfn] s'g} JolQmsf] ;Dklt /fVg] wlDs lbg' xf] .

 

When a person is compelled to enter into a contract by the use of force or under a threat, coercion is said to be

employed.

The threat amounting to coercion need not necessarily proceeds from a party to contract. It may precede event  from a stranger to the contract. Likewise, it may be directed against any body-not necessarily the other contracting party. The intention of the person using coercion should, however, be to cause any person to enter into an agreement.

Example: B threatens to shoot and kill sandeep and his family if he dose not land Rs. 10000 to shekher. sandeep

agrees to land the amount to shekher under coercion. This contract is voidable at the option of sandeep (Aggrieved

party.)

Conditions or circumstances for non-coecion.

Threat to lawsuit, high price, high rate of interest and threat to commit suicide is not condition for coercion.

 

Effect of coercion

A contract under coercion is voidable one. The party whose consent is caused by it is entiled to take action

against the contract.

se.84 of NCA the party rescinding a voidable contract must refund money or thing or any other benefit received

by him under the contract, to the person from whom it was received. The guilty party cannot avoid the contract; the contract gets validity as soon as the limitation prescribed by the law expires. In case of a contract caused by

coercion the burden of proof lies on the aggrieved party.

2. UNDUE INFLUENCE

The term undue influence is a moral coercion that means dominating the will of another with a view to obtain unfair advantage over the other. Undue influence is the domination of will of other by moral coercion. (Padma

Singh Angdambe vs.Dharmananda bajgain NKP 2045) sec. 14(1) (b) of Nepalese contract Act define, undue influence means influence exercised by a person upon another person who is under his influence for personal advantage or interest with an intention to have unfair benefit.cfkmgf] k|efjdf /x]s]f cfkmgf] OR5f cg';f/ sfd u/fpg ;lsg] JolQmaf6 cfkmgf] lxt jf :jfy{sf] nflu sg} cglrt nfe p7fpg] dg;fon] To:tf] JolQmpk/ kf/]s]f k|efjnfO{ cg'lrt k|efj ;Demg'kb{5 . cg'lrt k|efj eg]s]f g}lts s/sfk xf] s;}af6 cg'lrt nfe k|fKt ug]{ dg;fon] To:tf] JolQmsf] OR5f bafpg'nfO{ cg'lrt k|efj elgG5 . b'?kof]u ul/Psf] k|efjg} cg'lrt k|efjxf] .

If the contract is entered into between persons in a relationship power imbalance; the law calls it 'undue influence'.

Sec.16(1)of the ICA, Contract is said to be induced by undue influence where the relations subsisting between

the parties are such that one of them is in a position to dominate the will of the other and he uses that position to

obtain an unfair advantage over the other. b'O dWo] Ps kIf csf]{sf] OR5f bjfpg ;Sg] :yLltdf 5 / csf]{ kIfaf6 cg'lrt nfe k|fKt ug{ p;n] Tof] l:yltsf] k|of]u ub{5 eg] o;/L ul/Psf] s/f/nfO{ cg'lrt k|efj af6 ePsf] s/f/ elgG5 .

Undue Influence is the domination of a weak mind by a strong mind to the extent of exploitation in the context of an agreement

 

Essentials of undue influence

1.One of the party of the contract must be in a position to dominate the will of the other. s/f/sf] Pp6f kIf csf]{ kIfsf]  OR5fnfO{ bjfpg ;Sg] l:ytLdf /x]sf] x'g'kb{5_ for examples; master-servant, convict-police, patent- child and teacher-student etc.manusingh vs.umadat pandey Allabad, teacher and student case.

2.person of fiduciary relationship (kf/:kl/s lj:jf;sf] ;DaGw ePsf Joltm_ i.e. A lady gifted all her property to a medical man who was attending her. She disputed the gift deed as soon as she recovered from illness. The medical man's suit for possession was set aside.-sunder kumari vs.kishor.

3. contract made between person's of fiduciary relationship.

4.Where one party holds a real or apparent authority over the other(hxfF k|ToIf ?kdf b]lvg] jf jf:tljs clwsf/ Ps kIfn] csf]{ kIfdfyL /fVt 5_ bkmf !$ ! v, @ O NCA.

5. where one party makes a contract with the person of mentally week and who cannot think about his benefit because of oldness, illness or mental distress.(hxfF Pp6f kIfn] a[4fj:yf, la/fdL cj:yf, zf/Ll/s jf dfgl;s ba{ntfsf sf/0f

cfkmgf] lxtsf] ljrf/ ug{ g;Sg] Joltm ;Fu s/f/ ub{5. bkmf !$ ! v,@cf. i.e. sher singh vs. pirthi sing AIR 1975

Presumption of undue influence

- Inadequacy of consideration.

- Unconscionable transaction.c;Gt'lnt sf/f]af/

- there is a inequality between the parties in respect of social status, position, post, age etc. of the other parties.kIfx?sf] ;fdflhs x}l;ot l:ylt cf]xf]bf pd]/df leGgtf ePdf -there is a fiduciary relationship between the parties.kIfx?df lj>jf;sf] ;DaGw /x]df

 

Effect of undue influence

A contract formulated by undue influence is voidable at the option of aggrieved party whose consent is obtained by using undue influence. The aggrieved party is entitled to avoid the contract caused by undue influence. Such contract remains valid until it is declared void by the court or the aggrieved party remains silence or voluntarily accepts it later on. In such a case, the burden of proof lies on the aggrieved party only to the extent to prove his lower position. The main burden of proof about the non-using of undue influence.

 

Difference between the coercion and undue influnce

Coercion

1. The dominating position of a party over the will of another is not needed.1s/f/sf] kIfx?sf] ljrdf x}l;otsf] leGgtfsf] dtnj x'b}g. @=o;df k|o ef}lts / lx+;fTds bjfa lbOG5 . #=o;df ef}lts ansf] k|of]un] ha/h:lt ;xdlt lnOG5 . $=kIfx? ;dfg x}l;otsf] ;DaGwdf /x]sf x'g ;Sb5g, ;DaGw gePsf] kgL x'g ;S5 . % s/sfd t];|f] kIf dfkm{t kgL x'g ;s5 . ^ s/sfkhGo sfo{ b]zleq jf afxL/ hxfF kgL x'g ;S5 . & o;n] kmf}hbf/L cfr/0f jf sfo{nfO{ ;fd]n ub{5 . * o;df csf]{ kIfsf] lj?4df wDsL lbOPsf] x'g ;Sb5 . ( o;df cfkmgf] bfjL k|dfl0ft ug]{ ef/ lkl8t kIf jf s/f/ ab/ ug{dfu ug]{ kIfdf /xG5. !) o;df kmf}hbf/L bfloTj ;d]t ;dfj]z ePsf] x'g ;Sb5 .

2. It involves mostly the use of physical or violent pressure.

3. Consent is destroyed to enter into contract.

4. The parties may or may not be related with each other.

5. Any third party can do coercive act for another.

6. An act of coercion may be committed inside or outside of the country.

7. It includes the criminal conduct.

8. It involves threatens against the person or property.

9. Burden of proof lies on the aggrieved party to prove the consent was not obtained freely.

10. It may impose fine as criminal liability.

Undue Influence 1,s/f/sf] Ps kIfdf csf]{ kIfsf] OR5fnfO{ bafpg ;Sg] x}l;ot x'g'kb{5 . @ o;df ef}lts / lx+;fTds bjfj

x'b}g,s]jn dfgl;s bjfj lbOG5 . # o;df OR5f ljkl/t eP klg kIfn] cfkm}n] ;xdlt lbPsf] x'G5 . $ kIfx? c;dfg x}l;otsf] ;DaGwdf /x]sf x'G5g, o:tf] ;DaGwdf cg'lrt k|efjsf] nflu clgjfo{ 5 . % cg'lrt k|efj s/f/sf] kIfaf6 dfq} x'G5 . ^ cg'lrt k|efjsf] sfo{ b]z leq ePsf] x'g'kb{5 . & o;n] kmf}hbf/L cfr/0f jf sfo{nfO ;fd]n ub}g . o;df wDsL ;fd]n ePsf] x'Fb}g . ( o;df lkl8t kIfn] cfkmgf] sdhf]/ cj:yf dfq k|dfl0ft u/] k'Ub5 afFsL k|df0f sf] ef/ ;an kIfdf /xG5 . !) o;df b]jfgL bfloTj dfq ;dfj]z x'G5 .

1. The dominating position of a party over the will of another is needed.

2. It involves moral pressure rather than the use of physical or voilent pressure.

3. Consent is indued by improper means to enter into contract.

4. The parties must have relation with each other.

5. Third party is irrelevant.The dominating party exersise his influence.

6. An act of undue influence must be committed inside the country.

7. No criminal conduct is involved.

8. It does not involve threatens against the person or property but uses dominating position to contract.

9. The burden of proof lies on the aggrieved party only to the extent to prove his lower position but the main burden of proof about the non-use of undue influence lies on the dominant party regarding non-use of undue influence.

10. It imposes only civil liability.

 

Fraud

Fraud means to cheat. a French term fraud means a criminal deception intended to gain money or personal

advantage. In other words fraud means a false representation of fact made intentionally or knowingly by a

party to another party.

In English law " fraud" was defined in the case of Derry vs.Peek Lord Herschell stated; fraud is proved when it is shown that a false representation has been made, knowingly, or without belief in its truth, or and Recklessly

careless whether it be true or false.

sec.14(1) (c) of the NCA, has provided the provision regarding the contract with fraud, intention to deceive others in any form and by any person is known as fraud. the provision of forged document no.3 of common code of Nepal also provides definition of fraud-where a person prepares a formal document with a view to harm others of any kind by changing date or subject matters of the agreement include under a fraud case. bkmf !$ ! -l;_ s/f/

ug]{ kIfn] jf lghsf] k|ltlglwn] csf]{ kIf jf lghsf] k|ltlglwnfO{ wf]sflbg] lgotaf6 s'g} s'/f ;Toxf]Og eGg] hfgsf/L x'Fbf x'Fb} ;f] u/]s]f jf s'g} tYosf] af/]df hfgsf/L x'Fbfx'b} ;f] tYonfO{ hfgLhfgL n'sfPsf] jf k|rlnt sfg"g adf]lhd hfn;fhx'g] cGo sfd u/]sf] eP hfn;fh u/]s]f ;Demg'kb{5 . n]lvPafx]s csf{sf] xs d]6g] xbDofb tf/Lv hfg] jf s'g} t/x;Fu gf]S;fg kfg]{ OTofbL h'g;'s} dtnan] xf]; gu/] gePsf] em'7f s'/f u/] ePsf] xf] egL jf ldlt cªs jf Joxf]/f km/s kf/L ;xL5fk u/L u/fO{ sfuh agfP

 

sec.17 of ICA Shows the following ingredients necessary for fraud. there should be a suggestion as to a fact.

- the fact suggested should not be true,

- the suggestion should have been made by a person who does not believe it to be true, and

the suggestion should be made with the intention either to deceive or to induce the other party to enter into the

contract. s/f/sf] Ps kIfn] jf lghsf] clestf{n] csf]{ kIf jf lghsf] clestf{nfO{ wf]sf lbg] dg;foaf6 lgDg sfo{ug'{ hfn;fFh x'G5 .s'g} em'7fs'/fnfO{ hfgL hfgL ;Toxf] egL lj>jf; lbnfpg', tYosf] hfgsf/L jf ljZjf; /fVg] JolQmn] tYonfO{ l5kfpg' n'sfpg',kl5 k'/f gug]{ u/L sa'n jf wf]sf lbg] sfd ug'{ / sfg'gn] hfn;fhk"0f{ x'G5 egL 3f]lift u/]]sf] s'g} sfo{ ug'{ jf gug'{

 

Essential of fraud

-the fraudulent act must be committed with an intention to deceive the other party; csf{nfO 7uL ug]{ p2]Zo jf sfo{ ePsf] x'gkb{5

- there must be actual deceive,jf:tljs 7lu gf]S;fgL ePsf] x'g'kb{5 .

-the fraud must be committed by a party of the contract or by his representation; jf:tljs ?kdf tYo ;DalGw j0f{g u/L xfgL k'/ofPsf] x'g'kb{5 .

- There must be false representatione'm7f] j0f{g x'g'kb{5 .

- Any act declared as fraud by existing law ;k|rlnt sfg"gn] hfn;fh 3f]if0ff u/]sf] x'g' kb{5 .

Losses by one party to next;Ps kIfn] csf]{ kIfnfO{ xfgL k'/ofPsf] x'g'kb{5 .

- Fraud by party to the contract;

- wrong representation unt s'/f eGg'kb{5 .

must be related to the fact tYo;Fu ;DalGwt x'g'kb{5

-actually acted sfo{ u/]s]f x'g'kb{5 .

 

Thus, where is dishonesty, recklessness, bad intention to induce others to wrong way, to harm others and having

self benefit are the distinct characteristics of fraud. it turns the contract to voidable class.

silence regarding fraud hfn;fhL ;DalGw df}gtf!= df}gtf hfn;fh xf]Og mere silence is not fraud- doctrine of caveat empto=buyer bevare-s/f/df s|]tfsf] ;fjwfgL l;2fGt) ward vs. Hobbs 1878

@= df}gtf hfn;fh xf] silence is fraudulent

-legal obligation to disclose atfpg' kg]{ sfg"gL bfloTj

-contracts of utmost good faithclt;befjsf s'/fx?

-changes in circumstances kl/l:yltdf kl/jt{g

-half-truths cNk ;To

-silence is, in itself, equivalent to speech df}gtf cfkm}df af]n];dfg x'G5

 

Effect of fraud

It is also a voidable contract, voidable at the option of aggrieved party. It is a contract, made by obtaining the consent of other party by fraud, comprises the following effect or consequences.

a.legal action need to avoid the contract:-the party who is aggrieved by fraud can take action against the other party to avoid the contract.

b. Acceptance and demand:- there is double options to the aggrieved party that if such party thinks better can accepts such contract instead of taking legal action against it and demand to treat him in the same footing that contract is not made through the fraud. It means aggrieved party may accept the contract as valid contract.

c. Claim of damage:- if the party whose consent was caused by fraud sufferes some loss, he can claim damages or see for damages.

d. Not voidable contract.i.e.if such party does not go to the court within the limiation.

 

4.MISREPRESENTATION

ldYofsf] cy{ unt xf] / j0f{gsf] cy{ s'g} ljifosf] hfgsf/L jf ljj/0f lbg]sfo{ xf] . ldYof j0f{g eg]s]f s/f/sf] ljifodf em'7f] hfgsf/L lbg' xf] .The term misrepresentation means a misstatement or a falls representation of fact made by a party to the contract to another. A misrepresentation is a representation, when wrongly made by a party to the contract to another innocently or without any intention to deceive the other party. Anson- Misrepresentation is a false statement which the person making it honestly believes to true or which at any rate he does not know to be fals.ldYof syg eg]sf] em'7f] ljj/0f xf] h;af6 eGg] JolQmn] OdfGbf/L k"j{s ;To jf hf] s'g} kgL xfntdf em'7f] xf] eGg] s'/f p;nfO yfxfgeP/ ;To 7fgL eGb5

 

According to se.14 (1) (d) of NCA, Misrepresentation means submission of a false statement on any matter

without any reasonable basis of the fact, misleading a party so as to aggrieve him and inducing mistake about

the subject matter of the contract.em'SofO{ u/]sf] s/f/ eGgfn] dgfl;j dflkmssf] cfwf/ j]u/ s'g} s''/fsf] em'7f ljj/0f lbPsf], s'g} kIfnfO{ dsf{ kg]{ u/L axsfPsf] / s/f/sf] ljifo j:t'df uNlt u/fPsf] s/f/nfO{ ;Demg' kb{5

sec.18 of ICA, Defined the term misrepresentation according to it, there is misrepresentation in these case i.

positive assertion ii. Breach of duty and iii. Causing mistake innocently.csf]{ kIfnfO{ wf]sf lbgsf nflu b]xfosf] s'g} sfd u/]df ldYofsyg x'G5 –lgZrofTds egfO{, st{Josf] pnFwg /c1fgtfaf6 ePsf] uNlt

the supreme court in the case of Tirtharaj Kumari RanaVS. Ramshanker has decided any contract which has

been entered where son and daughter in law sit as witness, cannot presumed to be entered by misrepresentation.

Basic elements of contract by misrepresentation

-object for contract

-by a party of contract

- false state

- representation regarding fact, it may be indirect.

-actually acted s/fsf] p2]Zo s/f/sf] kIf4f/f unts'/f j0f{g / tYosf] j0f{g / jf:tljs sfo{

 Effect of misrepresentation

Contract caused by misrepresentation is not valid. Such contract is voidable at the option of the party whose

consent has been obtained by misrepresentation. Although to avoid or not to avoid the contract caused by misrepresentation depends on the will of the aggrieved party whatever it is, it has following consequences:-

a. the aggrieved party can avoid or rescind the contract but he is not entitled to compensation.

b. the aggrieved party can insist upon performance if he thinks fit or aggrieved party may accepts contract if thinks

so.

c Although a false representation is made believing it as true, subsequently it comes to be false before the contract is made, the information about it must be given to the other party. If such party is not informed, this amounts to fraud. In this case the victime party is entitled to avoid the contract and claim damages for the loss suffered.

d. In certain situation the aggrieved party neither rescinds the contract nor claim compensation for any loss caused to him if such party remains silence or does not take any legal action against the other party within certain time limitation. He is deprived from both these rights.

e. In the following cases the aggrieved party loses the right to avoid the contract for misrepresentation.

-if such party after being aware about the misrepresentation, takes a benefit under the contract.

-if such party cannot be restored in his original position.

-if an innocent third party has acquired rights in the subject matter of the contract.

-if such party does not go to the court within the limitation

 

Breach of contract

A breach means to an act of breaking a rule or an agreement. A breach of contract means a non-performance of he contract. A breach is just opposite to performance. If a contract is broken by one party the other party becomes victimized.

se.82 (1) of the NCA mentioned that if a party to a contract fails to fulfill his contractual obligation under the contract, or gives information to the other party that he will not perform the work as mentioned in the contract, or if his actions and conduct show that he is incapable of performing the work as mentioned in the contract, he is deemed to have broken the contract.

A breach of contract includes the following elements.

a. if the party fails to fulfill obligations under the contract, or s/f/adf]lhdsf] bfloTj k'/f gu/]df jf

b.if the party gives information to the other party that he will not perform the work as mentioned in the contract, or s/f/adf]lhd cfkm'n] ug'{kg]{ sfd gug]{ ePsf] s'/fsf] ;"rgf csf]{ kIfnfO{ lbPdf वा

c.if by action and conduct the party seems to be incapable of performing the work as mentioned in the contract.kIfsf] sfdsf/jfO{ / cfr/0faf6 lgh s/f/ adf]lhdsf] sfd ug{ c;dy{ b]lvPdf

 

Types of breach of contract

The breach of contract may be of following two types, they are

a. Actual breach of contract s/f/sf] jf:tjLs pn+3g:- when on of the parties to a contract does not perform his obligation under the contract when due, it is called an actual breach. Such a refusal may be either express or implied. The actual breach of contract may happen in any of the followings,

1. during the course of performance s/f/ kl/kfngfsf] s|ddf :- if one party fails or refuses to perform or by his actions and conduct he seems to be incapable of performing his obligation at the time fixed for performance, it is called an actual breach of contract on due date of performance.

2.on due date of performance kl/kfngf ug'{ kg]{ ldltdf:- in case where one party has performed a part of his obligation but fails or refuses to perform the remaining part of obligation under the contract, it is called an actual breach of contract on the due date of performance.

b.Anticipatory\ constructive breach of contract s/f/sf] clu|d jf /rgfTds pn+3g :- an anticipatory breach of contract is such a breach, which takes place before the time fixed for performance. if the time for performance of the contract is fixed for performance of the contract is fixed in the contract and one party repudiates his obligation or gives pre-information to the other party that he will not perform his obligation before the time for performance arrives, cfOk'Ug it is said to be an anticipatory breach of contract. It is also termed as a constructive breach of contract.

 An anticipatory breach of contract may happen in any of the following ways;

a, by renunciation s/f/sf] Tofu 4f/f b. by creating some impossible sl7gfO pTkGg eO kl/kfngf gePdf

 Remedies for breach of contract.s/f/pn+3gdf pkrf/

The term remedy can be understood as a legal treatment provided by the court of law or other formal agency performed under law to the injured party as per his\her demand. A remedy is the courses of action which are available to an aggrieved party for contract. As per the nature of breach of the contract, the different kinds of remedy may be available to the aggrieved party. But the purpose of each remedy is different. The aggrieved party may claim one or more than one remedies. The remedies, which are enforced by the court, of law are as follows.(se.82-87 of NCA)

1. Specific performance se.86 (1-2) the contracting parties are bound by obligations created by the contract. Specific performance means an order by the court upon the party breaching the contract directing him to perform the obligation as agreed upon previously. when any party breaches a contract the injured party may demand a specific performance by suit. in the following cases, the aggrieved party can demand the specific performance.(86 (1) of NCA)

a.when the act agreed to be done is such that the amount of compensation received for its non-performance is not adequate ,or

b.when there exists no standard for ascertaining the actual loss caused by the non-performance of the act agreed to be done, or

c.when it is probable that the amount of compensation cannot be received for the non-performance of the act agreed to be done.

There are some exceptions to the general rule. So in certain cases, as started in se.86 (2) of NCA the aggrieved party cannot demand the specific performance.

They are as follows;

a. where the amount of compensation received for the non-performance of the contract is adequate, or

b. where the contract is based on personal expertise, skills, or knowledge, i.e. a contract to painting, or

c. where the court cannot regularly supervise its carrying out e.g. building contract or

d. where the situation is such that the contract cannot be executed as stipulated, i.e. the subject matter is destroyed or

e. where the party breaking the contract himself demands to execute the contract as stipulated.

Thus specific performance is an equitable remedy given by the court to enforce against a defendant the duty of doing what he agreed by contract to do, a plaintiff may therefore obtain judgment for specific performance although there has not in the strict sense been any default by the defendant before the issue of the write.

The Supreme Court Nepal has endorsed the rights of aggrieved party to avail specific performance in the contract relating to the transfer of immovable property such as land, house etc. by deciding the case of tirthakumari Rana vs. Ram shankar shrestha NKP 2049 and kanchho kami vs sharkikami etc. Generally court grants specific performance in the contract relating to immovable property, rare goods etc.

2. Injunction\ right to sue for injunction (lgif]wf1fsf] d'4f rnfpg] clwsf/_ se.87(1-2);- it means 'to stop doing something'. Injunction is also one of the legal remedies for an injured party. Injunction is also an equitable remedy

which is a preventive relief. Injunction is a court order that restraints the breacher party from doing wrong or continuing the wrongful act, complained. Such an order is usually granted by the court, to enforce negative stipulations in the case where the damage can not be an adequate relief for the injuring party. Such a remedy is appropriate where there is an anticipatory breach of contract.

 In connection with injunction, the NCA has mentioned the following provisions.

They are as follows,

a.if it becomes impossible to perform the contract because any other party is about to take any action or behavior contrary to the nature of the contract, the party aggrieved by such action or behavior may file a complaint with the court of appeal to stop such action or behavior.

b. if the complaint is filed, the court of appeal may issue an appropriate order to the other party to immediately stop such action or behavior

c.if the aggrieved party suffers an additional loss or damage because of the failure of the other party to comply with the order so issued, he may also claim for compensation for such loss or damage.

3.Right to claim quantum meruit( dgfl;j /sd e/fOkfpg] clwsf/_;- The latin phrase quantum meruit means payment in proportion to the amount of work done. In other words as much as merited. The right to quantum meruit means a right to claim the compensation for the work already done or for the service already rendered. An injured party entitled to sue for quantum meruit, when a contract partly performed by one party has become discharged by the breach of another party. such a type of remedy is based on the implied agreement to payment for what has been done or completed. but it is not based on the original contract, because it is void. Quantum meruit principle is applicable in the following circumstances;

a.contract must be breached se.83(2)s/f/ e+u ePsf]x'g' kb{5

b.Act must be non-gratuitous se.85 ; ;'Ns sfo{ ePsf] x'g'kb{5

c. contract must be void se.65 of ICA

d. contract must not be partial or indivisible s/f/sf] cf+lzs sfo{ ePsf] x'g'x'b}g

e.promise of contract must be express or implied s/f/df ePsf] sa'n JoSt jf cJoSt x'g'kb{5

f. person may not be guilty kIfsf] cfkmg} bf]if ePsf] x'g'x'b}g.

g. where a remuneration or compensation is not prescribed in the contract, a reasonable payment should be paid.

 4. Right to claim Damages\compensation (Ifltk'lt dfu ug]{ clwsf/_

Damage is a financial compensation, awarded by the court for the loss of injured party, which can be calculated. In contract law, damage means the monetary compensation provided to the aggrieved party by considering his loss or damage caused by the breach of contract. To pay the damage is just to pay some money for the purpose of his recovery or monetary compensation. the main objective of damage in the law of contract is not to punish the guilty party. NCA se.83(1,2,3) has provided three types of damages as remedies for the injured party. An injured

party can recover the following losses from the breacher party;

1.actual loss se.83(1)

2.amount of compensation if mentioned\claim certain amount as contract s/f/df pNn]lvt lglZrt /sd e/fO{ kfpg]

3. cannot claim indirect or hypothetical amount ck|ToIf of sfNklgs /sd e/fO{ lng kfpb}g .

 5. Right to rescind the contract s/f/ vf/]h ug]{ clwsf/ se.82(2);- Rescind or rescission means the cancellation or revocation of a contract. When a party breaches a contract, the other party may go to the court to treat the contract as rescinded and refuse further performance. i.e. A agrees to supply 100 tons of sugar to B on April 10, and B promise to pay for the goods after its receipt. A doesn't supply the goods on the due date. Here, B IS discharged from the liability of paying the price.

unit 3Contract of Agency and sale of Goods 

Contract of agency cles/0f ;DjlGw s/f/

It is not possible for a businessman to transact all his business himself due to the  complexities of modern business. He has to be dependent on the services of other persons in order to run his \her day to day business activities. At the very beginning, businessperson carried on business activities themselves. But this concept has been changed at present time. Today, business activities are

becoming very complex and very wide on the one side and businesspersons are becoming very busy on the other side. Businessperson has become impossible for an individual to carry on business activities on individual scale. Because of this, businessman has started to employ another person as representative competent to handle business transaction with third person on their behalf. A person employing another is called the principal and a person to be employed is called the agent.

 

A contract creating relationship of principal and agent is agency or a contract of  agency. A contract of agency is one that creates a legal relationship between the principal and an agent. the person who has been delegated the authority to act  on behalf of another is called an agent and the person who authorize another carryout some responsibility is called a principal.

 

The matter of contract of agency is governed by commercial agent's regulation, 1993 in England. Indian contract act 1872 in India and Nepal agency act 2014, Nepal agency regualation, 2019 and contract act 2056 in Nepal. se. 2 (a) of Nepal agency act,2014 has provided that an agent is one who works for any domestic or foreign business firm all over Nepal or any part of the //Nepal

and the term agent may mean a distributor, stockiest, nominee or a representative.Ph]G6 eGgfn] g]kfnel/ jf To;sf] s'g} Onfsfsf] lgldt :jb]zL jf ljb]zL  kmd{sf] Ph]G;Llng] JoQmL ;Demg' kb{5 / ;f] ;Jbn] l8il6Jo'6/, :6ls:6 gf]ldlg jf  l/lk|h]G6]l6e eO{sfdug]{ JolQm ;d]tnfO{ hgfpFb5 .

 

se.56 of NCA has defined the term contract of agency as ' every person appoints any other person as his representative to do anything on his behalf except the subject concerned with his personal skill, or to conduct business or any transaction with a third person on his behalf or to represent himself to such person or to establish legal relations with principal person and a third person and

n this way, it is deemed to have been concluded the contract of agency.' s'g}  JolQmn] cfkmgf] JolQmut bIftfl;t ;DalGwt ljifodf afx]s cfkmgf] cfkmgf] tkm{af6 s'g}sfd ug{ jf k|ltlglw eO{ Joj;fo ;~rfng ug{ jf t];|f] JolQm ;Fu s'g} sf/f]af/ ug{ jf To:tf] JolQm;dIf cfkmgf] k|ltlglwTj ug{ jf k|ltlglw lgo"Q mug]{ JolQm -d'Vo JolQm_ / t];|f] JolQmlar s'g} lsl;dsf] sfg"gL ;DaGw :yflkt ug{ s;}nfO{ k|ltlglw lgo"Qmug{ ;Sg]5 / o;/L k|ltlglw lgo"Qm ePsf]df Ph]G;L ;DalGw s/f/ ePsf] dflgg] 5 .

 

Similarly, se. 182 of ICA has provided that ' a contract by which a person  employs person to do any act for himself or to represent him in dealing with third  persons, is a contract of agency.h'g s/f/ cg';f/ Ps Joltmn] cfkmgf] cflu s'g} sfd ug{ jf t];|f] Joltmx?;Fusf] sf/f]af/df cfkmgf] k|ltlglwTj u/fpg csf]{ JoltmnfO{ lgo"Qm u5{, Tof] cles/0f ;DalGw s/f/ xf] .

the law of agency is based on the two principals, they are;

-what ever a person can lawfully do himself, he may also do the some through an

agent.hltsfo{ sfg'GfL ?kdf Pp6f JolQmn] ug{ ;S5 Tolt s'/f lghn] cfkmgf] k|ltlglw

dfkm{t kg Lug{ ;S5 .

-he who acts through another is considered to have acted personally. h'g JolQmn] c? dfkm{t sfd ub{5 lghn] JolQmut ?kdf u/] ;/x dflgG5

 

Features of a contract of agency

a. consideration is not necessary in a contract of agency,

b. a contract of agency is based on good faith,

c. contractual capacity,

d. the principal is responsible for the act done by the agent.

e. principal appoints the agent,

f. the agent is appointed either expressly or implied,

g. delegation of authority.

h. consideration,

i. Establish legal relationship between the principal and the third party.

 

Who is a principal- the person who employs an agent in dealing with third  person is called a principal.

Who is an agent- the person who is employed with some powers to act on behalf of the principal dealing with the third person is called an agent.

 

Modes of creating agency Ph]G;L v8fug]{ tl/sf

The relationship between the principal and an agent is called an agency. An agency may be created legally in any one of the following modes;

1. Agency by express agreement JoQm jf k|ToIf cles/0f- an agency may be created either by an expressed or an implied agreement. An agency is created by an express or implied agreement which may be either written or oral. it is the most usual and natural way to appoint a agent, by executing the formal power of attorney in a written, stamped and signed document. In Nepal agency must be created in a written form. An agent can be appointed only after having application

submitted in the department of commerce of GON and getting it registered. The scope of the power of attorney may be different, so it may be subdivided into the following classes;

a. general power of attorney ;fdfGo clwsf/ kq

b. special power of attorney ljz]if clwsf/ kq

c. particular power of attorney vf; clwsf/kq

 

2. Implied agency kl/nlIft jf ck|ToIf cles/0f- an agent may be created by an implied agreement. It happens under certain circumstances from the behavioral conduct of the parties or the relationship between them. For examples- a son was allowed by his mother to drive a car for her paying all expenses of maintenance and operation. The son caused an accident injuring his wife. It was held that the son was an implied agent of the mother and the wife could sue the mother for the fault of her agent. (Smith vs. Moss 1940) agencies created under implied authority or agreement are of the following three kinds.

a. agency by estoppels\words arg 4f/f ePsf] cles/0f

b. agency created by holding out clego4f/ Ph]G;Lsf] ;[hgf jf k|bz{g4f/ cles/0f

c. agency by necessity cfj:ostf4f/f ePsf] cles/0f- TO real and definite necessity-it must be impossible to obtain notice of the principal k|wfgn] ;"rgf kfpg c;Dej ePdf -good faith- interest of parties etc. this can be made clear with the case decision held in sims and company vs. Midland Rly co.1913 gf}gL Wo" lglZrt 7fpFdf k'/ofpg] /]nj] sDkgL ;Fu s/f/ u/]s]fdf x8tfnsf] sf/0f uGtJodf k'/ofpg l9nf eof] . glhs ahf/df Wo' a]lrof] . o:tf] cj:yfdf Wo' a]Rg' cfj:ostf lyof] egL d'4fkbf{ cbfntn] JofVof u/of] .

 

3.Agency by ratification cg'df]bg 4f/f Ph]G;L ;[hgf jf k'i6Ls/0f 4f/f Ph]G;L such conformation is called ratification, which gives liability to the principal where an agent does an act for his principal without consent or knowledge, and the act is accepted by the principal afterwards, it is called agency by ratification.

Valid rules of ratification

1.existence of principal k|wfgsf] ljBdfgtf

2. express or implied ratification

3. full knowledge k|ofKt hfgsf/L

4. Absolute ratification k'0f { cg'df]bg

5. Lawfull act

6. Reasonable time

7. No damage to other party

8. act done on behalf of another person bf];|f] kIfsf] tkm{af6 sfd u/]sf] x'g'kb{5 .

9. Comunication must be done

10. Party must be competent

11. Ratification must be unconditional,

12. within the authority of principal k|wfgsf] clwsf/ If]qdf l;ldt x'g'kb{5 .

4. Agency by operation of law. Sometimes an agency arises by operation of law. i.e. when a company is incorporated, its promoters are its agents by operation of law.

 

Rights duties and personal liabilities of agent.

rights of agent

1. right to get compensation indemnification Ifltk'lt{ kfpg] clwsf/

-right to indemnification against the acts done on good faith c;n ;befjdf u/]s]f sfo{ ubf{ k'u]sf] Ifltk'lt{ kfpg] clwsf/

-right to indemnification against the acts done of lawful acts sfg"Gf ;Ddt sfo{ ubf{  k'u]sf] Ifltk'lt{ kfpg] clwsf/

ight to indemnification for injury due to cause of principal negligence k|wfgsf] nfk/jfxLsf sf/0f ePsf] Ifltsf] Ifltk'lt{ kfpg] clwsf/ k|wfgsf] nfk/jfxLsf sf/0f ePsf] Ifltsf] Ifltk'lt{ kfpg] clwsf/

-right to claim compensation in case removal without any reason ljgfsf/0f x6fPdf Ifltk'lt{ kpg] clwsf/

2. Right of lien j:t' sJhf ug]{clwsf/ wf/0fflwsf/

3. Right to retain money ?k}ofF /fVg] clwsf/

4. right to stoppage of goods in transit j:t' af6f]df /f]Sg] clwsf/

5. Right to claim remuneration,

6. right to get reasonable compensation in case of removal d'Vo JolQmn] k|ltlglwnfO{ x6fPdf k|ltlglwnfO{ dgfl;j dfkmLssf] Ifltk'lt{ lbg'kg]{

 

Duties of agent

1. Duty to follow the direction of principal se.59 1 ab

2. Not to deal with his own account lglhtj/df Jojxf/gug'{

3. Duty to pay the principal k|wfgnfO{ /sd e'StfgL ug'{

4. Duty to do honestly

5. Duty to submit actual account. plrt lx;fj k]z ug'{ kg]{

6. Duty communicate to the principal at any time k|wfgnfO ;b}a ;"rgf ;+rf/ ug'{kg]{ st{Jo

7. Duty not to disclose confidence or secrecy uf]Kotf e+u gug'{

8. Duty not to set-up adverse title cfkmgf] xsbfjL gug'{

9. Duty not to earn undue advantage or profit cg'lrt nfe k|fKt gug'{

10. Not to delegated his authority clwsf/ k|Tofof]hg gug'{

11. Duty to take reasonable step plrt sbd rfNg

 

Personal liabilities of agent.

According to se.60 (1) of NCA unless otherwise mentioned in the contract, the agent becomes personally liable for his works under the following circumstances;

1. If the contract is concluded with the provision of personal liability. olb JolQmut  ?kdf pQ/bfoL x'g] u/L t]:f|f] kIf;Fu s'g} s/f/ u/]df,jf

2. In case any work has been done for or on behalf of an unnamed principal person. a]gfdL k|wfg sf nflu sfd u/]sf]df To:tf] k|wfg x'g] JolQm k|sf; gul/Pdf, jf

3. in case principal person can not be sued for any reason. s'g}sf/0fn] k|wfg lj?4 d'4fdfldnf ug{ g;lsg] ePdf, jf

4. In case the contract has been signed in his own name. cfkmg} gfd af6 s/f/ u/]sf] ePdf, jf

5. If agent has acted against the agency contract or goes beyond his authority. s/f/sf] zt{ jf clVtof/L eGbf afxL/ uO{ sfd u/]sf] ePdf, jf

6. In case any fraud or misrepresentation has been committed in the course of the transaction. sf/f]af/sf] l;n;Lnfdf em'Sofg jf hfn;fhL u/]sf] ePdf, jf

7. in case the agent must bear personal responsibility according to the nature of the trade.Jofkf/sf] k|s[lt adf]lhd clestf{g} JolQmut ?kdf pQ/bfoL x'g'kg]{ ePdf, jf

8. in case the interest of the agent are also involved in the transaction. sf/f]af/df clestf{sf] ;d]t :jfy{ ;+nUg x'g]ePdf

 

Rights and duties of principal

right of principal

1.right to bind his direction to the agent. clestf{nfO{ cfkmgf] lgb]{zg kfngf u/fpg] clwsf/ ght

2. to demand account of agency to agent . clestf{;Fu cles/0f ;DalGw lx;fj dfu ug{ kfpg] clwsf/

3. right to demand compensation if agent doing against the direction of principal.

cfkmgf] lgb]{zg ljkl/t sfd u/]df Ifltk'lt{ kfpg] clwsf/

4. right to demand undue prifit earn by agent. clestf{n] cfh]{sf] cg'lrt nfe dfug] clwsf/

5. right to revoke agent authority if he doing fraud against himself.cfkm'nfO{ wf]sf lbO{ v/fj cfr/0f u/]sf]df clestf{ sf] clwsf/ v08g ug]{ clwsf/

6. right to notice. ;'rgfsf] clwsf/

7. right to recover compensation.

8. right over confidential information and documents. uf]Kohfgsf/L / sfuhft dflysf] clwsf/

9. right to receive cash gub k|fKt ug]{ clwsf/

 

Duties of principal

1. duty to remuneration according to contract or reasonable basis to the agent. clestf{nfO{ s/f/ adf]lhd dgfl;j kfl/>lds e'StfgL ug'{kg]{ st{Jo

2. to provide indemnity xh{gf pknJw u/fpg'kg]{

-pay indemnify incase loss due to by good faith c;n lgotn] sfdubf{ xfgLePdf Ifltk'lt{ lbg'kg]{

-pay indemnify due to neglect x]nr]s|ofO sf sf/0f k'Ug uPsf] Ifltsf] k'lt{ ug]{kg]{

-duty to indemnify in case of removal without reason ljgfsf/0f clestf{nfO x6fPdf Ifltk'lt{ lbg'kg]{ st{Jo

3. to make reasonable compensation plrt Ifltk'lt{ lbg'kg]{ st{Jo

4. duty doing from notice as agent as well as principal clestf{n] kfPsf] ;"rgf kgL k|wfgn] kfP;/x Jojxf/ ug'{ kg]{

5. duty to indemnity loss against consequence of lawful acts sfg"g adf]lhd sfd ubf{ k'u]sf] Ifltsf] Ifltk'lt{ lbg'kg]{ st{Jo

 

Termination of contract of agency cles/0f s/f/sf] ;dfKlt

se. 61,62 and 64 of the NCA has provided the various modes to terminate agency;

they are;

a. By acts of the parties kIfx?sf] sfo{ 4f/f ;dfKtL

1.by mutual agreement

2. by renunciation of contract kl/Tofu u/]/ s/f/sf] ;dfKtL

3.by revocation of authority of agent clestf{sf] clwsf/ s6f}lt u/]/

4. by fulfillment of contract of agency cles/0f Joj;fosf] sfo{ k"0f{ ePdf

5. by fulfillment \complete of time cjlw;dfKt ePdf

 

b. by operation of law

1.by expiry or fulfillment of time ;do ;dfKt ePdf

2.by death or insanity of party

3.by insolvency of principal k|wfg 6f6 kN6]df

4. by destruction of subjectmatter

5. by dissolution of company

6. by change of law

7. Either party becoming alien enemy kIfx? ljb]zL zq' ePdf

 

Meaning of contract of sale of goods.

The term goods including every kind of movable goods or property except money and actionable claim. se. 2(7) of the Indian sale of goods Act, defines the term; goods means every kind of movable property other than money and actionable claims and money; and includes stocks and shares, growing crops, grass and thing attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale .j:t' eGgfn] cleof]uof]Uo bfjL PjF d'b|f afx]s x/]s lsl;dsf rn j:t'nfO{ hgfpFb5 / j:t'cGt{ut C0fkq, nflu/x]sf] afnL / hUufaf6 5'6\ofP/ ljlqm ug{ ;lsg] j:t'x? kb{5g . similarly, Nepal law interpretation Act, 2010 defines the term goods in se.2 (0) as 'movable goods.' accordingly, the term movable goods refer to the property other than immovable property. Hence, goods include

every kind of movable property other than money and actionable claims and the term sale means selling of thing of any kind. Therefore, sale of goods is the fusion of these two terms goods and sale. se.4 (1) of Indian sale of goods Act, 1930 has provided that 'a contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. -j:t' ljlqmsf] s/f/ eg]sf] To:tf] s/f/ xf] h;df ljqm]tn] qm]tfnfO{ d'No lnP/ j:t' x:tfGq0f u5{ jf x:tfGq0f ug{ dGh'/ u5{ _ similarly se.40(1) of NCA has provided that a contract of sale of goods is deemed to have been concluded if any seller agrees to handover the goods to the buyer either immediately or in the future for a price. bkfm $) ! sf] :kli6s/0f cg';f/ j:t' eGgfn] tTsfn k|rngdf /x]s]f d'b|f, lwtf]kq jf ph'/L u/L sfof{Gjog ug{ ;lsg] bfjL afx]s vl/b ljlqm x'g ;Sg] s'g} kgL rn ;DktL ;Demg' k5{ .

j:t' ljlqm ;DalGw s/f/sf] d'n ljifo j:t'g} j:t' jf dfn;fdfg xf] . o; ;Gbe{df j:t' zJbn] ;Dk'0f{ rn ;DkltnfO a'emfpb5 . o:tf] j:t' vl/b ljqmL ug{ ;lsg] x'G5 . k'/fgf b'n{e l;Ssfx? Jofkf/ VoftLx? Jofkf/ lrGx k]6]G6 cfbL j:t'sf pbfx/0f x'g .

Thus, sale of goods means transfer of ownership of goods for a price from a seller to a buyer. Ownership is the legal right over the goods of a person. It is based on the contract. The parties to a contract of sale of goods may agree to any terms they like, relating to the delivery and payment of price and the like. The delivery of goods may be immediately or in future. The following aspects, Seller buyer and goods fall under such contract.

 

Fetures/essential elements of a contract of sale of goods

1. Movable propert / goods,

2. Two parties i.e. buyer and seller,

3. Price / consideration of goods,

4. Transfer of ownership,

5. Essentials of valid contract

6. Contract may be conditional,

7. Express or implied contract,

8. Includes sale and agreement to sale:- a contract of sale of goods is a general term which includes both the terms sale and agreement to sale. Under a contract of sale the property in goods is immediately transferred at the time of making contract from the seller to the buyer. s|]tf / ljqm]tf lar s'g} a:t' eljiodf jf s'g} lglZrt ;do kl5 jf s'g} zt{ k'/f u/]kl5 vl/b ljlqm ug]{ ;DaGwdf h'g dGh'/L x'G5 To;nfO{ ljlqm;DalGw ;Demf}tf elgG5 . cyf{t ljqm]tfn] qm]tnfO{ s'g} j:t' kl5 jf eljiodf dfq

x:tfGq0f ug{ dGh'/ u5{ eg] To;nfO{ ljlqm ;DalGw ;Demf}tf elgG5 . o;n] zt{o"tm ljlqmnfO{ hgfpb5 .of] sfof{Gjog x'g jfFsL s/f/ xf] . t'?Gt :jfldTjsf] x:tfGq0f x'b}g .

Difference between sale and agreement to sell j:t' ljlqm / ljqmo ;DalGw ;Demf}tfdf leGgtf

Sale of goods

1. this is a current selling contract, tTsfn} a:t' ljlqmsf] s/f/ xf]

2. ownership of the goods is transferred at the time of contract, t'?Gt} :jfldTj x:tfGq0f x'G5

3. the seller may file a suit against the buyer for price, d'nosf] nfuL d'2f ug{ ;S5

4. the buyer will responsible for the loss of goods after the sale, j:t' gf; ePdf x/fPdf s|]tf g} lhDd]jf/ x'G5

5. the seller can sell specific and existing goods, ljlzi7 tyf jt{dfg j:t'sf] ljlqm x'G5

6. in case of insolvency of the buyer, the seller can have price only, vl/b stf{ lbjfnLof ePdf d'No dfq kfpFb5

7. after payment the goods in possession of the seller cannot be sold. e'QmfgL k5L To:tf] j:t'df ljlqmstf{sf] j:t'df clwsf/ jf x}sd x'Gg.

 

Agreement to sell

1. this is the agreement to sell the goods in future, o;df efjL j:t'sf] jLlqmsf] ;Demf}tf x'G5

2. ownership of the goods will be transferred in future in certain circumstances, eljiodf jf s'g} zt{ k'/ ePkl5 ljqm]taf6 qm]tdf x:tfGq0f x'G5

3. the buyer may file a suit against the seller for indemnity,Ifltk'lt{ bfjL ug{ jLjm]tfn] ;Sb

4. the seller will be responsible in case of a loss of the goods, j:t' gf;jfg ePdf jf x/fPdf ljqm]tf lhDd]jf/ x'G5

5. the seller can sell future, contingent and uncertained goods, ;f+of]lus j:t'sf] ljlqmx'G5

6. an unpaid seller may have the goods, in case of insolvency of the buyer, vl/b stf{ lbjfnLof ePdf e'StfgL gkfPsf] ljqm]tfn] j:t' /fVg ;Sb5

7. the seller can sell the same goods again to another buyer. pxL j:t' csf]{ jlQmnfO ljlqm ug{ ;Sb5

 

Unpaid seller cbQ ljqm]tf j:t' gub jf pwf/f] b'j} ?kdf ljlqm ug]{ ul/G5 gub ljlqm cGt{ut j:t'sf] d'No t'?Gt} r'Qmf ul/G5 eg] pwf/f] ljlqmcGtu{t j:t'sf] d'No s]xL ;do kl5 jf eljiodf r'Qmf ul/G5 . ;fwf/0ftof gub ljlqm cGtu{t cbQ ljqm]tfsf] k|Zg p7\b}g . t/ ljqm]tfnfO{ r]saf6 d'No r'Qmf u/]s]f cj:yfdf ljqm]tf cbt ljqm]t aGg k'U5 . ljqm]tfnfO{ gubdf k'/} d'No r'Qmf u/]s]f cj:yfdf eg] of] k|Zg p7\b}g . pwf/f] ljlqmcGtu{t cfkm'n] j:t'sf] d'No ltg{ sa'n u/]s]f ;dofleq qm]tfn] k'/} d'No ltb}{g cyjf tf]lsPsf] ;dofleq laqm]tfn] qm]tfaf6 k'/} d'No e'QfgL kfpFb}g jf d'Nosf] hdfgt :j?k qm]tfn] ljlgdoof]Uo ;fwg ljqm]tfnfO{ ;'Dk]sf] cj:yfdf To;sf] cgfb/ x'G5 eg] laqm]tf cbQ ljqm]tf aGg k'U5 . tf]lsPsf] ;dodf cfkmgf] j:t'sf] d'No e'QfgL gkfpg] ljqm]tfg} cbQ ljqm]tf xf] . cbQ ljqm]tfsf] ;DaGwdf g]kfnsf] s/f/ sfg"gn] s'g} s'/f pNn]v u/]s]f kfOb}g . ef/lto j:t' ljqmL P]g sf] bkmf $%-!_ n] cbQ ljqm]tfnfO{ o;/L kl/efifLt u/]s]f 5 – s'g} qm]tfnfO{ tj cbQ ljqm]tf dflgG5– s= hj j:t'sf] k'/f d'No r'Qmf ul/Psf] 5}g jf d'No r'Qmf ug]{ cfx\jfg ul/Psf] 5}g,v= hj ljlgdokq jf

cGo ljlgdo of]Uo ;fwg4f/f zt{o'Qm d'No e'QfgL ul/Psf] 5 / ;f] ;fwg cgfb/ ul/Psf] 5 .

Under the contract of sale of goods, the goods are sold for price. The price is paid either immediately or in future. The price of goods is paid either in cash or in credit. Both the cash payment and transaction in credit are common phenomena

in business activities. In the case of cash payment, where the full price is paid immediately at the time of the goods purchased, there is no question of unpaid seller. In the case, where the payment is made by cheque and it is dishonored by bank, the seller arises only in credit seller. when the seller does not get the whole payment from the buyer on the stipulated date or if the negotiable instrument received for payment is dishonoured, the seller is called unpaid seller.The

contract act has not mentioned anything in this respect but the Indian sale of goods Act, 1930 has made the definition of the term unpaid seller under se. 45(1) mentioning as: the seller of goods is deemed to be an unpaid seller a.where whole of the price has not been paid or tendered or b. when a conditional payment was made by a bills of exchange or other negotiable instrument, and the instrument has been dishonored.

 

features of unpaid sellers. 

- When the whole or a partial price is not paid on the due date or in time.

- When payment is made in the form of a negotiable instrument and the instrument is dishonoured.

- When the goods are sold on cash term or on credit and he must be unpaid.

- The seller must not refuse to accept the payment when it is tendered from the side of the buyer.

Rights of an unpaid seller cbQ ljqm]tfsf clwsf/

There are two kinds of rights of an unpaid seller,

1. Right against the goods j:t'lj?4sf] clwsf/– the unpaid seller is entitled to enjoy the following rights against the goods whether the ownership passed to the buyer or not.

a. right to lien wf/0fflwsf/ – the unpaid seller has the right to hold the goods in possession and keep them until the price has been paid or tendered. se.47 of the Indian sale of goods act, 1930 mentioned the unpaid seller of goods , who is in possession of them sold. Is entitled to retain them in his possession until the price is paid or tendered.he may exercise this right only in any of the following case

-where the goods have been sold without any condition as to credit,

-where the goods have been sold on credit, but the term of credit has expired,

-where the buyer becomes insolvent.

wf/0fflwsf/ Ps lsl;dsf] clwsf/ xf] . ljqm]tfn] cfkmgf] a:t' qm]tfnfO{ ljlqm ul/;s]sf] cj:yfdf kgL obL j:t' ljqm]tfs} ;fydf 5 eg] hj;Dd qm]tfn] To;sf] d'No r'Qmf ub}{g tj;Dd qm]tfsf] j:t' qm]tfnfO{ ;'k'b{ gu/L ljqm]tfn] cfkmgf] sJhfdf /fvL /fVg kfpF5 . ef/lto j:t' ljqmo P]gsf] bkmf $& cg';f/lgDg ltg cj:yfdf cbQ ljqm]tfn] of clwsf/ pkef]u ug{ kfpFb5 –

hxfF j:t' gubd} ljqmL ePsf] 5 t/ qm]tfaf6 To;sf] d'No k|fKt ePsf] 5}g, hxfF j:t' pwf/f]df ljlqm ePsf] 5 t/ e'Qmfg ug'{kg]{ ;dofjlw gfl3;s]s]f 5 / hxfF qm]tf lbjflnof x'G5 .

Termination of lien

when he delivers the goods to a carrier for transmission to the buyer without reserving the rights of disposal.hj p;n] qm]tfnfO{ j:t' ;'k'b{uL lbg] p2]Zon] x:tfGq0f clwsf/ cfkm}df g/fvL j:t' s'g} jfxsnfO ;'DkLG5 .

when the buyer or his agent has lawfully obtained possession of the goods. hj qm]tf jf p;sf] clws[t clestf{ jf k|wfgn] sfg"gL ?kdf j:t'pk/ clwsf/ k|fKt u5{ / when he waives his right of lien over the goods sold. hj p;n] cfkmgf] wf/0flwsf/ sf] clwsf/ kl/Tofu ub{5 .

b. right to stoppage goods in transit j:t' af6f]df /f]Sg] clwsf/ ef/lto j:t' ljqmL ;DalGw P]gsf] bkmf%) cg';f/ of] clwsf/ k|of]usf] nflu, s=j:t' qm]t, laqm]tf jf p;sf] clws[t clestf{sf] sJhfdf x'g'x'Fb}g , v=j:t' af6f]df /xg'kb{5 , u=qm]tf lbjflnof ePsf] x'g'kb{5 .This provision is stipulated in se.50 of the sale of goods Act, 1930 of India. An unpaid seller can enjou this right only after fulfillment of the following conditions; a. the goods must be in transit, and b.the buyer must be insolvent, and c.the seller must have parted with the possession of goods.

c. right to re-sale k'g ljlqmsf] clwsf/ ef/lto j:t' ljlqm P]gsf] bkmf %$ n] o; ;DaGwdf Joj:yf u/]s]f 5 lgDg cj:yfx?df cbQ ljqm]tfn] j:t' k'g ljlqmug{ kfpF5 . s= j:t' gf;jfg k|s[ltsf] ePdf v=lalqm s/f/df tf]lsPsf] ;doleq d'No r'Qmf ug{ qm]tf c;dy{ ePdf u= s/f/dfg} k'g ljlqm ug]{ zt{ pNn]v ul/Psf] ePdf / k'g ljlqm ug]{ hfgsf/L lbPkl5 kgL qm]tfn] d'No e'QmfgL ug]{ k|oTg gu/]df

se.54 of the Indian sale of goods Act, 1930 has mentioned the unpaid seller has a right to resell the goods retained or stopped in the following cases; if the goods are of a perishable nature, if the right is expressly reserved in the contract in

favour of the seller, and if during exercise of right of lien or right of stoppage in transit the gives notice to the buyer of his intention to resell but the buyer fails to pay the price within a reasonable time.