Chapter 1 Introduction
“Every law is the gift of god and decisions of sages” Demosthenes“Law is not rights alone, nor might alone but perfect union of two” Salmond
Law in it most general and comprehensive sense signifies a rule of action and it applied indiscriminately to all kind of action whether animate or inanimate, rational or irrational” Blackstone
“A law is a rule conduct imposed and enforced by the Sovereign” Austin
“Ignorance of law is not excusable”
Law
The term ‘Law’ means ‘a set of rules’, which are made and applied by sovereign authorities. Law word is derived from the Stoic term ‘lag’ which means ‘stable’ and ‘universal’. The concept of law was developed from Roman period and founder was Cicero. Law is the important fact of the government which manages the state and determines relation of the people and nation. Law always direct to the society and social human beings. Without law, a complete society is impossible. Thinking that manner from ancient period, law was defined as religion and morality.
According to the Hindu religion, Muslim religion also accept this concept, that law is philosophy of religion that’s why we can say that law an instruments which regulate and controll the human behaviour whether external or internal and impose penalty for its violation. It is a means of rendering of justice, maintaining discipline and controlling human activities.
According to The Black Law Dictionary “Rule made by authority for the proper regulation of a community or society for correct conduct in life”
It means law is formulated by the legislation, which manage the state in proper destination, so law is important instruction of government likewise law which is applied in the society to get legal environment and legal representatives who compose legislature body makes law of nation and it’s exercised by government. If somebody violet the law he/she must be punished by the government and nobody gets chance to say sorry after violeting law because there is a universal thought that ignorance of law is not excusable.
According to Holland, “A law is a general rule of external human action enforced by a Sovereign political authority.”
By combing all the definitions of law given above, it becomes clear that law presumes a state. The state has primary duty to maintain peace and order in society provide security, render justice and so on to its subjects.
Thus in conclusion, the term law can be defined as a set of principles, rules and customs as well made or recognized and enforced by the supreme authority of the state in the country. Law guides the subjects of the state to do or not to do some acts. In case of violation of law, the society imposes a penalty.
Facts:
· Law is a set of rules of conduct of society.
· It is enacted by the sovereign authority.
· It attempts to regulate external action of human beings.
· It is that rule which is related to action of human beings.
· It applies to all human being in the territory of the state.
· It is imposed by state.
· It applies indiscriminately to all.
· It is the most powerful in the world.
· It helps people to live in a peaceful environment.
· It stops/protects people from going to the worse way.
· It is the combination of powers, rights and duties.
· It is inevitable to develop the society.
· Law and justice are interrelated.<
Law is meaningful expression of the civilized society, which indicates various types of rules or principle. For understanding concept of law it is essential to inquire upon the types of law.
Facts:
· Law is a set of rules of conduct of society.
· It is enacted by the sovereign authority.
· It attempts to regulate external action of human beings.
· It is that rule which is related to action of human beings.
· It applies to all human being in the territory of the state.
· It is imposed by state.
· It applies indiscriminately to all.
· It is the most powerful in the world.
· It helps people to live in a peaceful environment.
· It stops/protects people from going to the worse way.
· It is the combination of powers, rights and duties.
· It is inevitable to develop the society.
· Law and justice are interrelated.<
Types of law:
Law is meaningful expression of the civilized society, which indicates various types of rules or principle. For understanding concept of law it is essential to inquire upon the types of law.
a) Substantive Law and Procedural Law:
For the first time, W.W. Cook has expressed his opinion in his book “Conflict of Law” that is very useful to discuss substantive law and procedural law separately.
ü Substantive Law:
The law connecting with recognition of rights and duties is called substantive law.
According to Black law dictionary, “Substantive law is that which creates, defines and regulates right, as opposed to adjective or remedial law, which prescribes method of enforcing rights or obtaining redress for their invasion.”
Thus, substantive law is the part of law which deals with rights, and methods of enforcing rights. It is closely related with the object and subject-matter of law. It does not only create, define, and regulate rights and duties, privileges and immunities but also recognizes them and imposes on members of the society the duty to respect those rights, privileges and immunities as well.
ü Procedural Law:
The law which establishes means to be followed in enforcing or asserting rights, duties, etc. provisioned by substantive law is known as procedural law. It is also termed as an adjective law.
According to Black law dictionary, “Procedural law is that which prescribes methods of enforcing rights or obtaining redress for their invasion; machinery for carrying on a suit.”
Hence, procedural law is related with the process or methods by which the rights can be enforced, i.e. It covers that how a trail is handled and how a judgement by a court is to be enforced. Therefore, procedural law is the part of law which details the process to be followed while filing a suit for making judgement on it. A procedural law, being a process oriented law, can be implemented with the retrospective as well.
Distinction between substantive law and procedural law:
i. Nature:
Substantive law is theoretical whereas procedural law is practical.
ii. Activities:
Substantive law deals with rights, duties, privileges, immunities of the members of the society whereas procedural law details process to be followed for getting rights restituted.
iii. Oriented:
Substantive law is purpose oriented whereas procedural law is process oriented.
iv. Relations:
Substantive law relates only with the parties involved in the suit or case whereas procedural law relates not only with the parties but also with the parties and the court.
v. Establishment:
Substantive law establishes the facts amounting to crime or offence whereas procedural law establishes evidences providing the facts as crime or offence.
vi. Fixation:
Substantive law fixes punishment such as fine, imprisonment and damages whereas procedural law fixes the ways to impose punishment.
vii. Place:
Substantive law is superior to procedural law whereas procedural law is inferior to substantive law.
viii. Effect:
A substantive law which includes punishment has no enforceability with retrospective effect. For instance, a person cannot be punished for any act which is not declared crime by law. There is no possibility to punish such person by making new law with past effect whereas procedural law being a process oriented law is executed with past effect as it does not harm any person.
ix. Maker:
A substantive law is made by the parliament whereas procedural law is formulated by the government or other bodies like university, board of directors in case of a company etc. under the authority of law made by punishment.
Substantive Law
Procedural Law
It is defined as remedy and rights.
It enforces right and duty / asserting legal remedy
Method of enforcing law
It is a detail process / method to be followed / implement
Related to subject matter and object of event
It implements the legal process / provisions
It regulates right and duty / impose the respect of law
It is composed by Legislature
Example: Fundamental rights of constitution
It determines punishment for guilty person
It is theoretical law
It is practical law
Substantive law
Procedural law
1. It is known as law of the rights and power.
It is also known as remedial law.
2. It is the ends of law.
It is the means of law.
3. Except procedural law, all laws are explained.
It explains only procedural laws.
4. It contains rights and remedies of the victim party.
It contains modes and conditions to restore rights.
5. It determines rights and relationship of the parties of a case.
It determines the relation between court and the parties to a case.
6. It is prospective (not influenced by retrospective events).
It is influenced by retrospective events.
7. It is ideal in nature.
It is behavioural in nature.
b) Criminal Law and Civil Law:
i. Criminal Law:
Those laws are called criminal law which concern wrong against the whole society and aims to protect the society as a whole rather than one of its members. Under this type of law, if someone is found guilty of crime/offence such as theft, he is punished by a fine or imprisonment. A criminal law is the part of law which controls crime and punishes the guilty person if such person found to have committed any act forbidden by law.
ii. Civil Law:
The law relating to wrongs against individuals is called civil law. It speaks of rights, duties or liabilities as to post, title and property.
Differentiate between Criminal Law and Civil Law
Criminal Law
Civil Law
Intentional violation of the status
Harm to another person or property
1. Plaintiff (Government) Vs Defendant (Accused person)
Plaintiff (Wronged) Vs Defendant (Wrong doer)
2. Result
Fine
Imprisonment
Execution
Defendant may be bound plaintiff damages.
c) Public Law and Private Law:
ü Public Law:
The law relating to the organization of government and its relation to the people is public law. It applies within the boundary of that nation. Such type of law includes constitutional law, administrative law and criminal law, etc.
Constitutional law generally prescribes the plan and method by which government conducts public affairs. Similarly, administrative law is connected with regulatory activities of all administrative agencies.
ü Private Law:
The law dealing with relationships between individuals and organization is called private law. This does not apply to all members of the society equally. It is in the form of civil law. Some laws that fall in private law are law of contracts and family law, the property law, etc.
Differentiate between Public Law and Private Law
Public Law
Private Law
The relation between government and people.
Constitutional Law
Administration Law
Criminal Law
Relation with individual and organization
Contract Law
Agreement Law
Property Law
It describes the plan and methods by which government conducts public affairs
Basically it is formed on the ground of civil law
Differentiate between National Law and International Law
National Law
National Law
International Law
All the laws of nation
Civil law
Criminal law
Relation between nation to nation
The law which is composed on the basis of nation’s constitution for public
Nature/Scope/Importance of law:
Human beings live in the society as being a part of it, and law acts to tie them into chain. Law is the need of the society. In the absence of law, society becomes disordered and the anarchy gets chance to emerge in the society and lives become unsecured, fearful and painful.
1) Regulating Behaviours:
Law regulates or controls human behaviours. It’s a primary concern is human behaviour it does not intend to regulate non-human activities.
Law is to establish good relation between nation and citizen.
2) Pervasiveness:
Law is pervasive it interacts with and influences various systems of every civilized society. They are political, economic and social.
Anywhere anytime law takes place.
3) Treatment:
All are equal in the eyes of law i.e. the persons on same situation are treated equally by law.
4) Peace and order:
Law is one of the means that keeps peace and maintains order in the society.
Establishing or maintaining peace and order is the primary function of law.
5) Relation:
Law intends peaceful and harmonious relation between members of the society.
It helps to create good relation between police, nation to citizen.
6) Aim:
Its main aim is to establish peace and order in the nation and justice.
7) Administration:
Law is forcefully administered; everyone is obliged to follow it. No one can ignore it; otherwise society compels him to follow it by force.
All administration are controlled and run by the law.
Sources of law:
Simply, source means a place from where something emerges. Sources of law mean a birth or original place or institution or guidelines from other where law emerges.
Sources of law is universal, all country have same types of sources.
1. Legislation:
The term legislation refers to an act of making the law. The body making or promulgating is known as legislature.
Legislation is also known as parliament /constitution assembly.
2. Precedent:
A decision made by the court is called precedent. It is also known as judicial decision, case law or judge made law, precedent is regarded as formal and authoritative law. Precedent is the decision made by the court over a case referred to it by interpreting law and testing its validity and application according to the time and situation. Precedent is not limited only in a case once decided but applicable to other similar cases. Therefore, precedent is regarded as same as the law made by legislature. It makes effective unless legislature makes any law overriding it.
3. Customs:
Another source of law is custom. It is such law which is derived from the behaviours or usages practiced very long periods. Customs is applied as same as enacted law and binding to people following such practice. Thus, custom is recognized as law and hence is a source of law.
Rituals, Norms and values
4. Convention:
Convention is also one of the sources of law. Convention is derived from agreement between two or more persons to guide themselves in their dealings. When two parties have been practicing a specific dealing for very long period, it is considered to be binding on them for later times either. Therefore, Convention is also recognized as law.
5. Miscellaneous:
Good conscience
Books
Thought
In addition to the sources of law discussed above, there are other types of sources of law.
Chapter 2 Business/Mercantile/Trade/Commercial law or Legal environment)
‘Business law’ is the combination of two terms- business and law. ‘Business’ refers to the vast array of economic activity, in which goods and services are supplied in exchange for some payment, usually money. ‘Law’ is the set of rules and legal principles to regulate human activities. Thus ‘Business Law’ is sets of rules which regulate business activities. The establishment, operation, development, extension and dissolution of business, rights, duties and liabilities of the business persons facilities and concessions available while running business, governmental control over business and business person, and control over the governmental interference etc. are clearly provisioned in mercantile law.
The law which regulates business activities and transaction, manage business behaviour is known as business law
According to M.C Kuchhal, “Mercantile is the branch of law which comprises law concerning trade, industry, and commerce.”
According to P.C. Tulsion, “Basically, Mercantile law is the part of civil law which deals with the right and obligation of mercantile person arising out of mercantile transaction in respect of mercantile property.”
Therefore, the term mercantile law is defined as that part of law which regulates the transaction of mercantile community. In fact, this law is only a branch of civil law; however, there is no any clear-cut line of demarcation between business law and other branches of law. Mercantile law is designed for conducting business activities in a systematic channel.
Characteristics of business law:
Business law is that law which is enacted by the state with regard to business. This law has some distinct characteristics distinct from other laws which are as follows.
1. Formation:
Business law is made by the person or body of persons (state) having sovereignty. Behind it, there is sanction to be obeyed and facility to regulate their daily behaviour.
2. Branch of civil law:
There is no any clear-cut line of demarcation between business law and other branches of law. Primarily, mercantile law is a branch of civil law. There are many common aspects between business law and civil law regarding property, compensation and so on.
3. Regulation:
Business law regulates all the subject matter i.e. relating to merchandise, industry, trade, commerce, etc.
4. Equal treatment:
Business law treats equally all the mercantile people. Business law is such a law applicable to all persons involved in business undertakings equally and indiscriminately.
5. Status:
Business law is placed in the top position of hierarchy than mercantile persons.
6. Means (Aims):
Business law is a means to maintain peace, order, security, and discipline. It creates good environment for protecting and reminding rights and interest of business organization for overall prospect of mercantile community.
7. Administration:
Business law is administered either by judicial body or quasi-judicial body or any person having authority.
8. Close to justice:
Business law is closely connected with justice. Actually, business law and justice are placed as the two wheels of a cart.
Importance of business law:
Business law plays a tremendous role in strengthening the economy of any country by developing business in the country. The importance of this law has been discussed below:
1. Means of maintaining peace and order:
Business law regulates, systemizes and controls business activities of any kind. This helps to maintain peace and order in the business community for the betterment of the whole business community.
2. Creation of good environment:
Business law creates good environment in the company and make them long lasting.
3. Encouragement and inducement:
Business law encourages and induces any person who is willing to launch business. Business law guarantees various types of rights, concessions and facilities such as right on profit earned business, exemption in different types of taxes, excise duties, custom duties, etc. as per the nature or size of business.
4. Awareness to right and caution to obligation:
Business law makes businesspersons aware and cautions them to their obligations and duties.
5. Protection of right:
Business law protects the right of every business, businesspersons and other parties.
6. Settlement of dispute:
In the course of launching business activities, there may be difference and dispute between businesspersons in respect of business transaction. To settle such dispute, business law determines procedures which concerned parties should adopt while settling down disputes.
Sources of business law
1) Legislation (Legislature):
The laws made by legislature are known as enacted Acts which are the output of the law making of legislature. The parliament is one of the most important organs of the government, it makes various laws, repeals unnecessary part and also makes necessary reforms as per demand of time and situation, and they come into action as soon as they are approved. The acts enacted by legislature for business are contract acts, company acts, negotiable acts, sale of goods acts, banking acts, arbitration acts and so on.
2) Precedent:
In case where law is silent in respect of case to settle down, the court makes decision by employing its conscience. Such decision is called judicial decision, which later becomes precedent.
3) Customs:
Customs are the outcomes of ancient behaviours pursued by the people in the society. Social Norms and values of Mercantile
4) Convention
Agreement between both parties / persons about trade activities
5) Miscellaneous
Books
Thought
Articles
News
Literature
IMPORTANT: The main mercantile law made in Rana period in Nepal:
Factory law 1989
Trading company law 1989
Chamber of Commerce law 1990
Agency law 1992
Company law 1983
Banking law 1994
Private company law 2000
After the introduction of Democracy 2007 B.S.
Export and import Act 2013
Partnership Act 2020
Company Act 2021
Sales taxes Act 2023
Standard measurement and weight Act 2025
Commercial Banking Act 2031
Industrial enterprise Act 2038
Arbitration Act 2038
Privatization Act 2050
Insolvency Act 2063
Some important questions:
ü What is commercial law? State the sources and nature of Nepalese commercial law.
ü Define the business law. Explain the sources of Nepalese mercantile law.
ü Give the concept of business law. Explain its importance.
ü Define business law. Is there any clear-cut line of demarcation between business law and branch of law?
ü Distinguish between sustantive law and procedural law.
ü What is law? Differentiate between criminal law and civil law.
Chapter 3 Contract
Contract is a legal agreement created by an exchange of promises between two parties to do or not to do something. In other words, an agreement made between at least two parties to do or to abstain from doing something and creating contractual rights and obligations for themselves, which the law will enforce is called contract.
According to Salmond, “A contract is an agreement which creates and defines obligation between the parties.”
F. Pollock defines, “Every agreement or promise enforceable at law is contract.”
In the word of S.W. Anson, “A contract is an agreement enforceable at law made between neither two nor more person by whom rights are required by one or more to act or forebearances (obligation) on the part of the other or others.”
According to Nepal contract act 2056 sec 2(a), “A contract is an agreement between two or more persons to do or not to do something, which can be enforceable by law.”
In conclusion, contract is a valid agreement or promise, or an agreement enforceable by law.
So, contract is an agreement between two or more parties / persons to do or not to do something. If it is violated by any party / person, the contract is broken. It makes enforceable by law to get remedy. Example: ‘A’ wants to sell his house for Rs 1000000 and ‘B’ is ready to buy that house, they contract with each others about that house.
Basis of difference
Contract
Agreement
1. Definition
The agreement which is contracted between parties and enforceable by law is called contract
Agreement is the term which is practiced between two or more parties to do or not to do something.
2. Legal Obligation
Contract creates legal duty during the performance period
Agreement does not create legal obligation (It creates moral duty only)
3. Binding nature
Contract is binding to the contractual parties i.e. offer and acceptance
Agreement is not binding the parties.
4. Scope
Contract is limited term
Agreement is vague (vast) term
5. Inclusion
Contract includes agreement
Agreement does not include contract
6. Example:
‘A’ is ready to give 100000 for ‘B’ as loan ‘B’ takes the money, promising him to return within the month.
‘A’ invites his friend ‘B’ to participate on his birthday party at Liwali Garden.
Classification of contract:
1. Contract on the ground of mode of formation:
Focus on the formation of contract
i. Express contract:
A contract expressed by words written or spoken is called express contract. The parties express their intention in written or spoken way in an express contract. Directly showing action or saying
‘A’ wants to sell his cycle for Rs 2000.And ‘B’ is ready to pay. This is the example of express contract because, here ‘A’ and ‘B’ are ready to sell and buy so, and they express their wants.
ii. Implied contract:
Implied contract refers to a contract, which is made by the conduct of parties. This form of contract is not concerned with words but with the work of parties.
Without expressing, accepts the contracting process.
‘A’ takes bus from Chyamasingha to Kathmandu
Here ‘A’ has to pay Rs 25
iii. Quasi- contract
A contract resulted by law is quasi contract. The legal provision categories some kind of human dealing as competent to give both legal right and obligation such human dealing is pursued as quasi contract.
Unexpectedly, participate in the contract
‘A’ finds the cycle of anyone; ‘A’ has to return that cycle
iv. E-commerce:
Internet is used by millions of people in the current world. A contract done of two or more parties by using internet is an e-commerce contract.
Contract between two parties by online network
2. Contract on the ground of liability:
i. Unilateral contract:
The term ‘unilateral’ signifies to such contract in which one party performs his obligation at the time of forming contract itself. In order word, a unilateral contract means only one party makes legally enforceable promise. A contract announced by one party for agreement. The second party hides his title.
‘A’ notifies that if someone finds the lost cycle. She/he is ready to pay Rs 1000
ii. Bilateral contract:
When both parties to a contract exchange promise for promise it is bilateral contract. A contract announced by both party to participate the mentioned agreement
‘A’ is selected as cashier of B’s Bank. ‘A’ accepts the post.
3. Contract on the ground of creation of obligation:
i. General Contract:
A contract creating obligations immediately of the parties to contract is general contract. Generally, if two or more person or organizations are really to create agreement to do or not to do
ii. Contingency contract:
Contingency contract is that kind of contract, obligation of which arises only when something happens or does not happen in future. The contract which is agreed to complete in future
It is dependent in future event
If Nepal wins the ICC Cup 2014 ‘A’ is ready to pay Rs 5000 to ‘B’
For example: Insurance company
4. Contract in the ground of execution:
Focus on the work
i. Executed contract:
Executed means which is completed, a contract with the inclusion of completed work is executed contract. An executed contract consists of work fulfilled by both parties.
Both parties are ready to complete their obligation
They have completed their obligation
Example: A paints a picture for B and receives agreed remuneration with him. Here nothing remains undone. This is an executed contract.
ii. Executory Contract:
Executory means remains to be carried into effect; a contract that is remaining to implement according to the promise made is executory contract. The parties to an executory contract only make plan at the time of forming contract and implement such a plan according to provision of contract in future.
Both parties are ready but they haven’t complete their work
Agreement done for future implementation
iii. Partly executed contract:
A contract where one of the parties to the contract has fulfilled his obligation and other party has still to perform his obligation is partly executed contract. Some parts of contract are completed but not whole.
Like Advance
5. Contract on the ground of validity:
1) Valid contract:
When an agreement includes all the essential elements, it is called valid contract which can be enforced by law.
Both parties can enforce to complete the work according to the law
2) Void contract:
An agreement which is valid at the time of formation but becomes void or cease to be enforceable subsequently is known as void contract.
3) Void agreement:
The agreement which is not enforceable by law or conducted against the law is void agreement.
Agreement with minor
4) Voidable contract
Contract which is agreed due to the force
5) Illegal agreement
The contract which is unlawful
6) Unenforceable contract
The contract which is not implemented due to the lack of proper document
Difference between Agreement and Unenforceable contract:
Basis of difference
Agreement
Unenforceable contract
Area
An illegal agreements are also unenforceable
All unenforceable agreement are not necessarily the illegal agreement
Defect
Illegal agreement violates law of nation
It includes the procedural or minor technological defects
Collateral agreement
Collateral agreement to illegal agreement is also void
Collateral agreement to unenforceable agreement is not void
Enforceability
An illegal agreement never gets enforceability
Unenforceable contract may be enforceable if both parties are ready to remove the defects of agreement
Punishment
The parties of illegal agreement may get punishment
The parties of unenforceable contract may not get punishment
Difference between Voidable contract and void agreement:
Basis of difference
Voidable contract
Void agreement
Free consent
It is void due to lack of free consent
It is void due to other reason
Validity
It becomes void only when the court declares it to be void
It becomes void from the formation of agreement
Third party right
Third party get right over the goods under voidable contract
Third party cannot have right over the goods
Enforceability
It is enforceable if the affected party does not take action
It is not enforceable at all in case of agreement
Damages
The aggrieved party can have recovery of damage from another party
No recovery of damage is possible in agreement by reason of illegal
Laps of reasonable time
The laps of reasonable time to take action makes the contract valid where no action is taken
Laps of reasonable time does not have any significance because void agreement is void from very beginning
Nature
A contract suffered by coercion, undue influence, fraud is the nature of voidable contract
An agreement of marriage or possessing facility could be the example of void agreement
Essential elements of valid contract:
An agreement not enforceable by law does not amount to a contract and is only an agreement. In this sense, it is said that “all contracts are agreements but all agreements are not contracts.” For to be valid contract the following ten points must be in a contract if any one point is excluded the contract will be invalid.
1. Offer and acceptance:
Before doing any contract, there must be two parties; offer and accepter party to make the contract valid. If any one party is absent the contract cannot be made.
2. Legal relationship:
In the contract there must be some rules and regulation in the contract if any party violates rules legal punishment should be given.
3. Free consent:
A positive decision towards the term of the agreement is consent, if the party gives his consent freely, knowingly or voluntarily, it is called free consent. While involving or making contract, both parties must have free consent without any type of coercion, fear, threatening, undue influence, misrepresentation, etc.
4. Lawful consideration:
For to be a valid contract, lawful consideration is an essential element, consideration is something in return. In other words, consideration means advantages or benefits from one party to another party. From the contract done, both parties must get equal benefits or loss
5. Lawful object:
The object of an agreement must not be illegal or immoral or opposed to public policy, etc.
6. Not expressly declared void:
The government may declare something as void or illegal, if the contract done for those things are considered as void contract.
7. Certain meaning:
The terms of the agreement must be clear or certain and not vague and ambiguous. The contract to which is done must consist certain meaning.
8. Possibility of performance:
The contract done must have possibility of performance; an agreement to do an impossible thing in itself is void.
9. Legal formalities:
At the time of making contract there must be legal formalities it must be in written form
Nature of contract:
1. Parties autonomous:
The parties to the contract are considered to be autonomous to make contract on any matter not being contrary to the law. They are free to determine their rights and obligations in contract as they intend. Generally, law can also not restrict this freedom of parties.
2. Promise co-related with obligation:
3. Meeting of mind:
An agreement is the outcome of consenting minds of the parties. The contracting parties must have their minds as regards the subject matter of the contract in the same sense, upon same thing and by the same parties. Unless there is meeting of mind there can be no contract.
4. Application of law of contract;
Characteristics of contract: (2056 B.S.)
1. Existence:
2. Inclusion:
It has included the provisions relating to the specific contracts such as bailment, pledge, indemnity and guarantee, agency, carriage of goods and sale of goods.
3. 100% use of word contract:
4. Addressing:
5. Explanation:
6. Autonomy of parties:
7. Limitation:
It has not provided sufficient provision of consideration and rights and liabilities of third parties to a contract. It is silent on the capacity and liability of natural and artificial persons and terms and forms of the contract.
8. Compulsion:
This act has made the parties to the contract compulsory to obey the prevailing laws and the instructions prescribed by some specific laws.
Major provision of Nepal contract act 2056 B.S
1. Definition:
The Nepal contract act 2056 has provided definitions and explanations about contract.
2. Consideration:
According to Nepal contract act 2056 B.S, by getting involved into the contract both party must get benefits or bear loss if any.
3. Parties to be autonomous:
4. Contract to be deemed to be concluded
5. Contracting parties:
According to Nepal contract act 2056 B.S, there must be two contracting parties i.e. one offerer another accepter.
6. Place of contract:
According to Nepal contract act 2056 B.S, the place of contract must be included in the contract paper.
7. Offer and acceptance:
8. Contract according to the offer made to public
9. Indirect contract:
If anyone involve in the contract without knowing
10. Contingent contract:
The contract which is done in present for the future
11. Void and voidable contract
12. Contract of guarantee indemnity
13. Contract of bailment
14. Contract of pledge
15. Contract of sale of good:
At the time of selling and buying
16. Contract of agency
17. Contract of carriage of good
18. Time, manner, place for performing contract
19. Breach of contract remedy:
According to Nepal contract act 2056 B.S, if any party violate the law he will be punished. Both parties must follow the law.
20. Observance of law enforces:
According to Nepal contract act 2056 B.S, if any party goes beyond the contract another party can use law.
21. Limitation:
“All agreements are not contract but all contracts are agreement.”
Or
“A lawful contract has to comply a number of elements.” in the light statement discuss the essential element of a valid contract.
The agreements are not contract without intention of parties to create legal relationship between them.
“The law of contract is not the whole law of agreement nor is it the whole law of obligations.” (Salmond) Discuss the statement explaining the essential elements of a valid contract.
