ICAP CAF CAF-4: Business Law Dynamics Syllabus

CAF-4: Business Law Dynamics syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for CAF-4: Business Law Dynamics in ICAP CAF, not a summary of it.

1. 1

   Introduction to the Legal System

   2 topics

   • Legislation and its forms
   • Process of legislation in Pakistan
2. 2

   Contract Act, 1872

   6 topics

   • Offer, acceptance and revocation
   • Valid, voidable and void agreements
   • Contingent contracts
   • Performance of contracts
   • Breach of contract and remedies
   • Contract of agency
3. 3

   Partnership Act, 1932

   3 topics

   • Nature, creation and types of partnership
   • Relation of partners to one another
   • Relation of partners to third parties
4. 4

   Negotiable Instruments and Other Laws

   3 topics

   • Promissory note, bill of exchange and cheque
   • Anti-Money Laundering Act, 2010
   • Arbitration Act, 1940
5. 5

   Companies Act 2017: Incorporation and Shares

   3 topics

   • Business, objects and incorporation of companies
   • Kinds of companies
   • Issuance of shares
6. 6

   Companies Act 2017: Management and Administration

   3 topics

   • Registration of mortgages and charges
   • Management and administration
   • Investment and disclosure of interest
7. 7

   Meetings, Directors, Accounts and Dividends

   3 topics

   • Meetings and proceedings
   • Directors and chief executive
   • Accounts and dividends

CAF-4: Business Law Dynamics flashcards for ICAP CAF

21 of 67 cards from the CAF-4: Business Law Dynamics deck — real questions with worked answers.

1. What is legislation, and what are its two main forms?

   Legislation is law enacted by a competent legislative authority. Its two forms are: (1) Supreme/Primary legislation (made by the sovereign legislature, e.g. Acts of Parliament), and (2) Subordinate/Delegated legislation (made by a body under power delegated by the legislature, e.g. rules, regulations, by-laws).

2. Name four main types of subordinate (delegated) legislation.

   (1) Colonial legislation, (2) Executive/Departmental legislation (rules and regulations by the executive), (3) Judicial legislation (rules made by courts for their own procedure), and (4) Municipal/Local legislation (by-laws made by local bodies).

3. What is the difference between a Money Bill and an ordinary Bill in Pakistan's legislative process?

   A Money Bill (dealing with taxes, public funds, borrowing, etc.) can originate only in the National Assembly and is not voted on by the Senate (the Senate only gives recommendations within 14 days). An ordinary Bill may originate in either House and must be passed by both Houses.

4. Outline the stages a Bill passes through to become an Act in Pakistan's Parliament.

   Introduction (First Reading) -> Second Reading (general discussion and committee stage) -> Third Reading (clause-by-clause consideration and passage) -> transmission to the other House for the same process -> assent of the President -> publication, after which it becomes an Act.

5. In Pakistan, what is the time limit for the President to assent to a Bill (other than a Money Bill), and what happens otherwise?

   The President must assent or return the Bill within ten days. If returned, Parliament reconsiders it in joint sitting; if passed again it is re-presented, and assent is deemed given if not granted within ten days.

6. What is an Ordinance and who promulgates it in Pakistan?

   An Ordinance is law promulgated by the President (Federal) or Governor (Provincial) when the legislature is not in session and circumstances require immediate action. It has the same force as an Act but normally lapses after 120 days unless extended/approved by the legislature.

7. Define an 'offer' (proposal) under the Contract Act, 1872.

   When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal (offer). [Section 2(a)]

8. Distinguish between an offer and an invitation to offer (invitation to treat), with an example.

   An offer is a definite expression of willingness to contract on certain terms, capable of acceptance. An invitation to offer merely invites others to make offers (e.g. goods displayed in a shop window, advertisements, auction catalogues, tenders). The shopper makes the offer, which the seller accepts.

9. What are the essential rules for a valid acceptance under the Contract Act?

   Acceptance must be: (1) absolute and unqualified; (2) communicated to the offeror; (3) in the prescribed/usual manner; (4) given while the offer is still open (before lapse/revocation); and (5) by the person to whom the offer was made.

10. State the rules governing the communication of offer, acceptance and revocation under Section 4 of the Contract Act.

    Communication of an offer is complete when it comes to the knowledge of the offeree. Acceptance is complete: against the proposer when the acceptance is put in course of transmission (posted); against the acceptor when it comes to the proposer's knowledge. Revocation is complete: against the maker when it is put in transmission; against the receiver when it comes to his knowledge.

11. List the ways in which an offer is revoked/lapses under Section 6 of the Contract Act.

    (1) By notice of revocation by the offeror before acceptance; (2) by lapse of time prescribed or reasonable time; (3) by failure of the acceptor to fulfil a condition precedent; (4) by death or insanity of the offeror (if known to acceptor before acceptance); (5) by counter-offer or non-acceptance in the prescribed mode.

12. What is an agreement, and what equation expresses how it becomes a contract?

    An agreement is every promise and set of promises forming consideration for each other [Sec 2(e)]. The relationship: Agreement = Offer + Acceptance; Contract = Agreement + Enforceability by law (Sec 10).

13. List the essential elements of a valid contract under Section 10 of the Contract Act.

    (1) Offer and acceptance; (2) Intention to create legal relations; (3) Lawful consideration; (4) Capacity of parties (competent); (5) Free consent; (6) Lawful object; (7) Agreement not expressly declared void; (8) Certainty of meaning; (9) Possibility of performance; (10) Legal formalities where required.

14. Define a voidable contract and a void agreement, and state the key difference.

    A voidable contract is enforceable at the option of one (the aggrieved) party but not the other [Sec 2(i)]; valid until rescinded. A void agreement is not enforceable by law from the start [Sec 2(g)]; it has no legal effect. Difference: a voidable contract is valid until avoided, whereas a void agreement is void ab initio (or becomes void).

15. What is the difference between a 'void agreement' and a contract that 'becomes void'?

    A void agreement is unenforceable from inception (void ab initio). A contract that 'becomes void' was valid when made but later ceases to be enforceable [Sec 2(j)], e.g. due to supervening impossibility or change of law (frustration).

16. Who is competent to contract under Section 11 of the Contract Act?

    A person who (1) is of the age of majority (18, or 21 if under guardianship), (2) is of sound mind, and (3) is not disqualified from contracting by any law to which he is subject. An agreement by a minor is void ab initio.

17. What elements vitiate 'free consent' under the Contract Act, and what is the effect of each?

    Consent is free when not caused by: coercion (Sec 15), undue influence (Sec 16), fraud (Sec 17), misrepresentation (Sec 18), or mistake (Sec 20-22). Coercion, undue influence, fraud and misrepresentation make the contract voidable at the aggrieved party's option; a bilateral mistake of fact makes the agreement void.

18. Name five types of agreements that are expressly declared void under the Contract Act.

    (1) Agreements without consideration (Sec 25); (2) in restraint of marriage (Sec 26); (3) in restraint of trade (Sec 27); (4) in restraint of legal proceedings (Sec 28); (5) uncertain agreements (Sec 29); and wagering agreements (Sec 30).

19. Define a contingent contract under Section 31 of the Contract Act and give an example.

    A contingent contract is a contract to do or not to do something if some event, collateral to such contract, does or does not happen. Example: A contracts to pay B Rs. 10,000 if B's house is burnt. The contract depends on an uncertain future collateral event.

20. State the rules for enforcing contingent contracts dependent on the happening or non-happening of a future event (Sec 32-33).

    A contract contingent on the happening of an uncertain future event can be enforced only when that event happens; if the event becomes impossible, the contract is void (Sec 32). A contract contingent on a future event NOT happening can be enforced only when the event becomes impossible, and not before (Sec 33).

21. Under Section 35, when is a contingent contract on an event happening/not happening within a fixed time void?

    A contract contingent on an event happening within a fixed time becomes void if the event does not happen or becomes impossible within that time. A contract contingent on an event NOT happening within a fixed time can be enforced if the event does not happen, or becomes impossible, within that time.

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