LLB Examination Law of Contract and Mercantile Law Syllabus

Law of Contract and Mercantile Law syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Law of Contract and Mercantile Law in LLB Examination, not a summary of it.

1. 1

   Formation of Contract

   5 topics

   • Offer and Acceptance
   • Consideration
   • Capacity to Contract
   • Free Consent
   • Lawful Object and Consideration
2. 2

   Void and Voidable Agreements

   3 topics

   • Agreements in Restraint of Trade
   • Wagering Agreements
   • Contingent Contracts
3. 3

   Performance and Discharge of Contract

   4 topics

   • Performance of Contracts
   • Discharge by Agreement and Frustration
   • Breach of Contract
   • Remedies and Damages
4. 4

   Quasi-Contracts and Indemnity

   3 topics

   • Quasi-Contractual Obligations
   • Contracts of Indemnity
   • Contracts of Guarantee
5. 5

   Special Contracts

   2 topics

   • Bailment and Pledge
   • Agency
6. 6

   Sale of Goods

   3 topics

   • Conditions and Warranties
   • Transfer of Property and Title
   • Rights of Unpaid Seller
7. 7

   Partnership and Company Law

   5 topics

   • Nature and Formation of Partnership
   • Rights and Liabilities of Partners
   • Dissolution of Partnership
   • Incorporation and Types of Companies
   • Memorandum and Articles of Association
8. 8

   Negotiable Instruments

   4 topics

   • Promissory Notes and Bills of Exchange
   • Cheques
   • Holder in Due Course
   • Dishonour of Instruments

Law of Contract and Mercantile Law flashcards for LLB Examination

18 of 65 cards from the Law of Contract and Mercantile Law deck — real questions with worked answers.

1. Under the Contract Act 1872, what is the difference between an agreement and a contract?

   An agreement is every promise and set of promises forming consideration for each other (Sec 2(e)). A contract is an agreement enforceable by law (Sec 2(h)). Thus Contract = Agreement + Enforceability. All contracts are agreements, but not all agreements are contracts.

2. How does Section 2(a) of the Contract Act 1872 define a proposal (offer)?

   When one person signifies to another his willingness to do or 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.

3. What is the distinction between an offer and an invitation to treat? Give examples.

   An offer shows willingness to be bound on acceptance; an invitation to treat merely invites others to make offers. Examples of invitations to treat: goods displayed in a shop window with price tags, catalogues, price lists, auction advertisements, and tender notices (Pharmaceutical Society v Boots; Harvey v Facey).

4. What is a counter-offer and what is its legal effect on the original offer?

   A counter-offer is a reply that varies the terms of the original offer. It operates as a rejection of the original offer (destroying it) and substitutes a new offer (Hyde v Wrench). The original offer cannot later be accepted.

5. State the rule in Carlill v Carbolic Smoke Ball Co. regarding general offers.

   An offer made to the world at large (a general offer) can be accepted by any person who, with knowledge of the offer, performs the conditions. Performance of the condition is itself acceptance; communication of acceptance is not required where the offer dispenses with it.

6. How is acceptance defined under Section 2(b) of the Contract Act 1872?

   When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.

7. What are the essential requirements of a valid acceptance?

   It must be absolute and unqualified (Sec 7), communicated to the offeror, made in a reasonable/prescribed manner, given while the offer subsists, and by the person to whom the offer was made. Silence cannot generally constitute acceptance.

8. State the rules in Sections 4 and 5 on when communication of a proposal and acceptance is complete.

   Communication of a proposal is complete when it comes to the knowledge of the offeree. Acceptance is complete as against the proposer when it is put in a course of transmission (posted), and as against the acceptor when it comes to the proposer's knowledge. A proposal may be revoked before the acceptor posts; an acceptance may be revoked before it reaches the proposer.

9. What is the 'postal rule' (rule in Adams v Lindsell) of acceptance?

   Where post is a reasonable means of communication, acceptance is complete and the contract is formed the moment a properly addressed and stamped letter of acceptance is posted, not when it is received, even if the letter is delayed or lost.

10. List the modes by which an offer (proposal) may lapse or be revoked under Section 6.

    By notice of revocation before acceptance is complete; by lapse of prescribed or reasonable time; by failure of the acceptor to fulfil a condition precedent; by death or insanity of the proposer (if known to acceptor before acceptance); by rejection or counter-offer; by non-acceptance in the prescribed mode.

11. How does Section 2(d) define consideration?

    When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or abstain from doing, something, such act, abstinence, or promise is called a consideration for the promise.

12. What three kinds of consideration are recognised by Section 2(d), and which one is NOT valid in Pakistan/India?

    Past, present (executed), and future (executory) consideration. Unlike English law, past consideration IS valid under Sec 2(d). However, consideration that is wholly past and not done at the promisor's desire is invalid.

13. State the essential rules of valid consideration.

    It must move at the desire of the promisor; may move from the promisee or any other person; may be past, present or future; need not be adequate but must be real and not illusory; and must be lawful (Sec 23).

14. What does 'consideration need not be adequate' mean? (Explanation 2 to Section 25)

    An agreement is not void merely because the consideration is inadequate; the law requires consideration to be present, not equal in value. However, inadequacy may be evidence the court considers when deciding whether consent was freely given.

15. State the general rule and the exceptions of Section 25 ('An agreement without consideration is void').

    General rule: ex nudo pacto non oritur actio — no consideration, no contract. Exceptions: (1) written and registered agreement made out of natural love and affection between parties in near relation; (2) promise to compensate for past voluntary services; (3) written, signed promise to pay a time-barred debt. Also valid without consideration: completed gifts, agency (Sec 185), and bailment.

16. What is the doctrine of privity of contract, and how does Section 2(d) modify the consideration aspect?

    Privity means only parties to a contract can sue or be sued on it; a stranger to the contract cannot. However, under Sec 2(d), consideration may move from 'any other person', so a stranger to the consideration (but party to the contract) may sue — distinguishing it from English law.

17. List the exceptions to the doctrine of privity of contract (where a stranger may sue).

    Beneficiary under a trust; provision in family settlement/marriage arrangement; assignee of a contract; acknowledgement or estoppel; covenants running with land; and contracts entered through an agent.

18. Who is competent to contract under Section 11 of the Contract Act 1872?

    Every person who (1) is of the age of majority according to the law to which he is subject, (2) is of sound mind, and (3) is not disqualified from contracting by any law to which he is subject.

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