CORPORATE LAW

Submitted To
Mr. Muhammad Saleem
Submitted By
Ayesha Batool
Fa14-MBA-05
MBA 7th Semester
Department Of Business Management
Lahore Garrison University
 Contract:
Agreements which can be enforceable at law are called contracts.
Contract=Agreement + Enforceability by Law
 Modes of Discharging of contract:
“When the contractual obligations come to an end, the
contract is said to be discharged.”
Following are the methods of discharging the contracts
 By Performance
 By death of a party
 Bt mutual consent
 Promisor unable to perform
 Breach of Contract
 Discharge by operation of law

 By Performance:
It is the type of contract, where the parties have done whatever was
contemplated under the contract; the contract comes to an end.
Example:
“A” contracts to sell his car to “B” for Rs. 85,000 as soon as the car is delivered
to B and B pays the agreed price for it, the contract comes to an end by performance.

 By death of a party:
Where the performance of the contract executed by the promisor,
his death or physical disability to perform shall render the contract void and thus
exonerate him from the obligation.
Example:
A, a singer, agrees with B to give his performance at some particular theatre on
a specified date. While on his way to the theatre A meets an accident and he dies. The
contract becomes discharged.

 By mutual consent:
If the parties to a contract agree to substitute a new contract for it, or
to cancel it or alter it then the original contract is discharged.
Example:
A who owes B Rs. 20,000 enters into an agreement with him thereby giving B
a mortgage of his estate Rs.15, 000. This agreement constitutes a new contract and
terminates the old one.
 Promisor unable to perform:
If the promisor not performs according to the contract,
then the contract is discharged and both the parties become responsible.

 Breach of contract:
Breach of contract may take place at the time when;
 Performance is due
 During the performance of the contract

Performance is due:

If the person does not perform his part of the contract at the
stipulated time, he will be liable for his breach. Example: A seller offers to execute a
deed of sale only on payment by the buyer of a sum higher than is payable under the
contract for sale, the vendor shall be liable for the breach.

During the performance of the contract:

During the performance of the contract one party fails or refuses to perform his
obligation under the contract. Example: A contracted with a Railway company to
supply it certain quantity of railway chairs at a certain price. The delivery was to
made in installments. After a few installments had been supplied, the Railway
Company asked A to deliver no more So the breach of contract is done.

 Discharge by Operation of Law

A contract may be discharged by operation of law in the following cases:
 By Death of the Promisor:
A contract involving the personal skill or ability of
the promisor is discharged on the death of the promisor.
 By Insolvency:
When a person is declared insolvent, he is discharged from his
liability up to the date of his insolvency.
 By Unauthorized Material:
If any party makes any material alteration in the
terms of the contract without the approval of the other party, the contract
comes to an end.

 By the Identity of Promisor and Promisee:

When the promisor becomes
the promisee, the other parties are discharged
 Types of partnership:
Following are the types of partnership:
 General partnership
 Limited partnership
 Particular partnership
 Partnership at will
 General partnership:
A partnership between two or more persons created by an agreement to do a business and
to share a profit.
Characteristics:
 Partners are known as general partners
 All partners are responsible to conduct the business
 The business can be conducted by any partner or any number of partners on
behalf of all.
 General partners having unlimited liability
 Every partner has right to check stock of books
 All partners have right to take part in the management
 Limited partnership:
A limited partnership allows each partner to restrict his or her personal liability to the
amount of his or her business environment. Not every partner can benefit from this
limitation- at least one participant must accept general partnership status, exposing
himself or herself to full personal liability for the business’s debts and obligations.
Characteristics:
 Profit is shared according to the mentiones ratio
 Personal assets are not exposed to the creditor’s end
 Partners with limited liability will not allowed to take part in the management
 All partners are entitled to take stock of books
 Limited partnership get not affected by the death or retirement of any partner
 Particular partnership:
A particular partnership is one which is formed for a particular period and for a particular
purpose. Such a partnership usually dissolved on the completion of the time period or
when the purpose is fulfilled.
Example:
Two auditors engaged in a particular audit may be regarded as partners in the
audit.
 Partnership at will:
It is a partnership in which the purpose and the duration is not fixed, it is open ended. A
partnership-at-will can be dissolved at any time by any of the partners notifying his
willingness to do so.
 Dissolution of Firm:
Section-39 defined as: dissolution of partnership between all the partners is called
dissolution of firm.
OR
The dissolution of a partnership is the process during which the affairs of the partnership
are wound up.
 Modes of Dissolution:
Following are the modes of dissolution of firm or partnership;
 Dissolution by Agreement
 Dissolution by operation of law
 Dissolution on the happening of certain events
 Dissolution by notice
 Dissolution by court
 Dissolution by Agreement:
Partnership which formed by the agreement can also be
dissolved through the agreement, it can be dissolved any time with the consent of all the
partners. In the agreement must be mentioned when the firm gets dissolved and how
assets are dissolved and the ratio according to which capital is shared among the partners.
 Dissolution by operation of law:
Firm dissolved by adjudication of all the partners or of
all the partners less one as insolvent.
OR
By the happening of an event which makes the carrying on the partnership business or the
continued existence of the partnership, unlawful.
 Dissolution on the happening of certain events:
Partnership will dissolve on any of the
following events;
 If firm is constituted for a certain term, on the expiry of that term
 On the death of the partner
 On the adjudication of the partner as an insolvent
 Dissolution by notice of a partner:
Partnership may be dissolved by giving notice in
writing to the other partner of his intention to dissolve the firm. The notice must be
 In writing
 State the intention to dissolve the firm
 Dissolution by Court:
At the suit of the partner, the court may dissolve a firm on any of
the following grounds:
 Partner has become of unsound mind
 Partner is not able to do work
 Conduct of not expected from gentle men
 Guilty of conduct
 Negligently not performing as per the agreement his duties relating to the
management of the conduct of the business or partnership
 When a partner transferred his total assets to the third party
 Business of firm cannot be carried out safe as at a loss