Final-Term Exam Summer – 2021

Department of Business Administration

Name: Neham Riaz Siddique Registration ID: 10442

Subject: Business Law and Taxation Submission Duration: 3 Hours
Instructor: Muhammad Hasan Submission Date: 7th September, 2021
Program: BBA Max. Marks: 40

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ability to examine, explain, modify or develop concepts discussed in class.
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SITUATIONS/CASE LAWS: __________________ _____ _ [03 Each=24 Marks]

QUESTION: 01 [03 Marks]

Mr. Farhan offered to buy his nephew's horse for Rs 100,000 in a letter, stating that "if I hear
nothing more about him, I shall consider the horse mine." The nephew did not respond, but he
did tell Bilal's auctioneer not to sell the horse since he wanted to sell it to Mr. Farhan. Bilal
made a mistake and sold the horse. A lawsuit was launched against Bilal by Mr. Farhan. Will he
be successful?
Decision:
In this case there was no contract for the horse between Mr. Farhan and his nephew. There had not
been an acceptance of the offer from his nephew. Silence did not amount to acceptance and an
obligation cannot be imposed by another. Any acceptance of an offer must be communicated
clearly. Although the nephew had intended to sell the horse to the complainant and showed this
interest, there was no contract of sale. Thus, the nephew’s failure to respond to the complainant
did not amount to an acceptance of his offer. Mr. Farhan will not sue to Bilal because there is no
contract.

QUESTION: 02: [03 Marks]

Mr. Haleem offered Mr. Taufeeq Rs. 950,000 to sell her apartment. Mr. Taufeeq stated that the
apartment will be his for Rs. 830,000. Mr. Haleem declined to sell his apartment at this price to
Mr. Taufeeq. Mr. Taufeeq agreed to pay the original sum for the apartment a day later. Is Mr.
Haleem obligated to sell Mrs. Taufeeq's apartment to Mr. Taufeeq?
Decision:
A counter-offer is an offer made in response to another offer. Because a counteroffer serves as a
rejection, it completely voids the original offer. This means that the original offer can no longer be
accepted. That’s why Mr. Haleem is not obligated to sell her apartment to Mr. Taufeeq.

QUESTION: 03: [03 Marks]

Mr. Maesam offered Mr. Miqdad Rs. 50,000 for his cell phone. “I will pay Rs 40.000 for it,” Mr.
Miqdad responds. Mr. Maesam is adamant about not selling at this price. Mr. Miqdad then makes
an attempt to make the initial offer, but Mr. Maesam refuses to sell his cellphone. Discuss the
legal situation?
Decision:
A counteroffer functions as both a rejection of an offer to enter into a contract, as well as a new
offer that materially changes the terms of the original offer. Because a counteroffer serves as a
rejection, it completely voids the original offer. This means that the original offer can no longer be
accepted.  The Mr. Miqdad(offeree) introduces a new offer to Mr. Maesam(offeror) and the
counter-offer kills the original offer which is no longer be accepted. After making a counter-
offer, the original offeree means Mr. Miqdad becomes offeror and the original offeror Mr.
Maesam becomes offeree.

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QUESTION: 04 [03 Marks]
Mr. Khalid agreed to sell his property, which was valued at around Rs. 90,000, for merely Rs.
9,000. Mr. Khalid's mother demonstrated that he was congenital idiot, incapable of
comprehending the deal. Is this offer still valid?
Decision:
This sale is void because Mr. Khalid was incapable of exercising his own judgment as to whether the act
he is about to do is in his interest or not. Mr. Khalid is incapable of understanding the nature of the
contract and it will be void since the very beginning.

QUESTION: 05 [03 Marks]

Mr. Zubair agreed to sell his firm, including goodwill, to Mr. Yasir for Rs. 15, 00,000. Mr.
Zubair agreed not to engage in any comparable business in Pakistan for the following ten years
under the terms of the agreement. After one month, Mr. Zubair established the same business in
the same city. Describe the legal situation.
Decision:
Mr. Zubair in this case would not be justified to start similar business in the same city. An
agreement which restrains the seller of goodwill from carrying on a business is valid if all the
following conditions are fulfilled:
 Such restriction must relate to a similar business.
 Such restriction must be within specified local limits.
 Such restriction must be for the time so long as the buyer or any person deriving title to the
goodwill from him canies on a like business in the specified local limits.
 Such specified local limits must be reasonable to the Court having regard to the nature of the
business.

QUESTION: 06 [03 Marks]

A,B,C and D enter in a shop. A says to the trader, “supply the goods required by B and if he
does not pay, I will C says to the trader, “Let D have the required goods. I will see that you are
paid.” State the nature of the contract between A and B and that of between C and D.
Decision:
The contract between A and B is a contract of guarantee but between C and D is a contract of
indemnity.

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QUESTION: 07 [03 Marks]
Will it be considered legitimate acceptance if Mr. Imran (Offeror) specifies a specific mode of
acceptance of an offer, such as “Send me an email or SMS by 6.00pm today,” but Mr. Ali
(Offeree) sends a letter by regular mail instead?
Decision:
The offeror, as the master of the offer, has the power to specify the precise time, place, and
manner in which acceptance must be communicated. This is called stipulation. If the offeror
stipulates a particular manner of acceptance, the offeree must respond in this way to form a valid
acceptance.

QUESTION: 08 [03 Marks]

Mr. Altamash, who works as the country head of a private company's marketing division, travelled
to Pakistan to complete particular responsibilities related to his company's new ongoing project in
Karachi. He arrived in Pakistan on July 15, 2018, and departed on November 15, 2019. Assess
Mr. Altamash’s residential status as a Resident or Non-Resident.
Decision:
Any person who stay in Pakistan for 182 days or more becomes a 'resident' of financial year, if he
stays in Pakistan for 182 days or more. Mr. Altamash’s residential status is a Resident because he
stays 488 days.

QUESTION: 09:
[16 Marks]
The following is the Agreement of Sale between Mr. Muzammil and Mr. Minhal for the Sale of
property. You are supposed to analyze the below ‘Agreement of Sale’ and explain following
essentials of valid contact in context of the following contact:
NOTE: (Each essential must not exceed 150 words).

1. Offer and Acceptance

Offer can be express or implied. Express means by using words while implies means
by conduct or using body language. Acceptance occurs when an offeree agrees to be
mutually bound to the terms of the contract by giving consideration, or something of
value like money, to seal the deal.
In this contract Mr. Muzammil offer his house express by using words to Mr. Minhal
and he accept it.

2. Capacity of Parties
Capacity of parties refers to each party who is entering a contract. Each is required by
law to have the mental and intellectual capacity to understand the terms of the
contract and to make the decision to enter it.
a. Legal Age
This is the age at which a person gains the legal status of an adult. However,
almost all states set the base legal age as 18 years old.

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 Mr. Muzammil and Mr. Minhal both are at the age of adult as mention in
contract.
b. Sound Mind
A sound mind means the person has sufficient mental capacity to understand
their actions.
c. Convicted
A person is guilty of a crime according to law. He/she have been declared
guilty of a criminal offence by the verdict of a jury or the decision of a judge.

3. Consideration
It is something of value given to the party in exchange for contractual promises.
Mr. Minhal gave Rs.90, 00,000/- to Mr. Muzammil for the property which was
offered.

4. Free Consent

Free Consent means the absence of any kind of coercion, undue influence, fraud,
misrepresentation or mistake. Therefore consent given under anyone of these has the
potential to invalidate the contract. It also means contract without errors. These errors
are folllowing;
a. Coercion
It is the committing or threatening to commit any act forbidden by law.
b. Under Influence
It is the inappropriate pressure applied by a more powerful party on a less
powerful party to enter into a legally binding agreement against their will.
c. Fraud
It occurs when a person knowingly makes a false statement in order to have
someone else agree to a contract.
d. Misrepresentation
It is the giving of false information by one party to the other before the
contract is made which induces them to make the contract.
e. Mistake
It is an incorrect understanding by one or more parties to a contract.

In this contract Mr. Muzammil and Mr. Minhal both agree upon the same thing and in
the same sense without any of the above error. It means they agree on the same
property with Measuring 120 Square Yards, in the Project/Society Star Appt. Namely
‘Gulistan-e-jaudar’’, in Block No. 13, Situated at KDA Scheme at Rs.90, 00,000/-.

5. Legal Object
The object of the contract should be not prohibited by law.
The house which was offer by Mr. Muzammil to Mr. Minhal is not prohibited by law.

6. Not declared as void

Legally, a void agreement means the contract or agreement is no longer enforceable.
Mr. Muzammil and Mr. Minhal agree on contract and make it enforceable from both
sides.

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 7. Definite/ Certain
The offer must be sufficiently specific to allow the offeree to understand and accept
the offer. Same thing both parties in mind during a contract.
In this contract Mr. Muzammil specifically tell the address of the house with floor and
area to Mr. Minhal.

8. Legal formalities
Legal formalities if any required for particular agreement such as registration, writing,
they must be followed. Writing is essential in order to affect a sale, lease, mortgage,
gift of immovable property etc. it defer from person to person or contract to contract.
In terms and condition no.3 that the vendor hereby delivers to the vendee all deeds,
Document, receipts and writing etc.

Agreement of Sale
This Agreement of Sale is made at Karachi, this __01_ day of _June______, 2020
Between

____________Mr.
Muzammil______________________________________________, Muslim, adult,
holding C.N.I.C. No.__________________, resident of ______
_____________________________________________________________________
___________, hereinafter called the Vendor Party of the First Part:

And

___________Mr.
Minhal__________________________________________________, Muslim, adult,
holding C.N.I.C. No.__________________, resident of ______
_____________________________________________________________________
_________, hereinafter called the Vendee Party of the Second Part:

(Both expression shall wherever the context so permits, mean and include
their Heirs, Executors, Administrators, Successors, and Assigns).

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 Witnesseth as Under:

Whereas the aforesaid Vendor is at the date of these presents seized and possessed of
and is otherwise well and sufficiently entitled to a Property Residential
Bearing No. , on Floor, Measuring ______120____Square Yards, in
the Project/Society Star Appt. Namely ‘Gulistan-e-jaudar’______________
_________________________’, in Block No. 13 , Situated at KDA Scheme No.
, Namely _________________Karachi, hereinafter called the “SAID PROPERTY”.

And Whereas the Vendor agrees to sell and the Vendee above named agrees to
purchase the ‘Said Property’ for a lump sum price of Rs.90,00,000/- (Rupees Nine
Million Only) on the following terms and conditions:
1. That the Vendor has been received a sum of Rs.90,00,000/- (Rupees Nine
Million Only) through Cash/Cheque/Pay Order
No._______________________________ ______________________, and
Rs.____________/- (Rupees ____________
_______________________________________________ only) through
Cash/Cheque/Pay Order No._____________________________________
________________________, from the aforesaid Vendee, the above said both parties
is mutually agreed for the above said schedule being FULL & FINAL settlement,
towards the said sale consideration, and the Vendee this day paid full and final
settlement well and truly paid by the Vendee to the Vendor, receipt whereof the said
Vendor do hereby fully admit & acknowledge and passed a separate receipt as well.
2. That the Vendor also executed and signed of all relevant documents for
transfer of the said property in favour of Vendee.
3. That the Vendor has this day delivered vacant peaceful possession of the said
property with all the documents, papers, forms, receipt etc., to the Vendee, who will
henceforth be sole and absolute owner of the ‘Said Property’ and shall have, occupy,
possess and enjoy the peaceful possession and profits thereof to which the said
Vendor shall have no claims, and concern therewith.
4. That the Vendor has already cleared all the dues of all relevant
authorities/concerned Department/Society/Corporation, and other dues if any, in
respect of the ‘Said Property’, at Vendor’s own cost and expenses upto date.
5. That the Vendor do hereby undertakes to keep safe, harmless, indemnified,
protected and secured to the Vendee by the Vendor’s own cost and expenses, to the
Vendee, if anybody inside or outside Vendor’s family set up any title, interest or
claim on the ‘Said Property’ or any part or portion thereof the Vendor do hereby
declare that the Vendor shall be responsible in the title or the Vendee is jeopardized
in any way.
6. That all the expenses for attending the transfer of the ‘Said Property’, such as

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Transfer Fee, Charges, Legal Fee, etc. and other expenses shall be borne and paid by
the Vendee.
7. That the Vendor do hereby declared that the ‘Said Property’ is free from all
sorts of claims, liens, burdens, encumbrances, mortgage, suit, dispute, proceeding and
adverse possession.
8. That the Vendor’s hereby agrees that if any hurdle, obstacles, objections will
be found during the transaction in respect of ‘Said Property’ then Vendor shall be
liable to remove the same.

9. That the Vendor further agrees, to be ready and prepared to sign the all
application documents wherever needed and Vendor shall appear before the
authorities concerned in this connection till the property is finally transferred in favour
of the Vendee.

IN WITNESS WHEREOF the parties hereto have hereunto set and subscribed their
respective hands at Karachi, the day, month and the year first above mentioned.
Witnesses :
1. Vendor:
Name: Name:
C.N.I.C. No. C.N.I.C. No.

2. Vendee:
Name: Name:
C.N.I.C. No. C.N.I.C. No.

RECEIPT

Vendor has been received a sum of Rs.90,00,000/- (Rupees Nine Million Only)
through Cash/Cheque/Pay Order No.______________________________
_____________________, and Rs.____________/- (Rupees _____________
_______________________________________________ only) through
Cash/Cheque/Pay Order No._____________________________________
________________________, from ____________________________________,
being FULL & FINAL settlement towards the total sale consideration of my
Property Residential Bearing No. , on Floor, Measuring
______120____Square Yards, in the Project/Society Star Appt. Namely
‘Gulistan-e-Jaudar’______________ _________________________’, in Block No.
13 , Situated at KDA Scheme No. , Namely _________________Karachi, the
above named Vendee, who will hence forth be the sole and absolute Owner of the

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Said Property, and I, also hereby delivered vacant peaceful possession of the said
property with all Original Documents, Receipts, Forms, which were in possession,
custody.
Karachi,
Dated : ______________.
Signature of the Vendor
Name:
C.N.I.C. No. _________________

****************************Best of Luck**************************

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