Continues Assignment for BBS III Years' 2080

The Students are required to give their answer in their own words as far as practicable.
The figure in the margin indicates full marks.
[5x10=50]
1. What are the provisions implied in an arbitration agreement where the parties
proceed with the arbitration without intervention of the Court?
From the perspective of business law, an arbitration agreement is a contract in which the
parties agree to refer any dispute arising out of their relationship to a private tribunal,
rather than a court of law. By doing so, the parties waive their right to sue each other and
accept the arbitrator's decision as final and binding. An arbitration agreement can be a
separate document or a clause within a larger contract.

When the parties proceed with the arbitration without intervention of the court, they
imply certain provisions in their arbitration agreement, such as:

- The scope of the arbitration agreement, which defines the types of disputes that can be
submitted to arbitration and the parties that are bound by it .
- The seat of the arbitration, which determines the procedural law and the supervisory
jurisdiction of the arbitration.
- The governing law of the arbitration agreement, which may be different from the
governing law of the main contract and affects the validity and interpretation of the
arbitration agreement.
- The choice of rules, which specifies the institutional or ad hoc rules that will apply to
the arbitration process.
- The language of the arbitration, which affects the communication, translation and
interpretation issues in the arbitration.
- The number and appointment of arbitrators, which influences the composition,
qualification and impartiality of the arbitral tribunal.
- The specifying arbitrator characteristics, which may include certain criteria such as
nationality, expertise or experience that the arbitrators must meet.
- The consolidation and joinder provisions, which allow for multiple disputes or parties to
be joined in a single arbitration proceeding under certain conditions.
- The multi-tiered clauses, which require the parties to attempt other methods of dispute
resolution such as negotiation or mediation before resorting to arbitration.

These provisions are implied by the parties' conduct and consent to arbitrate without
court intervention. However, it is advisable for the parties to expressly include these
provisions in their arbitration agreement to avoid ambiguity, uncertainty and potential
challenges to the arbitration process or outcome.
2. Under what circumstances is an insolvent discharged? What are the effects of such a
discharge?

An insolvent is a person who has insufficient assets to discharge his or her debts and
liabilities. In some jurisdictions, an insolvent can be discharged by a court order after
 undergoing a legal process of insolvency or bankruptcy. The circumstances and effects of
such a discharge may vary depending on the applicable law and the nature of the
insolvency.

One possible circumstance for an insolvent to be discharged is when he or she has

completed a corporate rescue plan under the supervision of an administrator or a
liquidator. A corporate rescue plan is a scheme that aims to restore the viability of an
insolvent company or to achieve a better outcome for the creditors than liquidation. A
discharge under this circumstance may have the effect of releasing the insolvent from
some or all of his or her debts and obligations, subject to certain conditions and
exceptions.

Another possible circumstance for an insolvent to be discharged is when he or she has

obtained the consent of all the creditors to whom he or she owes money. This may be
done by entering into a voluntary arrangement or a composition with the creditors,
whereby the insolvent agrees to pay a certain percentage or amount of his or her debts
over a period of time. A discharge under this circumstance may have the effect of binding
all the creditors to the terms of the arrangement or composition, and preventing them
from taking any further action against the insolvent.

A third possible circumstance for an insolvent to be discharged is when he or she has

been adjudged insolvent by a court and has satisfied certain requirements imposed by the
court. These requirements may include paying a dividend to the creditors, surrendering
his or her assets to a trustee, cooperating with the trustee and the court, and refraining
from engaging in any fraudulent or dishonest conduct. A discharge under this
circumstance may have the effect of terminating the insolvency proceedings and restoring
the insolvent's legal capacity and status, subject to certain restrictions and limitations.

The discharge of an insolvent may have various legal and practical implications for the
insolvent and his or her creditors. For example, it may affect the insolvent's ability to
obtain credit, enter into contracts, hold public office, or act as a director of a company. It
may also affect the creditors' rights to recover their debts, enforce their security interests,
or pursue any remedies against the insolvent. Therefore, it is important for both parties to
understand the consequences of a discharge before agreeing to it or applying for it.
3. A holder in due course gets a title free from equities' Explain the statement
and discuss the various privileges of a holder in due course.
From the perspective of business law, a holder in due course is a person who acquires a
negotiable instrument, such as a cheque or a promissory note, in good faith and for value,
without any notice of any defect in the instrument or any claim against it. A holder in due
course gets a title free from equities, which means that he or she can enforce the
instrument against the original parties, regardless of any defenses or objections that they
may have. The statement implies that a holder in due course has a superior right to the
instrument than the previous holders or the maker.
The various privileges of a holder in due course are:
- He or she can sue on the instrument in his or her own name and recover the full amount
due on it.
 - He or she is not affected by any fraud, duress, illegality, or lack of consideration that
may have vitiated the contract between the original parties.
- He or she is not bound by any personal or equitable defenses that the original parties
may have against each other, such as set-off, counterclaim, or estoppel.
- He or she is not liable for any stamp duty or other taxes that may be payable on the
instrument.
- He or she can transfer the instrument to another person and confer the same rights and
privileges to him or her.
4. What is a contract of sale of goods? Discuss the essential characteristics of a
contract of sale of goods.
A contract of sale of goods is a legal agreement between a seller and a buyer for the
transfer of ownership of goods in exchange for a price. According to the Sale of Goods
Act 1979, a contract of sale can be either a sale or an agreement to sell, depending on
whether the ownership passes at the time of the contract or at a future date. A contract of
sale of goods has some essential characteristics, such as:

- The subject matter of the contract must be goods, which are movable and tangible
property.
- The seller must have a right to sell the goods or be able to pass a good title to the buyer.
- The buyer must pay or agree to pay the price for the goods, which must be fixed or
determinable.
- The contract must be made by offer and acceptance, which can be express or implied by
conduct.
- The contract may contain express or implied terms, which govern the rights and
obligations of the parties.
5. Can silence be fraudulent? What remedies are available to a party who has been
induced to enter into an agreement by fraud?
Silence can be fraudulent if it amounts to a deliberate concealment of a material fact that
the other party is entitled to know. This is also known as silent fraud or fraudulent
nondisclosure. For example, if a seller of a house fails to disclose a serious defect that
they are aware of, such as a termite infestation, they may be liable for fraud.

The remedies available to a party who has been induced to enter into an agreement by
fraud depend on whether they want to rescind or affirm the contract. Rescission means
canceling the contract and restoring the parties to their original positions before the
contract was made. Affirmation means keeping the contract in force and suing for
damages to compensate for the losses caused by the fraud.

If silent fraud happens, the non-liable party can usually:

- Rescind (cancel) the contract and be compensated for any consideration (usually
money);
- Affirm the contract agreement and sue to receive a damages award (for example, if the
contract property has decreased value).
The choice of remedy may depend on various factors, such as the nature and extent of the
fraud, the availability of evidence, the time limit for bringing a claim, and the preference
of the aggrieved party.