An example of Journal-
Ledger-Trial Balance
Tuesday, March 20, 2012
Saturday, March 17, 2012
Thursday, March 15, 2012
Wednesday, March 14, 2012
The Law Relating to Carriage-1930
The Law Relating to Carriage-1930
Legislation relating to carriage:
The law relating to carriage may be studied under three heads:
1)Carriage by Land, including inland navigation
2)Carriage by Sea and
3)Carriage by Air Act-1972
The statutes ( a law that is passed by a parliament) relating to carriage are mentioned bellow-
1)Carriage by Land-
i) The Common Carriers Act-1865
ii) The Railway Act-1890
2) Carriage by Water-
i) The Bills of Lading Act-1856
ii) The Carriage of Goods Act by Sea-1925
3) Carriage by Air-
i) The Carriage by Air Act-1934
Carriers
1.Definition:
Any person or organization, by an express or implied contract, with or without remuneration, carries goods and/or passengers, is called “Carrier”.
Carriers may be classified into i) carriers of goods and ii) carriers of passengers
Another important classification of carriers are-
i)Common Carriers/ Public Carriers
ii)Private Carriers
Common Carriers
1.Definition:
The common carriers are those who are prepared to carry the goods of anyone without discrimination.
The Common Carries Act-1965 defines a common carrier as any individual, firm, or company (other than the govt.) who transport goods, as a business, for money, over land or inland waterways, without discrimination between different consignors.
If a carrier reserves to himself the right to reject an offer he is not a common carrier. Example: A lorry of a transport company or a tempo.
( Belfast Ropework Co., V Bullshell, 1918)
Characteristics of a common carrier:
i)(a) It may be a firm or an individual or a company. But the govt. is not included in the category.
ii)(b) Only carrier of goods come within the definition. A carrier of passengers is not a common carrier.
iii)(c) A common carrier is one who carries goods for business or money.
iv)(d) Who carries goods occasionally is not a common carrier.
(e) Also one who carries goods free is not a common carrier.
(f) A common carrier is one who is ready to carry the goods of any person without any discrimination.
(g) The term common carrier is applied only in the case of carriage by land and over inland waterways.
Tuesday, March 13, 2012
Sunday, March 11, 2012
The Insolvency Act-1997
The Insolvency Act-1997
Procedure of adjudication
What is the order of adjudication?
The order of court by which a person is declared to be insolvent is called the Order of adjudication.
Before the court can pass an order of adjudication there must be a petition presented to it either by a creditor or by the debtor. The petitioning creditor or debtor must fulfill certain conditions.
Conditions of a creditor’s petition:
The following conditions must be fulfilled before a creditor can present a petition for the adjudication of a person as insolvent:
1)The amount owned must be Tk 500,000 or more.
2)The debtor must have committed an act of insolvency within one year before the presentation of the petition.
3) A secured creditor is one who holds some movable or immovable property of the debtor out of which he can realize his claims.
A secured creditor can present an insolvency petition if the following conditions are satisfied:
a)He abandoned his security in favor of all the creditors, or
b)The security is insufficient to meet his claim of minimum Tk 500,000.
Conditions of a debtor’s petition:
1)His debt amount of Tk 500,000 or
2)He has been arrested and imprisoned in execution of the decree of any court for the payment of money, or
3)An order of attachment in execution of a money decree has been made and is subsisting against his property.
Who can not be declared insolvent?
Any person, man or women, who has attained majority can be declared insolvent if the conditions laid down in the insolvency act.
The following persons can be considered:
a)(a) Minor: A minor is not personally responsible for his debts and is not capable of entering into contracts. Therefore a minor can not be adjudicated an insolvent.
b)(b) Lunatic: A lunatic can not be adjudged insolvent for debts. But he can be adjudged insolvent only for debts incurred by him while he was sane.
a)(c) Deceased person: A dead man can not be declared insolvent. If a debtor died after the presentation of the insolvency petition, his estate will be administered by the official assignee.
b)(d) Convict: A prisoner in the jail can be declared insolvent.
a)(e) Companies: A company can not be declared insolvent. Because companies are directed by the Company Act-1994 approved by the govt.
b)(f) Govt. Body: Any govt. body can not be declared insolvent. If any creditor claim any due from the govt. organization, it is considered as the liability to the government. And government is bound to pay the amount at any time.
(g) Partner: Since every partner is responsible for his debts of the firm, the creditor of a firm can file an insolvency petition against any partner or all of the partners for any debt due and owned by the firm.
The Insolvency Act-1997
The Insolvency Act-1997
When can a person be declared insolvent?
Two conditions must be satisfied before a person can be adjudicated insolvent:
(i) he must be a debtor, i.e., he must owe money to others and his assets must be insufficient to meet all claim upon them;
(ii) the debtor has committed an ‘ act of insolvency’.
Act of Insolvency
An act of insolvency is some act of the debtor which shows that he is financially embarrassed.
Only those acts which are listed as such by the act are considered to be acts of insolvency.
Each of the following acts committed by the debtor is an act of insolvency:
(1). If he makes a transfer of all or substantially all his property to a third person for the benefit of his creditors generally.
(2). If he makes a transfer of his property or any part thereof, with the intend to defraud or to delay his creditors.
(3). If he makes a transfer of his property or any part thereof it would under this act or any other enactment for the time being in force, be void as a fraudulent preference if he were adjudged as insolvent.
(4). If, with intent to defeat or delay his creditors-
i) he departs from or remain out of Bangladesh
ii) he departs from his dwelling house or usual place of business or otherwise absent himself
iii) he secluded (to keep oneself away from contract with other people) himself so as to deprive his creditors of the means of communicating with him.
(5). If any of his property has been sold or attached for a period of not less than 21 days in execution of the decree of any court for the payment of money.
(6). If he petitions to be adjudged an insolvent
(7). If he gives notice to any of his creditors that he has suspended, or that he is about to suspend, payment of his debt.
(8). If he is imprisoned in execution of the decree of any court for the payment of money.
(9). If a creditor has served an “insolvency notice” in respect of any decree or order for payment of money, and if the debtor has not paid the money within the period specified in notice.
The rules regarding notice are stated below:
(a) The notice must be given according to the prescribed form and prescribed manner
(b) It must specify the amount due.
(c) It must specify the period for its compliance, i.e., not less than 01 month.
(d) It must specify the consequences of non-compliance ( the practice of obeying rules).
What is the order of adjudication?
The order of court by which a person is declared to be insolvent is called the Order of adjudication.
Before the court can pass an order of adjudication there must be a petition presented to it either by a creditor or by the debtor. The petitioning creditor or debtor must fulfill certain conditions.
The Insolvency Act-1997
The Insolvency Act-1997
Origin of the Law of Insolvency
The law relating to Insolvency first introduced in this subcontinent in India. At that time there were two acts:
1). The Presidency Town Insolvency Act-1909:
which applied for Calcutta, Mumbai and
Madras
2). The Provincial Insolvency Act-1920: which
applies for the remain India.
After the independence of Bangladesh, both of the acts are approved by the first parliamentary session.
a)The first act was applied for Dhaka and
b)The second was applied for remain of the country.
But at last the act was changed again in 1997 that was known as –
“The Insolvency Act-1997”
What is Insolvency?
An insolvent is one who is unable to pay his debt. But no man can be called “ insolvent” unless the competent court declares him an insolvent.
Usually used to refer to a business, insolvency refers to the inability of a company to pay off its debts
Business insolvency is defined in two different ways:
1).Cash flow insolvency
Unable to pay debts as they fall due.
2).Balance sheet insolvency
Having negative net assets – in other words, liabilities exceed assets. It includes its contingent and prospective liabilities.
The object of the insolvency
Insolvency legislation has two fold objective:
(i) Protection of debtors and
(ii) Safeguarding the interests of creditors , as far as possible.
These objects are sought to be achieved in the following way:
(a) Distribution of insolvent’s property
(b) Cancellation of debt and removal of disqualification
(c) Benefits of creditors
(d) Fresh start in the life of debtors
(a)(a) Distribution of insolvent’s property:
After a person is declared insolvent by the court, his properties are taken over by an officer of the court, known as Official Assignee or the Official Receiver.
The properties are converted into cash and distributed among his creditors in proportion to the claim of each.
(b) Cancellation of debt and removal of disqualification:
After the distribution is complete, the unpaid debts are cancelled and the insolvent is allowed to engage in trade or services without any of his former obligations.
The creditor lose a part of their claims, the debtor gets a fresh start in life.
(c) Benefits of creditors:
It ensures the equitable distribution of the debtor’s remaining properties among all the creditors.
If there were no insolvency laws there would have been free to dispose of his properties in any way he liked. He might have wasted the properties or might have paid one creditors proportionately more than the other creditors.
(d) Fresh start in the life of debtors:
Prior to the passing of insolvency legislation, a debtor who was unable to pay debts was regarded as a sort of criminal and was very often sent to jail.
It was realized in course of time that inability to pay debt is more often due to misfortune than to misconduct and sending the debtor to jail is oppressive. Insolvency legislation provides a method by which the debtor can free himself from his past obligations and get a fresh start.
Wednesday, March 7, 2012
Sunday, March 4, 2012
The Contract Act-1872
Offer and Acceptance
5. Rules regarding offer:
► An offer may be express or may be implied from the circumstances-
When an offer is made by stating so in words or in writing, it is called Express offer. When an offer is implied from the conduct of a person, it is called an implied offer.
Implied off-”a transport company runs tramway cars along the streets. This is an offer by the company to carry passengers at the scheduled fares. The offer is accepted when a passenger gets upon on a tram of becoming a passenger.”
► An offer may be made to a definite person; to some definite classes of persons; or to the world at large-
An offer made to a definite person or a definite classes of person is called a specific offer.
An offer sent to all person or the world at large is called general offer.
► Legal relationship is required-
The offer must be one which is one capable of creating legal relationship. A society party or invitation to play cards is not a legal relationship.
►The terms of the offer must be certain, definite, unambiguous and not vague-
X says to Y, “I will give you some money if you marry Z”. This is not an offer. Because the amount of money is not certain
► A mere intention is not an offer-
A distinction is made, between an “offer” and a “statement of intention”.
Intention to sell-a label on an article in a shopkeeper’s showcase stating ‘price Tk 10’ is considered to expression of an intention to sell the article at Tk 10. It is not an offer. The intended purchaser who wishes to buy is the proposer. The shopkeeper may or may not accept the proposal.
►An offer must be communicated to the offeree-
A person can not accept an offer unless he knows of the existence of the offer.
P offers a reward to anyone who returns his lost dog. Q finding the dogs brings it to P without having heard of the offer. Held, there was no contract between P and Q and the reward can not be claimed.
►An offer may be conditional-
An offer may be conditional. In such cases, the conditions must be clearly communicated to the offeree.
If a person accept an offer without knowledge of the condition, the offerer cannot claim for fulfillment of the condition.
►An offer may be conditional-
Ex-Strict enforcement- X agreed to buy goods from Y and signed an order form given by Y containing a number of clauses in small print, without reading them. Held, clauses were binding on X. (L’Estrange V. Graucob Ltd)
Ex-Strict enforcement-T, who could not read, took an excursion ticket on the railway. On the front of the ticket printed “for conditions see back”. One of the conditions was that the railway company would not be liable for personal injuries to passengers. T was injured. Held, T was bound by the conditions and could not recover any damage
►An offer may be conditional-
Ex-against public interest-M delivered a new saree to a laundry for washing. On the back of the printed receipt it was stated that the customer would be entitled to recover only 15% of the market price of the article in case of loss. The saree was lost owing to the negligence of the Laundry. In a suit by M it was held that the term was unreasonable. Such a term would give a premium on dishonesty and is against the public interest. (Lily White V. R. Munnuswami)
►An offer may be conditional-
A contract formed on a conditional offer is valid. The terms of the contract can be constructed strictly or leniently.
Conditional offers are invalid under the following circumstances:
i)Lake of reasonable notice
ii)Unreasonable terms
iii)Breach of fundamental rights
iv)Tortuous (usually disapproving) action by offerer.
►Printed contracts:
Printed contracts or standard forms of contracts often contain a large number of terms and conditions which exclude liability under this contract.
For example, the life insurance corporation, the railway administration, statutory corporation and big companies issue printed forms of contracts.
The Contract Act-1872
Offer and Acceptance
1.Formation of contract:
All contracts are made by the process of a lawful offer by one party and lawful acceptance by the other party.
X says to Y “will you bye my house for Tk 50,000? This is an offer. If Y says “yes”, the offer is accepted and a contract is formed.
2.An “offer” involves the making of a “proposal”.
Proposal means ‘when one person signifies to another his willingness to do or to obtain from doing anything, with a view to obtain the assent of other’.
3. Offer:
A proposal is also called an offer. The promisor or the person make the offer is called offeror. The person to whom the offer is made is called the offeree.
4. Promise :
A proposal when accepted becomes a promise.-Sec.2 (b)
The person making the proposal is called the ‘promisor’ and the person accepting the proposal is called the ‘promisee’.
Examples:
a) Specific offer-X says to Y “will you bye my house for Tk 50,000? This is an offer. If Y says “yes”, the offer is accepted and a contract id formed.
a)(a) Specific offer-P puts up a notice offering to pay a reward of Tk 100 to any student who finds out and returns a book lost in the NUB. Q a student, read the notice and then finds and brings the book to P. P’s notice is an offer and Q is the acceptor.
b)(b) General offer-a transport company runs tramway cars along the streets. This is an offer by the company to carry passengers at the scheduled fares. The offer is accepted when a passenger gets upon on a tram of becoming a passenger.
The Contract Act-1872
Headlines of the Essential Elements of a valid contract
Now, we can say that, every contract is an agreement but all agreements are not contracts. The legal obligations are enforced by the court.
These essential elements are discussed below:
1.Offer and acceptance
There must be a lawful offer by one party and a lawful acceptance by the other party.
The word ‘lawful’ implies that the offer and acceptance must conform to the rules laid down in the contract act.
Sec-2
2.Legal relationship
There must an intention among the parties that the agreement shall create legal relationship.
An agreement to dinner at a friend’s house is not an agreement.
But an agreement to buy and sell is agreement intended to create legal relationship and is therefore a contract.
Sec-3
3.Lawful consideration
Subject to certain objections, as agreement is legally enforceable only each of the parties give something and get something.
An agreement to do something for nothing is usually not enforceable by law.
The something given or obtained is called “consideration”. It may be an ant to do something or not to do something.
4.Capacity of parties
The parties to an agreement must be legally capable of entering into an agreement, otherwise it can not be enforced by a court of law.
Lack of capacity arises from minority, lunacy, idiocy, drunkenness and from similar other factors.
If any of the parties of the agreement suffers from any such disability, the agreement is not enforceable by law, except in some special cases.
5.Free consent
In order to be enforceable, an agreement must be based on the free/genuine consent.
A consent will be said a genuine consent if it is free from coercion, undue influence, mistake, misrepresentation, and fraud.
A person guilty of such factors can not can not enforce the agreement.
6. Legality of the objectives
The object for which the agreement has been entered into must not be illegal, or immortal or opposed to public policy.
An agreement is unlawful in the following cases (Section-23):
i)i) If it is forbidden by law
ii)ii) If it is of such a nature that, if permitted, it would defeat the provisions of any law
iii) If it is fraudulent
iv) If it involves or implies injury to the person or property of another.
v) If the court regards it as immortal
vi) If the court regards it as opposed to public policy.
See examples.
7. Certainty
A contract create legal obligation.
The agreement must not be vague.
It must be possible to ascertain the meaning of the agreement.
Otherwise it can not be enforceable by law.
8. Possibility of performance
The agreement must be capable of being performed.
A promise to do an impossible thing can not be enforceable by law.
Possibility of performance means the “performance of the contract”.
Each party must perform or offer to perform the promise which he has made.
9. Void agreement
Void means not valid or legal. An agreement which does not satisfy the essential elements of a contract may be either (i) void or (ii) voidable.
X enters into a wagering agreement and borrowed Tk 100 from C for the purpose. The main agreement is void but the loan transaction being collateral to it is valid even though the creditor is aware of the purpose of the loan.
10.Written and legal formalities
A contract may be written, registered or even oral.
The terms of an oral contract are sometimes difficult to prove. Therefore important agreements are written.
Even registration is compulsory in some documentation.
The Contract Act-1872
Types of Contracts
On the basis of Validity:
1.1. Valid contract:
An agreement which has all the essential elements of a contract is called a valid contract. A valid contract can be enforced by law.
2. Void contract :
An agreement not enforceable by law is said to be void. A void agreement has no legal effect. It confers no rights on any person and creates no obligations.
3. Void able contract:
A void able agreement is one which can be avoidable. Until it is avoided, it is a good contract.
“An agreement which is enforceable by law at the option of the one or more of the parties, thereto, but not at the option of the others, is a void able contract.
Example-X coerces Y into entering into a contract for the sale of Y’s house to X. This contract may be avoided by Y. X can not enforced the contract. But Y, if he so desires, can enforce it against X.
4. Illegal contract:
A contract is illegal if it is forbidden by law; or is of such nature that, if permitted, would defeat the provisions of any law or opposed to public policy. These agreements are punishable by law. These are "void-ab-initio".
“All illegal agreements are void agreements but all void agreements are not illegal.”
Example-an agreement to commit murder, robbery or cheating.
5. Unenforceable contract:
Where a contract is good in substance but because of some technical defect cannot be enforced by law is called unenforceable contract. These contracts are neither void nor void able.
On the basis of Formation:
1.1.Express contract:
Where the terms of the contract are expressly agreed upon in words (written or spoken) at the time of formation, the contract is said to be express contract.
2. Implied contract:
An implied contract is one which is inferred from the acts or conduct of the parties or from the circumstances of the cases. Where a proposal or acceptance is made otherwise than in words, promise is said to be implied.
On the basis of Performance:
1. Executed contract: An executed contract is one in which both the parties have performed their respective obligation.
2. Executory contract: An executory contract is one where one or both the parties to the contract have still to perform their obligations in future. Thus, a contract which is partially performed or wholly unperformed is termed as executory contract.
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