Table of Contents

Lecture Title Page No.

1 Introduction to business and labour laws & legal system of Pakistan 1
2 Concepts and definitions of law 7
3 Classification & sources of law 9
4 Contract act – scope & significance 17
5 Contract act – definition & scope 20
6 Consideration & essentials of contract 26
7 Contracts – essentials and kinds 31
8 Kinds & legal capacity of parties to a contract 36
9 Legal capacity and free consent 44
10 Free consent 49
11 Free consent – fraud & misrepresentation 55
12 Void agreements 62
13 Contingent contracts & performance of contracts 67
14 Performance of reciprocal promises 72
15 Performance & discharge of contracts 77
16 Modes of discharge of contract 83
17 Breach of contract 89
18 Remedies for breach of contract 94
19 Contract of guarantee & indemnity 98
20 Contracts of bailment, pledge & agency 102
21 Contract of agency 107
22 Contract of agency 113
23 Law of partnership – kinds & mutual rights & duties 120
24 Law of partnership 125
25 Companies ordinance, 1984 130
26 Law relating to companies 135
27 Law relating to companies 139
28 Establishment of non banking finance company & winding up of companies 144
29 Winding up & SECP act, 1997 148
30 SECP & code of corporate governance 152
31 Code of corporate governance 156
32 Negotiable instruments 160
33 Negotiable instruments 165
34 Negotiable instruments—endorsement & negotiation 170
35 Transfer of property 179
36 Law relating to sale of goods 184
37 Law of trust 190
38 Law of insurance 195
39 Industrial relations ordinance 199
40 Industrial relations ordinance 202
41 Industrial relations ordinance 205
42 Industrial relations ordinance 208
43 Industrial relations ordinance 211
44 National industrial relations commission 213
45 Labour laws 220
 Business and Labour Laws - MGT 611 VU
Lesson 1

INTRODUCTION TO BUSINESS AND LABOUR LAWS & LEGAL SYSTEM OF PAKISTAN

Objectives of the Course

This course has been designed with the objective of developing clear perception and understanding of the
students about the different laws concerning business and labour. This course would enable the students to
apply these laws in real life situations.

The course is comprised of the following modules containing different laws confronting the businesses and
labour force.

Course Management

MODULE 1

Scope of Law and Legal System of Pakistan

Topics /contents to be covered in this module:

1) Concept of law
2) Significance of law
3) Meaning and importance of jurisprudence
4) Kinds of jurisprudence including the following:
i) Analytical jurisprudence
ii) Historical jurisprudence
iii) Ethical jurisprudence
5) Definitions of law according to point of view of different jurists
6) Classification of law
7) Essentials of imperative law
8) Legal sources of law including the following:
i) Legislation
ii) Precedents
iii) Customs
iv) Agreements

MODULE 2

Law of Contract (Contract Act, 1872)

We shall start with the law of contract, which is a very important branch of law and is of great significance
for everyone whether an individual or a corporate entity or a government. Every one of us enters into
different contracts and these contracts do affect in our every day transaction and dealing. The influence of
the contract can be judged from the following:
ƒ Every purchase we make
ƒ Loan to a friend
ƒ Admission in the school / college
ƒ Ride one takes on a bus
ƒ Opening a bank account or taking a bank loan so on and so forth

Hence studying the general principles is of great importance for every one of us.

The contract is a binding force that holds the fabrics of any economic system. If there is no contracts and
there is no law at the back of these contracts, there will be chaos in the business world rather society at
large. The contracts give rise to rights and obligations amongst the contracting parties and law of contract

© Copyright Virtual University of Pakistan 2

Business and Labour Laws - MGT 611 VU
provides the mechanism through which It can be determined weather the promises or agreements between
the parties have legal binding and enforceable at course of law. Similarly the law regarding partnerships,
companies, negotiable instruments and other statutes outline in the modules or equally important for
individuals and business and shall be discussed at length.

Topics / contents to be covered in this module:

1) Definitions and concept of agreement, promise, promiser, promisee, consideration, void agreements
and proposal.
2) Concept and scope of consideration
3) Essentials of a valid contract including the following:
(i) Offer and acceptance
(ii) Legal relationship
(iii) Legal consideration
(iv) Competent parties
(v) Free consent of the parties

4) Concept of the legal capacity of contracting parties

5) Importance and scope of free consent
6) Kinds of contracts including the following:
(i) Valid contract
(ii) Voidable contract
(iii) Void contract
(iv) Unenforceable contract
(v) Express contract
(vi) Implied contract
(vii) Executed contract
viii) Executory contract
7) Contingent contracts
8) Performance of contracts
9) Performance of reciprocal promises
10) Discharge of contract
11) Different modes in which a contract is stands discharge including the following:
- By performance
- By impossibility of performance
- By agreement of parties
- By operation of law
- By breach of contract
12) Essentials of valid tender including the following:
- Unconditional--There is no obligation on the counter party to accept a conditional tender.
- Tender to be made at proper time and proper place.
- Tender should be in entirety as per stipulations of the agreement.
- In case of tender relating delivery of goods, the Promisee should be provided opportunity to
examine the goods according to the stipulations of the contract
- Tender must be offered to a person who is able to perform the promise under the contract
- Tender to be made to the Promisee or his agent
- In case of joint Promisee, tender can be made to any of the joint promises.
- In case tender of money, the exact amount should be mentioned.
13) Breach of contract
14) Remedies for breach of contract including the following:
- Suit for damages: Sec. 73
- Suit for compensation-- Party rightfully rescinding contract entitled to compensation: Sec. 75
- Suit for specific performance
- Suit for Injunction
15) Contracts of indemnity and guarantee
16) Contracts of bailment and pledge

© Copyright Virtual University of Pakistan 3

 Business and Labour Laws - MGT 611 VU
17) Contracts of agency
- Scope of contract of agency

MODULE 3

Law of Partnership (Partnership Act, 1932)

Topics / contents to be covered in this module:

a) Concept of partnership
b) Essentials and kinds of partnership
c) General duties of partners
d) Mutual rights and liabilities of partners

MODULE 4

Law relating to companies (Companies Ordinance, 1984)

Topics / contents to be covered in this module:

- Objects of Company’s Ordinance, 1984
- Scope of the company
- Different legal definitions
- Advantages of incorporation
- Formation of company
- Memorandum of association
- Article of association
- Prospectus of a company
- Effect of registration
- Kinds of shares
- Winding up of a companies
- Securities and Exchange Commission of Pakistan
- Concept of corporate governance

MODULE 5

Law of negotiable instruments

Topics / contents to be covered in this module:

- Concept, object and purpose of this Act
- Types of negotiable instruments
- Essentials of promissory note
- Essentials of bill of exchange
- Essentials of a cheque
- Types of cheques
- Concept of crossed cheque
- Distinguishing features between these instruments
- Endorsement
- Parties to negotiable instrument
- Negotiation of the instruments
- Discharge from liability

MODULE 6

Law relating to transfer of property (Transfer of Property Act, 1932)

© Copyright Virtual University of Pakistan 4

Business and Labour Laws - MGT 611 VU

Topics / contents to be covered in this module:

- Concept of transfer of property
- Sale of immovable property
- Concept of sale and agreement to sell
- Mortgages of immovable property, scope of mortgages and types of mortgages
- Lease of immovable property
- Essentials of lease
- Transfer of property through exchange
- Transfer of property through gifts
- Transfer of actionable claims

MODULE 7

o Law relating to sales of goods

o Carriage of goods by different modes

Topics / contents to be covered in this module:

- Scope of the Sales of Goods Act, 1932
- Concept and essentials of sales of goods
- Classification of goods
- Concept of condition and warrantee
- Performance of contract of sales of goods
- Carriage of goods
- Carriage by land
- Carriage by sea
- Carriage by air

MODULE 8

Law of trust

Topics / contents to be covered in this module:

- Law of trust
- Concept of trust
- Purpose of trust
- Duties and liabilities of trustees
- Rights of trustees
- Extinction of trust
- Revocation of trust.

MODULE 9

Law of insurance

Topics / contents to be covered in this module:

- Concept of insurance
- Essentials of a contract of insurance
- Classification of insurance business
- Life insurance
- Fire insurance
- Marine Insurance

MODULE 10

© Copyright Virtual University of Pakistan 5

 Business and Labour Laws - MGT 611 VU
Labour laws

Topics/ contents to be covered in this module:

1) Industrial Relations Ordinance, 2002
a) definitions
b) trade unions
c) worker’s participation and dispute resolution
d) Labour courts:
i) Procedure and powers
ii) Awards and decisions
iii) Appeal to the High Court
2) National Industrial Relations Commission
3) Law Relating to Compensation to Workmen
4) Definitions
5) Workmen compensation
6) Commission
7) Law Relating to Factories
i) definitions
ii) health and safety standards for factories
8) Penalties
9) Law relating to payment of wages
10) Employees social security ordinance, 1965
i) definitions
11) Employees social security institutions
12) Contribution for social security
13) Benefits for workers
14) Determination of claims
15) Social security courts
16) Offences and prosecutions

What is Law?
Everyone around us talks about law according to one’s own perception. Before studying the statutory
provisions of law, interpretation and significance of law, it is important to know what law is all about. Law
in general sense defined as under:
“The law consists of rules that regulate the conduct of individuals, businesses, and other organizations
within society”

Significance of Law
Law is to maintain rights, uphold justice and redress wrongs. Law ensures public order, balance, harmony,
peace among the persons within the state and inter-states. The legal experts term signs the civil law as
jurisprudence. Some other concepts of jurisprudence are given below:
“Jurisprudence means the knowledge of law, or knowledge of just and unjust. It deals with laws that are
enforceable by the courts”.

Kinds of Jurisprudence
The jurisprudence has been divided into following branches:
• Analytical Jurisprudence
• Historical Jurisprudence
• Ethical Jurisprudence
Analytical jurisprudence
It studies the principles of law as it exists now.

Scope of Analytical jurisprudence

© Copyright Virtual University of Pakistan 6

Business and Labour Laws- MGT 611 v
Its scope is enumerated below:
• Analysis of the law as it exists
• Treatment of a concept in its elementary sub-divisions
• Study of the legal source of law

©Copyright Virtual University of Pakistan 7