...CHAPTER 1: INTRODUCTION CONTRACT OF SALE – One of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefor a price certain money or its equivalent. A contract of sale may be absolute or conditional. SALES 1. Contract of sale (absolute) • real obligation – obligation to give • remedies available: a. specific performance b. rescission c. damages 2. Contract to sell (conditional) • personal obligation – obligation to do • remedies available: a. resolution b. damages ESSENTIAL REQUISITES OF A CONTRACT OF SALE 1. consent 2. subject matter 3. price CHARACTERISTICS OF CONTRACT OF SALE: 1. Nominate - law gave it a name 2. Principal - can stand on its own; unlike accessory contract 3. Bilateral - imposes obligation on both parties a. obligation of seller – transfer ownership & deliver b. obligation of buyer – pay for price Consequence: power to rescind is implied in bilateral contracts 4. Onerous – with valuable consideration • Consequence: all doubts in construing contract to be resolved in greater reciprocity of interest 5. Commutative – equal value is exchanged for equal value • Test: subjective – as long as parties in all honesty that he is receiving equal value then it complies with test & would not be deemed a donation; but must not be absurd. • Inadequacy of price or aleatory character not sufficient ground to cancel contract of sale; inadequacy can show vitiation...
Words: 10225 - Pages: 41
...Islamic Contract Law TYPES OF COMMITMENTS 1. Wa‘d – • • • – وunilateral promise One party binds itself to perform a function for another Does not normally create legal obligation Legal obligation is created: • • Genuine need of the masses – (ر Contingent promise ا س )رد ا ز ن ز ا إذ ا 2. Muwaa‘ada – ا ة • • • • – bilateral promise Two parties performing two unilateral promises on the same subject Use of two unilateral promises can lead to a forward contract, which is impermissible Not allowed and non–enforceable according to majority (AAOIFI, IFA and others) Some Hanafi/subcontinent scholars allow it provided no other prohibition (excessive gharar or short selling) 3. ‘Aqd – – contract Promises do not constitute a contract • Difference between a contract and a bilateral promise is there is no proprietary transfer in bilateral promise ENFORCEABILITY OF PROMISES • • • Islam prohibits rolling 2 contracts into one (safaqah-fi-safaqah). Modern financial transactions often need to combine 2 contracts into one eg Hire Purchase. As Islam prohibits client signing agreement binding him to 2 contracts at the same time eg rent and purchase, how can a bank structure an Ijara Mortgage where there is a rental element and purchase element? How can a Bank offer an Islamic Mortgage yet still prevent itself having to hold huge assets on the balance sheet and potentially suffer massive losses on property disposals? Solution is to make client...
Words: 1081 - Pages: 5
...INTRODUCTION The contract law principles in Shariah Law are not different from English contract law principles. In English law, ‘contract is an agreement enforceable by law’. According to Islamic law, a promise may not be legally enforced although it is strongly recommended by religious and moral values to be fulfilled.[1] In Islamic law, contract is known as ‘aqd’ which means tie or bond. It means a contract binds the parties together. From the definition, the term ‘aqad is more or less of the equivalent of the technical term of contract in Western Jurisprudence. However, ‘aqad does not necessarily involve agreement (which is a necessary element in a conventional contract) because the term is also used to describe a unilateral juridical act which is binding and effective without the consent of the other party. Islam emphasizes on fulfilling contractual obligations. Allah says in the Quran, “O ye who believe, fulfil all of your obligations”[2] and also similarly in this surah which is stated “…So fulfil your engagement with them to the end of their term, for Allah loves the righteous”[3] Under Islamic law, to be a valid contract, there must have some elements in the contract. Those elements are sighah (ijab and qabul), contracting parties and subject matter. The first element is sighah (ijab and qabul) or offer and acceptance. There are three kinds of offer which are verbal offer (kalam), offer by conduct (‘amal’) and offer in writing...
Words: 3271 - Pages: 14
...[pic] LAC 4443 COMMERSIAL LAW INDIVIDUAL ASSIGNMENT ‘SHARIAH LAW OF CONTRACT’ |NAME |HANNA FAUZANA BINTI HAMDAN | |ID NUMBER |1110*** | |GROUP |TMC 2 | |LECTERUR’S NAME |MADAM MAHERAN BINTI MOHAMED | ‘Aqd’ was conjunction consent (tender expression on the one hand that held a contract) with qabul (expression of acceptance by other) which give effect to a contract. Qabul affinity binding agreement and both parties mutually agree of each of the parties involved in the contract bound to perform their respective obligations accordance with an agreed deal. ‘Aqd also is the two parties taking upon themselves an undertaking to do something. It is composed of the combination of an offer (ijab) and acceptance (qabul). The making of ‘aqd is connecting in a legal manner, one’s offer (ijab) and acceptance (qabul) with the other, in a way which will be clear evidence of being mutually connected. Allah said in the Quran: يَا أَيُّهَا الَّذِينَ آمَنُوا لا تَأْكُلُوا أَمْوَالَكُمْ بَيْنَكُمْ بِالْبَاطِلِ إِلا أَنْ تَكُونَ تِجَارَةً عَنْ تَرَاضٍ مِنْكُمْ “Oh you who are believe...
Words: 1513 - Pages: 7
...Written Assignment 1. a) From the information given a contract is necessary because according to the Statute of Fraud it states that sale of goods priced at five hundred dollars or more. This type of contract needs to be a writing or memorandum and signed. The essential terms of this writing are quantity, signed by party to be charged, name of parties, subject matter, and consideration. In this scenario there was a contract offer because Garvey had written offers for the Porpoise to Caldwell but we are not sure if Garvey met all the requirements of the Statute of Fraud law and then five days later he informed Caldwell that he is going to sell Porpoise to Montgomery someone totally different. Also it does not mention anywhere that Caldwell signed any contract and sent back to Garvey to prove his acceptance, so that is why I say there is no contract in this situation. b) According to the facts given a contract is necessary in this situation because according to the Statute of Fraud any goods priced at five hundred dollars or more needs to be a writing or memorandum and signed. This writing needs to include the quantity, signed by party being charged, name of parties, subject matter, and consideration. This applies to this situation because Priscilla is for $4200 which is way more than five hundred dollars. Garvey did offer a contract because he mailed a written offer but we are not sure if he completed all the requirements from the Statute of Fraud. However this is a...
Words: 982 - Pages: 4
...Executive Summary: This report focuses on the importance of contract between two parties before commencing final deal. It will discuss the major outlines required in a commercial contract, the essential terms and conditions which both parties agree to and the clauses upon which the deal is finalized. Since the case is based on sale of good it will therefore include terms and conditions on which the contract is formed and the desired actions from both parties. The terms on which the sale of good is made and the clauses which make the contract null and void. The report will discuss the contract from seller perspective including the processes involved and stages throughout the selling process through a commercial contract. However, the report will also consider the buyer perspective as no contract is formed without the consent of two independent bodies therefore the terms and conditions laid down by buyer on which the sale is to be made will also be highlighted. The contract serves as a purpose to cushion both the parties against any foreseeable losses and provide a guideline to perform a profitable deal which provides a mean to conduct business. Therefore contracts cover every concerned authority involved with definite understood terms upon which they agree and sign contract. Upon finalizing, the contract serves as a mean to seek the guideline for desired actions and basis of deal and as and when necessary might be used as a measure to prevent from any loses with the help of...
Words: 2323 - Pages: 10
...KULLIYYAH OF ECONOMICS AND MANAGEMENT SCIENCES ‘Comparison of Principles of Sale Contract between Conventional and Shari’ah Laws’ LAW 3512 COMMERCIAL LAWS (SECTION 3) Any form of cheating or attempt to cheat is a serious Offence which may lead to dismissal Introduction We are blessed as a human being on the earth as the only creature created by God who has the ability to think upon choosing between alternatives. Humans are associates with many labels and beliefs that they uphold throughout their life. Major differences of choosing between alternatives would be based on their framework of thinking mostly derive from their religions or beliefs. Speaking from Malaysia context, Islamic belief would be a stronger influence for Malaysian citizens before embarking into any decision. Although, Malaysia is known as the Islamic state but Malaysia still uphold conventional laws as the supreme laws for the state over Islamic Laws which ruled by the Federal Court. Islamic Laws would only covers family laws, inheritance and few specific issues among muslims[1]. We would further discuss on the framework of sale contract from Islamic and conventional point of view. Take a look around and it is apparent in our daily lives that transactions need to occur for us to carry on sustaining our needs and wants. As humans we ought to want things and we need to have goods that are essential for our daily lives in order to carry on living our lives...
Words: 6604 - Pages: 27
...one or both parties in the formation of a contract and may be used as grounds to invalidate the agreement. There are three types of mistake in the law of contract. These are common mistake, mutual mistake and unilateral mistake. A common mistake is where both parties hold the same mistaken beliefs of the facts. A common mistake ca only void a contract if the mistake of the subject matter was sufficiently fundamental to render its identity different from what was contracted, making the performance of the contract impossible. There are two situations of common mistake. These are the case of res extincta and the case of res sua. In the case of res extincta, there is a common mistake asto the existence of the subject matter of the contract. For example, if A agrees to sell his car to B and unknown to both persons, the car had at the time of sale been destroyed by fire, the contract will be void because A has innocently undertaken an obligation which he cannot possibly fulfill. The following case is an application of res extincta. In the case of Couturier v Hastie, Hastie dispatched a cargo of corn from Salonica and sent the chaterparty a bill of lading to their London agents so that the corn might be sold. The London agents employed Couturier to sell the corn and a person named Callander bought it. Unknown to the parties the cargo had become overheated and had been landed at the nearest port and sold, so that when the contract was made the corn was not really in existence...
Words: 1515 - Pages: 7
...the trial court, dated 30 August 1991 and 27 September 1991, in Civil Case No. 87-41058. The antecedents are recited in good detail by the appellate court thusly: "On July 29, 1987 a Second Amended Complaint for Specific Performance was filed by Ann Yu Asuncion and Keh Tiong, et al., against Bobby Cu Unjieng, Rose Cu Unjieng and Jose Tan before the Regional Trial Court, Branch 31, Manila in Civil Case No. 87-41058, alleging, among others, that plaintiffs are tenants or lessees of residential and commercial spaces owned by defendants described as Nos. 630-638 Ongpin Street, Binondo, Manila; that they have occupied said spaces since 1935 and have been religiously paying the rental and complying with all the conditions of the lease contract; that on several occasions before October 9, 1986, defendants informed plaintiffs that they are offering to sell the premises and are giving them priority to acquire the same; that during the negotiations, Bobby Cu Unjieng offered a price of P6-million while plaintiffs made a counter offer of P5-million; that plaintiffs thereafter asked the defendants to put their offer in writing to which request defendants acceded; that in reply to defendants' letter, plaintiffs wrote them on October 24, 1986 asking that they specify the terms and conditions of the offer to sell; that when plaintiffs did not receive any reply, they sent another letter dated...
Words: 4537 - Pages: 19
...TRANSACTIONS IN ISLAMIC LAW I TUTORIAL QUESTIONS 2 Mahal al-‘Aqd – Subject Matter of Contract: 1. (i) A Proton Waja car belonging to Saiful was stolen in April 2004 from a parking lot in Kuala Lumpur. Saiful lodged a report with the police promptly, but was not successful in recovering the vehicle. In June 2004, he gifted the car the whereabouts of which was still unknown to his friend Azhar. The car was found intact in July 2004. Upon being demanded by Azhar to handover the car, Saiful refused to deliver the car arguing that the previous contract of gift was not valid. Discuss. (7 marks) Sem I, 2004/2005 2. (i) Islamic law prescribes that the subject matter of a contract should fulfil certain conditions. State these conditions, and out of these, describe the two conditions that the subject matter should be identified with certainty and be capable of being readily delivered. (7 marks) Sem II, 2004/2005 3. Decide the validity of these contracts with the reasons for their validity or otherwise. (i) Iman sold a personal computer to Abu, but she was unsure about its specifications. (3 marks) (ii) Bank A sold a house to Aminah with two options of payment: RM20,000 if the payment is to be made in two years, or RM30,000 if the payment is to be made in 3 years, and it was accepted by Aminah. (3 marks) (iii) Abu paid a diver for 10 kg of fish that he will catch from Pedu lake. (3 marks) (iv) Omar pays a diver for whatever he may catch for him from Pedu lake on next Friday...
Words: 4489 - Pages: 18
...QUESTION 1 IF ONE OR BOTH PARTIES ENTER INTO A CONTRACT UNDER SOME MISUNDERSTANDING OR MISTAKEN ASSUMPTION, IN WHAT CIRCUMSTANCES WILL THE COURT INTERVENE TO HOLD THE CONTRACT VOID AND UNENFORCEABLE ON THE GROUNDS OF MISTAKE? In contract law, a mistake is an erroneous belief made by parties when contracting. Mistakes are not generally enforceable at the law court and are often treated as void or voidable. Mistakes are generally irrelevant, but exception to this places great emphasis on operative mistake which includes common mistake, mutual mistake and unilateral mistake. Mistakes or misunderstanding may render a contract void when the following are presents; * Mistake of the law; When a party enters into a contract, without the Knowledge of the law in the country, the contract is affected by a mistake making it unenforceable on the grounds of ignorance. Note also that the ignorance of the law is not an excuse. CASE Lydia a foreigner entered into contract with Amina in Ghana with the view that, Amina should supply heroine on a contract basis for a token of GHC 5,637,600 for every supply made. Unknowingly to Lydia that it is illegal to trade heroine in Ghana. Hence the contract is void and loses its enforceability at the law court. * Mistake of Fact; This happens where both parties enter into an agreement under a mistake as to a matter of fact essential to the agreement, the contract is declared void. For instance, ‘A’ agrees to buy a certain horse from ‘B’. It turns out...
Words: 3695 - Pages: 15
...Rule about Contracts: -common law/UCC uniform commercial code. UCC is for buying and selling goods, common law contract is for everything else, Party, subject matter, price,delivery, payment terms – all neds to be listed in common law Party and subject matter – 2 things for UCC- everything else is filled by the judge based on the reasonableness. Contract is a promise or set of promises for breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. Contract is a set of voluntary promises that the law will enforce for private parties. Sources of Contract Law:/ Law that governs contracts 1) Common law * First law of contracts * Law decided by the judges and they used statutory law to interpret the common law * Common law applies to contracts that have land or services as their subject matter. Eg employment, home etc * Party, subject matter, price, delivery, payment terms * General treatment of the common law for contracts can be found in Restatement of Contracts 2) UCC – uniform commercial code * Common law lacks uniformity * Businesses experienced great difficutly and expense when they contracted across state lines because of differences in state contract common law * To address the need for uniformity, the National Conference of Commissioners on Uniform State Laws and the American Law Institute worked to draft a set of commercial laws appropriate for business people, lawyers, and law...
Words: 544 - Pages: 3
...| SALE OF GOODS ACT, 1930 | | | master of finance and control (Part 1) September 30, 2011 Submitted by: Nishtha Tewari-2506 Aditi Rao-2560 Jasmeet Kaur-2562 SALE OF GOODS ACT, 1930 ACKNOWLEDGEMENT We would like to extend our gratitude towards Dr. Nidhi Jain for her guidance and constant supervision as well as for providing necessary information regarding the project & also for her support in completing the project. SALE OF GOODS ACT, 1930 CONTENTS I. Contract of Sale of Goods II. Overview III. Characteristics of a Contract of Sale of Goods IV. Sale v/s Agreement to sell V. Sale v/s Hire Purchase VI. Sale v/s Contract for Work and Labor VII. Kinds of Goods VIII. Perishing of Goods IX. The Price X. Modes of Price fixing XI. Agreement to sell at Valuation XII. Earnest or Deposit XIII. Stipulations as to Time XIV. Document of Title of goods XV. Conditions and Warranties XVI. Misrepresentation and Stipulation XVII. Conditions v/s warranties XVIII. When condition can be treated as warranty XIX. Implied Conditions XX. Warranties XXI. Implied Warranties XXII. Doctrine of Caveat Emptor XXIII. Exceptions to Doctrine of Caveat Emptor HISTORY BEHIND THE ACT * Sale of Goods act is a very old mercantile law. The Contracts of Sale of Goods was initially covered in Indian Contract Act, 1872 (Chapter V11) * Since the Indian Contract Act itself was a part...
Words: 8193 - Pages: 33
...Contract Law LAW OF CONTRACT Name: Institution: A contract can be simply defined as an agreement made by parties that is legally binding by its nature. It can also be defined as legally binding set of promises or promises (Lawrence & Elizabeth, 2007). A breach of any aspects of the agreement or a promise that constitutes a contract will lead to a subsequent remedy from the party that has been accused of the breach. The law of contract as shall be later discussed has provided for such remedies. The obligation to perform the duties that the law recognizes the contractual document or agreement specified. This defining characteristic of the contract is broadly known as enforceability. A contract is thus an agreement that is deemed enforceable. However, it is worthy to point out that while it is generally acceptable that all contracts are agreements, the reverse is not true. Not all agreements constitute a contract. The law of contract may classify contracts as follows: specialty or written contracts, contracts that are evidenced in writing, contracts that are under a seal and simple contracts. Specialty contracts are contracts, which the law specifies that they must be written. A formal structured document embodies a specialty or written contract. Examples of contracts that the law classifies as specialty contracts include insurance contracts like marine insurance, lease and hire purchase agreements and the contracts that will put in place proceedings that are...
Words: 1685 - Pages: 7
...CHARACTERISTICS 7. ARTICLE 1868 8. DIFFERENCE CONTRACT OF SALE FROM CONTRACT / AGENCY TO SELL 9. REQUISITES CONCERNING OBJECT OF A CONTRACT OF SALE 10. WHEN AN OBJECT OF A CONTRACT OF SALE IS CONSIDERED “DETERMINATE?” 11. WHAT KINDS OF THINGS MAY BE OBJECTS OF A CONTRACT OF SALE? 12. WHAT IS CONTRACT FOR PIECE OF WORK? 13. CONTRACT OF BARTER 14. DISTINGUISH BETWEEN “CONTRACT OF SALE” FROM “CONTRACT OF BARTER” 15. WHEN IS PRICE CONSIDERED CERTAIN – ARTICLE 1469 / 1472 16. WHAT IS THE EFFECT IF THW PRICE IS FIXED BY ONE OF THE CONTRACTING PARTIES? 17. ARTICLE 1469, 1472,1473,1474 18. WHAT IS THE EFFECT OF “GROSS INADEQUENCY OF PRICE” IN A CONTRACT OF SALE? 19. • WHAT IS THE EFFECT OF “PRICE SIMULTATION” IN A CONTRACT OF SALE? 20. KINDS OF SIMULTATIONS 21. SALE BY AUCTION 22. WHAT ARE KINDS OF DELIVERY 23. DIFF. FORMS/KINDS OF CONSTRUCTIVE DELIVERY/OBLIGATION OF BUYER 24. WHAT IS “EARNEST MONEY” 25. ARTICLE 1483, 1484, 1489, 1490, 1491 26. ARTICLE 1493, 1494, 1495, 1497-1501 27. WHAT ARE THE KINDS 28. WHAT IS PUBLIC INSTRUMENT 29. WHAT ARE THE KINDS OF WARRANTIES 30. OBLIGATIONS OF BUYERS/ VENDEE 31. BREACH OF CONTRACT OF SALE/ OF GOOD 32. REMEDIES OF THE BUYER AS AGAINST THE SELLER IN CASE OF BREACH OF WARRANTIES 33. HOW IS CONTRACT OF SALE DISTINGUISHED? 34. WHAT ARE CONSIDERED EQUITABLE MORTAGE INSTEAD OF CONTRACT OF SALE 35. WHAT IS PACTO DE RETRO SALE? 36. ADVANTAGES/ DISADVANTAGES ...
Words: 8053 - Pages: 33
