Sale of Goods

The sale and purchase of goods is the most common character of the business transaction. In fact, it plays very significant role in every business operation. Most of the business, by its very nature comprise buying and selling of goods. All the agricultural and industrial produce goods for the purpose of selling in the market to earn money. The transaction of selling and buying occupy the large number within the whole business activities.

To recognize and regulate such business every country requires own legal framework. Every country of this world has arranged legal framework for governing this area. Both the Acts, the sale of goods act 1971 and the unfair contract term acct 1977 has governed

Carriage of Goods ( Transportation)

As being a necessary part of modern business, it is essential to regulate such business under legal framework. Therefore, every country of the world has made required legal framework to regulate carriage of goods. The goods are carried by land, sea or air. All the laws, relating to carriage of goods by land, sea or air, are considered as the law of carriage. The contract of carriage of goods under the law of carriage plays very significant role for operating the business activities.

Quasi Contract

Contract is formulated on the basis of free consent of its parties. It is basic and general rule in the realm of contract but there are some exceptional situation under which even in absence of free consent or even in lacking of knowledge, a person becomes responsible to perform certain work pursuant to law as a contractual liability. Law imposes contractual liability to the person in certain circumstances for preventing the victim party and its is accepted as in indirect or quasi contract. It is also one of the issue to be discussed under concept of contract.

Duties and Liabilities of Surety

The liabilities of a surety arises from the creation of a contract. But it comes into execution only when the principal debtor fails to perform his obligation. The liabilities are already found in the name of contract and provided in Section. 16 of NCA. But a surety may place a limit upon his liability in the contract. The nature of liability of a surety according to the contract of guarantee is give below:

1.       Primary or co-extensive nature of liability: The liability of the surety is secondary and co-extensive with that of the principal debtor, unless it is otherwise provided by the contract. In general terms the quantum of obligation of a surety wills neither be more nor less than the surety will be responsible until the principal debtor becomes free his liability.

Law of Company and Insolvency

When a person wants to operate any business or industry, s/he has to establish a firm or company as specified by prevailing law. A company plays very important role to develop the commerce and industry in the world because it is an organization having separate identity from its promoters and it has covered almost all areas of the business. In the contemporary world, all the big type of institutions, organization, insurance, banks, industries etc are operated as companies. To arrange the sufficient finance, to limit the liability, to operate the business as an organized way and to operate the transnational huge business as easy way, the company is as a panacea.

Company is an artificial person that is created, run and ended by the law. The scope of company is wider than that of partnership firm of business. Partnership firm is a suitable device for a small group of partners who take personal interest and there is a mutual trust and confidence among them. The concept of the formation of a company is to outcome of experiences of partnership business and incorporation by registration. In partnership the liability of the partners for the debts of the business is unlimited. They are bound to meet without any limit, all the business obligations of the firm. The company being a separate person, the liability of its shareholders is limited in the context of company. The shareholders are not liable personally.

 The concept of a person is great achievement of jurisprudence that enables to deal with someone as a person in the eye of law. Law is the creation of a human being and artificial person is creation of law but in the eye of law there is not so significant difference between them. Only those who are capable to enjoy the rights and fulfill the duty are person in the eye of law, whether natural or artificial. In this sense Law creates the rights and obligation of persons and divides them to two classes:

1.       Natural person

2.       Artificial person

Natural person: Natural person are the human beings.

Artificial person: Artificial person are those persons created and developed by laws for the purpose of society and government.

Pledge and Pawn

Bailment and Pledge are those matters which are governed by the special types of contract. It is specific types of transaction between the parties that play significant role in the operation of business. Bailment is a border term under which pledge is also compromised one of special form. It is one of the important areas to be addressed by the contract law. Nepalese Contract Act, 2000 has dealt the general principles in relation to this contract under its chapter 5 and 6. They are mentioned separately as underneath:

B. Pledge and Pawn 

Accumulation of capital is one of the significant functions for business. Capital may be raised by different means. One of these means is to obtain loan. Loan transaction is very much important in business operation and pledge or pawn provides security of repayment of such loan. Pledge is a specific bailment since it is relating only to the loan transaction. The goods deposited as security to repay the debt or to perform the promise is known as pledge. The term pawn is synonymous to the term pledge and it can be used interchangeably.

The Contract Act, 2000 has used the different terms Dhito or Dharaut for denoting pledge. Section 35 of the Act mentions that in case any person has obtained a collateral while supplying credit to anybody as a security for that credit, or obtained any property as a deposit in the form of a guarantee to perform the concerned work while having any work performed a contract relating to collateral or deposit shall be deemed to have been concluded. The Explanation of the same section further mentions that For the purpose of this chapter, the term property shall denote any movable or immovable property, and title or document establishing title to that property.

Therefore a pledge is only a special kind of bailment contract under which goods are deposited with a tender or promise as a security for the repayment, a pledge also involves only a transfer of possession of goods pledge not ht ownership. The ownership remains with the pledger. The pledge or Pawnee has a special interest in the goods pledged. The general interest always remains in the pawner and wholly reverts to him on discharge of debts or work to be performed.

Bailment and Pledge

Bailment and Pledge are those matters which are governed by the special types of contract. It is specific types of transaction between the parties that play significant role in the operation of business. Bailment is a border term under which pledge is also compromised one of special form. It is one of the important areas to be addressed by the contract law. Nepalese Contract Act, 2000 has dealt the general principles in relation to this contract under its chapter 5 and 6. They are mentioned separately as underneath:

A.      Bailment

A contract of bailment is one of the branch of general contract since it has to comply all the necessary elements of general contract. It is special in the sense that it comprises special matter under which party hands over certain movable goods to another party for certain purpose one returnable basis. This term bailment is received from the French term baillier. It means to deliver or handing over. A bailment is conditional delivery of goods by a person to another for definite purpose and after the fulfillment of purpose; the goods delivered have to be returned. The essence of bailment is to change the actual possession of goods; it does not comprise the transfer of ownership of goods like sale. Its common illustrations are hiring of goods, furniture cycle, delivering of cloth to a tailor for making suit, delivering a car or scooter for repairing, delivering dress to dry cleaner, etc.

Section 25 of Contract Act, 2000 defines: A contract relating bailment shall be deemed to have been concluded in case any person delivers any property to another person on a returnable basis or for handing it over to any other person or selling it as ordered by him/her. The same section has provided that a deed must be execute while bailing any property worth more than Five Thousand Rupees.

Some Examples of contract of bailment

1.       A hires 60 chairs from B for using in marriage ceremony

2.       A gives his suit to B, a dry cleaner for washing

3.       A gives his motorcycle to B for repairing

4.       A gives his watch to be for repairing

5.       A hand over his cow to B, a veterinary doctor, for treatment.