Types of Business Entities • Limited liability LLP – Limited liability refers to when your

personal assets are not at stake in case of a bankruptcy

Partnership-registered or unregistered
• Unlimited liability - Unlimited liability is when your personal
assets are at stake in case of a bankruptcy and can be sold to
recover losses
Sole Proprietorship
• Single owner – owned by a single individual • Unlimited liability – Explained above
Company

• Private Ltd – 2-50 people and operating as a company.

• Can issue shares but not to the general public and not listed on • SMC-single member company – Page 4
stock exchange. • MMC-multiple member company
• Less regulations imposed on private ltd companies

Public Ltd (Public companies have more compliances and have to report frequently.)
Open to all public to trades shares on the stock exchange • Limited by guarantee
• Non listed • S.42-not for profit – Page 3
• Listed-most regulated

Structure of a Company
Members/shareholders-owner CEO
Directors-Board of Directors CFO
Management Head of various operations

Companies are governed by the Companies Act 2017 and Code of Governance for Listed Companies
S.42 – Company (Not for profit)
. Licensing of associations with charitable and • intends to apply the company’s profits and other income in
• promoting its objects; and
• not for profit objects.—(1) Where it is proved to the satisfaction of the • prohibits the payment of dividends to the company’s
• Commission that an association is to be formed as a limited • members; and
company— • such company’s objects and activities are not and shall not, at any
• for promoting commerce, art, science, religion, health, education, • time, be against the laws, public order, security, sovereignty and
• research, sports, protection of environment, social welfare, charity • national interests of Pakistan,
• or any other useful object;
• such company—
S. 154:
• (1) Notwithstanding anything contained in any other law for the time • (c) a public company other than a listed company shall have
being in force,- not less than three directors
• (a) a single member company shall have at least one director; • (d) a listed company shall have not less than seven directors
• (b) every other private company shall have not less than two
directors; and
• Provided that public interest companies shall be required to have female representation on their board as maybe specified by the commission
Single Member Company
• Owned by a single person. • All the rules and regulation of Company ordinance applied to
• Any company registered as Single Member under Company law SMC, similar to private company.
2003 as a single member company. • Limited Liability
• Or any private company changed its status to SMC according to
Company law 2003.
Formation of SMC
• Any person/company can form a company as per Company Act • Documents similar to private company.
2017 and Single member company rules 2003. • Form S1:Indicating at least two individuals to act as nominee
• Following procedure for registering SMC director and alternate nominee director in the event of his death.
• File with the registrar at the time of incorporation as SMC
Core Objective of SMC
• To facilitate sole proprietorships to avail corporate status. • To stimulate documentation of the economy.
• Extended Advantage of limited liability • Proper documentation of decisions taken, Such documentation
• Rights and privileges of a separate legal entity. would avoid future disputes.

Partnership
• Whenever two or more people wish to start a business together • Regulated by the partnership act
is called Partnership. • Unlimited liability
• Partnership is an agreement between two or more persons to • Jointly and severable liable
share a common interest in a commercial endeavor and to share • Indemnity agreement
profits and losses • Mutual agency - All partners are agents for each other
• When compared to other form of business organization a • Can be registered-through a partnership deed (written contract)
partnership is easily formed
Corporations
• A corporation is an artificial, entity created under the • The corporation is more complex to create and to operate then
administrative authority of the Government other form of business
 • The legal complexities are associated with structure of • A corporation is created through a legislation by the Government
corporation

LLP – Limited Partnership

• A Limited Partnership is basically all the attributes of partnership • A Limited Partnership is created by an agreement under LLP act
except that one or more of the partners are designated as 2015
Limited Partner (AOP) • The term of the Partnership Agreement control the management
• This type of partnership is not personally responsible for the debts of the organization
of the business organization

Factors to consider when selecting a business entity type

• Significant factors to consider in selecting the best organizational o The personal liability of the owners
form for a particular business activity include: o The taxation of the organization’s earning and its
o The cost of creating the organization distribution of profits to the owners
o The continuity or stability of the organization
o The control of decisions

Non Business Entities

Non-business entity
• NGO: non-govt organization, (Education, Health, Infrastructure, • Structure: executive council, body of member
Community development) • Tax benefits: PCP: Pakistan Centre for Philanthropy certification
• Register with social welfare department • Source of funding can be through donations, collections, etc.
• Documents: constitution/bye laws
• Social welfare ordinance
Examples:
• Trust-waqf-foundation • Beneficiary: benefit from the trust
• Settlor: who forms the trust • Trustee: board of trustees
• Private trust: family settlement • Trust deed-contract
• Public-charitable-edhi/selani • Social welfare department
Associations - collection of people-An association can be called a group of entire amount themselves. A partnership is not a taxable entity under federal
people who come together to achieve any particular purpose or goal and that law. There is no separate partnership income tax, as there is a corporate
too for a limited period of time. income tax. Instead, income from the partnership is taxed to the individual
partners, at their own individual tax rates.
Clubs, Societies-, Societies Act
Corporate formality: Corporate formalities” are steps and precautions that the
Purpose - Perpetual succession or temporary business must take to ensure that the corporation remains legally distinct
Tax considerations: All business entities (sole proprietorship, company and from its owners.
partnership) have different tax considerations. Sole proprietors must pay the

Contract Law
In Pakistan, the general law of contract is contained in be Contract Act, The proposal is said to be accepted when the person to whom be proposal is
1872. The first 75 Sections of this Act contain the general principles that made signifies his assent.
govern all types of contracts. The remaining sections deal with the following
three special types of contracts: Promise

1. Indemnity and Guarantee When a proposal is accepted, it becomes a promise.

2. Bailment Reciprocal Promise

3. Agency Promises which form a consideration or part of a consideration for each other
are called reciprocal promises. Each promise is a consideration for the other.
What is a contract?
These are of two types:
A contract may be defined as an agreement that is enforceable in law. A
contract originators when a person called a ’proposer', makes a 'proposal’ or (a) A reciprocal promise that is to be simultaneously performed.
'offer’ to the other party, called the 'offeree' accepts the offer. Offer and (b) If the order, in which reciprocal promises are to be performed is expressly
acceptance make an agreement and if it is enforceable in law, it is called a fixed by the contract, they shall be performed in chat order. In a situation
contract. where the order is not expressly fixed by the contract, the promises shall be
Definitions performed in that order, in which the nature of the prosecution requires.

Proposal Promisor

A proposal is known as an offer. A person is said to make a proposal, when A person who makes a proposal or an offer is called a promisor.
he signifies to the other person his willingness to do or to abstain from doing Promisee
anything with a view to obtaining the assent of that person to such as act or
abstinence. A person who accepts the proposal is called a promises.
Invitation of Offer Agreement
An invitation of offer is a statement of the person's intention or his Every promise (constituting an offer and acceptance) is an agreement. An
willingness to enter into negotiations. It is like an advertisement through agreement which is not enforceable at law is known as a void agreement.
which people are invited to make an offer.
Consent
Standing Offer
In law, “two or more persons are said to consent when they agree upon
When an offer takes the form of a continuing offer, it is called standing offer. the same thing in the same sense”
Acceptance Contract
A contract is a legally binding agreement. An agreement arises as a result of (d) The parties must be competent to create a contract.
an 'offer' and 'acceptance'. In order for an agreement to be enforceable (e) The agreement must not be rendered void under any of the clauses
(legally binding), it must meet the following requirements: of agreement in the Contract Act, 1872.
(f) The agreement must comply with any formal requirement.
(a) There must be an agreement. Certain transactions are valid only if effected by deed of in
(b) The agreement must be legal. writing. The agreement must be attested and registered under law
(c) The parties must give their free consent. in Pakistan

Kinds of Contracts For example: If a contract which should be in writing and registered, is not
registered, would constitute an unenforceable contract.
1. Valid Contract
5. Illegal Contract
An agreement that is enforceable at law (legally binding) on either party to
the agreement is called a valid contract. An illegal contract is one which contravenes another law.
2. Voidable Contract For example: A contract is illegal at common law on the grounds of 'public
policy' or 'immoral nature'.
An agreement that is enforceable at law (legally binding) at the option of one
or more parties to the agreement but not at the option of the other(s) is called 6. Contingent Contract
a voidable contract.
These are also called conditional contracts and the following elements are
3. Void Contract essential to make a continent
A contract which is ordinarily enforceable at law (legally binding} but cannot (a) The contingency should not depend on the mere will and pleasure
be enforced due to the taking place of a certain event is known as a void of a party. It must depend on be actions of a party.
contract. (b) The liability of performance is not absolute but is dependent upon
the taking place of a certain event.
4. Unenforceable Contract (c) The contingency must relate to a matter that is collateral to be
A contract, although valid, that cannot be enforced by action because it lacks main purpose of the contract.
evidence as would be necessary for enforcement should the contract not be
carried out, is called an unenforceable contract,
7. Quasi- Contract expenses incurred in preserving them. This is known as
responsibility of finder of goods.
A quasi-contract is a field of law covering cases in which one person has 8. Quantum Merit
been unduly enriched at the expense of another.
The doctrine of quantum merit is based on ‘payment in proportion to
For example: the amount of work done'. This doctrine comes into effect in the
(a)
Where the defendant has received benefit from the claimant i.e., following three situations:
reimbursement to a person where money due by another in which (a) Where the contract of parties leads to an interference of a promise
he is interested. to pay reasonable remuneration.
(b) Liability of person to whom money is paid or money delivered by (b) Where breach of contract is such that it discharges the whole
mistake or under-coercion he must repay or return it. connect, ensuring that one party can recover from the other party
(c) Claim for necessaries supplied to a person incapable of contract proportionate compensation for work already done under the
i.e. lawful or a lunatic contract.
(d) Obligation: Person enjoying benefit of non-gratuitous act. He is (c) Where the law implies a contract to pad for the work done.
bound to make compensation in respect of the things so done or
delivered. A person who finds goods belonging to another and For example: in case of services rendered under a contract that is not
takes them into his own custody is subject to the responsibility of enforceable on account of some technical objection such as the requirement
taking due care of them and trying to find out the real owner. of registration.
However, he can exercise his right of lien until he recovers the
COMMUNICATION, ACCEPTANCE AND REVOCATION OF For example: Suppose A revokes his proposal by sending a registered letter
PROPOSAL to B, the acceptor. The revocation is said to be complete when the registered
letter is dispatched by A and it is said to be complete when B receives the
Communication of Proposal registered letter revoking the proposal.
The communication of a proposal is complete when it becomes known to the Suppose that B revokes his acceptance by posting a registered letter to A B's
person to whom the proposal is made. revocation is said to be complete when the registered letter is dispatched to
For example: A proposes to legally sell a house to B at a certain price. The A and when A receives the registered letter.
communication of the proposal is complete when B receives the letter giving Note: A proposal may be revoked at any time before the communication of
him the details. its acceptance is complete as against the proposer but not afterwards.
Communication of Acceptance Therefore, follows that the proposal cannot be revoked if its acceptance has
been put in a course of transmission to the proposer so as to be out of power
The communication of acceptance is said to be complete when it is of the acceptor.
communicated to the offence.
For example: A proposes through a letter sent by post, to sell his house to B
For example: A accepts B’s proposal through a letter sent by post. The on 1 January 2009. B accepts the proposal through a letter sent by post on 5
communication of acceptance is complete on the part of B when the letter is January 2008 at 3.00 p.m. If A revokes his offer before 3.00 p.m. on 5 January
posted and on the part of A when the letter is received. 2008, the revocation will be considered to be wrong.
Revocation HOW TO REVOKE A PROPOSAL?
Revocation is when the proposer or the acceptor wishes ro withdraw the Through the following ways, you can revoke a proposal:
proposal or acceptance. The communication of revocation is said to be
complete: (a) The proposer sends a notice of revocation to the other party
(b) Through the lapse of time prescribed in the proposal, for its
(a) When she proposer sends information to the acceptor to acceptance, or, where no time is prescribed, through the lapse of
whom the proposal is made. The matter then being out of a reasonable time, without communication of the proposal;
the power of the proposer, (c) By the failure of the acceptor to fulfil a rendition precedent to
(b) When the information sent by the proposer regarding the acceptance, and
proposal is known to the acceptor. (d) By the death or insanity of the proposer, if the fact of his death or
insanity comes to the knowledge of the acceptor before
acceptance.
REVOKING AN ACCEPTANCE For example: A overs to sell his house to C for Rs 550,000 through a letter
potted on 1 December 2007. The proposal is accepted by C through a letter
An acceptance may be revoked at any time before the communication of the posted on 5 December 2007. The letter reaches A on 7 December 2007 at
acceptance is said to be complete by the acceptor, but not afterwards. It 11.00 a.m. C can revoke his acceptance at any time before 11.00 a.m. on 7
means that an acceptance cannot be revoked if it comes into the knowledge December 2007 but not after this time period.
of the proposer.

For example:
ESSENTIAL OF A VALID CONTRACT Foreign enemies or persons due to their professional status, i.e., a barrister
cannot sue for fees for professional services; or due to legal status.
Offer and Acceptance
For example:
Every contract is an agreement. In order to constitute an agreement there
must be an offer and the offer must be accepted. A company, being an artificial person, cannot enter into a contract except
through in agent and according to its constitution.
An offer must possess the following characteristics:
FREE CONSENT OF PARTIES
a. It should not impose any condition.
b. It must be made with a view to creating a legal relationship. The consent of the parties to a contract must be free. It is said to be free when
c. The offer must be accepted by the other party. it is not caused by:
A valid acceptance must possess the following characteristics: a. Coercion
a. It should be absolute and unqualified Coercion is the committing, or threatening to commit, any act forbidden
b. It must be made in the manner prescribed by the offer. The under the Pakistan Penal Code, or the unlawful detaining, or threatening to
acceptance may be made either by word or by conduct. A counter detain, any property, to the prejudice of any person whatever, with the
proposal does not constitute a valid acceptance. intention of causing any person to enter into an agreement. Coercion renders
c. It must be an expression of willingness to undertake or to abstain the contract voidable at the option of the party who has been coerced.
horn doing something.
d. It must be made with a view to obtaining the assent of the other TO MAKE COERCION EFFECTIVE IN LAW
person. In order that coercion be effective in law, the following points are important:
e. It must be made to another person.
• It must have been exercised.
Contractual Capacity
• The object of coercion must be to cause any person to enter into
Every person is competent to enter into contract if the following three an agreement
conditions are specified: Coercion without this intention will not be legally effective. It is, however,
a. Age of Majority immaterial whether the Pakistan Penal Code is or is not in force in the place
where coercion is employed. ‘
A major is competent to enter into a contract provided he suffers from no
other disqualification. A minor is incompetent to enter into a contract. A b. Undue Influence
person is deemed to have attained majority when he attains the age of 18
A contract is said to be induced by undue influence where the relations
years and not before. existing between the parties are such that one of the parties is in a position to
CASE OF A MINOR dominate the will of the other, and uses that position to obtain an unfair
advantage over the other.
* The Court of Wards was a legal body created by the East India Company
on a model similar to the Court of Wards and Liveries that had existed in Undue influence makes the contract voidable at the option of the party whose
England from 1540 to 1660. Its purpose was to protect heirs and their estates consent has been obtained by undue influence. The elements that constitute
when the heir was deemed to be a minor and therefore incapable of acting undue in8ticnce are the holding of a dominant position and its use to obtain
independently. an unfair advantage.

In case of a minor who has a guardian appointed by a court or the SOME EXAMPLES
superintendence of whose property is assumed by Court of Wards, the age
Undue influence may be induced:
of majority is deemed to have been attained on the completion of 21 years
of age. I. By a teacher on his student
II. By a medical doctor on his patient
Ordinarily, an agreement with a minor is void. However, an agreement
III. By a lawyer on his client
regarding the necessaries supplied to minor shall be binding on the minor IV. By a guardian on his ward
and his estate shall be liable for payment, if the price is reasonable. The V. By a man on a pardahnashin woman
judge shall decide whether the necessaries supplied to the minor are
essential to his life or not c. Fraud
b. Sound Mind Fraud means and includes any of the following acts committed by one party
A person is said to be of sound mind for the purpose of making and entering to a contract or with the involvement, of by the agent, with the intention to
into a contract if, at the time when he makes the contract, he is capable of deceive the other party or its agent, or induce the other party to enter into
understanding it, and of forming a rational judgment as to its effect upon his contract:
interest.
I. The suggestion of a fact which is not true, by one who does not
A person who is usually of unsound mind, but occasionally of sound mind believe it to be true.
may make a contract when he is of sound mind. Similarly, a person who is II. The active concealment of a fact by one having knowledge or
usually of sound mind, bur occasionally of unsound mind, may not make a belief of the fact.
contract when he is of unsound mind. III. A promise made without any intention of performing it.
IV. Any other act fit to deceive.
An insane person is incompetent to enter into a contract. Therefore, any V. Any such act or omission as the law specially declares to be
agreement entered into by him will be void. fraudulent.
c. No Other Disqualification A mere silence on facts that are likely to affect the willingness of a person to
enter into a contract is not fraud, unless the circumstances of the case are
In order to be competent to enter into a contract, a person must not be
such that, it is the duty of the person keeping silence to speak, or unless his
disqualified from contracting by any law to which he is subject:
silence is in itself, equivalent to speech.
I. The Court of Wards Act imposes contractual incapacity. A ward
A contract to which consent is obtained by fraud is voidable at the option
of any Court of Wards cannot enter into a valid contract with
of the party who has been defrauded.
regard to property situated anywhere.
II. Certain persons are not capable of entering into a contract due to
their political status.
CONTRACTS OF GOOD FAITH ii. Contracts of Partnership
iii. Contracts of Guarantee
However, there are some contracts which are said to be the contracts of iv. Contracts for the purchase of shares in companies through the
uberrimae fidei (Latin: of utmost good faith). publication of a prospectus
In such contracts, it is the preliminary duty of one party to disclose all v. Contracts for the sale of land in which the seller is bound to
material facts to the other party, i.e. facts which are likely to effect the disclose to the buyer any other material defect in the property or
judgement of the other party. In the absence of full disclosure or good faith in the seller's title
the contracts are faulty.
d. Misrepresentation
The contracts of utmost good faith are only those contracts in which one party
is deemed to have access to some knowledge which cannot be possessed by Misrepresentation means and includes:
'the other party. It is only reasonable that the former should disclose to the 1. The positive assertion, in a manner not warranted by the
other. Examples of such contracts are: information of the person making it, of that which is not true,
i. Insurance Contracts though he believes it to be true.
ii. Contracts regarding the sale of land and for the purchase of 2. Any breach of duty which, without any intent to deceive, gains
shares an advantage to the person committing it or anyone claiming
under him, by misleading another to his prejudice or to the
In the case of all other contracts, the principle of caveat emptor (Latin: let prejudice of anyone claiming under him.
the buyer beware) applies. The following are be examples of contracts in 3. Causing, however, innocently, a party to an agreement. For
which the duty of disclosure is imposed: example: an erroneous statement of the tonnage of the ship.
i. Contracts of Insurance
DIFFERENCE BETWEEN FRAUD AND MISREPRESENTATION
Fraud should be distinguished from misrepresentation. Fraud implies an intention to deceive. Misrepresentation may be quite innocent, i.e. it may be free from
any fraudulent motive.
Misrepresentation Fraud

A false statement without any intention to deceive A false statement deliberately made to deceive another
Makes Contract Voidable Gives rise to an independent action for tort

The fact that the plaintiff has the means of discovering the truth is a good It is not open to the person making a false statement to say that the
plea plaintiff has the means discovering the truth with ordinary diligence

A person whose consent has been obtained by fraud or misrepresentation A mistake may be one of fact or law. When both the parties to an agreement
may avoid be contract if he so desires. The contract is voidable at his option. are under a mistake as to matter of fact essential to be agreement, the
agreement is void.
If he thinks, he may insist that the contract shall be performed and that he
shall be put in the position in which he would have been if the representation But it shall not be voidable merely because it was caused by one of the parties
made had been true. to it being under a mistake as to matter of fact. This is based on the principle
that ‘if a man will not take reasonable care to ascertain what he is buying
NOTE: he must take the consequence’.
However, it should be noted that if consent was caused by If a contract is fused by a mistake as to any law enforced in Pakistan, it shall
misrepresentation or by silence, the contract will not be voidable if the party not be voidable since every citizen is deemed to have the knowledge of law
whose consent was so obtained had the means of discovering the truth with of be land. It is based on the maxim that ‘ignorance of law is no excuse’.
ordinary diligence.
However, if the mistake is as to a law not enforced in Pakistan, but say in
e) Mistake Spain or France, it shall have the same effect as a mistake of fact.
*Mistake is also called an unsound misrepresentation and differs from
fraud which is also called willful misrepresentation.

Lawful Consideration and Object In each of the above cases, the consideration or object of an agreement is said
to be unlawful. Every agreement of which the object or consideration is
A contract without consideration is a mere wagering contract and is void. unlawful is void. However, the law recognizes the following exceptions to
Consideration has been defined by law. When at the desire of the proposer, this general rule, in which the consideration can be dispensed with or without
the promise or any other person abstains from doing or promises to do or to any harm to the contract:
abstain from doing something, such an act or abstinence of promise is carted
a consideration for the promise. The doctrine of consideration has the (a) If it is expressed in writing and duly registered and is made on
following characteristics: account of natural love and affection between parties standing in
a near relation to each other.
(a) Consideration must move from the promisee.
(b) If it is a promise to compensate a person who has already voluntarily done
(b) It may be given by the promisee or by any other person. something for the promisor or something which the promisor was legally
(c) Consideration is paid by the commission or abstinence of an act. compellable to do; or

(d) It might be past, present or future. Present consideration is doing or (c) If it is a promise made in writing and signed by the person to be charged
abstaining from doing anything at tbe time of the contract. Future therewith, or by his agent, to pay wholly or in part a debt which is time-barred
consideration is the promise to do or to abstain from doing anything in future. under the law for the limitation of suits.
Past consideration is the commission or abstinence of some act in the past. In any of the above cases, such an agreement is a contract. But the above
The consideration or object of an agreement is said to be lawful unless: provisions do not provoke validity, as between the donor and donee, of any
gift actually made. Again an agreement to which the consent of the promisor
(b) It is forbidden by law or is of such a nature that, if permitted, it would is freely given is not void merely because the consideration is inadequate;
defeat the provisions of any law; or but the inadequacy may be taken into account by the Court in determining
the question whether the consent of the promisor was freely given.
(c) is fraudulent; or
An executed consideration is something actually done at the time the contract
(d) involves or implies injury to the person or property of another; or the is made. For example: X receives Rs 5,000 in return for which he promises
Court regards it as immoral or opposed to public policy. to deliver goods to Y. Here the payment by Y to X is as executed
consideration.
An executory consideration is a promise to do something in the future. For (i) Contracts for sale of public offices
example: X promises to deliver goods in a month’s time to Y and Y promises
to pay for the goods when they are delivered. (ii) Contracts for trading with enemies

Here the consideration is executory. (iii) Contracts for waiving liquidity

An Agreement expressly declared as Void (iv) Contracts for stifling prosecution

In order for a contract to be a valid, it must not be one of those agreements (v) Contracts interfering with the courts of justice
which have been expressly declared to be void by law. These are: (vi) Contracts tending to create interest against duty
(a) Agreement in Restraint of Marriage (vii) Contracts contrary to morality
Every agreement in restraint of the marriage of any other person, other than (viii) Marriage brokerage contracts
a minor, is void, the object is to safeguard the moral welfare of the society
and consequently such agreements have been declared as void. (ix) Contracts in the nature of maintenance and champerty
An agreement to procure marriages for reward (generally fled brokerage When a person agrees to maintain a suit in which he has no interest, it is
contracts) is void as being opposed to public policy. Public policy is that called maintenance and Bargain whereby one party assists the other party in
principle of law which holds that no person can lawfully do that which has recovering the property and is to share in the proceeds of the action, is known
a tendency to be injurious to the public or be against the public good. as champery.
Contracts against public policy are:

(b) Agreement in Restraint of Trade proceedings or which limits the time within which he may thus enforce his
rights is void to that extent. However, an exception is made in case of
Every agreement by which anyone is restrained Tom exercising a lawful contracts providing for reference to arbitration any disputes, present or
profession or trade or business is to that extent, void agreements in restraint future.
of trade. These prevent individual genius and industry to exercise itself to the
public good and tend to create monopolies injurious to public welfare. (d) Agreements involving Uncertainty
Therefore, they have been expressly declared by law to be void:
Agreements for which the meaning is not certain, or capable of being made
(i) One who sells the goodwill of a business may agree with the buyer to certain, are void.
refrain from carrying on a similar business within specified local limits so
long as the buyer or any person deriving title to the goodwill for him carries (e) Agreement by Way of Wager
on a like business therein, provided that such limits are remarkable. An agreement to do an impossible task or a task which becomes impossible
(ii) Partners may, upon or in anticipation of dissolution of the partnership is void. To constitute a wager, there must be:
agree that some or all of them will not carry on business similar to fat of the (i) mutual chance of gain and loss, and
partnership within certain specified local limits.
(ii) an uncertainty of the event about which the parties have no knowledge.
(iii) Partners may agree that some one or all of them will not carry on any
business, other than that of the partnership, during the continuance of the From these characteristics, a wagering contract can be defined as an
partnership. agreement between two parties that, upon the happening of some uncertain
event, one party shall pay a sum of money to be other. The party's liability to
(c) Agreement in Restraint of Legal Proceedings. pay is dependent on the happening of an event. For example: life Insurance
Every agreement by which any part thereto is restricted absolutely from is a wager of life if a person insures the life of another in whom he has no
enforcing his right under or in respect of any contract by the usual legal insurable interest.

Wagering transactions are distinct from speculative transactions.

Wager Transactions Speculative Transactions

1. Merely betting on the rise and fall in market price without 1. A speculative transaction is an attempt to make a profit
any intention of buying or selling at all. from a fluctuation in prices.
2. When only the differences are to be paid and neither party 2. Either party to be bargain can insist upon either carrying
is compelled to deliver or to pay for the goods. out the bargain by delivering goods sold or by paying for
3. An agreement by way of a wager is void. goods purchased.
3. A speculative transaction is enforceable.

In order to decide whether a particular bargain is either wagering or A Teji transaction is also known as a call option and is one where a person
speculative, the question to be asked is whether the buyer has the right to by paying a certain premium buys the right to purchase certain goods at a
demand actual delivery and the seller has the right to make the actual fixed price and at certain future dates, he may or may not exercise his right.A
delivery. The Teji Mandi transactions are not wager transactions where the Teji Mandi (also known as Nazrana transaction) is one in which one of be
intention of be parties is to give and take delivery of goods, but if the parties parties is given a double option of either buying from or selling to the other
merely mean to abide by the results of chance and only intend to pay the parties certain specified goods at a future date at a price fixed at the time of
difference, they enter into a transaction which is a wager. The word Teji entering into the transaction.The Mandi transaction (also known as a put
means a rise in the market price of goods and the word Mandi means a fall option) is one where a person by paying a certain premium, buy the right to
in the market price of goods: sell certain goods at a fixed price at a certain future date. He may or may not
exercise his right.
The three common forms of speculations are:
Agreements in Writing and Registered
(i) Teji transaction;
Where a law requires that an agreement shall be in writing, attested by the
(ii) A Teji Mandi transaction; and witnesses and duly registered, all such conditions must be satisfied;
(iii) A Mandi transaction. otherwise the agreement shall be void. All contracts of sale, mortgage, lease
and right of immovable property must be in writing and registered.
Performance of a Contract Examples:
The parties to a contract must either perform or offer to perform their (a) A promises to paint a picture for B by a certain day at a certain price. A
respective promises, unless such performance is dispensed with or excused dies before the specified day, consequently the contract cannot be enforced
under the provisions of this Act, or of any other law. For example: under the either by A's representatives or by B.
Insolvency Act, the insolvent is discharged from paying his debts.
(b) Y promises to deliver goods to X on a certain day on payment of Rs (c) Contracts which require the performance by the promisor cannot be
25,000. Y dies before that date. Ys representatives are bound to pay Rs assigned to anybody else by the promisor without the consent of the
25,000 to X's representatives. promisee. However, when a promisee accepts performance of the promise
from a third party, he cannot afterwards enforce it against the promisor.
Who can demand Performance
(d) A contract where the performance may be undertaken by the promisor or
The parties to contract or their representatives can demand the performance his representatives may be assigned but the original promisor and his
of a contract, In case the contract has been validly assigned, the assignee can assignee are both liable for non performance.
enforce the promise. However, the burden of a contract cannot be removed
from a promisor on to another without the consent of the promises. But the (e) When two or more persons who make a joint promise, all such persons
benefit of a contract can be assigned, if there is no obligation attached to it, during their life arid after be death of either of themn, their representative,
and the contract does not depend upon personal qualifications and jointly with the survivor or survivors, and after the death of the last survivor,
consideration of the parties to it. the representatives of all jointly, must fulfil the promise. In such a case, the
promisee may compel anyone or more of such joint promisors to perform the
Who should Perform the Contract whole of the promise by one that discharges all the promisors. One of the
(a) A contract is performed by the promisor or his agent. joint promisors may compel every other joint promisor to contribute equally
with himself to the performance of the promise. If anyone of the joint
(b) When the parties intend that the promise must be performed by the promisors makes default in such contribution, the remaining joint promisors
promisor himself on account of some special personal skill, it must be must bear the loss rising from such default in equal shares.
performed by him. for example: when X promises to paint a picture for Y he
must perform this personally.

Valid Offer of Performance (b) Where be owner has offered a specific reward for the return of goods lost,
he may sue for such reward and may retain the goods until he receives it.
Where a promisor has made an offer of performance to the promises, and the
offer has not been accepted, the promisor is not responsible for non- (c) When a thing which is commonly the subject of sale is lost, if the owner
performance, nor does he hereby lose his rights under the contract. Every cannot, with reasonablediligence, be found or if he refuses upon demand to
such offer: pay the lawful charges of the finder, the finder may sell it:
(a) must be unconditional, (i) when the thing is in danger of perishing or of losing the greater part of its
value, or
(b) must be made at a proper time and place, and
(ii) when the lawful charges of the finder, in respect of it, amount to two
(c) must be made in such a way that the promisee is able to ascertain that the thirds of its value.
promisor is able and willing to perform his part as promised. If the offer is
an offer to deliver anything to the promisee, the promisee must have a Discharge of a Contract
reasonable opportunity of seeing thar the thing offered is that which
thpromisor is bound by his promise to deliver. The parties to a contract enter into it with the object of performing it; and the
performance of the contract brings its termination. But there are some other
For example: A contract to deliver to B on 1 March 200B, at his warehouse, modes as well which set the parties free from their respective rights and
500 bales of cotton of a particular quality. In order to make an offer of a liabilities under the contract. The various modes in which a contract maybe
performance with the effect stated herein, A must bring the cotton to B's discharged are the following:
warehouse on the appointed day, under such circumstances that B may have
a reasonable opportunity of satisfying himself that what is being offered is (a) By Performance
cotton of the quality contracted for, and that there are 500 bales. When the parties to the contract have duly performed their respective
Time and Place of Performance promises undertaken by them, the contract comes to an end.

When by the contract a promisor is to perform his promise without (b) By Mutual Agreement
application by the promisee, and there is no fixed time for such performance, A contract comes into being by the agreement between the parties, therefore
it must be made within a reasonable time. What is a reasonable time will it may also be discharged by their mutual agreement. This can be done either
depend upon the particular facts and circumstances of the case. If a definite by novation, or by substituted agreement or by subsequent conditions:
day is, however, fixed for the performance without any application by the
promises, it must be performed during the usual hours of business on that (i) Novation: When the terms of the original contract are altered by
day. When the performance is to be made on a fixed date upon application agreement between the parties it takes the shape of a new contract and is
by the promisee, it is the duty of the promisor to apply for the performance deemed to substitute the original contract. The originalcontract is thus
at a proper place and within the usual hours of business. If there is no place discharged or rescinded.
of performance fixed by the contract, and the performance is to be made
without application by the promisee, the promisor is to ask for a reasonable (ii) Waiver: The parties may abandon their respective rights by mutual
place being fixed for such performance. When a contract is to be performed consent, i.e. may rescind the contract.
within the usual hours of business, proper place would be the place where the (iii) Condition Subsequent: A contract may contain provisions regarding its
place of business is situated. discharge on the non- fulfillment of a condition, precedent or the occurrence
Obligation and Rights of Finder of Goods of a condition subsequent.

A person, who finds goods belonging to another and takes them into his (c) By Impossibility of Performance
custody, is responsible for taking due care of such goods and for trying to If the performance of the contract becomes, or turns out to be, impossible,
find out the real owner. He must restore the goods to the real owner on the parties to the contract are discharged from their respective obligations
demand. His rights are as follows: under the contract,
(a) To retain the goods against the owner until he receives compensation for
trouble and expense voluntarily incurred by him in preserving the goods and
not finding out the owner, though he cannot sue for such amount.
(d) by Operation of Law Sometimes the performance of a contract is discharged by the operation of
some law. For instance, as soon as a person is discharged by as order of the
Insolvency Court, his liabilities under contracts are died.
The lapse of time under the law of limitation, amounts to a discharge for all
practical purposes.
(e) By Breach
Frustration of a contract means its pre-mature termination on account of the
When one party to the contract breaks the contract by non-performance of happening of an event which was not in the contemplation of the parties when
the promise or otherwise, the other party is discharged from his obligation they entered into contract. for example: in times of wars many contracts are
under the contract and has a right of action against the party responsible for ineffective because their performance becomes wholly or in part unlawful.
the breach. Frustration operates to bring the contract to an end as regards both parties.
(f) By Lapse of Time This may be under the general rules against entering courts with the enemy
and may be the result of express executive orders issued under emergency recovered only if the contract makes special provision for its recovery,
legislation. In such situation, if performance of a contract becomes unlawful, damages are granted as compensation for the loss actually inflicted and not
there is said to be frustration of that contract. by way of penalty.
Breach of Contract In estimating the loss or damage arising from a breach of contract, the means
which existed of remedying the inconvenience caused by the non-
Modes of Breach performance of the contract must be taken into account.
A contract may be broken in one of the following ways: When the contract has been broken, if a sum is named in the contract as the
(a) By Renunciation before Performance amount to be paid in case of such breach, or any other penalty is stipulated
therein, the injured party is entitled, whether or not actual damage or loss is
Ahmad Hussain, a painter, undertakes to paint a picture for Anwar within a proved to have been caused thereby, to receive from the party accused of
week. Before the due date, Muhammad Anwar may inform Ahmad Hussain breach reasonable compensation not exceeding the amount so named or the
that he will not take delivery of the picture. penalty stipulated for. There is, however, one exception to this rule. lf a
person enters into any bail-bond, recognizance the instrument of the same
This situation where a contract is broken by the promisor before the due date nature with the Government, or gives any bond for the performance of any
of the performance is called an anticipatory breach of contract. The public duty or act in which the public are interested, he shall be liable, upon
following remedies are available to the promise: breach of the condition of sub instrument, to pay the whole sum mentioned
(i) He may wait till the due date of the performance arrives and, if the therein.
contract still remains unperformed he may sue for the breach, or
(ii) He may treat the contract as broken and sue for that at once. Examples
(b) By impossibility created by one Party before Performance is due: (a) A contracts to sell and deliver 250 maunds of salt to B at a certain price,
For instance, Muhammad Akhtar may undertake to repair the house of to be paid on delivery. A breaks his promise. B is entitled to receive from A
Muhammad Ali within a week but he subsequently may close his house and by way of compensation, the sum, if any, by which the contract price falls
be out during that period. short of the price for which B might have obtained 250 maunds of salt of like
quality at the time when the salt ought to have been delivered.
(c) By Renunciation in the course of Performance:
(b) A contracts to buy B's ship for Rs 250,000 but breaks his promise. A must
For example: Mr A may employ Ms B to perform two dances in his theatre pay to B by way of compensation, the excess of the contract price over the
on a particular event. After She has performed one dance, Mr A may refuse price which B can obtain for the ship at the time of the breach of promise.
to allow Ms B to dance for the second time.
(c) A contracts to supply B a certain quality of iron at fixed price, being a
(d) The impossibility created by one Party in the course of performance: higher price than that for which A could procure and deliver the iron. B
wrongfully refuses to receive the iron. B must pay to A, by way of
For example: Mr A may, after Ms B has completed her first dance, remove
compensation, the difference between the contract price of the iron and the
all musical instruments thereby making it impossible for Ms B to perform sum for which A could have obtained and delivered it.
her dance.
(d) A contracts to pay a sum of money to B on a day specified. A does not
(e) By Failure of Performance:
pay the money on that day. B, in consequence of not receiving the money on
The party or parties to the contract may fail to perform their respective that day, is unable to pay his debts and is totally ruined. A is not liable to
obligations. make good to B anything except the principal sum he contracted to pay,
together with interest up to the day of payment.
Remedies for Breach of Contract
(e) A contracts to sell and deliver 6,000 bales of cotton to B on a fixed day.
Where one party has broken the contract, the injured party may obtain either: A knows nothing of B's mode of conducting his business. A breaks his
promise and B having no cotton, is obliged to close his mill. A is not
(a) damages for the loss caused,
responsible to B for the loss caused to B by the closing of the mill.
(b) a decree for specific performance, or
(f) A contracts with B to pay B Rs 5,000 if he fails to pay B Rs 2,500 on a
(c) an injunction. given date. A fails to pay B Rs 2,500 on that day. B is entitled to recover
from A such compensation not exceeding Rs 5.000 as the Court considers
The damages granted to the injured party are usually nominal. reasonable.
Damages (g) A contracts with B that if A practices as a surgeon within the city of
Lahore, he will pay B Rs 10,000. A practices as a surgeon in Lahore. B is
When a party has broken the contract, the other party who suffers by such
entitled to such compensation not exceeding Rs 10,000 as the Court considers
breach is entitled to receive from the former compensation for any loss or
reasonable.
damage caused to him hereby. But the loss which can be compensated must
be one (1) which naturally arose in the usual course of things from such
breach, or (2) which the parties knew, when they made the contract, to be
likely to result from the breach of it. If the loss or damage sustained by reason (h) A gives B a recognizance binding him in a penalty of Rs 1,000 to appear
of breach is remote or indirect, no compensation will be granted for the same. in Court on a certain day. He forfeits his recognizance. He is liable to pay the
A loss which does not arise naturally is called a special loss and can be whole penalty.
(i) A who owes money to B, a money-lender, undertakes to repay him by he shall be liable to deliver 51 maunds. This is a stipulation by way of penalty
delivering to him 50 maunds of grain on a certain date, and stipulates that. In and B is only entitled to reasonable compensation in case of bre
the event of his not delivering the stipulated amount by the stipulated date,

Damages for Breach of Contract (c) Such compensation is not given for any remote or intricate loss or damage
sustained by reason of the breach; and
The following are the principles usually valid to assess damages for breach
of contract: (d) Reasonable compensation, not exceeding the sum named for the penalty
stipulated should be paid.
(a) In estimating the loss or damage arising from the breach of contract, the
existing means of remedying the inconvenience caused must be taken into Types of Damages
account.
The principle underlying damages is not punishment, but compensation. The
(b) A party who sustains a loss by the breach of contract, is entitled to recover various types of damages awarded for the breach of contract are:
from the party breaking it, the compensation for any loss or damage caused
to him. However, the compensation can be recovered only, when the loss or (a) Nominal Damages
damage is such as arises naturally in the usual course from such breach or as These generally consist of a very small sum of money, usually one rupee, and
the parties knew at the time of the contract to be likely to result from the are awarded by a court where the plaintiff has proved a breach of contract.
breach:
(b) Exemplary Damages
These are also known as vindictive damages and are especially penal and (e) Contemptuous Damages
consist of heavy sum awarded by court in cases where the injured feelings of
the party are also taken into account. These are awarded where the court determines that the wrong is of such a
trifling nature that no reasonable minded person would think of coming
(c) General Damages before a court in a situation there has undoubtedly been a wrongful act on the
part of the defendant.
These consist of compensation for the loss resulting from the breach of
contract. For example: on breach of a contract of sale, general damages (f) Liquidated Damages
amount would represent the difference between the contract price and the
market price on the date of the breach. It is the amount fixed before hand by the party for the just protection of the
injured party and is recoverable in full.
(d) Special Damages
These are damages which are awarded by the court on the ground that they
were in the contemplation of both the parties to the contract at the time they
entered into it.

Reko Diq
INTRODUCTION
• Mine in the Chaaghi District in Balochistan
• Said to be the 5th largest deposit of Copper and Gold Reserves
WHAT HAPPENED NEXT?
• Pakistani Judicial system messed up big time
• Originally BHP (US based company) partnered with Balochistan 1. This claim was completely unsubstantiated but it was widely
Development Authority (BDA) in 1993 accepted
2. Balochistan Govt. now decides to try to extract resources
THE INITIAL AGREEMENT themselves but they don’t have either the expertise not do they
a) Both parties signed the Chaaghi Hill Exploration Joint Venture have the machinery for mining
Agreement 3. According to TCC their 10 year profits wfrom the mine were
b) The venture was done with the BDA acting as a private entity supposed to be 104 billion dollars
c) In the original terms of agreement there was a 75% to 25% split 4. TCC spends 360 million dollars on development in Balochistan
between BHP and BDA with BHP taking 75% literally establishing an entire town for the workers with
electricity and other resources
NOTE: At this time there was no proof of minerals, this was an exploratory 5. TCC goes back to the government to get a mining contract again
partnership which the government of Balochistan denied
TIMELINE OF CASE CASE GOES TO SUPREME COURT
2000 • Supreme court sends the decision in the favor of the Balochistan
Government which is unreasonable because
1. BHP due to financial instability withdrew from the agreement and
passed the baton to Mincor Resources
a) The supreme court didn’t have jurisdiction over the matter
2. Mincor Resources is an Australian company
since an arbitration clause was already in place
3. First proper agreement signed and ratified with the Balochistan
b) Supreme court incorrectly understands what indigenous
government
people are and rules that the mine hampers the right of the
4. In the agreement an Arbitration clause was put in saying that all
indigenous people of Balochistan
settlements will be resolved by International Centre for
c) Supreme court ruled that the original agreement was made in
Settlement of Investment Disputes (ICSID) – a body of the
conditions where the Balochistan government was under
World Bank
duress
2006 d) This happened even though the company TCC was protected
under the Bilateral Trade Agreement between Australia and
1. TETHYAN COPPER COMPANY (TCC) ACQUIRES Pakistan signed in 1998
MINCOR RESOURCES.
2. TCC Is also an Australian Company WHAT HAPPENED AFTER THAT?
3. Same year a petition was filed in the Balochistan High Court that
TCC bought the gold mine at a cheap price because they had • TCC takes the case to ICSID which rules in their favor
bribed Balochistan government officials and therefor the • In 2017, ICSID puts a 6 billion dollar penalty on Pakistan which
agreement signed in 2000 called CHEJVA doesn’t stand anymore is less than the 11 billion dollar initial penalty in the contract
4. Balochistan high court dismisses the appeal in 2006 • Because of this Pakistan also had to revoke the license to a
Chinese Company in 2015 which was given the license to mine
2007 in Pakistan
TCC gets the mining rights and they started investing. WHAT DID PAKISTAN DO?
2009/10 • Pakistan had an out of court settlement that now favors the
Australian Company and increases their profits from the mine
A journalist brought the case to light and said the value of the minerals was
• Pakistan had to still settle on its 25% share
260 billion dollars

NRO – National Reconciliation Ordinance • Musharraf brought this case → politically motivated
• From 1986 to 1999 → all crimes done in this period are all
Introduction
quashed (khatam) and expunged from record→ around 8000+
The National Reconciliation Ordinance (NRO) was a controversial →got rid of their crimes→ these included some 34 politicians and
ordinance issued by the former President of Pakistan, General Pervez roughly 3 bureaucrats
Musharraf, on 5 October 2007. It granted amnesty to politicians, political • NRO can be given as a special provision for protection of
workers and bureaucrats who were accused of corruption, and wanted to vulnerable groups such as ‘women and children’
leave country for their own profit embezzlement, money laundering, murder,
and between 1 January 1986, and 12 October 1999, the time between two • Article 45 – President Pardon – different from NRO (clean slate)
states of martial law in Pakistan. It was declared unconstitutional by – crime record stays only the punishment is executed
the Supreme Court of Pakistan on 16 December 2009, saving the country
from political crisis According to the Supreme Court's order, the NRO is void ab initio (Null and
void from the point of inception) being ultra vires (Out of power/jurisdiction)
History and violation of various constitutional provisions including;
 • Articles 4 (right to be dealt with in accordance with law) This separation of powers between levels of government is known as
• 8 (laws inconsistent with fundamental rights to be void) federalism. This concept recognizes that each level of government has a
• 25 (equality of citizens) separate and distinct role to play.
• 62f (qualifications for members of parliament) 2. SUPREMACY CLAUSE
• 63 (disqualifications for members of parliament) • Article VI makes it clear that the Constitution is supreme under
• 89 (powers of the president to promulgate ordinances) all laws and that federal law is supreme over a state law or local
• 175 (jurisdiction of courts) and 227 (Islamic injunctions) ordinance
• Under the supremacy clause, courts may be called upon to decide
if a state law is invalid because it conflicts with a federal law.
What happened during the case? • A conflict exists if the state statute would prevent or interfere with
the accomplishment and execution of the full purposes and
1. that as a consequence of the said declaration, all steps taken,
objectives of Congress.
actions suffered, and all orders passed by whatever authority,
any orders passed by the courts of law including the orders of For example, an Arizona statute provided for the suspension of licenses of
discharge and acquittals recorded in favour of the accused drivers who could not satisfy judgments arising out of auto accidents, even
persons, are also declared never to have existed in the eyes of if the driver was bankrupt. The statute was declared unconstitutional since it
law and resultantly of no legal effect; was in conflict with the federal law on bankruptcy

2. that all cases in which the accused persons were either o Preemption
discharged or acquitted under Section 2 of the NRO or where If a federal law preempts a subject, then any state law that attempts to regulate
proceedings pending against the holders of public office had the same activity is unconstitutional under the supremacy clause. The
got terminated in view of Section 7 thereof, a list of which concept of preemption applies not only to federal statutes but also to the rules
cases has been furnished to this Court and any other such and regulations of federal administrative agencies.
cases/proceedings which may not have been brought to the
notice of this Court, shall stand revived and relegated to the 3. CONTRACT CLAUSE
status of pre-5th of October, 2007 position; • Article I, Section 10, of the Constitution says, "No State shall ...
pass any ___ Law impairing the Obligation of contracts." This is
the contract clause.
3. that all the concerned courts including the trial, the appellate and • It does not apply to the federal government, which does in fact
the revisional courts are ordered to summon the persons accused frequently enact laws and adopt regulations that affect existing
in such cases and then to proceed in the respective matters in contracts.
accordance with law from the stage from where such • Under the contract clause, states cannot enact laws that impact
proceedings had been brought to an end in pursuance of the rights and duties under existing contracts.
above provisions of the NRO;
Example: Suppose your company has a contract to provide natural gas to
Violations: customers for stated minimum costs. A state or local government cannot
impose new lower minimum prices on these existing contracts. The new
minimum prices would be applicable only to newly created contracts.
• Articles 4 (right to be dealt with in accordance with law)
• The first ten amendments, known as the Bill of Rights, establish
a variety of important protections.
• First, basic constitutional rights are not absolute.
• Article 8 of Fundamental Rights being violated of the citizens • Second the extent of any limitation on a basic constitutional
that had been wronged in the expunged and quashed crimes. Laws guarantee depend upon the nature of the competing public policy.
being in violation of fundamental rights of citizens are deemed Cases involving the Bill of Rights almost always require courts to
void strike a balance either between some goal or policy of society and
the constitutional protection involved or between competing
• Article 89 dictates Presidents powers regarding ordinances. constitutional guarantees.
Ordinance by President → National Reconciliation • Third, constitutional guarantees exist in order to remove certain
ORDINANCE → Can be passed if 1. NA and senate are not in issues from the political process and the ballot box. They exist to
session 2. Time sensitive things such as declaration of war → protect the minority from the majority.
valid for 120 days after this it has to be presented before NA and • Finally, constitutional rights vary from time to time and may be
approved narrowly interpreted during emergencies such as war or civil
strife.
• Article 62 and 63 says that if someone is convicted on a criminal
act, they cannot be a candidate during elections. Recall the 34 4. FREEDOM OF RELIGION
politicians. • The First Amendment states that Congress shall make no law
"respecting an establishment of religion" (the establishment
• Article 25 says there has to be Equality for all citizens in the eyes clause) "or prohibiting the free exercise thereof" (the free exercise
of the law. Giving an NRO means giving out preferential clause). These clauses guarantee freedom of religion through the
treatment and hence discrimination separation of church and state.
• The Supreme Court has held that the denial of unemployment
• 175 (jurisdiction of courts) and 227 (Islamic injunctions) benfits to a worker who refused a position because the Job would
Pardon vs NRO have required him to work on Sunday violated the free exercise
clause of the First Amendment. The constitution requires that the
A Presidential Pardon is different from an NRO. A Pardon keeps the owner of the business either allow the person to have Sunday off
judgement intact with reduced punishment / conviction and you DON’T get or allow the state to pay unemployment compensation and
a clean slate. An NRO gives you a clean slate such that the crime is said to increase the business's taxes
have never been committed in the first place even if the hearing is fixed or a
judgement has been made. 5. FREEDOM OF THE PRESS
• The First Amendment states that "Congress shall make no law
... abridging the freedom of ... the press."
Regulating Business • Freedom of the press is not absolute. The press is not free to
print anything it wants without liability. Rather, freedom of the
The Constitution contains many concepts that frame how the federal press is usually construed to prohibit prior restraints on
government operates and interacts with state and local governments. Three publications. If the press publishes that which is illegal or
of these are of great significance to the creation of a strong centralized, libelous, it has liability for doing so. This liability may be
federal government. They are the separation of powers concept, the either criminal or civil for damages.
supremacy clause, and the contract clause • The tort theory known as libel is used to recover damages as a
1. SEPARATION OF POWERS result of printed defamation of character. Libel cases
compensate individuals for harm inflicted by defamatory
printed falsehoods.
 • If a person is a public official or figure, a plaintiff seeking o Strict scrutiny: a classification will be a denial of equal
damages for caused by offensive publications emotional protection unless the classification is necessary to
distress must prove actual malice in order to recover. Actual achieve a compelling state purpose. It is not enough that
malice includes knowledge that the printed statements are a classification be permissible to achieve any state
false or circumstances showing a reckless disregard for interest, it must be a compelling state objective.
whether they are true or not. If the plaintiff is not a public o Quasi-Strict Scrutiny: Cases that fall between the
figure or public official there is liability for libelous statements minimum rationality and strict scrutiny approaches.
without proof of malice. These cases use what is sometimes called quasi-strict
• scrutiny tests because the classifications are only
6. FREEDOM OF SPEECH partially suspect or the rights involved are not quite
• Freedom of speech, sometimes referred to as freedom of fundamental.
expression, covers both verbal and written communications
The Commerce Clause-Government's Authority to Regulate Business
(protection relates to governmental action that restricts us
from expressing ourselves.) The power of the federal government to regulate business activity is found in
• The first Amendment protection does not apply to private action. the commerce clause of the Constitution. Article I, Section 8, states,
(Example: private business) "Congress shall have Power ... to regulate Commerce with foreign Nations,
• Free speech also covers conduct or actions considered symbolic and among the several States, and with the Indian Tribes.”
speech (It exists to protect the minority from the majority)
(freedom to express the unorthodox, and it recognizes that there Areas that government regulate:
is no such thing as a false idea.) 10. Regulation of foreign commerce:
• In some free-speech cases, an individual whose own speech or • The power to regulate foreign commerce is vested exclusively in
conduct may not be prohibited is nevertheless permitted to the federal government, and it extends to all aspects of foreign
challenge a statute limiting speech because it also threatens trade. The federal government can prohibit foreign commerce
other people not before the court. The person is allowed to entirely
challenge the statute because others who may desire to engage • State and local governments sometimes attempt directly or
in legally protected expression may refrain from doing so. They indirectly to regulate imports or exports to some degree. Such
may fear the risk of prosecution, or they may not want to risk attempts generally are unconstitutional. However, a state may
having a law declared to be only partially invalid. This is called regulate activities that relate to foreign commerce if such
Overbreadth doctrine: means that the legislators have gone too activities are conducted entirely within the state's boundaries.
far in seeking to achieve a goal.
11. REGULATION OF INTERSTATE COMMERCE
• The power of Congress to regulate commerce "among
o Commercial Speech the several states" extends to those intrastate activities
that affect interstate commerce as to make regulation
The public interests served by freedom of expression protects the listener as
of them appropriate.
well as the speaker. Freedom of expression includes freedom of information
or the rights of the public to be informed. Since corporations may add to the
12. LIMITATION ON STATE POLICE POWER
public's knowledge and information, they also have the right to free speech.
• Police Power: These powers can be summarized as
requiring state legislation and regulation to protect the
public's health, safety, morals, and general welfare These w
7. RIGHT TO POSSESS GUNS d particularly the last phrase, give state government
• According to the amendment "A well-regulated Militia, expansive power to regulate business activities.
being necessary to the security for a Free State, the right of • State regulations must not be arbitrary, capricious, or
the people to keep and bear Arms, shall not be infringed. unreasonable. Furthermore, the state regulation must not
• The supreme court’s majority opinions simply affirms the violate the commerce clause. These limitations imposed by
right to possess guns, including handguns, in one’s home the US Constitution are referred to as the dormant
and to have them ready for use in self-defense. commerce clause concept
8. DUE PROCESS OF LAW • Some areas are exclusively federal, some are said to be
• The Constitution states, "No state shall make or enforce any exclusively state, and still others are such that regulation of
law which shall abridge the privileges or immunities of them may be dual
citizens of the United States; nor shall any state deprive any o Exclusively Federal: Example of a regulatory area that
person of life, liberty or property, without due process of needs to be limited to the federal government is the
law, nor deny to any person within its jurisdiction the equal opening and closing of airports. Because airlines need
protection of the laws.” access to airports consistent with their routes, havoc
• Simply stated, due process means "fundamental fairness and could ensue if local authorities were allowed to set the
decency." It means that government may not act in a manner hours that their airports operate.
that is arbitrary, capricious, or unreasonable o Exclusively State: In theory, those matters that are
• The due process clause applies only to governmental exclusively within the states' power are intrastate
bodies; it does not apply to the actions of individuals or activities that do not have a substantial effect on
businesses. interstate commerce.
• Procedural due process cases involve whether proper o Dual Regulation: Between the two extremes, joint
notice has been given and a proper hearing has been regulation is permissible. This area can be divided into
conducted. the following three subparts:
▪ Federal Preemption: When a federal statute preempts a
9. EQUAL PROTECTION particular area of regulation, any state or local law pertaining to the same
• No law treats all persons equally, laws draw lines and treat subject matter is unconstitutional under the commerce clause and the
people differently. Therefore, almost any state or local law supremacy clause, and the state regulation is void. The net effect of a
imaginable can be challenged under the equal protection law that preempts an area of regulation is to make that subject matter of
clause the law exclusively federal.
• It is obvious that the equal protection clause does not always ▪ No Preemption: includes situations in which the federal regulation of a
deny states the power to treat different persons in different subject matter is not comprehensive enough to preempt the field.
ways. Yet the equal protection clause embodies the ethical However, when state law is inconsistent or conflicts irreconcilably with
idea that law should not treat people differently without a the federal statute, it is unconstitutional and void. Example, if the state
satisfactory reasons. minimum wage is $8.00 per hour and the federal is $7.75, employers
• To challenge state and local laws, courts use three distinct would be required to pay $8.00 since the conflict can be reconciled.
approaches: ▪ No Federal Regulation: The third area of possible joint regulation
o Minimum rationality: a law creating different exists where there is no federal law at all. When there is no federal
classifications will survive an equal protection regulation of a subject, state regulation of interstate commerce is
challenge if it has a rational connection to a permissible permissible, provided that it does not impose an undue burden on
state end. A permissible state end is one not prohibited interstate commerce and does not discriminate against interstate
by another provision of the Constitution. (for economic commerce in favor of local businesses.
issues or social legislation such as welfare laws)
Commerce clause: The commerce clause limits property taxes, income identification the age of all purchasers younger than 27, prohibit the sales of
taxes, and sales or use taxes levied by state and local governments on cigarettes in quantities smaller than 20, prohibit the distribution of free
interstate commerce. The purpose of the commerce clause is to ensure that a samples, prohibit sales through self-service displays and vending machines
taxpayer engaged in interstate commerce pays only its fair share of state except in adult only locations. It also imposed promotional; restrictions.
taxes.
The Court of Appeals for the Fourth Circuit reversed, holding that Congress
To prevent multiple taxation of the same property or income of interstate has not granted the FDA jurisdiction to regulate tobacco products
businesses, taxes are apportioned. Apportionment formulas allocate the tax
burden of an interstate business among the states entitled to tax it. QUESTIONS:

To justify the tax, there must be sufficient contact, connection, tie, or link 1. What regulations adopted by the Food and Drug Administration are
between the business and the taxing state. There must be sufficient local challenged in this case?
activities to justify the tax in a constitutional sense. This connection is called Info from case: Respondents, a group of tobacco manufacturers, retailers, and
the nexus. advertisers, filed suit ... challenging the regulations. They moved for
Regulatory Process-Administrative Agencies: summary judgment on the grounds that the FDA lacked jurisdiction to
regulate tobacco products as customarily marketed, the regulations exceeded
Th3 term administrative agencies describes the boards, bureaus, the FDA's authority, and the advertising restrictions violated the First
commissions, and organizations that make up the governmental bureaucracy. Amendment. The court held that the FDCA authorizes the FDA to regulate
tobacco products as customarily marketed and that the FDA's access and
These agencies have either one or both types of regulatory authority. labeling regulations are permissible, but it also found that the agency's
1. The first type is called quasi-legislative in that an agency can advertising and promotion restrictions exceed its authority.
issue rules (regulations) that have the impact of laws. 2. Describe the dilemma that the Court discusses regarding its role of
2. The second type is quasi-judicial in that agencies can make determining an agency's authority and deferring to the finding of that
decisions like a court. agency?
For example, state workers' compensation boards hear cases involving Info from case: In reference to: Chevron U.S.A. Inc. v. Natural Resources
industrial accidents and injuries to employees, and most local governments Defense Council, Inc., 104 S. Ct. 2778 (1984): Under Chevron, a reviewing
have zoning boards that make recommendations that impact business court must first ask "whether Congress has directly spoken to the precise
activities question at issue." If Congress has done so, the inquiry is at an end; the court
Standing to sue: "must give effect to the unambiguously expressed intent of Congress." But if
Congress has not specifically addressed the question, a reviewing court must
To establish standing, the challenging party must address two issues. respect the agency's construction of the statute so long as it is permissible.
Such deference is justified because the responsibilities for assessing the
1. Reviewability: Is the action or the decision of the agency subject to wisdom of such policy choices and resolving the struggle between competing
judicial review? Not all administrative decisions are reviewable. The Federal views of the public interest are not judicial ones, and because of the agency's
Administrative Procedure Act provides for judicial review except where greater familiarity with the ever-changing facts and circumstances
(a) statutes preclude judicial review or surrounding the subjects regulated.

(b) agency action is committed to agency discretion by law. In determining whether Congress has specifically addressed the question at
issue, reviewing court should not confine itself to examining a statutory
2. Aggrieved Party: Second, is the plaintiff an aggrieved party? It is clear provision in isolation. Context makes it clearer.
that persons who may suffer economic loss due to an agency's action have
standing to sue. 3. What does the Court conclude in this case? Why?

Is delegation valid? Delegation of quasi-legislative authority to Info from case: The court says that: By no means do we question the
administrative agencies is subject to two constitutional limitations: seriousness of the problem that the FDA has sought to address. The agency
has amply demonstrated that tobacco use, particularly among children and
• It must be definite. Definiteness means that the delegation must adolescents, poses perhaps the single most significant threat to public health
be set forth with sufficient clarity so that all concerned, and in the United States. Nonetheless, no matter how important, conspicuous, and
especially reviewing courts, will be able to determine the extent controversial the issue, and regardless of how likely the public is to hold the
of the agency's authority. Executive Branch politically accountable, an administrative agency's power
to regulate in the public interest must always be grounded in a valid grant of
• It must be limited. This delegation of authority must provide that
authority from Congress. Reading the FDCA as a whole, as well as in
the agency' s power to act is limited to areas that are certain, even conjunction with Congress' subsequent tobacco-specific legislation, it is
if these areas are not specifically defined.
plain that Congress has not given the FDA the authority that it seeks to
It must be kept in mind that this delegation of discretion is to the agency and exercise here. For these reasons, the judgment of the Court of Appeals for
not to the judiciary. Therefore, courts cannot interfere with the discretion the Fourth Circuit is: Affirmed.
given to the agency and cannot substitute their judgment for that of the
4. If regulation of tobacco is to occur, what has to happen first?
agency.
No info in case.
Authority exceeded: Courts will hold that an agency exceeds its authority if
an analysis of legislative intent confirms the view that the agency has gone
beyond that intent.

Judicial review of agency adjudications:

Two doctrines guide courts in the Judicial review of agency adjudications.
*Case 6.4: FOOD AND DRUG ADMINISTRATION v. BROWN &
WILLIAMSON TOBACCO CORPORATION •Exhaustion of remedies: Courts refuse to review administrative
actions until a complaining party has exhausted all of the administrative
On August 11,1995, the FDA published a proposed rule concerning the sale remedies and procedures available to him or her for redress. Judicial
of cigarettes and smokeless tobacco to children and adolescents. The rule, review is available only for final actions by an agency. Preliminary
which included several restrictions on the sale, distribution, and orders such as a decision to file a complaint are not reviewable.
advertisement of tobacco products, was designed to reduce the availability
and attractiveness of tobacco products to young people. •Primary jurisdiction: Primary jurisdiction applies when a claim is
originally filed in the courts. It comes into play whenever enforcement
On August 28, 1996, the FDA issued a final rule entitled "Regulations of the claim requires the resolution of issues that, under a regulatory
Restricting the Sale and Distribution of Cigarettes and Smokeless Tobacco scheme, have been placed within the special competence of an
to Protect Children and Adolescents." The FDA determined that nicotine is a administrative body.
"drug " and that cigarettes and smokeless tobacco are "drug delivery
devices," and therefore it had jurisdiction under the FDCA to regulate
tobacco product. Review of factual determinations:
FDA’s access regulations prohibit the sale of cigarettes or smokeless tobacco Substantial evidence is that which a reasonable mind might accept as
to persons younger than 18; require retailers to verify through photo adequate to support the conclusion.
DISCUSSION QUESTIONS: The ICJ is the judicial branch of the United Nations and sits at The Hague in
the Netherlands. It consists of 15 judges representing all of the world's major
1. Other retail businesses in the mall in which your sports shoes shop is legal systems. The judges are elected by the U.N. General Assembly and the
located have dec1ded to open on Sundays from 12 noon to 6 p.m. You decide Security Council after having been nominated by national groups, not
to follow suit, but two of your employees refuse to go along, saying it is governments. No more than one judge may be a national of any country. The
against their religious beliefs to work on the Sabbath. You terminate their ICJ has not been a major force in settling disputes since it began functioning
employment. They apply for unemployment compensation, and contend in 1946. The ICJ renders, on average, only one contested decision per year
the1r unemployed status is your fault. If the state grants them benefits, you and one advisory opinion every two years.
will be penalized since your unemployment compensation taxes will go up.
Should you contest their claim? What would be the result if the employees ARTICLE 38 SETS FORTH THE FOLLOWING ORDER OF
refuse to work on Sunday because of their desire to play golf on that day? IMPORTANCE FOR DETERMINING WHAT IS INTERNATIONAL
LAW IN A GIVEN CASE
2. In both your personal and professional lives, you realize how much
government at the federal, state, and local levels influences what you can and The Court, whose function is to decide in accordance with international law
cannot do. For example, since your business employs more than 15 people, such disputes as are submitted to it shall apply:
there are numerous federal statutes dictating the physical condition of the
workplace, the amount you must pay your employees, the taxes you owe, and a) International Conventions, whether general or particular,
the paperwork you must file with regulatory agencies. At the state level, you establishing rules expressly recognized by the contesting states;
know you have to obtain certain licenses to conduct business or to engage in b) International Custom, as evidence of a general practice accepted
recreational activities, such as fishing. And your local government regulates as law;
how you can use the land you own. In light of this multitude of regulatory c) The General Principles of Law recognized by civilized nations;
activity, you ask yourself the following questions: By what authority do d) Judicial Decisions and the Teachings of the Most Highly
governmental entities impose various regulations? Is there any limit to the Qualified Publicists of various nations, as subsidiary means for
extent such regulations impact our lives? How can an individual or a business the determination of rules of law.
organization challenge the application of regulatory authorities?
3. Suppose it has been two years since your graduation. During the time you
have worked for a large energy company. In your work, you have been
exposed to the numerous ways your employer is investing in energy. These
sources include oil, coal, natural gas, solar, w1nd, nuclear, and electrical
plants. Just last month, you were told you were being transferred to the CEO
s off1ce. Your f1rst assignment is to work with the general counsel's staff to
determine how your company IS regulated and how all divisions are
complying with the various, relevant laws and regulations. As you ponder
this assignment, you ask yourself the following quest1ons. Is this company
regulated only by the federal government, or are state and local regulations
relevant? How do the company and its divisions keep track of laws and
regulations? If an administrative agency begins an investigation of your
company, should your company cooperate with or fight the agency's action?
WHAT IS INTERNATIONAL LAW?
International law is found in a variety of sources, including US domestic law,
national law of other countries, international agreements/treaties or International Conventions are similar to legislation or statutes and represent
customary international law (which involves principles that are widely formal agreements between nations. International Custom describes common
practiced and acknowledged by many civilized nations to be law) legal practices followed by nations in working with each other over a long
period of time. General Principles of Law may be found in national rules
Organizations such as the UN, WTO and EU directly impact international common to the countries in a dispute. Finally, Judicial Decisions and
business transactions. When the US enters into trade agreements, the global Teachings, although not binding, may be used for guidance in resolving a
sale of goods is also affected. The agreements facilitate trade and minimize dispute.
risk for businesses.
PRIVATE INTERNATIONAL LAW
WHAT ARE CORPORATE CODES OF CONDUCT?
Examines relationships that are created by commercial transactions and
Policy statements adopted by companies to define ethical standards for their utilizes international agreements and laws of nations to resolve business
conduct. They are voluntary and address issues such as: disputes.
• Forced labour, child labour, discrimination, health and safety of Private international law is represented by the laws of individual nations and
workers, freedom of association and collective bargaining, hours the multilateral agreements developed between nations to provide mutual
of work, wages, overtime compensation, and benefits, working understanding and some degree of continuity to international business
conditions, environmental issues, monitoring and enforcement of transactions. Even in purely domestic business deals, the law is rarely
code of conduct. predictable/certain. When different languages/cultures/practices are added,
• Since there are different legal and cultural requirements around the situation can become very unstable for international business.
the world, companies develop a code of conduct to establish a
foundation for their standards in international business. Private international law can become complicated if organizations from
• To promote global corporate citizenship, the UN developed the multiple countries are involved in a transaction. Which law controls?
Global Compact (a voluntary code of conduct supported by Determining which nation’s court hears the case complicates matters. Hence,
countries and organizations around the world) most international contracts contain choice of law and forum provisions to
• Major corporations which engage in global operations – eliminate uncertainty.
Microsoft, GAP, Cisco Systems have supplier or vendor codes of
INTERNATIONAL ORGANIZATIONS
conduct. These allow conduct to be set for suppliers/vendors
consistent with the company’s mission/values. Several international organizations play an important part in the development
of political, economic, legal rules for conducting international business.
SOURCES OF INTERNATIONAL LAW
1. The United Nations (UN)
PUBLIC INTERNATIONAL LAW
Established post WW 2 – has grown from its 51 founding states. The charter
of the UN sets forth its primary goal “to save succeeding generations from
Examines relationships between nations and uses rules which are binding on war” and authorizes “collective measures for prevention and removal of
all of them in the international community threats to peace, and for the suppression of acts to aggression or other
breaches of peace”
Article 38 of the Statute of the International Court of Justice (ICJ) is the
traditional place for ascertaining what public international law is. However, The General Assembly comprises every nation which is a member of the UN,
the decisions made by the ICJ, the World Court, do not create binding rules and gives each member one vote. The real power rests with the Security
of law or precedent in future cases. Council, which is composed of 15 member states. The Security Council has
the power to authorize military action and to sever diplomatic relations with
THE ICJ other nations. The five permanent members of the Council (United States,
Russia, China, France, and United Kingdom) have veto power over any hindering negotiations to cut tariffs. The cooperation of member states is
action proposed in the Council. critical to its success in liberalizing trade.
OTHER ORGANIZATIONS AFFILIATED WITH THE UN:
The United Nations Commission on International Trade Law (UNCITRAL) THE EUROPEAN UNION
was created in 1966 to develop standardized commercial practices and
agreements. One of the documents drafted by UNCITRAL is the Convention An economic and political partnership between 27 democratic European
on the International Sale of Goods. UNCITRAL has no authority to force any countries. In 1957, 6 European countries, Belgium, France, Germany,
country to adopt any of the conventions or agreements that it proposes. Luxembourg, and the Netherlands signed the Treaty of Rome, creating the
European Community. Six successive enlargements created the European
The United Nations Conference on Trade and Development (UNCTAD) Union (EU), as It IS known today.
deals with international trade reform and the redistribution of income through
trading with developing countries. UNCTAD drafted both the Transfer of Europe’s mission in the 21st century:
Technology Code and the Restrictive Business Practices Code, which are • Provide peace, prosperity and stability for its people
largely ignored by most nations.
• Overcome divisions on the continent
At the Bretton Woods Conference of 1944, two important institutions were • Ensure its people live in safety
also created under the auspices of the United Nations. • Promote balanced economic and social development
• Meet globalization challenges and preserve diversity of people
• The International Monetary Fund (IMF) encourages international • Uphold values which Europeans share – sustainable development
trade by maintaining stable foreign exchange rates and works closely and a sound environment and respect for human rights
with commercial banks to promote orderly exchange policies with
members. The major institutions of the EU are the
• The World Bank promotes economic development in poor countries
by making loans to finance necessary development projects and • Council of Ministers
programs. • The Comission
• The Parliament
1. The World Trade Organization (WTO) • The Court of Justice
Ultimately, after years of economic conflict, many countries concluded that MAJOR AGREEMENTS AFFECTING TRADE
their own interests could be served best by liberalizing trade through reduced
tariffs and free markets. In addition to the international institutions discussed in this chapter, a number
of international agreements also facilitate trade.
The General Agreement on Tariffs and Trade (GAIT) was originally signed
by 23 countries after World War II and represented the determination of a CONVENTION ON THE INTERNATIONAL SALE OF GOODS
war-weary world to open trade and end the protection of domestic industries.
The Convention on the International Sale of Goods (CISG) outlines standard
The WTO expects nations to avoid unilateral trade wars and rely on GATT international practices for the sale of goods. It took several years to develop,
dispute settlement procedures to avert conflict. At the heart of the 1994 and represents many compromises among nations that follow a variety of
Uruguay Round are several enduring GATT principles: practices in the area of contracts. Effective in 1988, it has been adopted by
the United States and most of the other countries that engage in large
• Nondiscrimination (treating all member countries equally with quantities of international trade. The CISG represents the cumulative work
respect to trade). of over 60 nations and international groups and is widely accepted around
• National treatment (countries not favoring their domestic the globe. The CISG applies to contracts for the commercial sale of goods
products over imported products. (consumer sales for personal, family, or household use are excluded) between
• Elimination of trade barriers (reducing tariffs and other parties whose businesses are located in different nations, provided that those
restrictions in foreign products). nations have adopted the convention.
Under the WTO, existing tariffs are reduced and the agreement extends Risks Involved in International Trade
GATT rules to new areas such as agricultural products and service industries.
The WTO further restricts tariffs on textiles, apparel, and forest products. It Because international trade means dealing with different legal systems,
also requires countries to upgrade their intellectual property laws to protect cultures, and ways of doing business, there are a number of risks involved.
patents and copyrights and to guard against the piracy of items such as For example, when a firm expands globally, a host of potential risks and
computer software and videotapes. concerns are raised, such as:

TRADE IN COUNTERFIET GOODS Are property rights enforced?

• Will foreign courts uphold the validity of contracts?
Another important aspect of the WTO is the Agreement on Trade- • Is intellectual property protected or is it vulnerable to infringement?
Related Aspects of Intellectual Property Rights (TRIPS), including trade • Are there export or import restrictions on the firm's products?
in counterfeit goods. Recognizing that there are widely different standards • Are there risks associated with political instability and/or war?
for the protection of intellectual property, as well as a lack of a multilateral • What U.S. laws have an "extraterritorial" reach?
framework of rules for dealing with counterfeit goods, the WTO directly • What international trade agreements will affect the firm's expansion?
addressed this issue with TRIPS. • What national laws (e.g., labor and environmental) affect the firm?
• How should language and cultural differences be bridged?
This agreement discusses the applicability of GATT principles and those of
relevant international property agreements in an effort to strengthen the
protection of intellectual property in the international sphere. INTERNATIONAL ARBITRATION
Power of WTO The United Nations Convention on the Recognition and Enforcement of
Foreign Arbitral Awards of 1958 (New York Convention), adopted in more
The WTO has the power to hear disputes involving member states. The than 50 countries, encourages the use of arbitration in commercial
United States has been involved in a number of disputes. For example, the agreements made by companies in the signatory countries. Under the New
United States brought an action against the European Union claiming that the York Convention it is easier to compel arbitration, where previously agreed
European-wide restrictions on genetically modified food violate WTO rules. upon by the parties, and to enforce the arbitrator's award once a decision is
Additionally, the United States brought a successful challenge against reached. There are many advantages to arbitrating international disputes. The
Mexico; the WTO held that Mexico's beverage tax on soft drinks made with arbitration process likely will be more streamlined and easier for the parties
imported sweeteners is discriminatory. Under the beverage tax, soft drinks to understand than litigating the dispute in a foreign court. Moreover, the
made with cane sugar are tax exempt. Because the beverage tax discriminates parties can avoid the unwanted publicity that often results in open court
against U.S. products, it is contrary to WTO rules. If a nation does not comply proceedings. Finally, the parties can agree, before the dispute even arises, on
with a WTO ruling, the organization has the power to impose sanctions. a neutral and objective third party to act as the arbitrator.
Like any international institution, compliance by the most powerful trading The World Intellectual Property Organization: Arbitration and
nations is necessary to give the WTO credibility. The WTO faces opposition Mediation Center
from anti-globalization protesters. There are many reasons to support the
WTO and the important role it plays in trade. Concerns, however, are raised The World Intellectual Property Organization (WIPO) Arbitration and
by opponents who are concerned about human rights, environmental, and Mediation Center hears cases involving domain name disputes and cyber-
labor issues. Tensions between developed and developing nations are squatting. The Uniform Domain Name Dispute Resolution Policy (UDRP)
went into effect m 1999. Many UDRP cases involve high-value, well-known
brands. In fact, cases involving most of the 100 largest international brands
by value have been heard by the WIPO.
Intellectual Property Organization of Pakistan
History
Intellectual Property Organization of Pakistan (IPO-Pakistan) was
established as an autonomous body on April 8, 2005 under the administrative
control of the Cabinet Division for integrated and efficient intellectual
property management in the country.
A Trademark is a word, phrase, symbol, and/or design that identifies and
distinguishes the source of the goods of one party from those of others.
A service mark is a word, phrase, symbol, and / or design that identifies and
distinguishes the source of a service rather than goods.
Trade Marks Registry (TMR) is premier body of Intellectual Property
Organization of Pakistan (IPO-Pakistan) working for the registration of trade
and services marks under the Trademarks Ordinance, 2001. It is a federal
government body and its jurisdiction for trade and services marks lies within
the geographical boundary of Pakistan. It works as a civil court and its
decisions are appealable at the provincial high courts. The Trademarks
Registry is headed by a Registrar and its office is located in Karachi and also
Regional Office situated in Lahore.
Patent
A patent is grant of exclusive rights for an invention to make, use and sell
the invention for a limited period of 20 years. The patent grant excludes
others from making, using, or selling the invention. Patent protection does
not start until the actual grant of a patent.
In order to be patentable an invention should have the following
characteristics:
- The invention should be process or product
- The invention should be novel or new
- It involves an inventive step
- It is capable of industrial application

Copyright is a legal instrument that provides the creator of a work of art or

literature, or a work that conveys information or ideas, the right to control
how the work is used. The intent of copyright is to advance the progress of
knowledge by giving an author of a work an economic incentive to create
new works
Copyleft is a general method for making a program free software and
requiring all modified and extended versions of the program to be free
software as well. The simplest way to make a program free is to put it in the
public domain, uncopyrighted. This allows people to share the program and
their improvements if they are so minded