At the very outset, it is observed that the impugned order passed by the learned trial Court is revisable; thus, the instant writ petition is converted into civil revision by placing reliance on Mian Asghar Ali v. Government of Punjab through Secretary (Colonies) BOR, Lahore and others (2017 SCMR 1 18).
2. Through the instant revision petition, the petitioner calls into question the order dated 26.01.2019 passed by the learned Civil Judge Ist Class, Lahore whereby the petitioner , being plaintif f in a suit for specific performance of agreement settlement dated 30.03.2018, was directed to pay the remaining consideration amount in the Court within a period of 30 days while relying on the dictum laid down by Hon'ble Supreme Court in judgment reported as Hamood Mehmood v . Mst. Shabana Ishaque and others (2017 SCMR 2022 ).
2. It has been contended by learned counsel for the petitioner that in peculiar facts and circumstances of the petitioner 's case the impugned order could not have been passed as the agreement between the petitioner and respondents No.2 & 3 is altogether bilateral. Further submits that the petitioner has paid an amount of Rs.170,000,000/- in response to clause 2(a) of the agreement; after payment of the said amount there were certain acts to be done by the respondents No.2 & 3, in furtherance of which the petitioner was to pay the second part of the agreed consideration. On failure of the respondents No.2 & 3 to perform their part of the agreement, the petitioner was left with no option but to file the suit. Draws attention of this Court to the agreement where the petitioner was to pay the agreed consideration at five stages. Adds that the petition er is ready to perform his part of agreement of other stages but the respondents have miserably failed in response to the very first part of payment made by the petitioner . Further submits that the ratio of case law relied upon by the learned trial Court i.e. Hamood Mehmood v. Mst. Shabana Ishaque and others (2017 SCMR 2022 ) does not attract in this case. Contends that section 22(iii) of the Specific Relief Act, 1877 obligates the learned trial Court to exercise its discretion in favour of the petitioner/plaintif f where the plaintif f has done substantial acts or suffered losses in consequence of contract capable of specific performance. The learned trial Court has acted in a manner contrary to applicable law, thus, has caused a grave injustice to the petitioner; hence, the impugned order being not sustainable in the eye of law may be set aside by allowing the revision petition in hand and impugned order may be declared without lawful authority and of no legal ef fect and the learned trial Court may be ordered to proceed with the case in accordance with law .
3. On the contrary , learned counsel representing the respondents No.2 and 3 has supported the impugned order and has prayed for dismissal of the revision petition in hand.
4. Heard.
5. Business contracts serve to obligate the parties involved to fulfill their contractual duties by exposing them to the risk of legal consequences in the event of a contract breach. Contracts may come in many different forms to suit different situations, needs, and purposes. They can be categorized based on how they are formed, what kind of consideration is being of fered, how they will be executed and whether or not they are valid.
What Is a Business Contract?
A contract refers to any agreement between two parties to create a legally-enforceable obligation to perform, or refrain from performing a certain task. It can relate to almost any kind of transa ction, including a sale, service, transfer of property , ownership, or a combination of different kinds of transactions. Parties entering into a contract may be individuals, business organizations, or government agencies. A contract may involve more than two people.
In most situations, only parties who enter into a contract have duties and rights under the contract.
The function of a contract is to create a legal relationship between two parties who wish to enter into an agreement and specify their obligations and rights in accordance with the agreement. Contrac ting parties are legally obligated to fulfill the terms stated in the contract, even if the contract seems to be a bad bargain or improvident, as long as it is not fraudulent or does not result from undue influence or duress.
Understanding the Different Kinds of Contracts.
A contract can be a simple oral or written agreement that does not have to be signed, witnessed, or sealed. It can also be a formal agreement that is writte n witnessed, signed and sealed by the parties involved. Traditionally , a contract was regarded as legally enforcea ble only if it was sealed. Now that courts are recognizing implied contacts and other kinds of informal contracts, the use of formal contracts under seal has diminished. When it comes to contracts, there are four classifications, including: Contracts based on formation Contracts based on nature of consideration Contracts based on execution Contracts based on validity Contracts Based on Formation Contracts based on formation can be categorized into three groups; express contra cts, implied contracts, and quasi contracts. An express contract refers to a contract resulting from an expression or conversation, while an implied contract occurs without an express. While an implied contract can be implied in fact or implied in law, a true implied contract arises from a mutation agreemen t that has not been expressed in words. An implied-in-law contract is also known as a quasi contract. It is not predicated on the consent of the parties involved and exists regardless of consent.
Contracts Based on the Nature of Consideration .
There are two types of contracts based on the nature of consideration; unilateral and bilateral contracts. In a unilateral contract, only one party makes a promise. Such a contract can be established with just an acceptance of an offer. In a bilateral contract, participating parties promise each other they will perform or refrain from performing an act . This type of contract is also known as a two-sides contract.
Contracts Based on Execution.
Contracts based on execution can either be executed contracts or executory contracts. An executed contract is a contract in which performance is already completed. To a certain extent, the term is a misnomer since a contract no longer exists once the parties involved have fulfilled their obligations. An executory contract refers to a contract that obligates the participating parties to perform their obligations in the future. Contracts Based on V alidity .
Contracts based on validity can come in five different forms, including valid contracts, void contracts, voidable contracts, illegal contracts, and unenforceable contracts. A valid contract is one that is legally enforceable, while a void contract is unenforceable and imposes no obligations on the parties involved. If a contract is established under certain physical or mental pressure, it is called a voidable contract. Such a contract may become a valid or void contract in the future. An illegal contract refers to a contract with unlawful object, whereas an unenforceable contract is a contract that has not fulfilled certain legal formalities.
6. Here, in this case, the perusal of Property Sale Agreement/Settlement Agreement goes to evince that it is bilateral agreement/contract/settlement agreement and in a bilateral contract, participating parties promise each other that they will perform or refrain from performing an act. This type of contract is also known as a two-sides contract, as stated above; thus, when the petitioner has already performed his first part of agreement, it is the respondents who have to perform their part as agreed between them and the petitioner and when they refused to perform their part of agreement/settlement agreement, this thing prompted the petitioner to approach the Court so as to force them to perform their part. Thus, in this eventuality , the petitioner cannot be forced to deposit the whole sale consideration, especially when the agreement is bilateral as well as under certain terms and conditions and both the parties have to perform their parts step by step. As such, the case law relied upon by the learned trial Court reported as Hamood Mehmood v. Mst. Shabana Ishaque and others (2017 SCMR 2022 ) does not attract and is not applicable to the facts of the case in hand being on dif ferent premises.
The petitioner/plaintif f has shown and pleaded his willingness to perform his part of sale agreement/settlement agreement as is evident from paragraph No.9 of the plaint, which reads:-
9. That as already mentioned above the plaintiff was and is ready to perform his part of the Agreement dated 30- 03-2018. He has already performed his part of contract in toto. The defendants have not performed their part of obligation which made the plaintiff to seek the indulgence of this Hon'able Court.'
It is clear from clause 2(a) of the settlement agreement that the petitioner/plaintif f has paid a huge amount of Rs.170,000,000/- and the respondents/defendants have to contact him after obtaining Fard for further proceedings i.e. execution of sale deeds etc. but when they did not perform their part, the petitioner/plaintif f knocked the door of Court of law so as to get the remedy available under law. The petitioner/plaintif f has done substantial act and there is no denial rather an admitted fact on record that he has paid Rs.170,000,000/- in performance of first part of settlement agreement in question, so discretion ought to have been used by the learned trial Court in his favour instead of directing him to deposit the balance amount by appreciating the ratio of above said judgment in a wrong way .
7. Having observed above, agreements are an integral part of the business. Every business will have several Types of agreements in place for the smooth functioning of the organization and processes. These Types of agreements also help in dealing with scenarios of difficulty . Agreements are also known as contracts in which there are two or more parties involved and they both are bound by agreement enforced by law. Different types of agreements/contracts are there, which are entered into as per circumstances and scenario. Almost twenty agreements are used by various parties or business to form a law bound contract between them, which are:- 1) Express agreement or Express contract The agreement in which all the terms and conditions of all the parties that are involved in winning clearly and explicitly specified is called Express agreement. Express agreement or contract is also termed as special agreement and all of the terms and conditions are clearly stated in it.
2) Partnership agreement It is an agreement in which two or more partners spell out the relation and individual obligation along with their contributions to the business which is mutually agreed upon. Partnership agreements are very common in every organization.
3) Indemnity agreement.
Indemnity literally translates to hold harmless. Therefore, an agreement in which one partly explicitly agrees to indemnify another person or party or parties for damages that my result from an agreement is called indemnity contract of indemnity agreement. An example would be a pet store owner would ask the pet store workers to sign an indemnity agreement to prevent legal problems if a pet bites the worker in any case. The worker may still be covered with medical expenses from the employer but this is to avoid the lawsuit of hurting the employee on purpose.
4) Non-disclosure agreement.
A non-disclosure agreement empowers the business owners with legal status if any of the parties involved in the organization share any kind of proprietary or confidential trade information to anyone or any party outside the organization. A non-disclosure agreement is also signed by many employees working for various organizations.
5) Purchase order It is a legal and forced agreement that ensures a business owner or a company to purchase the said item in the given quantity for a price which is mutually agreed upon with specific terms and conditions for the delivery and payment. Purchase orders are common in sales and many organizations issue a purchase order to avoid for the dispute. It is the job of the sales team to get purchase orders from their customers. In some cases, even customer service may help to get the purchase order .
6) Property and/or equipment lease This agreement will ensure monthly payment deposits and other terms and conditi ons for the disease of a building a piece of land or an equipment. It is generally agreed upon that equipment and properties is covers the maintenance charges with the party who has leased the equipment.
7) Bill of sale.
It is perhaps the most commonly used agreement by people involved in businesses and non-businesses alike. It is a legal document that transfers title of property or a product and serves as an evidence for the terms of sale between the seller and the customer .
8) General employment contract It is an agreement which jots down the relation between the employer and the employee, the remuneration, the benefits, terms and conditions, job description and any other issues that relate the employee to the workplace. All the organizations have a gentle employment contract to enroll any employee.
9) Security agreement A security agreement is one which the borrower pledges to keep an assent of any kind as a collateral to get a loan from the lender . It comes with the condition that in case the borrower is not able to pay the principal amount, the lender may transfer the ownership of the asset mentioned in the agreement, to himself.
10) Independent contractor agreement The supplements for people who are working individually as a contractor . This agreement is between two people one of which works as an individual and independent contractor who provides a particular service to the other person. The agreement without terms and conditions which delete both the hiring person and the individual contractor .
11) Non-compete agreement This agreement specifies that for a specific period of time, after leaving an organiz ation the employee is prohibited in any way, to compare with the organization getting involved with any such organization that competes with the earlier organization. Usually , a General Employment contract will have with Non-Compete Agreement and Non- disclosure agreement together for employee.
12) Executory Agreement An agreement drawn upon by two or more parties in which the terms and conditions are agreed upon mutually and a date is decided for the fulfillment is called executory contract. The contact and shows that both the parties involved have obligations to complete the order for the contract to fulfill the terms and conditions.
13) Bilateral agreement It is an agreement in which there is mutual understanding between the parties that are involved and each of them promises to implement an action in exchange for other parties' action.
14) Unilateral agreement Unilateral contract or agreement is when only one party makes an un-asserted promise or ensures to fulfill the performance without obtaining other exchanged agreement from the other party, only one party is exclusively involved in the unilateral agreement. The promises are fulfilled without the involvement of the second party .
15) Unconscionable agreement A contract that is entirely based on one side of the participating parties which in turn is unfair to the other party or parties and therefore is unenforceable under the terms of law is called unconscionable contract are agreement. This type of agreement is entirely uneven and does not favour other parties in any way thus ensuring disagreement from the other parties.
16) Adhesion agreement When one participating party in the contract has all the leverage along with additional bargaining power , and the agreement is legally binding to all of the parties involved in it for executing of a specific thing or process while it is used to create the contract to benefit all of them is called Adhesive agreement.
17) Promissory Note It is a legal record of the loan wherein the parties involved agree that a certain amount is borrowed and is to be returned on an agreed date. In other words, the promissory note is a legally enforced document which says 'I owe you' a certain amount of money or services.
18) Stock Purchase agreement It is an agreement to sell a certain stock, in pre-decided quantity by all the participating parties, to a specified individual. The individual would owe the organization payment on agreed terms and agreed price. Post completion of Stock Purchase Agreement, the parties may either extend or terminate contract thereby taking back all the unsold stock, if any .
19) Transfer agreement They are also known as 'transfer from a sole proprietorship to a limited company transfer agreement'. These are usually executed in order to transfer a business from an individual owner to a company . Transfer agreements are extremely complicated owing to the ownership and segregation of assets and liabilities.
20) Joint V enture agreement When two or more companies agree to pool and share all the resources and profits at a pre-decided percentage, is called a Joint Venture Agreement. This agreement facilitates the mutual benefit of both the parties involved.
Joint ventures pools resources and reduce risk while shares challenges. Joint ventures are great when an organization is expanding in a new country.
8. All such contracts and agreements are introduced and entered into as per wishes and whims of the parties with free consent and undue influence as well as coercion and unless and until the same are not void or voidable due to terms and conditions, the same are enforceable in accordance with law .
9. For the foregoing reasons and discussions, the direction for depositing the remaining sale consideration issued by the learned trial Court to the petitioner is not tenable and such a direction will be issued only after the trial of the suit and at the time when the rights of the parties are being determined and such a direction will be issued at the time when the final decree is passed and not at this stage, keeping in view peculia r facts and circumstances of the case in hand. Resultantly , it is observed that the learned Court below has wrongly exercised vested jurisdiction and as such the impugned order cannot be allowed to hold field further . Consequently , the revision petition in hand is allowed and impugned order is set aside. No order as to the costs.