Summary: [Defination of offer and invitation to treat] i) Difference between offer and an invitation to treat.:-. The test is that if the statement or act contemplates that further negotiation will take place, then the statement or act is not binding but merely a preliminary communication before a definite offer is made. Such communication is not an ?offer? but ?an invitation to treat?. ii) When the parties signed a document containing terms on which both the parties agreed then an invitation to treat or correspondence led parties to stage on which they signed the document will not have precedent over the signed document. iii) Difference between alteration, novation and rescission of contract:- There is difference between alteration and novation of contract in section 62 of the Contract Act. The Novation is the complete substitution of the original contract with a new contract. The original contract remains no more in existence and the parties are not required to perform that. Contrarily an alteration of a contract is variation, modification or change in one or more respects which introduces new elements into the details of the contract, cancels some of them but leaves the general purpose and effect undisturbed. Generally the modifications are read into and become part of the original contract. The original terms also continue to be part of the contract and are not rescinded and/or superseded except in so far as they are inconsistent with the modifications. However, those of the original terms which cannot make sense when read with the alterations must be rejected. Same is the distinction between alteration and rescission of contract. iv) Effect of reciprocal promises. Under Section 54 of the Contract Act, when a contract consists of reciprocal promises, such that one of them cannot be performed and the promisor of the last mentioned fails to perform it, such promisor, not only cannot claim specific performance but must pay compensation for the resulting loss.

Summary: (a) Contract Act (IX of 1872)-------S. 124---Constitution of Pakistan, Art. 199---Constitutional petition---Contract ofindemnity---Withdrawal of amount from missing person's Bank account---Scope---Petitioneralong with her daughters sought direction to the respondents to release the amount lying inthe Bank account of her missing husband---Contention of respondents was that the amountcould not be released in favour of the petitioners until and unless death of the missing personwas confirmed and a succession certificate was issued by a court of competent jurisdiction---Validity---Section 124 of Contract Act, 1872, furnished a complete answer to the contentionof respondents---Spouse of the missing person would guarantee through affidavit or executepersonal bond indemnifying the Bank---In the event of the appearance of missingperson, the Bank would not be responsible for re-payment of such amount to the missingperson, which had already been released to his spouse/family members---Spouse of themissing person would be responsible for satisfying the claim of the missing person---Constitutional petition was allowed and the respondents were directed to release the amountin question to the spouse of missing person after obtaining affidavit or personal bond.(b) Qanun-e-Shahadat (10 of 1984)-------Arts. 123 & 124---Burden of proving death of person known to have been alive withinthirty years---Burden of proving that person is alive who has not been heard of for sevenyears---Scope---Court cannot declare a missing person dead for the simple reason that ahuman being does not come into existence on account of any law of the country---Life is notdependable on a law---If the law does not bring into existence a human being by itsdeclaration, it can certainly not declare such human being to have died that too in case ofmissing persons.(c) Islamic law-------Missing person is to be regarded alive till the expiry of ninety years from the date of hisbirth.(d) Qanun-e-Shahadat (10 of 1984)-------Arts. 123 & 124---Burden of proving death of person known to have been alive withinthirty years---Burden of proving that person is alive who has not been heard of for sevenyears---Scope---Article 124 of the Qanun-e-Shahadat, 1984 only creates a presumptionregarding the missing person and it only deals with the concept of production of evidence;the effect of such evidence and the concept of proof and as to on whom such burden wouldlie---Basically Arts. 123 & 124 of the Qanun-e-Shahadat, 1984, define the concept of burdenof proof and apply to a person who desires a judgment from the Court---Judgment indicatedin these Articles is restricted to any legal right or liability and does not extend to anythingelse.(e) Qanun-e-Shahadat (10 of 1984)-------Arts. 123 & 124---Burden of proving death of person known to have been alive withinthirty years---Burden of proving that person is alive who has not been heard of for sevenyears---Scope---Difference exists between natural and civil deaths---Natural death is thephenomenon of the termination of physiological features of creatures, including humans---Besides the natural death of a person, which is due to the termination of all its physiologicalfunctions, legislations provide even the civil death, which presumes a possible natural death---Civil death is always verified by the court decision which recognizes the person dead---In cases of civil deaths, the decision of Court is not based on the fact of physical death, buton its presumption due to the absence of the person from his last residence and the absenceof news for a certain period---Civil death and natural death have same consequences but thisdoes not mean that they are equal institutes---The first is based on the presumption of deaththerefore in a precarious situation which can be recovered in the future, the second is basedon the end of all physiological functions of the person, therefore, the situation is sure---Incivil death, the uncertain situation continues because the person declared dead can reappear.(f) Qanun-e-Shahadat (10 of 1984)-------Arts. 123 & 124---Burden of proving death of person known to have been alive withinthirty years---Burden of proving that person is alive who has not been heard of for sevenyears---Scope---Presumption of death under Arts. 123 & 124 of the Qanun-e-Shahadat, 1984and issuance of succession certificate actually provide a way for the relatives of missingpersons to deal with the financial affairs of the missing person.

Summary: Balochistan Public Procurement Regulatory Authority Rules, 2014-------R.12(1)(b)(c)---Constitution of Pakistan, Art. 199---Packaging / Merging of constructioncontracts--- Petitioner was a pre-qualified contractor and aggrieved of packaging / mergingof construction of ten water dams in four districts into four contracts---Validity---Publicexchequer was not to be made to suffer due to exercise of powers by public functionaries inarbitrary and unreasonable manner giving extra favour to one party at the cost of others---Contracts carrying elements of public interest were to be just, fair, transparent, reasonableand free from any taint of mala fides and all such aspects were always open for judicialreview by High Court in exercise of Constitutional jurisdiction under Art.199 of theConstitution on the touchstone of reasonableness, fair play, natural justice, equality and nondiscrimination---High Court declared packaging / merging of construction of ten dams intofour contracts by authorities as null, void and of no legal effect---High Court further declaredpre-qualification summary prepared by authorities for ten dams of four districts packed /merged into four contracts as null, void and of no legal effect---High Court cancelledfinancial bids submitted by construction companies for ten dams of four districts packed /merged into four contracts, as the same had not been opened till then---High Court directedthe authorities to issue notice inviting tenders / invitations to bid to all already prequalifiedconstruction companies to participate in bidding process for construction of ten dams as tendifferent projects---Constitutional petition was allowed accordingly.Airport Support Services v. Airport Manager 1998 SCMR 2268 and MuhammadAfzal v. Shahzad Asghar Dar 2003 SCMR 280 rel.

Summary: The dispute centered around the interpretation of the term "total loss" in a contract between an insurance company (the appellant) and an individual (the contesting respondent) who purchased a damaged motor vehicle from the insurance company. The insurance company had settled the claim of the insured and sold the damaged vehicle to the contesting respondent as salvage for a sum of Rs. 130,000. The contesting respondent spent a substantial amount on repairing the vehicle but faced difficulties in registering it with the motor vehicle authority due to an existing registration under the same number.The central issue was whether the term "total loss" in the contract referred to the vehicle being reduced to mere wreckage or whether the vehicle retained its character as a motor vehicle, albeit in a damaged state. The insurance company argued that the term referred to the vehicle being a total loss, i.e., mere wreckage, and therefore, it had no liability beyond the sale of the salvage. On the other hand, the contesting respondent contended that the term meant the vehicle was a constructive total loss, and he had the right to use and register it as a motor vehicle.The court analyzed the contract and held that the term "total loss" was ambiguous and should be interpreted against the party that drafted the contract, i.e., the insurance company. Thus, the court ruled that the contesting respondent had purchased a damaged motor vehicle, and the insurance company was liable for the loss suffered by the respondent due to its failure to register the vehicle. Consequently, the court upheld the decisions of the lower courts and decreed the suit in favor of the contesting respondent. The appeal was dismissed, and the insurance company was held responsible for the loss incurred by the contesting respondent.

Summary: The sale agreement stipulated the payment of Rs. 45,000 as the sale consideration, out of which Rs. 500 was paid as earnest money. Additionally, the vendor was responsible for obtaining necessary documents for the registration of the property.However, instead of executing the sale deed, Mst. Ashfaq Jehan executed a sale deed in favor of her husband, Mst. Rehmat Bibi, the appellant No.1, which led to a legal dispute. The respondent No.1, Mst. Zubaida Begum, filed a suit for specific performance of the agreement and cancellation of the registered sale deed.The trial court partially decreed the suit, but it was set aside by the appellate court. The matter then reached the High Court, which upheld the judgment of the appellate court in favor of the respondent No.1.The Supreme Court heard the case and found that the time was not the essence of the agreement dated April 1973, and the vendor failed to perform her part of the contract by not procuring the required documents for the sale deed. The respondent No.1 was put in possession of the property and had paid 80% of the sale consideration.The court ruled that the respondent No.1 was entitled to equitable relief under sections 8 and 27 of the Specific Relief Act, and the appellant No.1 was not a bona fide purchaser without notice of the earlier transaction. The court directed the respondent No.1 to deposit 20% of the balance sale consideration, and upon doing so, the sale deed would be executed in their favor. Any subsequent transactions after the agreement in April 1973 were deemed annulled. The appeal was dismissed, and the judgment of the High Court was upheld.

Summary: The case originated from a contract entered into between ZTE and the petitioner, where the petitioner provided an advance payment guarantee. The guarantee was initially valid until 22.12.2007 and was subsequently extended until 22.10.2008. However, the guarantee was not further extended, leading to a dispute between the parties. The contesting respondent, ZTE, claimed that the guarantee had been breached and served notice for encashment of the guarantee. As the claim remained unattended, ZTE filed a suit in the civil courts in Islamabad for the recovery of the guaranteed amount. The suit was initially decreed in favor of ZTE by the civil court and subsequently dismissed by the Islamabad High Court upon appeal by the petitioner. In the Supreme Court, the main argument put forth by the petitioner was that the guarantee was a demand guarantee, and strict compliance with its terms was necessary for the liability of the petitioner. The petitioner contended that the demand made by ZTE did not comply with the guarantee's requirements, thus justifying the refusal of payment. The Supreme Court, after considering the arguments and the legal principles, held that demand guarantees are akin to letters of credit and that strict compliance is generally required. In this case, the demand made by ZTE fell short of the guarantee's requirements as it did not include a categorical statement of breach. The Court concluded that the demand was not in strict compliance and did not warrant the application of the substantial compliance rule. Therefore, the Supreme Court allowed the appeal, dismissed ZTE's suit, and converted the petition into an appeal. The Court's decision was based on the principles established in the Karachi Shipyard case and other relevant authorities. It emphasized that the liability of the issuer of a demand guarantee is independent of any underlying disputes between the parties and depends on the fulfillment of the guarantee's terms. Overall, the Supreme Court ruled in favor of the petitioner, stating that ZTE's demand did not meet the requirements of the guarantee, and therefore, the petitioner was not liable to pay.

Summary: (a) Contract Act, 1872 (S.62) – Novation of Contract – Effect of Subsequent Agreement: ----Scope of Novation – Existing Obligations – Preservation of Rights Under Prior Agreements. Under Section 62 of the Contract Act, 1872, novation occurs when the parties to a contract agree to substitute a new contract for it. However, novation does not extinguish accrued obligations under the original contract if the subsequent agreement expressly preserves those obligations. In the case of PTCL v. Circlenet Communications Pakistan (Pvt.) Ltd., the 3rd Settlement Agreement explicitly preserved PTCL's pending claims and legal proceedings arising from earlier agreements. Therefore, the obligations under the 1st and 2nd Settlement Agreements were not extinguished. Held: Where accrued obligations under earlier agreements are expressly preserved in a subsequent agreement, novation does not nullify such obligations, and parties remain bound by those terms. ----Cited Cases: Karachi Municipal Corporation v. Nawabuddin 1990 CLC 1247 (b) Implied Terms – Scope and Application – Business Efficacy Test: ----Implied Contractual Terms – Requirements – Business Efficacy and Non-Contradiction with Express Terms. For a contractual term to be implied, it must satisfy the "business efficacy test" and must not contradict express terms of the contract. The court emphasized that implied terms cannot override explicit provisions. In this case, Circlenet argued that an implied term prevented PTCL from terminating the ITTA (International Incoming Traffic Agreement) until the full outstanding amount under the 3rd Settlement Agreement was recovered. However, the termination clause in ITTA expressly allowed termination with 30 days' notice without assigning any reason. Held: The court rejected the implied term argument, stating that such an implication would contradict the express termination clause and violate the "Entire Agreement" clause, which superseded all previous agreements. ----Cited Cases: BP Refinery (Westernport) Pty Ltd v. Shire of Hastings [1977] UKPC 13 Philips Electronique v. British Sky Broadcasting (1995) EMLR 472 (c) Contract Termination – Unilateral Termination Clause – Validity and Enforcement: ----Termination Clause – Unilateral Right – Neutrality of Termination Clause. A termination clause granting unilateral termination rights to either party with notice is valid and enforceable if it does not depend on fault or breach by either party. In this case, PTCL terminated the ITTA with 30 days' notice as per the agreed termination clause, which was neutral and did not require proof of default. Held: Where a termination clause is neutral and grants unilateral rights to terminate with notice, such termination cannot be challenged unless it breaches an express contractual obligation. ----Cited Cases: West Pakistan Industrial Development Corporation v. Aziz Qureshi 1965 SCMR 745 (d) Novation – Partial vs. Complete Substitution of Contract: ----Effect of Subsequent Agreement on Accrued Rights Under Prior Agreements. Novation does not necessarily extinguish all obligations under an earlier contract unless expressly agreed by the parties. In the present case, the 3rd Settlement Agreement did not replace the accrued obligations under the 1st and 2nd Settlement Agreements, as Clause 3 of the 3rd Settlement Agreement preserved PTCL's pending claims and ongoing legal proceedings. Held: A subsequent agreement does not annul prior accrued obligations unless it explicitly states so. The preservation of claims in Clause 3 negated the argument for complete novation. ----Cited Cases: Karachi Municipal Corporation v. Nawabuddin 1990 CLC 1247 (e) Contract Interpretation – Entire Agreement Clause: ----Scope and Effect of "Entire Agreement" Clause – Supersession of Previous Agreements. An "Entire Agreement" clause indicates that the agreement constitutes the full understanding between the parties and supersedes prior agreements or representations. In this case, the ITTA contained an "Entire Agreement" clause, which precluded any implied cross-reference or dependency on the 3rd Settlement Agreement. Held: The "Entire Agreement" clause prohibits the court from inferring implied terms or obligations from earlier agreements unless explicitly mentioned in the new agreement. ----Cited Cases: Philips Electronique v. British Sky Broadcasting (1995) EMLR 472 (f) Principle of Accrued Rights Under Settlement Agreements: ----Preservation of Rights – Legal Proceedings Despite Subsequent Agreements. The 3rd Settlement Agreement expressly preserved PTCL's right to pursue pending claims and legal proceedings despite the restructuring of payment terms. The court emphasized that such preservation clauses must be given effect, and obligations under previous agreements cannot be considered extinguished. Held: Express preservation of pending claims in settlement agreements bars arguments of implied novation or waiver of accrued obligations. ----Disposition: The appeals filed by Circlenet Communications Pakistan (Pvt.) Ltd. were dismissed. The 3rd Settlement Agreement did not extinguish accrued obligations under earlier agreements, and PTCL's right to pursue claims and recover amounts under prior agreements was upheld. No order as to costs.

Summary: The case involved an agreement for the sale and delivery of a luxury car, a Porsche Panamera Turbo S E-Hybrid MY 18 (Model 2018). The respondent, Akbar Adamjee, entered into the agreement with the petitioner but faced difficulties in getting the car cleared from the Customs Authority. Akbar Adamjee filed a suit for specific performance, seeking delivery of the car. The learned Single Judge of the High Court granted a mandatory injunction, ordering the defendant to file the necessary documentation for clearance and directing that the car be delivered to the plaintiff once it is ready. The petitioner appealed the decision, but the learned Division Bench upheld the Single Judge's order.The Supreme Court, in its judgment, affirmed the High Court's decision. It stated that specific performance could be ordered for specific and ascertained goods, which applied to the customized luxury car in this case. Damages were not an adequate relief for such goods, and therefore the Court could direct specific performance. The Court also noted that the respondent had paid the entire consideration as per the agreement. The Court found no reason to interfere with the High Court's judgment, and the petition was dismissed.

Summary: The court further pointed out that even if the said document and the page were read together as a contract, the respondent's suit for specific performance could not be granted as the sale to the contesting petitioners (third parties) had already taken place, and there was no evidence of fraudulent or collusive sale.The court also considered the defense raised by the contesting petitioners, who had purchased the land from the petitioners (sellers) for valuable consideration, without knowledge of the alleged contract with the respondent. The court invoked section 41 of the Transfer of Property Act, which protects bona fide purchasers for value without notice, and section 27(b) of the Specific Relief Act, which allows the protection of subsequent transferees who acted in good faith and paid consideration without notice of an earlier contract.In conclusion, the Supreme Court set aside all previous judgments and dismissed the respondent's suit for specific performance. The court allowed the respondent to seek recovery of any money paid to petitioner No. 1 and the return of any money deposited in court.

Summary: .The Supreme Court noted that the plaint lacked specific details of the oral agreement and the land involved. The prescribed forms for a specific performance plaint require such particulars to be mentioned. As a result, the agreement was considered void for uncertainty under the Contract Act, and it could not be specifically enforced under the Specific Relief Act. The written agreement, exhibit P1, also did not adequately describe the land. Furthermore, the court found that the plaintiffs had failed to establish their possession of the land as owners or prove that possession was received pursuant to the alleged sale. The suit was deemed barred by limitation, and the benefit of section 53A of the Transfer of Property Act was not extended to the plaintiffs or their predecessor. Consequently, the Supreme Court declined to grant leave to appeal, dismissed the petition, and also dismissed the related CMA No. 4061 of 2018.