Commercial law governs the rights, terms, and behaviour of individuals and companies involved in commerce. It also covers legal issues that can arise in business operations. The global social and economic landscape is changing rapidly. Modern businesses require a clear understanding and practical application of commercial and contract law. Commercial law covers many areas, including trade, sales, business contracts, banking, insurance, finance, partnership, bankruptcy, and taxation. It defines the rights and responsibilities of parties in contracts such as agency agreements, guarantees, contracts of carriage, and sales of goods. 

Commercial law governs the rules for commercial documents. We help clients understand these rules and the legal formalities involved. We also guide them on preventing legal issues. Our team stays alert to changes in legislation and commercial law in all relevant jurisdictions.

Commercial Law in Pakistan

Pakistan’s commercial legislation is based on the British Legal System, with certain amendments to reflect Shariah ideals. It follows the Common Law system, developed from British India under the Government of India Act, 1935. Key legislations are the Contract Act 1872 (updated by Companies Regulation 1984 and Company Act 2017), Sales of Goods Act 1930, Partnership Act 1932, Negotiable Instruments Act 1881, and Limited Liability Partnership Act 2017.

Realm of Commercial Legislation in Pakistan

The Contract Act, 1872

In Pakistan, the law of Contracts is contained in the Contract Act, 1872. The Act is premised on the English Common Law. The notable provisions in the Act are:

• Agreement: An agreement is any promise (as well as any arrangement of promises) that creates consideration in each other.
• Contract: A contract is an agreement enforceable by law. – Sec.2(b).
• Promisor: The person who proposes is termed the promisor 2(c).
• Promisee: the one who is receiving the proposal is referred to as the promisee – Sec.2(c).

The Negotiable Instrument Act, 1881

The Act concerns itself with promissory notes, cheques, or bills of exchange, etc. Some of the important characteristics of the act are:

• Promissory Note: A promissory note is an instrument in writing (not a bank-note or a currency note) which includes an unconditional obligation signed by the maker, to pay on demand or at a fixed or determinable future time, a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.
• Bill of Exchange: A bill of exchange is a written instrument, signed by the maker, giving an unconditional order to a specific person to pay either on demand or on a fixed or determinable future time a specified sum of money only to, or to the order of, a specific person.

The Sale of Goods Act, 1930

The Sale of Goods Act, 1930, was enacted on 1st July 1930. The law identifies and addresses contracts on which a seller sells or undertakes to sell the property or goods to the purchaser at a price. Implied terms, transfer of title, effects of breach of a sale of goods contract and remedies of commercial parties are also addressed in the act. The most notable features under the Act are:

• Contract of Sale of Goods: A contract of sale of goods is a contract according to which the seller sells or promises to sell the property in the form of goods to the buyer at a price. One part-owner and another may have a contract of sale.
• Price: The price should be in monetary form and paid or offered (payment of cheque, credit card or other money transfer methods) price need not be fixed in the contract, may be left to be fixed in a manner acceptable to the contract, by being measured (e.g. weight), or by a third party.
• Personal Chattels: Goods, all personal chattels, except things in action. Thus, it should be physical things and not the intangible ones.

The Companies Act, 2017

The law was reformed and re-enacted in the Companies Act 2017 regarding companies and the issues which are related to it. The Act replaced the Companies Ordinance 1984 (other than Part VIIIA, which comprised sections 282A-282N). The main points in the Act include:

• Company: refers to a company that is incorporated and registered by this Act or by the company law ~ Sec. 2(17)
• Company Law: refers to the repealed Companies Act, 1913 (VII of 1913), Companies Ordinance, 1984 (XLVII of 1984), Companies Ordinance, 2016 (VI of 2016) and to this Act except where the context indicates otherwise, as a consequence of this section of the Companies Act 2006.

Significance of Commercial Clientele in Pakistan

As a group of commercial law lawyers, we are obliged to comprehend the needs of the clients, negotiate their concerns and have business acumen and, above all, be effective and efficient in relation to time and case management. Our main agenda is to serve the needs of our customers, and Our staff works diligently to assist clients in all matters and provide the best possible solutions.

As a group of commercial law lawyers, we form new organisations into the business and have the needed documentation prepared with the existing institutions. Businesses can be in the form of a corporation, partnership, limited-liability company or any other form. The business also has the ability to be tailored to meet the demands of the customers. In the specific case of this customised business, the process will be activated by the rules and regulations that will be interpreted based on the commercial law. This will assist the businesses in not being held responsible.

In addition, we make it easy on our clients by preparing legal agreements. The number of documents used in commercial dealings is many, and the law of commerce governs how commercial deals are handled. We make sure that the contracts are right and made legally by the business. While business owners can generally handle transactions themselves, complex deals may require legal guidance to ensure compliance with the law. Internet commerce or security regulation are some of the transactions in which a business ought to seek legal advice before initiating them to ensure that it does not impact the business adversely.

We provide clients with a clear understanding of all business processes and transactions. Moreover, we have the responsibility to carefully scrutinise the business process in order to prevent any future suits and to limit any risks related to the business practices of the clients, which can be expensive to the business. Proper business processes and transaction structures help reduce legal risks and potential litigation.

Commercial Disputes & Litigation in Pakistan

There are legal issues that are a part of all commercial and business laws. Nevertheless, the most prevalent one is the breach of contracts. Other problems involve advertising concerns and contradictions, breaches of marketing terms, unfair trade practices, service deficiency, consumer issues and trade secrets leakage, among many others .In some cases, a contract involving two parties can have an impact on the rights of a third party that was not involved in the contract, i.e. third person. On the same note, occasionally, a conflict might entail infraction of more than a single law. We possess special competence in resolving such complex problems.

Besides investigating the case of our client thoroughly and enhancing their legal standing, we assist you in suing and defending them in court. When it comes to litigation, we begin our assignment by acquiring all the information and supporting documents needed. We consider all the cases carefully and dwell on the significant facts of the case. Then our qualified staff researches the applicable case law and former precedents, prepares arguments and pleadings, and conducts frequent briefing sessions with the clients. Next, litigate on behalf of the clients in the court when necessary.

The commercial law offers several possible solutions to the dispute, depending on the nature of the violation. The popular resolutions in commercial litigation consist of financial incentives, areas of damage sustained, rescission of a contract, injunction and other equitable solutions, and mediation, reconciliation, and arbitration. Remedy is determined by whether the breaching party is an individual or a business entity. Business legal matters may be very complicated, and though they might seem simple, the presence of a qualified business attorney to address the legal matters becomes a necessity for the business.

Commercial Transactions in Pakistan

Some of our practices involve that we handle all complex transactions, mergers, asset acquisitions and sales, joint ventures, leasing transactions, financing, bankruptcy-related transactions, and business startups, and the preparation of all types of contracts. Contract terms can be complex. We help clients understand them and maintain strong commercial relationships with their partners. We aim to safeguard business interests, and to service their day-to-day commercial dealings requirements (such as competition law problems, safeguard of intellectual property rights). We aim at making life easy for the client, meeting the goals of the client within time and cost. We are offering our service to local, national and international clients.

Our Expertise

The clients who visit commercial law firms are large businessmen, government, banks, and insurance companies, among others. SARDAR KHAN and CO has an excellent and widely anchored international commercial law practice. We have a group of attorneys with the specialisation of drafting, reviewing and negotiating commercial agreements. These include strategic alliances, large one-off contracts (e.g. outsourcing, systems management and project development contracts) to repeat contracts, and umbrella contracts involving subcontractors and suppliers. The commercial law department has a special interest in how commercial services are introduced to the commercial market and marketed, and has substantial knowledge of marketing and sales promotion.

This, combined with our knowledge of the commercial law, also provides our clients with a substantial edge in more complicated commercial transactions and demerging of companies, since, more often, there is a necessity of advice on strategic business dealings in the context of a corporate deal, e.g. to address transitional service problems or continuing supply. Our combined legal and industry experience provides valuable insights into critical business issues, particularly for private equity firms and investment banks.

Our Approach

Our goal is to continuously bring value to the businesses of our clients by helping them realise their commercial goals most pragmatically through our professional knowledge and business savvy. We are also especially aware of the necessity to defend and advance the legal interests of clients in the conditions of emergency and delicate commercial cases. Our team is conversant with the scope of issues of specialists that may emerge in the day-to-day commercial transactions, including the competition law issues, and the necessity to safeguard intellectual property rights. We collaborate with specialists to provide integrated legal solutions that support our clients’ commercial objectives.

Our clients are locally and nationally leading commercial banks, finance companies, insurance companies and other lenders, and also borrowers in relation to all aspects of secured and unsecured financing of all scales. Those arrangements include:

• Short-term and long-term business loans
• Loans secured by business assets like stock, equipment, aircraft, or ships
• Loans secured by commercial property
• Agreements between multiple lenders and shared loan arrangements
• Financing provided by the seller to the buyer
• Loans are used to acquire companies through leveraged transactions
• Investment funding from venture capital firms
• Letters of credit and related repayment agreements
• Foreign currency exchange transactions
• Leasing and financing for business equipment
• Special lease financing arrangements
• Loans for farming and agricultural businesses
• Buying and selling single loans or groups of loans
• Financial agreements to manage interest rate risks
• Selling receivables and other structured financing methods

Our knowledge of several sectors and our concentration on strategic issues enable us to help our clients negotiate terms protecting them throughout the lending process.