Legal Environment for Business in Nepal

The legal environment of business is the set of laws, rules, regulations, courts and legal institutions within which a business must operate. It covers laws on contracts, companies, partnership, sale of goods, labour, taxation, consumer protection, competition and intellectual property. It sets the limits of lawful business activity, protects the rights of businesses, consumers and employees, and gives remedies when rights are violated.

A minor (a person under 18 years in Nepal) is declared incapable of contracting because he lacks the maturity, experience and judgment to understand the nature and consequences of a contract. The law protects him from being cheated or exploited by shrewd adults and from making imprudent bargains that could harm his property and future. For this reason a contract with a minor is generally not enforceable against him.

The offeror (or proposer) is the person who makes a proposal or offer to another, signifying his willingness to do or abstain from doing something in order to obtain the other's assent. The person to whom the offer is made is the offeree.

Example: Ram offers to sell his motorcycle to Shyam for Rs 1,50,000. Ram is the offeror and Shyam is the offeree.

An injunction is a court order that directs a person to do a particular act or to refrain from doing it. It is a judicial remedy, issued where damages would not be adequate, to prevent a wrong or the continuation of one. A prohibitory injunction restrains a person from doing an act, and a mandatory injunction orders a person to do an act. For example, a court may restrain a person from breaching a contract or from using another's trademark. In Nepal the Supreme Court and High Courts issue such orders under writ jurisdiction (for example, mandamus, prohibition, certiorari, habeas corpus and quo warranto).

Yes. A contingent contract is a valid contract. It is a contract to do or not to do something if some uncertain event, collateral to the contract, does or does not happen. For example, an insurance company agrees to pay compensation if a house is burnt. It satisfies the essentials of a valid contract (offer, acceptance, consideration, capacity, free consent and lawful object). It is enforceable only when the uncertain event occurs; if the event becomes impossible, the contract becomes void.

Four major sources of law are:

1. Constitution: The supreme law of the country.
2. Legislation (statutes/Acts): Laws made by the Federal Parliament and provincial and local legislatures.
3. Custom and usage: Long-established practices accepted as binding.
4. Judicial precedents (court decisions): Rulings of the Supreme Court and higher courts that guide later cases.

Other sources include international treaties, delegated legislation (rules and regulations) and equity.

A common carrier may lawfully refuse to carry goods in these cases:

1. Goods are dangerous or likely to damage other goods or the vehicle, such as explosives, inflammable or poisonous goods, when the consignor does not disclose their nature or the carrier is not equipped to carry them.
2. The carrier's capacity is exhausted or the goods are outside its line of business, for example no space is available, the goods are not of the kind it carries, or the route is not one it serves.

It may also refuse if the freight is not paid or tendered, if the goods are not properly packed, or if the goods are illegal.

Dipak cannot recover the rent. A contract whose object is unlawful is void, and gambling is unlawful, so an agreement to let a flat for use as a gambling den has an unlawful object and consideration. The contract is therefore void and unenforceable, and the court will not help Dipak recover the rent, because it cannot enforce an agreement made for an illegal purpose. Dipak, who knew the purpose, is a party to the illegality.