Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
0 of .
Results for:
No results containing your search query
P. 1
Final solved MB0051

Final solved MB0051



|Views: 466 |Likes:
Published by Avinash Singh
Final solved MB0051
Final solved MB0051

More info:

Categories:Types, School Work
Published by: Avinash Singh on Nov 24, 2012
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less





Master of Business Administration - Semester 3
MB 0051: “Legal Aspects of Business
(4 credits)
Q1. Discuss the nature and significance of business law?
 The term „law is used in many senses: you may speak of the law
 of physics, mathematics, science, or the laws of the football or health. Inits widest sense, „law means any rule of conduct, standard or pattern, to
 which actions are required to conform; if not conformed, sanctions areimposed. When we speak of the law of a State, we use the term „law in a
 special and strict sense
Significance of law
Law is a body of rules:-
 These rules prescribe the conduct,standard or pattern to which actions of the persons in the state arerequired to conform. However, all rules of conduct do not becomelaw in the strict sense. We resort to various kinds of rules to guideour lives. For example, our conduct may be guided by a rule such as“do not be arrogant” or “do not be disrespectful to elders orwomen”. These are ethical or moral rules by which our daily livesare guided. If we do not follow them, we may lose our friends andtheir respect, but no legal action can be taken against us.
Law is for the guidance or conduct of persons :–
both humanand artificial. The law is not made just for the sake of making it. Therules embodied in the law are made, so as to ensure that actions of the persons in the society conform to some predetermined standardor pattern. This is necessary so as to ensure continuance of thesociety. No doubt, if citizens are „self-enlightened
or „self-controlled
, disputes may be minimized, but will not be eliminated.Rules are, therefore, drawn up to ensure that members of thesociety may live and work together in an orderly manner. Therefore,if the rules embodied in the law are broken, is used to enforceobedience, and certain consequences ensue.
Law is imposed :-
Law is imposed on the members to bring aboutan order in the group, enabling it to continue and prosper. It is notsomething which may or may not be obeyed at the sweet will of themembers of society. If you cannot impose a rule it is better not tohave it. Thus, law is made obligatory on the members of the society.
Law is enforced by the executive :-
Obviously, unless a law isenforced it ceases to be a law and those persons subject to it willregard it as dead.
For example
, if A steals Bs bicycle, he may be
 prosecuted by a court and may be punished. Also, the court mayorder the restitution of the bicycle to its rightful owner i.e., B. If thegovernment passes many laws but does not attempt to enforcethem, the citizens lose their respect for government and law, andsociety is greatly weakened. The force used is known as sanctionwhich the state administers to secure obedience to its laws.
The state :-
A state is a territorial division, with people thereinsubject to a uniform system of law administered by some authorityof the state. Thus, law presupposes a state.
Content of law :-
 The law is a living thing and changes throughoutthe course of history. Law responds to public opinion and changesaccordingly. Law can never be static. Therefore, amendments aremade in different laws from time to time. For example, theMonopolistic and Restrictive Trade Practices Act, 1969, has beensubjected to many amendments since its inception in 1969.
Two basic ideas involved in law :-
 The two basic ideas involvedin any law are: (i) to maintain some form of social order in a groupand (ii) to compel members of the group to be within that order. These basic ideas underlie formulation of any rules for the membersof a group. A group is created because first, there is a social instinctin the people to live together and secondly, it helps them in self-preservation. Rules are made by the members of the group, so thatthe group doesnt whither away.
Law is made to serve some purpose which may be social,economic or political :-
Some examples of „law in the widest
 sense of the term. „Law in its widest sense may include:
Moral rules or etiquettes, the non-observance of which may lead topublic ridicule,
Law of the Land the non-observance of which may lead to arrest,imprisonment, fines, etc.,
Rules of international law, the non-observance of which may lead tosocial boycott, trade-sanctions, cold war, hot war, proxy war, etc.
Q2. Define contract of indemnity. Describe the rights of theindemnifier and the indemnity holder.Ans:-- Meaning of indemnity-
Secs.124 and 125 provide for a contractof indemnity. Sec.124 provides that a contract of indemnity is a contractwhereby one party promises to save the other from loss caused to him(the promisee) by the conduct of the promisor himself or by the conductof any other person. A contract of insurance is a glaring example of suchtype of contracts. A contract of indemnity may arise either by (i) anexpress promise or (ii) operation of law, e.g., the duty of a principal toindemnify an agent from consequences of all lawful acts done by him asan agent. The contract of indemnity, like any other contract, must have all theessentials of a valid contract. These are two parties in a contraction of identity indemnifier and indemnified. The indemnifier promises to makegood the loss of the indemnified (i.e., the promisee).
A contracts to indemnify B against the consequences of anyproceeding which C may take against B in respect of a certain sum of Rs200. This is a contract of indemnity.
Rights of the indemnified (i.e., the indemnity holder)-
He is entitledto recover from the promisor: (i) All damages which he may be compelledto pay in any suit in respect of any matter to which the promise toindemnify applies; (ii) All costs of suit which he may have to pay to suchthird party, provided in bringing or defending the suit (a) he acted underthe authority of the indemnifier or (b) if he did not act in contravention of orders of the indemnifier and in such a way as a prudent man would act inhis own case; (iii) All sums which may have been paid under the terms of any compromise of any such suit, if the compromise was not contrary tothe orders of the indemnifier and was one which it would have beenprudent for the promisee to make.
Rights of the indemnifier-
 The Act makes no mention of the rights of indemnifier. However, his rights, in such cases, are similar to the rights of a surety under Sec.141, viz., he becomes entitled to the benefit of all thesecurities which the creditor has against the principal debtor whether hewas aware of them or not.
Q3. What is Partnership? Briefly state special features of apartnership on the basis of which its existence can be determinedunder the Indian Partnership Act?Ans:--
Partnership is defined as “the relationship between persons whohave agreed to share profits of a business carried on by all, or by any of them acting for all”. On analysis of the definition, certain essentialelements of partnership emerge. These elements must be present so as toform a partnership and are discussed below.
1. Partnership is an association of two or more than two persons:-
 There must be at least two persons who should join together to constitutea partnership, because one person cannot become a partner with himself. These persons must be natural persons having legal capacity to contract. Thus, a company (which is an artificial person) cannot be a partner.Similarly, a partnership firm cannot be a partner of another partnershipfirm. As regards maximum number of partners in a partnership firm,Sec.11 of the Companies Act, 1956, puts the limit at 10 in case of bankingbusiness and 20 in case of any other business.
2. Partnership must be the result of an agreement between twoor more persons:-
An agreement presupposes a minimum number of two persons. As mentioned above, a partnership to arise, at least twopersons must make an agreement. Partnership is the result of an

Activity (16)

You've already reviewed this. Edit your review.
1 hundred reads
Varsha Tilwani liked this
Varsha Tilwani liked this
Shiv Singh liked this
nadeemsayyed liked this
Rupali Dhende liked this
Rupali Dhende liked this
Danish Jamal liked this

You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->