Professional Documents
Culture Documents
Introduction
What is business?
(Business is as old as civilization. Over the period of time it has gained enormous power over customers/employees/shareholders)
a) b) c) d)
Characteristics of Law
A body of rules For the guidance and conduct of persons Imposed Enforced by the executive Presupposes a State Contents are non-static Develop Social Order & Compel Social Member to remain in order Serves Social/Political/Economic purpose Law & Morality ignorantia juris non excusat
Classifications of Law
Public Law / Private Law Criminal Law / Civil Law Substantive Law / Procedural Law International Law / Municipal Law Public International Law / Pvt. Int. Law
Law of
Contract
The law of contract is that branch of law which determines the circumstances in which promises made by the parties to a contract shall be legally binding on them. Its rules define the remedies that are available in court of law against a person who fails to perform his/her contract and conditions under which the remedies are available
What is a Contract ?
An Agreement Enforceable by law Made between atleast two parties By which rights are acquired by one, & Obligations are created on the part of another And on failure, the other party has a remedy.
All agreements are not contracts, but all contracts are agreements
Free & Genuine consent of the parties Lawful Objects Must not have been expressly declared Void Certainty & possibility of performance Legal Formalities
may
Classification of Contract
Classification as per Validity
(void/voidable/illegal/unforceable)
Completion of Communication
Offer or Acceptance OFFER : when it comes to the knowledge of the Offeree ACCEPTANCE : (i) As against the offeror : when putted into course of transmission (out of acceptors power) (ii) As against the acceptor : when it comes to the knowledge of the offeror Revocation of Offer or Acceptance (i) As against the person who makes it -when putted into course of transmission. (ii) As against the person to whom it is made -- when it comes to his knowledge
Consideration
When A promises to do something A must get something in return this something is known as consideration (Affirmative Act / Abstinence / Promise) It must move at the desire of the promisor It may move from promisee or any other person It may be act, abstinence, forbearance or promise It may be past, present, future Need not be adequate It must be real and not illusory It must not be something which the promisor is not already bound to do It must not be illegal / immoral Stranger to the Contract
Compensation for Voluntary Services [25 (2)] Promise to pay a time barred debt [25 (3)] Completed gift [Expl. 1 to Sec. 25] Agency [Sec. 185] Charitable subscription
Capacity to Contract
As per Sec. 10 an agreement becomes a contract if it is entered into between the parties competent to contract. As Sec. 11 declares following persons to be incompetent to contract; a) Minors b) Persons of unsound mind c) Persons disqualified by from contracting Alien Enemies / Corporations / Insolvent / Convicts
Free Consent
Sec. 13 two or more persons are said to be consented when they agree upon the same thing in the same sense A consent is said to be free when it is not caused by; a) coercion sec 15; b) undue influence sec 16; c) fraud sec 17; d) misrepresentation sec 18; e) mistake sec 20, 21 & 22
Legality of Object
Sec 23 declares that object & consideration of a contract should be lawful Consideration & object could be unlawful:a) If it is forbidden by law b) If it is of such a nature that, if permitted, it would defeat the provisions of any law c) If it is fraudulent d) If it involves or implies injury to the person or property of another e) If the court regards it as immoral f) If the agreement opposed to public policy
Void Agreements
The following agreements have been expressly declared to be void by the Contract Act; Agreements by incompetent parties-(Sec11) Agreements made under a mutual mistake of fact (Sec 20) Agreements, the consideration or object of which is unlawful (Sec 24) Agreements made without consideration (Sec 25) Agreements, meaning of which is uncertain (Sec 29) Agreements to do impossible acts (Sec 56)
Contingent Contracts
i) ii) iii)
Contract may be Absolute OR Contingent Absolute contract is one in which the promisor binds himself to performance in any event unconditionally A contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen (Sec 31) 3 essential characteristics of Contingent. Contract;
Its performance depends upon happening or non-happening of some event in future The event must be uncertain The event must be collateral, i.e. incidental to the contract
Performance of Contract
Sec 38 says if a promisor has made an offer to perform as per the contract and the promisee does not accept that, the promisor is not responsible for non performance. By whom the contract must be performed; Promisor himself, Agent, Legal Rep., Third Person, Joint Promisors. Devolution of joint liabilities (Sec 42 to 44) (When 2 or more Promisors have made the promise, they are known as the joint promisors) All of them must fulfil the promise jointly (42), If not, 43 comes into effect thereby; liability of joint promisors is joint & several, a joint promisor may claim contribution, sharing of loss arising from default of one (43 para 1,2,3)
Discharge of Contract
Discharge of contact means termination of the contractual relationship between the parties. A contract may be discharged by; Performance Agreement of Consent Impossibility Lapse of time Operation of law Breach of contract
a) b) c) d) e) f)
Quasi Contracts
Law of Quasi Contract Law of Restitution As a matter of fact Quasi Contract is not a contract at all. It is rather created by Law. It is an obligation which the law creates in the absence of any agreement. Sec. 68 -72 deals with following kinds of quasicontractual obligations; 1. Supply of necessaries 2. Payment by an interested person 3. Obligation to pay for non-gratuitous 4. Responsibilities of finder of goods 5. Mistake or Coersion 6. Quantum meruit >> as much as erned 7. Compensation for failure to discharge obligation created by quasi contracts
Guarantee
(Sec. 126) A contract of guarantee of a contract to perform the promise or discharge the liability of a third person in case of his default. The person who gives surety Who defaults principal debtor To whom it is given creditor It may be oral or written; express or implied Essential features; Concurrence/Primary & Secondary liability/Essentials of a Valid Contract (in case of principal debtor being a minor, the surety is regarded as principal debtor)
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CoG
Three Parties Liability is Secondary Total three contracts Surety to give guarantee upon debtors request Debt/duty already exists the performance of which has been guaranteed by the surety
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A few features
Nature of suretys liability (coextensive/limitation) Kinds of guarantee (specific / continuing) Revocation of Continuing Guarantee (notice/death etc.) Discharge of Surety (suretys liability ends) (revocation/creditors conduct/invalidation)
Bailment
Ch. IX (sec 148 - 181) of Indian Contracts Act 1872 Bailment means delivery of goods by one person to another for some purpose upon a contract, that they shall, when the purpose is accomplished be returned or disposed off as per the directions given by the person delivering them. One who delivers called Bailor and to whom delivered called Bailee. >>> (sec. 148) Duties of Bailee (take care of bailed goods/not to make unauthorise use/exclusive benefits to the bailee/not to mix the bailed goods with his own/to return the goods) Duties of Bailor (disclose known faults/bear extraordinary expenses of the bailee/receive back the goods/indemnify bailee in case of premature termination)
Cntg. >>>
Law relating to lien; Lien means right of a person to retain possession of some goods until the claims are satisfied. These could be of two types; i) Particular Lien & ii) General Lien (sec 170) (sec 171) Only those goods All the goods which Against which services are in possession Have been rendered (bankers/attorneys)
Pledge
Bailment of goods as security for payment of a debt for performance of a promise is called pledge; in this case The bailor is called >> pledger or pawnor The bailee is called >> pledgee or pawnee (sec 172) Pledge is bailment of goods as security, bailment is for a purpose of any kind In case of default, pawnee may sell the pledged goods, bailee may either retain the goods or sue for his charges In case of pledge, the pawnee cannot use the goods pledged, in case bailment bailee may do so if the contract so provides
Contract of Agency
Ch. X (sec. 182-238) of Indian Contract Act 1872 An Agent is a person employed to do any act for another, or to represent another in dealings with third person(s) --- [sec. 182] Person who represent called Agent Person who is represented called Principal Essentials of Agency Relationship; 1. Agreement btn. Principal and the Agent (no consideration is necessary to create agency) & 2. Intention of the Agent to act on behalf of the Principal
A few features
Creation of an Agency
(Express Agreement/Implied Agreement/Ratification)
Duties of Agent
(to carry out work undertaken as per instructions/to carry out work with reasonable care,skill & dilligence/to render accounts to the Principal/not to deal on his own account/to pay sums received for the principal/to protect & preserve interest of the principal in case of his death or insolvency/not to use the information obtained in the course of agency against the principal/not to make secret/not to delegate authority
Contd.
maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument [sec 5] Parties to the bill >>> three (drawer, drawee, payee) Elements (writing, contain an order to pay, order must be unditional, requires 3 parties, sum payable must be certain) A cheque is a bill of exchange drawn upon a specified banker and payable on demand [sec 6]
A person who is or has been a Judge of a High Court, shall be its President >>State Govt. appoints under consultation with CJ of HC Term is 5 yrs or 67 yrs of age, whichever is earlier Jurisdiction: 1. >5 lac but not more than 20 lac, 2.Appeals against the order of District Forum
Powers of MRTPC
Powers
Of a Civil Court To enquiry and pass final order To make enquiry & express opinion To grant temporary injunction To award compensation To enforce orders of MRTPC To investigate whether the orders are being implemented To punish for contempt To regulate the procedure
Duties:
To comply with RBI direction To ensure compliance of FEMA To produce books of accounts RBI may issue instructions time to time RBI may inspect the authorized person
FEMA
Contravention & Penalties:
Penalties Enforcement of orders of Adjudicating Authority Power to compound contravention
Appelate Tribunal:
Constitution/Chairperson & Members/Term (5yrs/65+62 yrs age bar respectively)
1. 2. 3. 4.
Examination of Applications Exclusive Marketing Rights (Application & Grant) Opposition to Grant of Patent (within 4 mnths of ad) Working of Patents
contg..>>>
Registration of Copyright [sec 44-50] Infringement of Copyright [sec 51] Civil Remedies for Infringement [sec 55]
IPO
i) ii) iii) Prospectus (Invitation to public, dating, registration) Contents of Prospectus General Information Capital Structure Terms of the present offer (objects, project cost,
means of financing (including contribution of promoters)
iv) Co., mgmt & project v) Particulars in regard to the co. and other listed companies under the same mgmt vi) Outstanding litigation vii) Mgmt.s perception of risk factors Liabilities for mis-representation in prospectus
(against the co., directors, promoters & experts)
Contg. >>>
keeping the register, Power to close) Annual Return (Every co. having sharing capital shall file this within 60 days of AGM)
Authorized, Registered or Nominal Capital Issued & Subscribed Capital Called-up Capital Paid-up Capital Uncalled Capital Reserve Capital Reduction of Share Capital (Under sec 100 a co.
may do so subject to confirmation by the court)
Contg. >>>
1. 2. 3.
Conversion of debentures or loan into shares Stock & Shares (Distinction) Application & Allotment of Shares Share Certificate Share Warrant Distinction between Share Warrant & Share Certificate Buy Back of Securities Transfer of Shares
Contg. >>>
1.
Surrender of Shares (Sec 77 prohibits) Forfeiture of Shares Purchase by Co. of its own shares Dividends Debentures Appointment of Directors;
First Directors, 2.Appointment by Co., 3.By the Board, 4.By third parites, 5.By proportional representation, 6.By the Central Govt.
1.
Removal of Directors;
Shareholders[284], 2.Central Govt., 3.Co. Law Board
Contg. >>>
Winding up OR Liquidation >>Last stage in a Co.s life A Process in which the Co. is dissolved Official Liquidator & His Duties Dissolution of Company [481] Defunct Company [560] Restoration