Definition and scope of Business

Law:
The term ‘Business Law’ may be defined as
that branch of law which comprises law
concerning trade, industry and commerce,
i.e., it deals with contractual situations and
the right and obligations arising out of
mercantile transactions between mercantile
persons.

BL Lect 1 JollySarkar
 Introduction to Contract Act
• Contracts are the basis of many daily activities.
• Contract law is based on the principle expressed in
the Latin phrase pacta sunt servanta
• They provide the means for individuals and
businesses to sell and otherwise transfer property,
services, and other rights.
• Without enforceable contracts, commerce would
collapse.

BL Lect 1 JollySarkar
 Indian Contract Act, 1872

• 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.
• It is the most important branch of business
law.

BL Lect 1 JollySarkar
 Definition of Contract
According to Sec.2(h) of the Indian Contract Act: “An
agreement enforceable by law is a contract.”

Contract consists of two elements:-

4) An agreement
5) Legal Obligations

• Agreement + enforceability by law = contract.

• Agreement must create a legal obligation or duty.

BL Lect 1 JollySarkar
 1. Agreement
• Acc. To Sec. 2(e), “Every promise and every set of
promises, forming consideration for each other, is an
agreement.”

Promise
• Acc. To Sec.2(b), “When a person to whom the
proposal is made signifies his assent thereto, the proposal
is said to be accepted. A proposal when accepted,
becomes a promise.”

•Agreement = Offer + Acceptance.

BL Lect 1 JollySarkar
 2. LEGAL OBLIGATION
Social agreements
Legal agreements

“Legal agreements are contracts.”

Thus an agreement is a wider term than a contract.

“All contracts are agreements but all agreements are

not contracts”.

BL Lect 1 JollySarkar