Sikkim Manipal University

- MBA -

MB0051 – Legal Aspects of Business

Semester: 3 - Assignment Set: 2 Question 1: What are the situations which cannot be referred to arbitration? Answer: Arbitration law is a process that involves the assistance of one or more neutral parties known as arbitrators. Arbitrators are charged with hearing evidence from numerous involved parties in a dispute, and their main duty is to issue an award deciding who gets what in order to resolve the situation. In some instances of arbitration law, an arbitrator may also issue an opinion in conjunction with the award, which is designed to explain the award and the reasoning that led to it. Arbitration law and mediation law are two different processes and should not be confused. The award and the opinion are not capable of being reviewed by a court, and there is no availability for appeal. The purpose of arbitration law is to serve as a substitution to a trial and a review of the decision by a trial court. Subject matter of arbitration: Any commercial matter including an action in tort if it arises out of or relates to a contract can be referred to arbitration. However, public policy would not permit matrimonial matters, criminal proceedings, insolvency matters anti-competition matters or commercial court matters to be referred to arbitration. Employment contracts also cannot be referred to arbitration but director - company disputes are abatable (as there is no master servant relationship here)5. Generally, matters covered by statutory reliefs through statutory tribunals would be nonabatable. Arbitration is an Alternative Dispute Resolution process whereby a person chosen as an arbitrator settles disputes between parties. Arbitration is similar to a court trial, with several exceptions:             The arbitrator makes the decision called an "arbitration award” The arbitration does not take place in a courtroom The arbitration award is binding. With rare exceptions, there is no right to appeal Arbitration is not a matter of public record. It is private and confidential There is no court reporter or written transcripts Lawyers generally prepare their cases in an extremely limited manner The rules of evidence are relaxed so that the parties have a broader scope, more expanded opportunity to tell their stories to present their cases With very few exceptions, it is much less expensive than legal litigation An arbitration time frame is substantially less than that of litigation and going to trial No jury. The Arbitrator(s) maintain neutrality and conflicts of interests Generally, all paperwork and evidence presented are destroyed after the Arbitration The arbitration and arbitration award does not have to adhere to Judicial Case precedent nor formality of traditional court proceedings In India, Arbitration is one of the most effective and trusted proceedings in regard to private dispute settlement are guided by the Arbitration & Conciliation Act, 1996.

Kind of matters cannot be referred for arbitration: As per general practice, matters involving moral questions or questions of public law cannot be resolved by arbitration. For instance, the following matters are not referred to arbitration:

Bhupinder Singh

Reg. No. 521063004

Page 1 of 9

consider alternatives and endeavour to reach an agreement. 89 permits the Court to refer a dispute for conciliation even where parties do not consent.Sikkim Manipal University . 521063004 Page 2 of 9 .MBA - MB0051 – Legal Aspects of Business Semester: 3 . with the assistance of a neutral third party (the conciliator). develop options. Thus the meaning of ‘conciliation’ as can be gathered from the 1996 Act has to be read into sec. This makes no difference as to the meaning of ‘conciliation’ under sec. In order to understand what Parliament meant by ‘Conciliation’. The conciliator may have an advisory role on the content of the dispute or the outcome of its resolution. it says that once a reference is made to a ‘conciliator’. It is true. The conciliator may advise on or determine the process of conciliation whereby resolution is attempted. Bhupinder Singh Reg. section 62 of the said Act deals with reference to ‘Conciliation’ by agreement of parties but sec. based on the UNCITRAL Rules for conciliation. we have necessarily to refer to the functions of a ‘Conciliator’ as visualized by Part III of the 1996 Act. provided the Court thinks that the case is one fit for conciliation. 89 of the Code of Civil Procedure. No. 89 because. and may make suggestions for terms of settlement. it may be noted. proceedings Criminal proceedings Questions relating to charity or charitable trusts Matters relating to anti-trust or competition law Dissolution or winding up of a company Indian Arbitration Act follows the guideline of:    The Geneva Convention on the Execution of Foreign Arbitral Awards. Role of conciliator:  The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute. identify the disputed issues. the 1996 Act would apply. but not a determinative role. give expert advice on likely settlement terms.Assignment Set: 2         Matrimonial matters Guardianship of a minor or any other person under disability Testamentary matters Insolvency. and may actively encourage the participants to reach an agreement. The 1996 Act is. 1927 The New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards The Geneva Protocol on Arbitration Clauses of 1923 Question 2: What is the role of a Conciliator? Answer: Conciliation: Conciliation is a process in which the parties to a dispute.

The Commission is empowered to enquire into Monopolistic or Restrictive Trade Practices upon a reference from the Central Government or upon its own knowledge or information. The Commission can also order a preliminary investigation by the Director General of Investigation and Registration when a reference on a restrictive trade practice is received from the Central/State Government. fairness and justice.Sikkim Manipal University . at any stage of the conciliation proceedings. Enquiries are instituted by the Commission after the Director General of Investigation and Registration completes preliminary investigation and submits an application to the Commission for an enquiry. giving consideration to. the rights and obligations of the parties.OBJECTIVES AND POLICY: The Monopolies and Restrictive Trade Practices Commission has been constituted under Section 5(1) of the MRTP Act. who is wrong or what the outcome of the dispute should be. Bhupinder Singh Reg. including any previous business practices between the parties. The conciliator may. The MRTP Act also provides for appointment of a Director General of Investigation and Registration for making investigations for the purpose of enquiries by the MRTP Commission and for maintenance of register of agreements relating to restrictive trade practices. among other things. taking into account the circumstances of the case. 1969 . Question 3: What are the unfair trade practices under the MRTP Act? Answer: THE MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT. and the need for a speedy settlement of the dispute.   Conciliators do not:      Make decisions for disputing parties Make judgments about who is right.Assignment Set: 2  The conciliator shall be guided by principles of objectivity. Complaints regarding Restrictive Trade Practices or Unfair Trade Practices from an association are required to be referred to the Director General of Investigation and Registration for conducting preliminary investigation. 1969. including any request by a party that the conciliator hear oral statements. or when Commission's own knowledge warrants a preliminary investigation. The MRTP Commission receives complaints both from registered consumer and trade associations and also from individuals. The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate.MBA - MB0051 – Legal Aspects of Business Semester: 3 . the wishes the parties may express. Tell people what to do Make rulings Force parties to participate in the conciliation process. Such proposals need not be in writing and need not be accompanied by a statement of the masons therefore. No. make proposals for a settlement of the dispute. the usages of the trade concerned and the circumstances surrounding the dispute. 521063004 Page 3 of 9 .

Sikkim Manipal University . or The price which any person coming across the advertisement would believe to be better than the price at which such goods are ordinarily sold. adopts unfair method. for the purpose of promoting any sale. • a promise to replace. composition. efficacy or length of life of the goods. for a reasonable period or reasonable quantity.   2) False Offer Of Bargain Price: Where an advertisement is published in a newspaper or otherwise.Assignment Set: 2 Unfair Trade Practices: An unfair trade practice means a trade practice. If such representation is materially misleading or there is no reasonable prospect that such warranty. it shall amount to an unfair trade practice. or Gives false or misleading facts disparaging the goods. guarantee or promise will be fulfilled Materially misleads about the prices at which such goods or services are available in the market. quantity or grade. Makes to the public a representation in the form that purports to be• warranty or guarantee of the goods or services. quantity. performance. Gives any warranty or guarantee of the performance. or the usefulness of. 521063004 Page 4 of 9 . whereby goods or services are offered at a bargain price when in fact there is no intention that the same may be offered at that price. or unfair or deceptive practice. Represents that the goods or services have sponsorship. approval. for this purpose means:   the price stated in the advertisement in such manner as suggests that it is lesser than the ordinary price. Makes a false or misleading representation concerning the need for. accessories. uses or benefits which they do not have. The bargain price. maintain or repair the goods until it has achieved a specified result. use or supply of any goods or services. Falsely suggests that the services are of a particular standard. reconditioned or old goods as new goods. Represents that the seller or the supplier has a sponsorship or approval or affiliation which he does not have. which. 3) Free Gifts Offer And Prize Scheme: The unfair trade practices under this category are: Bhupinder Singh Reg. characteristics.MBA - MB0051 – Legal Aspects of Business Semester: 3 . No. 1) False Representation: The practice of making any oral or written statement or representation which:         Falsely suggests that the goods are of a particular standard quality. any goods or services. that is not based on an adequate or proper test. style or model. second-hand renovated. grade. services or trade of another person. Falsely suggests any re-built.

or  Upon reference made to it by the Central Government or State Government  Upon an application to it by the Director General or  Upon its own knowledge or information. construction.Sikkim Manipal University . as are necessary to prevent or reduce the risk of injury to the person using such goods. when in fact the price is wholly or partly covered by the price of the article sold. with real intention to promote sales or business. Destruction.  The agreement relating thereto shall be void in respect of such unfair trade practice or shall stand modified.: Any practice that permits the hoarding or destruction of goods. in relation to their performance. consumer or a registered consumer association. However no order shall be made in respect a trade practice which is expressly authorized by any law in force.MBA - MB0051 – Legal Aspects of Business Semester: 3 . shall be an unfair trade practice. or Offering some prizes to the buyers by the conduct of any contest. No. contents. for use by consumers. 521063004 Page 5 of 9 . or refusal to sell the goods or provide any services. issued or published as may be specified  The Commission may permit the party to carry on any trade practice to take steps to ensure that it is no longer prejudicial to the public interest or to the interest of the consumer.Assignment Set: 2 Offering any gifts. 5) 6) Inquiry Into Unfair Trade Practices: The Commission may inquire into any unfair trade practice:  Upon receiving a complaint from any trade association. knowing or having reason to believe that the goods do not comply with the standards prescribed by some competent authority. statement or advertisement relating to such unfair trade practice shall be disclosed. prizes or other items along with the goods when the real intention is different. or Creating impression that something is being offered free along with the goods. The Commission is empowered to direct publication of corrective advertisement and disclosure of additional information while passing orders relating to unfair trade practices.    4) Non-Compliance Of Prescribed Standards: Any sale or supply of goods. Relief Available: After making an inquiry into the unfair trade practices if the Commission is of the opinion that the practice is prejudicial to the pubic interest. shall amount to an unfair trade practice. Bhupinder Singh Reg. finishing or packing. design. Hoarding. Etc. with an intention to raise the cost of those or other similar goods or services.  Any information. lottery or game of chance or skill. or to the interest of any consumer it may direct that?  The practice shall be discontinued or shall not be repeated. composition.

An offer may be positive or negative. No. If the terms of an offer are not definite and clear it cannot be called a valid offer. It may be in the form of a statement or a question. Hence. For example a person invite to another person to diner if the other person accepts the invitation then it is not any legal agreement between the parties it is social agreement. This is an express offer. It is one of the essential elements of an agreement. An offer may be express or implied. He offers to another person to sell his one bike for a certain price then it is not a legal and valid offer because there is an ambiguity in the offer that which motorcycle the person wants to sell. This is an implied offer by KSRTC. an offer to perform social. An offer which is expressed by conduct is called an implied offer. The person to whom the proposal is made is called the offeree or promisee. Sridhar does not turn up at the dinner party. The offer must be made in order to create legal relations otherwise there will be an agreement. The person making the proposal is called the proposer or offer or the promisor. Sometime people offer the invitation for the sale. A person has two motorbikes. it is not an offer in the eyes of law e. he is said to make a proposal". 521063004 Page 6 of 9 .20000. An agreement to agree in future is not a contract because the terms of an agreement are not clear. In business transactions there is a presumption that the parties propose to make legal relationships. An offer which is expressed by words. written or spoken. 50000. This is a proposal. Sunil offers to sell his car to Padmaja for Rs. Sunil cannot sue Sridhar for breach of contract as there was no intention to create legal obligation. It must not be a casual statement. If the offer is not intended to create legal relationship. is called an express offer. Bhupinder Singh Reg. to such act or abstinence. If an offer does not give rise to legal obligations between the parties it is not a valid offer in the eye of law. There is a difference between the offer and invitation of offer. Essentials of a valid offer:  A valid offer must intend to create legal relations. for example. The Karnataka State Road Transport Corporation runs omnibuses on various routes to carry passengers at the scheduled fares. Sunil is the offeror and Padmaja is the offeree. with a view to obtaining the assent of that other.Assignment Set: 2 Question 4: What are essentials of a valid offer? Answer: Offer: A proposal is an expression of will or intention to do or not to do something. religious or moral acts without any intention of creating legal relations will not be a valid offer. Sunil invites Sridhar to a dinner party and Sridhar accepts the invitation.MBA - MB0051 – Legal Aspects of Business Semester: 3 . If such offer is accepted it cannot create a binding contract. Sridhar says to Radhika that he will sell his scooter to her for Rs. It is the very basis of the contract. It is also called an "offer".Sikkim Manipal University . Section 2 (a) of the Contract Act defines the proposal as "when one person signifies to another his willingness to do or to abstain from doing anything. It becomes a promise when it accepted. An offer must be definite and clear. For example.g.

Any member of the public can accept this offer by searching for and bringing back Sunil's missing dog. A person can accept the offer only when he knows about it. No. This is a specific offer and can only be accepted by Sridhar. This is not an offer which can be accepted because the amount of money to be paid is not certain. An advertisement to sell goods by auction. messenger. It should be noted that an invitation to offer is not an offer. Loud speaker announcements. in ignorance of the offer. When offer is made to a definite person or to a special class of persons. it is called "specific offer".Assignment Set: 2  The terms of an offer must be definite.  An offer is effective only when it is communicated to the offeree. It is immaterial whether the terms and conditions were harsh or ridiculous. Sridhar says to Sunil "I will give you some money if you marry my daughter". A specific offer can be accepted only by that person to whom it has been made and a general offer can be accepted by any person. Railway time-table. If he does not know. An offer should may contain any term or condition. Sunil issues a public advertisement to the effect that he would give Rs. A price list of goods for sale. The following are only invitations to offer but not actual offers:          Invitations made by a trade for the sale of goods. if he brings back his missing dog. Communication is necessary whether the offer is general or specific. Mere enquiry is not an offer. 521063004 Page 7 of 9 . Prospectus issued by a company.  An offer may be made to a definite person or to the general public. Sunil promises to give Rs. mail. An acceptance of an offer. If the other party accepts it.Sikkim Manipal University . The special terms or conditions in an offer must be brought to the notice of the offeree at the time of making a proposal. The offeror may prescribe any mode of acceptance. he cannot accept it. Display of goods with price-tags attached.g. An offer to do or not to do must be made with a view to obtaining the assent of the other party. unambiguous and certain.MBA - MB0051 – Legal Aspects of Business Semester: 3 . 500 if a particular house proves lucky is too vague to be enforceable. He cannot say that if the acceptor does not communicate his acceptance within a specified time.100 to anyone who brings back his missing dog. The offeror may communicate the offer by choosing any available means such as a word of mouth. This is a general offer.g. telegram.100 to Sridhar. E. They must not be loose and vague. a written document. is no acceptance at all. he is deemed to have accepted the offer. it is called "general offer". Communication may also be implied by his conduct. Bhupinder Singh Reg. When an offer is made to the world at large or public in general. Quotations of lowest prices. But he cannot prescribe the form or time of refusal so as to fix a contract on the acceptor. A promise to pay an extra Rs. or even signs and gestures.    The offeror is free to lay down any terms any terms and conditions in his offer. E. then he has to abide by all the terms and conditions of the offer. An advertisement inviting tenders.

as they don't want to get negative publicity or worse get entangled in legal proceedings.Sikkim Manipal University . which have not been addressed in the IT Act. We are now beginning to see new categories and varieties of cyber-crimes. No. Although the law came into operation on October 17. the USA. Answer: The Consumer Protection Act was born in 1986. The prime reason for this is the fact that the IT Act is a set of technical laws. but such powers are largely inefficient. This is because India does not have reciprocity and extradition treaties with a large number of countries. It is described as a unique legislation of its kind ever enacted in India to offer protection to the consumers.Assignment Set: 2 Question 5: Find out a case where a person appealed under the Consumer protection Act and won. 2000. A major hurdle in cracking down on the perpetrators of cyber-crimes such as hacking is the fact that most of them are not in India. Australia and New Zealand. Not only from the perception of the common man. 2000 provides for punishment to whoever transmits or publishes or causes to be published or transmitted. which are punitive or preventive in nature the provisions of this Act are compensatory in nature. at the height of the dot-com boom.MBA - MB0051 – Legal Aspects of Business Semester: 3 . only less than 25 cases have been registered under the IT Act 2000 and no final verdict has been passed in any of these cases as they are now pending with various courts in the country. Question 6: What does the Information Technology Act enable? Answer: Information Technology Act: In May 2000. The Indian IT Act also needs to evolve with the rapidly changing technology environment that breeds new forms of crimes and criminals. cyber defamation and the like. it still has an element of mystery around it. 521063004 Page 8 of 9 . cyber nuisance. India enacted the IT Act and became part of a select group of countries to have put in place cyber laws. cyber harassment. Another major hurdle is the reluctance on the part of companies to report the instances of cyber-crimes. Though Section 67 of the Information Technology Act. speedy and inexpensive re-dressal to the consumer’s grievances. but also from the perception of lawyers. The Act intends to provide simple. it does not Bhupinder Singh Reg. In all these years. law enforcing agencies and even the judiciary. The IT Act does give extra-territorial jurisdiction to law enforcement agencies. Unlike other laws. This includes cyber stalking. The main objective of this Act is to provide better protection to the consumers. The Act is claimed to have been designed after an in-depth study of consumer protection laws and arrangements in UK. despite the growing crime rate in the cyber world. any material which is obscene in electronic form with imprisonment for a term which may extend to two years and with fine which may extend to twenty five thousand rupees on first convection and in the event of second may extend to five years and also with fine which may extend to fifty thousand rupees.

Assignment Set: 2 expressly talk of cyber defamation. Bhupinder Singh Reg.MBA - MB0051 – Legal Aspects of Business Semester: 3 .Sikkim Manipal University . No. The above provision chiefly aim at curbing the increasing number of child pornography cases and does not encompass other crimes which could have been expressly brought within its ambit such as cyber defamation. 521063004 Page 9 of 9 .

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