ASSIGNMENT SET - 1

LC CODE NAME ROLL NO. COURSE SEMESTER SUBJECT SUBJECT CODE

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02014 Atul Upadhyay 521158436 MASTER OF BUSINESS ADMINISTRATION 3 LEGAL ASPECTS OF BUSINESS MB0051

1930? Describe the main features of Consumer Protection Act 1986.MASTER OF BUSINESS ADMINISTRATION MBA SEMESTER – 3 MB0051 – LEGAL ASPECTS BUSINESS ASSIGNMENT SET – 1 QUE NO. 1 2 3 4 5 QUESTION “All agreements are not contracts. What are the essentials of a contract of sale under the sale of Goods Act. What are the duties and powers of an ‘authorized person’ under FEMA. 1999? What do you mean by Memorandum of ANSWER PAGE 3-5 6 7-8 9-10 11-12 13 14 Association? What does it contain? Write a note on the following: (a) Copy Right Act (b) Pledge 6 MB0051 – LEGAL ASPECTS BUSINESS 2 . but all contracts are agreements”. Comment.

to another person named “Y”.QUESTION – 1:- “All agreements are not contracts. The Contract Act.” If we analyze the definition of the contract mentioned above. If we clear the concept about contract and agreement. So this agreement is not enforced by law. Apart from this.i) ii) Agreement between the parties and This agreement must be enforced by law. section 2(a) and 2(b) provides that “When one person signifies to another his willingness to do or to abstain from doing anything. Unlawful consideration may create agreement but not a contract:Section 2(e) provides that. “All contracts are agreement. But if the agreement is not enforced by law that will not be treated as a contract but merely an agreement. but all agreements are not contracts”.every promise and every set of promises. If that agreement is enforced by law then it will be treated or turned into contract. According to section 2 (h) of the Contract Act. “An agreement enforceable by law is a contract. But after making agreement. For example: . viz. 1872. ANSWER – 1:“All agreements are not contracts. it may be enforceable by law or may not be enforceable at law. but all contracts are agreements”. with a view to MB0051 – LEGAL ASPECTS BUSINESS 3 . we get two fundamental characteristics or features. But from the definition of contract we know. all contracts are agreement but all agreements are not contract. Comment. a minor is not capable of entering into a contract.A minor “X” has agreed to sell an apartment that he has inherited to his father. Here. forming consideration for each other. but all contracts are agreements” For the illustration of above mentioned statement we need clear concept about contract and agreement. provides the definition of contract. but all agreements are not contract. So all contracts are agreement.every agreement enforced at law is a contract. So agreement is the first step of contract. Because according to the law of contract. we can easily say that. is an agreement. this will be called agreement but not a contract. 1872. So.

” And when the person to whom the proposal is made signifies his assent there to. if. MB0051 – LEGAL ASPECTS BUSINESS 4 . or does or abstains from doing. he is said to make a proposal.obtaining the assent of that other to such act or abstinence. when accepted becomes a promise. But if under section 23 of the Contract Act. So one of the fundamental elements of contract is consideration and which must be lawful. is fraudulent. In order to create right. or opposed to public policy.All agreements are contract if they are made by the free consent of parties. duties or obligation the following extra elements are neededi) Capacity of the parties/Competent to contract: According to section 11. such consideration is forbidden by law. something such act or abstinence or promise is called a consideration for the promise”. competent to contract. A proposal. the proposal is said to be accepted. or. or promise to do or to abstain from doing. what agreements are contracts it is said in section 10. it would defeat the provision of any law. According to this section the definition of consideration is as follows:“When. But in a contract that consideration must be lawful. Further more. the promise or any other party/person has done or abstained from doing. and is not disqualified from contracting by any law to which he is subject. In order to make a contract.all agreement are not contract. Every agreement of which the object or consideration is unlawful is void. the first and main step is agreement which must be constituted through lawful consideration. is of such a nature that. for a lawful consideration and with a lawful object. the consideration or the object of the agreement is said to be unlawful. So in agreement the consideration may be unlawful. at the desire of the promisor.“promisor” and the person accepting the proposal called “promise”. that. if permitted. From this view point it can be said that. Section 2 (d) provides the definition of consideration. or Involves or implies injury to the person or property of other. and are not hereby expressly declared to be void. every person is competent to contract who is of the age of majority according to the law to which he is subject and who is of sound mind. This agreement does not crate any duties and obligation. In these cases. The person who making the proposal is called. or the Courts regards it as immoral.

Contract is not valid if it is illegal. If the above mentioned elements exist in a lawful agreement. In the absence of above elements or in the presence of defective elements (i. So it can undoubtly be said that – “All contracts are agreement but all agreements are not contract” ************** MB0051 – LEGAL ASPECTS BUSINESS 5 . Lawful object: The object of the contract must be lawful. then that agreement turned into a contract. iii) iv) After the above discussion. Because such kind of contract has no/ will not have legal effect. it is found that the first and main condition of valid contract is lawful agreement. that are treated as a contract. they are proper to say illegal or void agreements. consent is said to be free when it is not caused by coercion. fraud. the agreements which are constituted under/ within the frame of the law of contract. immoral or opposed to public policy. misrepresentation and mistake. On the other hand. immoral or opposed to public policy. unlawful consideration/unlawful object) illegal or void contract can be formed/ constituted. in all contracts there must be agreement as no contract can be formed without an agreement. But illegal or void contract has no legal status/existence. Object must not be illegal.ii) Free consent of the parties: According to section-14.e. Finally we can say that all agreements are not contract. Contract is not prohibited by law: Contract will not be prohibited by the existing law. undue influence.

It will be called a ‘barter’. If for instance. The following are the essentials of contract of sale:- 1) There must be at least two parties. the parties may agree that the price will be payable by installments. In the case of sale of goods. a part-owner may sell to another part-owner. Payment by installments.. goods are offered as the consideration for goods.e. However. A sale has to be bilateral because the property in goods has to pass from one person to another.2(7). Also. In a contract of sale. Price is the consideration of the contract of sale. the legal tender money). The consideration in a contract of sale has necessarily to be ‘money’.4 defines a contract of sale as ‘a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price’. it is the ownership that is transferred (in the case of sale). the terms may stipulate some amount by way of down payment and the balance by installments. The expression ‘goods’ is defined in Sec. it will not amount to sale. or agreed to be transferred (in the case of agreement to sell).QUESTION – 2:- What are the essentials of a contract of sale under the Sale of Goods Act. Transfer or agreement to transfer the ownership of goods. 2) 3) 4) 5) ***************** MB0051 – LEGAL ASPECTS BUSINESS 6 . as against transfer of mere possession or limited interest (as in the case of bailment or pledge). The subject matter of the contract must necessarily be goods. A person cannot buy his own goods. The sale of immovable property is not covered under Sale of Goods Act. (i. The seller and the buyer must be different persons. 1930? ANSWER – 2:Sec.

In fact. Covers Goods and Services : The Consumer Protection Act covers both goods and services rendered for consideration by any person or organization including public sector undertakings and Government agencies. public and cooperative sectors are covered under the Act. However.on a simple paper along with the name and address of the opposite party against whom the complaint is made. 2) 3) 4) 5) 6) MB0051 – LEGAL ASPECTS BUSINESS 7 . Special Consumer Courts: The Consumer Protection Act has created special consumer courts for enforcement of the rights of consumers.QUESTION – 3:Act 1986. The redressal machinery is merely to observe the principles of natural justice. It is not mandatory to employ any advocate. convenient and inexpensive redressal of consumer grievances. This is a unique law which directly pertains to consumers in the market place and seeks to redress complaints arising there from. Three-Tier Grievance Redressal Machinery: The Consumer Protection Act provides for a three-tier consumer grievance redressal machinery — District Forums at the base. All suppliers of goods and services in private. Simple and Inexpensive : There are no complicated or elaborate procedures or other technicalities. The complainant can write his grievance. 1986 1) Social Welfare Law : It is a highly progressive piece of social welfare legislation. It provides effective safeguards to the consumers against various types of exploitation and unfair trade practices. the consumer protection Act provides a simple. Comprehensive Provisions and Effective Safeguards: Its provisions are very comprehensive. The redressal machinery is quasi-judicial in nature. services rendered free of charge or under any contract of personal service are excluded. Describe the main features of Consumer Protection ANSWER – 3:Main Features of the Consumer Protection Act. No court fee any other charge is to be paid by the complainant. the State Commission at the middle level and the National Commission at the apex level. Thus. it provides more effective protection to consumers than any other law in India. It is acclaimed as the Magna Carta of Indian consumers.

directly to the District Forums. The consumer can pick up a food sample from a shop. a consumer can protect against food adulteration. Check on Unfair Trade Practices : The Consumer Protection Act also covers complaints relating to unfair trade practices. Thus.7) Time Frame : The Consumer Protection Act lays down time limits for the disposal of cases so as to provide speedy redressal of grievances. get it analyzed by a chemist and file a complaint on that basis. Class Action : The Consumer Protection Act allows filing of class action complaints on behalf of groups of consumers having common interest. short weighting and overcharging. Check on Overcharging : The Consumer Protection Act also provides for complaints against charging in excess of the price of a product fixed by a law or rule and/or displayed on the packaged commodities 8) 9) 10) ***************** MB0051 – LEGAL ASPECTS BUSINESS 8 .

comply with such general or special direction or order as the Reserve Bank may. notification. authorize any person to be known as authorized person to deal in foreign exchange or in foreign securities.QUESTION – 4:- What are the duties and powers of an ‘authorized person’ under FEMA. direction or order made thereunder. require that person to make such declaration and to give such information. as will reasonably satisfy him that the transaction will not involve and is not designed for the purpose of any contravention or evasion of the provisions of this Act or of any rule. or (b) the authorized person has failed to comply with the condition subject to which the authorization was granted or has contravened any of the provisions of the Act or any rule. from time to time. in all his dealings in foreign exchange or foreign security.10(4)]. An authorized person shall.10(5)]. Duties of an authorized person The duties of an authorized person as provided in the Act are summarized hereunder: i) To comply with RBI directions [Sec. an authorized person shall not engage in any transaction involving any foreign exchange or foreign security which is not in conformity with the terms of authorization under this section. direction or order made thereunder.10 provides that the Reserve Bank may. regulation. money changer or offshore banking unit or in any other manner as it deems fit. To ensure compliance of FEMA provisions [Sec. before undertaking any transaction in foreign exchange on behalf of any person. Where MB0051 – LEGAL ASPECTS BUSINESS ii) iii) 9 . think fit to give. The authorization shall be in writing and shall be subject to the conditions laid down therein. 1999? ANSWER – 4:Duties and Power of an “Authorized Person” under FEMA. on an application made to it in this behalf. 1999:Authorized Person:Sec. An authorized person shall. An authorization so granted may be revoked by the Reserve Bank at any time if it is satisfied that (a) it is in public interest to do so. Not to engage in unauthorized transactions [Sec. regulation. Except with the previous permission of the Reserve Bank. notification.10(4)]. as an authorized dealer.

iii) iv) v) Bank’s powers to issue directions to authorized persons (SEC. To open NRO. give to the authorized persons any direction in regard to making of payment or the doing or desist from doing any act relating to foreign exchange or foreign security. if he has reason to believe that any such contravention or evasion as aforesaid is contemplated by the person. NRNR.3(a)] Receive any payment by order or on behalf of any person resident outside India in any name. for the purpose of securing compliance with the provisions of this Act and of any rules.the said person refuses to comply with any such requirement or makes only unsatisfactory compliance therewith. report the matter to the Reserve Bank. [Sec. [Sec. Powers of the authorized person i) ii) To deal in or transfer any foreign exchange or foreign security to any person [Sec.6]. [Sec.3(c)] However. ***************** MB0051 – LEGAL ASPECTS BUSINESS 10 . notifications or directions made thereunder. an authorized person is not allowed to credit the account of any person without any corresponding remittance from any place outside India. regulations. To sell or purchase foreign exchange for current account transactions.11) The Reserve Bank may. NRE. the authorized person shall refuse in writing to undertake the transactions and shall. NRSR and FCNR accounts.5] To sell or purchase foreign exchange for permissible capital account transactions.

It contains fundamental rule regarding the constitution and the activities of a company. The division of share capital into different shares must be stated in the capital clause. King. Imperials. It contains the broad objective along with subsidiary objectives. Any action beyond the scope of the memorandum of association is void. Emperor and the words of patronage of the central government is not used in company. The memorandum of association contains the following: - Name clause: This clause contains the name of the company. A company limited by guarantee should specify the amount of guarantee. The word limited is used after the name of a public limited company and private limited is used after the name of a private company. The face value of the share will be stated in this clause. Liability clause: This clause states that the liability of the shareholders is limited to the extent of the face value of shares. Capital clause: This clause states the amount of authorized capital with which a company is registered. It is the most significant document on which the super-structure of the company is raised. It sets out the limits with in which the company may function and defines the relations of the company with the outside world. Situation clause: This clause states the place at which the registered office will be situated. This clause is vital for determination of jurisdiction of the court for legal matters. MB0051 – LEGAL ASPECTS BUSINESS - - - - 11 . The name of the company should not be identical to the name of an existing company. The words like Royal. This clause gives an idea of exact capital structure of the company. Object clause: This is an important clause of the memorandum of association which states the objects with which the company has been established. Any action beyond the stated objective is ultra vires and as such a great deal of care will be taken in drawing up this clause. The place of registered office should be intimated to the register within 30 days incorporation.QUESTION – 5:- What do you mean by Memorandum of Association? What does it contain? ANSWER – 5:Memorandum of Association Memorandum of Association is the fundamental charter which defines the aims and objectives of a company.

***************** MB0051 – LEGAL ASPECTS BUSINESS 12 . The memorandum of association is signed by at least seven persons in case of public limited company and at least by two persons in case of private company.- Association clause: This clause states the names and addresses of the signatories of the memorandum of association and articles of association. Each subscriber is required to take at least one share in the company.

The Act has been amended in 1983. Copyright applies to any expressible form of an idea or information that is substantive and discrete. Sec. 1958. or a finite period for anonymous or corporate authorship. Copyright has been internationally standardized. 1984. (b) Pledge MB0051 – LEGAL ASPECTS BUSINESS 13 .QUESTION – 6:- Write a note on the following: (a) (b) Copyright Act Pledge ANSWER – 6:- (a) Copyright Act The law relating to copyright is contained in the Copyright Act. after which time the work is said to enter the public domain. It extends to the whole of India and came into force on January 21. lasting between fifty to a hundred years from the author’s death. distribution and adaptation. 1992 and 1994 primarily to bring the Indian law in conformity with the international conventions in general and Bern Convention and the Universal Copyright Convention in particular.44 provides for a Register of copyright to be kept in the copyright office. publishers and owners of copyright and certain other prescribed particulars are entered in the Register. including its publication. The names or titles of the works.44 to 50 deal with the registration of copyright. Secs. Copyright is a form of intellectual property which gives the creator of an original work exclusive rights for a certain time period in relation to that work. such as the right to be credited for the work. It is enforceable as a civil matter. 1957. Some jurisdictions also recognize "moral rights" of the creator of a work. the names and addresses of authors.

however. no other creditor or ‘authority’ can take away the goods or its price. The owner of the goods can create a valid pledge by transferring to the creditor the documents of title relating to the goods. defines a pledge as the bailment of goods as security for payment of a debt or performance of a promise. It is only a qualified property that passes to the pledgee.172. be actual or constructive. Thus. where sugar pledged with the Bank was seized by the Government of Bihar. in Bank of Bihar v. is called the ‘pledgor’ and the person to whom the goods are so delivered is called the ‘pledgee’. A pledge is created only when the goods are delivered by the borrower to the lender or to someone on his behalf with the intention of their being treated as security against the advance. ***************** MB0051 – LEGAL ASPECTS BUSINESS 14 . (1971) Company Cases 591. The person. the Court ordered the State Government of Bihar to reimburse the bank for such amount as the Bank in the ordinary course would have realised by the sale of sugar seized. and lien which is not of ordinary nature and so long as his loan is not repaid. who delivers the goods as security. State of Bihar and Ors. It is constructive delivery where the key of a godown (in which the goods are kept) or documents of title to the goods are delivered.Sec. He acquires a special property. The ownership remains with the pledgor. Delivery of goods may.

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