IBS Hyderabad (Academic Year 2019-2020)

Course Handout

Course Title : Legal Environment of Business Semester: IV

Faculty Name : Dr D.Sreenivas chary
Room No : F 208
Consultation Hours :
Mobile No : 9849709741 Email: dschary@ibsindia.org

Course Objectives:
The course is designed to provide:
 Basic knowledge of the legal system in which business entities function.
 An in-depth understanding of the structure and interpretation of laws which are relevant to the functioning of
business entities.
 A functional knowledge of the laws of the land which impact business decisions.

Expected Learning Outcomes:

Upon completion of this course, students are expected to:
 Demonstrate an understanding of the Legal Environment of Business.
 Outline the legal framework in which a business operates.
 Apply basic legal knowledge to business transactions.
 Explain the effects of government policy on the legal environment of business.
 Communicate effectively using standard business and legal terminology.

Recommended Text Book:

 Legal aspects of Business, By Ravinder Kumar, (2016), 4th edition, Cenegage Learning India
(P) Ltd.

Suggested reference books:

 Legal aspects of Business, by Akhileshwar Pathak, 6th edition, Mc Graw Hill Education.
 Elements of Mercantile Law: by N D Kapoor, 35th edition, Sultan Chand & Sons.

Course Outline:
S Case /Reading article/ Cha
TOPIC Learning Outcomes
No Lecture / Activity pter
1 Introduction to the  Appreciate the importance of Legal
Legal Aspects of environment of Business.
Business,  Understand the nature, purpose and Class Lecture -
significance of law.
 Describe the various forms of business
organizations and their differences.
2 Establishing  Define an offer and a contract.
Contractual  Distinguish between agreements and
Relationships contracts.
 Understand the classification of  Bhagwan Das
Carlil Vs. Carbolic 1
contracts and their differences.
 Appreciate the essentials of a valid Smoke Ball Co.
offer and the legal rules governing a
valid acceptance.
 Explain how an offer is communicated,
accepted and revoked.
3 Consideration and  Understand the rules governing valid
Legality of Object consideration.  Void and Voidable
 Appreciate the bearing of lawful Contracts: The Legal 2
object on the validity of contract. Dilemma
 Explain when the object or
consideration is deemed to be
lawful/unlawful and the effect of
 IBS Hyderabad (Academic Year 2019-2020)
partial illegality.
 Describe the essential elements of
valid consideration and the legality
of contracts without consideration.

4 Competency of  Understand the competency of parties  Mohoribibi vs.

Parties to a contract. Dharmodas Ghose; 3
 Appreciate the position of agreements Balfour vs. Balfour. ;
with a minor. Merritt Vs Merritt
 Describe the effect of agreements
made by persons of unsound
mind/disqualified by law.

5-6 Free consent  Understand the significance of free Void and Voidable Contracts: The
consent and how the flaws in consent Legal Dilemma 4
impair contract validity.
 Appreciate how coercion, undue
influence, misrepresentation, fraud
and mistake affect free consent.

7 Void Agreements,  Distinguish between void agreements

quasi-contracts and void contracts and illegal
and Contingent agreements.
Contracts  Describe the essentials of a contingent 5
contract and how a a contract can be Class Lecture
enforced.
 Explain how contingent contracts
differ from wagering agreements and
quasi-agreements.
8 Performance and  Appreciate the importance of
Discharge of performance as the most obvious
Contract means of discharging a contract.  High Tides 6
 Highlight other modes of
discharge like mutual agreement,
operation of law etc.
9 Remedies for  Elucidate the meaning of breach of
Breach of Contract contract.
 Appreciate the various remedies  High Tides 7
available to the aggrieved party in
case of breach.
10 Contracts of  Explain and distinguish between the
Indemnity, two special types of contracts of
Guarantee, indemnity and guarantee.
Lease, Hire  Appreciate the rights of an indemnity
holder and the extent of surety’s
purchase. liability.
 Understand the procedure for  High Tides 8
revocation of continuing guarantee
and the rights and discharge of
surety.
 Explain the meaning of lease and
hire-purchase contracts and
appreciate their differences.
11 Test-1
 IBS Hyderabad (Academic Year 2019-2020)
12 Contracts of  Describe the rights and duties of  High Tides
Bailment and bailor, bailee, pledger and pledge.  Smart Plans 8
Pledge ; Lien,  Explain and appreciate the meaning – Bumpy
Hypothecation, of Lien, hypothecation, mortgage and Finale
gift and appreciate their differences..
Mortgage, Gift,
Exchange
13 Contract of  Understand the test of determining
Agency the existence of an agency.
 Appreciate the rights and duties of Class Lecture 8
an agent ,his liability to the principal
and modes of creating and
terminating an agency.
14 Sale of goods  Understand the nature of contract
Act: Agreement of sale and compare the sale and
to sell and sale, agreement to sell.
Conditions and  Appreciate the meaning and
warranties differences between conditions and
warranties
Class Lecture 9
 Describe the transfer of property in
goods and performance of a
contract of sale.
 Outline the rights of an unpaid
seller against the goods as well as
against the buyer personally.
15 Partnership Act:  Understand the provisions relating to
Formation, the nature and formation of
Registration, partnership, the rights, duties and 10
liabilities of partners. Class Lecture
Mutual rights, to
 Appreciate the procedure for
duties and dissolution of partnerships. 12
liabilities of
Partners .
16 Formation of a  Get an overview on corporate
Company, and legal framework and elaborate
Prospectus. the four major stages involved
in the formation of a company. Class Lecture 17
 Describe the procedure and
provisions for issuance of
prospectus.
17 Memorandum  Understand the rules to be followed  Sally Steel 18
(MOA) and in preparing MOA and AOA. Products Pvt.
Articles(AOA),  Highlight the provisions relating to Limited:
Share capital raising of capital by a company. Legal
and Tangles.
debentures,
Membership.
18 Management  Describe company management, role  You can build 19
Meetings and of managing director and other or dismantle
Winding Up of directors, their power and liabilities, the Business.
qualifications and disqualifications,  Death
Company.
appointment, remuneration and Warrant
removal from the company.
 Appreciate the provisions of law
relating to the meetings of a company
and winding up of a company.
19 Limited  Understand the basic provisions of Class Lecture
 IBS Hyderabad (Academic Year 2019-2020)
Liability LLP formation and how an LLP
Partnership(LL differs from other forms of business 20
P) enterprise.
 Appreciate the rationale behind the
introduction of LLP in India..
20 The Consumer  Understand and appreciate the salient  A journey from
Protection features of the Act. Dream to
Act,1986  Explain its aims and objectives, Disputes and 21
major concepts and rights of Role Reversals
consumers as provided in the Act.
21 RBI and SEBI  Comprehend and describe the  Securities and
Role and functions. objectives, powers and functions of Transparency
RBI and SEBI and their role in the Trading 23
regulation of money market and
capital market respectively.
22 Test-2
23 Negotiable  Get an overview on NI
Instruments(NI) Act,1881,
Act,1881  Understand and appreciate the
kinds of negotiable instruments Class Lecture 13 to 15
and major concepts relating to
negotiation, assignment and
presentment of negotiable
instruments.
24 Dishonor and  Describe the legal rules relating to  Bouncing of
discharge of the dishonor and discharge of Cheque is Not
negotiable negotiable instruments. Cricket – It is 16
instruments
Ticket to Jail.
25 The Information  Get an overview on the aims and  Business
Technology objectives, scope of the Act. Transaction and
24
Act,2000  Comprehend the major concepts and Cyber Law
important provisions of the Act.
26 The Right to  Become conversant with the scope,
Information major concepts and important
Act,2005 provisions of the Act.
 Appreciate the role of Information  Class Lecture
25
Commissions and the remedies
available to the aggrieved party and
the penalty for non-compliance.

27 Introduction to  Appreciate the major concepts and  Pleasure of

Income Tax important provisions of i)Income- Income and Pain -
Act,1961 tax Act,(ii)Insurance law and (iii) of Tax
Foreign Exchange Management
Act,1991.
28 Introduction to  Explain the major concepts and
Foreign Exchange important provisions of Foreign  Class Lecture 30
Management Act, Exchange Management Act, 1991.
1999.
29 Introduction to  Appreciate the major concepts and  Insurance
Insurance Law important provisions Insurance Law Business: A step
and the essential features of Contract Towards Social -
of insurance. Commitment
30 The Competition  Understand the important  Class Lecture 22
Act,2002 provisions of the Competition Act,
2002.
 Explain the aim and objectives of
 IBS Hyderabad (Academic Year 2019-2020)
Competition Commission.
31 Environment Law  Appreciate the General legislations
of Environmental Law.
 Comprehend the essence of various  Devils Eye and 31
protection legislations relating to Dreamers Valley
Forest and wild life, Water pollution
and air pollution.
32 Intellectual  Get an overview on the subject  Identity of
Property matter of Intellectual property(IP) Identical Names 32
Rights(IPRs)  Appreciate the rationale behind IP
and its international dimensions.
 Discuss the various categories of IP
rights and the emerging issues in
IPR.
33 Test-3

Expectations from Students

a. Students must report to the respective sessions well before the announced time. Latecomers will not
be permitted to join the class after the scheduled time. If late, the attendance for that session will be
marked as absent.
b. Read the Case Study / material well prior to the class discussion. He/she is also expected to read the
chapter indicated in the course plan as the faculty directs.
c. In the class discussion student is expected to participate actively and contribute to individual and
group learning. Evaluation is based on active participation.
d. Evaluation is a continuous process at IBS. Every student needs to be aware of the timelines given in
the section below. Absence from these evaluations will mean non awarding of marks in that
particular component.
e. Each faculty has been given a scheduled consultation hour. Utilize this time to meet the faculty and
clarify doubts if any, seek explanations and get mentored if needed.

Evaluation Timelines
Keeping in line with continuous evaluation at IBS the following evaluation schedule has been drawn.
Students are expected to go through the dates / sessions mentioned and prepare accordingly.
Component Component Expected slot / Marks Weightage
Number due date declaration by
Class Participation 1 At the end of 10
semester.
Test I 2 11th Session Third day from 20
the exam date.
Test II 3 22nd Session Third day from 20
the exam date.
Test III 4 33rd Session Third day from 10
the exam date.
End exam At the end of 40
the semester
Total 100

Electronic and Web resources: Swayam Videos, Syndicated Databases