INTRODUCTION

OF LAW
 Learning Outcomes
• Law Defined
• Types of Law
• Sources of Law
• Agreement
• Types of Contracts
• Promise
• Valid, Void, Void-Able
• Revocation of Proposal
• Acceptances
 What is Law…?
 Law refers to the principles and regulations
established by a Government, applicable to people
and enforced by judicial decision.

 It is the body of principles that recognized and

applied by the state in the administration of justice.

I. Abstract Body of Rules

II. Social Machine for Securing
Community order
 What is Law…?
Purposes of Law…
 Types of Law…
• Public Laws • Private Laws
– Constitutional Laws – Business Law
– Administrative Laws  Agreement
– Criminal Laws  Contracts
 Agencies
 Sales
 Negotiable
Instruments
 Bailment
 Types of Law…
 Business Law (Mercantile Law)
Deals with Contractual situations and rights and
obligations arising out of mercantile transactions
between two parties.

It establishes a set of rules and

prescribes conduct in order to
avoid misunderstandings and
injury in business relationships.
 Sources of Law
Sources of Business (Mercantile) Law:

 Common Law

 Equity

 Statute Law
 Merchant Law
 Sources of Law
 Common Law  Equity
• Based upon immemorial • Based upon justice
customs concept
• Un-Written Law • Also Un-Written Law
• Derived from Subsequent • Derived from lacks in
disputes of similar nature common law

 Statute Law  Merchant Law

• Act of parliament • Law of Fair Trade
• Backed by Constitution & • Maritime & Sea Law
Parliament • Governs commercial
• Superior than Common & transactions
Equity Law • Merchants & traders law
 What is Agreement
– Agreement defined as “Set of promises and
reciprocal set of promises forming consideration
for each other. [Section 2(e)]

Agreement can be Social or Legal

 Essential Elements of
Agreement
1. Offer ~ Proposal
2. Acceptance
3. Consideration
4. Free Consent
a) No Undue Influence
b) No Miss Representation
c) No Coercion
 What is Promise

PROMISE - A proposal when accepted

becomes a promise. Section 2(b)

Promisor Promisee
- Offerer - Offeree
- Proposer - Acceptor
 What is Contracts
• CONTRACT- In the words of Pollock, “every
agreement and promises enforceable by law is
contract”.
• Section 2(h) of the Contract Act, 1872 states that ‗an
agreement enforceable by law is contract‘.

Contract
Agreement
Enforceable by Law
 Essential Elements of
Contracts
1. Offer ~ Proposal
2. Acceptance
3. Consideration
4. Free Consent
5. Legal Competency
6. Sound Mind & Judgment
7. Public Policy
8. Lawful Object
 Types of Contracts
• Valid Contracts
• Void Contracts
Validity • Void-Able Contracts
• Illegal Contracts
• Unenforceable Contracts

• Express Contracts
Formation • Implied Contracts
• Quasi Contracts

• Executed Contracts
• Executory Contracts
Performance
• Unilateral Contracts
• Bilateral Contracts
 Types of Contracts
Basis of Validity

1. Valid contract: An agreement which has all the essential

elements of a contract is called a valid contract.
2. Void contract: A void contract is a contract which ceases
to be enforceable by law. A contract when originally
entered into may be valid, but later It may subsequently
become void. [Section 2(g)]
3. Voidable contract: An agreement which is enforceable
by law at the option of one or more of the parties thereto,
but not at the option of other or others, is a voidable
contract. Lack of free consent
 Types of Contracts
Basis of Validity

4. Illegal contract: A contract is illegal if it is forbidden by

law; or is of such nature that, if permitted, would defeat
the provisions of any law or is fraudulent; or involves or
implies injury to a person or property of another, or court
regards it as immoral or opposed to public policy.

5. Unenforceable contract: Where a contract is good in

substance but because of some technical defect cannot
be enforced by law is called unenforceable contract.
 Types of Contracts
Basis of Formation

1. Express Contract – stated in words and may be oral or

written

2. Implied Contract – one that comes from the actions of

the parties, sometimes without exchanging a word.
3. Quasi contract: A quasi contract is created by law in
which there is no intention of parties and It is legal
obligation which is imposed on a party who is required to
perform it.
 Types of Contracts
Basis of Performance
1. Bilateral: Contains two promises, one by each person.

2. Unilateral: Contains only one promise; promise for an

act.
3. Executed contract: An executed contract is one in
which both the parties have performed their respective
obligation.
4. Executory contract: An Executory contract is one
where one or both the parties to the contract have still to
perform their obligations in future.
 Revocation of Proposal
Revocation – Taking back of an offer
• An offer can be revoked any time before acceptance.
• A revocation becomes effective when it is received or
communicated to the offeree
Rejection –The offeree does not want to accept the offer;
Counteroffer – Ends the first offer
Expiration of time – If a time frame is listed in the offer,
and that time frame ends, the offer ends too.
Death or Insanity – If the offeror dies or becomes insane
before the offer is accepted, the offer comes to an end.
 Acceptance
 Unconditional Acceptance – “Mirror Image
Rule“– Must not change the terms of the original
offer in any way.

 When Offeree signify assent of the offeror.

 Counteroffer – acceptance that changes the terms

of the original offer and terminates the offer.
 Acceptance
 Express Acceptance:
– Acceptance is made in written or oral.
– It leaves no room for doubt that offer was accepted.
– Orally agreeing offer, Handshake, Exchange of Business
Cards
 Implied Acceptance:
– Acceptance is made in oral and action based.
– Based on previous history
– Hire of Taxi, ATM Cash withdrawal,
 Conditional Acceptance:
– Acceptance is made only on condition or adding points
– Promise to pay draft only when shipment of goods is made