MASTERS IN BUSINESS

ADMINISTRATION
1 (MBA)

BUSINESS & CORPORATE LAW

(BCL)

Prof. Parul Gupta

PhD (Faculty of Law-JMI, New Delhi), LL.M., PGDBM
Management Development Institute (MDI) Gurgaon

Dr. Parul Gupta

 Course Overview
2

This course is designed to enhance the legal literacy of

the participants by developing a body of legal
knowledge and honing legal instincts to help business
leaders attain a competitive edge and promote long-
term success of the business firms.

 Indian Contact Act, 1872,

 Arbitration and Conciliation Act, 1996,

 Sales of Good Act, 1930,

 Consumer Protection Act, 1986,

 Companies Act, 2013 and

 Negotiable Instruments Act, 1881

Dr. Parul Gupta

 Evaluation Components
3

S.NO. ACTIVITY NUMBER TOTAL WEIGHTAGE

1 Class Participation 1 5%
& Attendance
2 Quiz Test 3 15%
(5% for each quiz)
3 Group Assignment NA 20%

4 Minor Test - I 1 10%

5 Minor Test - I 1 10%

6 Semester End 1 40%

Examination
Total 100%
Dr. Parul Gupta
 Indian Contract Act, 1872
4

Session 1, 2 & 3
 Nature of Business law, Sources of Business law
and their classification, Agreement and their legal
obligations, Essential elements of a valid contract
Session 4, 5 & 6
 Legal aspects of offer, acceptance, capacity of
parties, free consent, Offer and acceptance over the
telephone.
Session 7, 8 & 9
 Types of contact, Void and voidable contract.
Unenforceable and illegal agreements

Dr. Parul Gupta

 Arbitration and Conciliation Act, 1996
5

Session 10, 11 & 12

 Lesson Round Up- Group Case Discussion – Indian
Contract Act,
 Definition of Arbitration, Arbitral Agreement,
Effect of Arbitration.

Session 13, 14 & 15

 Arbitration without Intervention of Court, Powers
and duties of Arbitrators, Lesson Round Up- Group
Case Discussion – Law of Arbitration

Dr. Parul Gupta

 Sale of Goods Act, 1930
6

Session 16, 17 & 18

 Definition and essentials of a contract of sale,
Condition & Warranty, Kinds of goods, perishable
goods.
QUIZ TEST – I/ SESSION 1 TO 15

Session 19, 20 & 21

Distinction between sale and agreement to
sell, sale and hire purchase.

Dr. Parul Gupta

 Sale of Goods Act, 1930
7

Session 22, 23 & 24

Document to the title of goods, Rules regarding
transfer of property, Transfer of Title on sale.
Rules regarding delivery of goods.

Session 25, 26 & 27

Buyers rights against seller, and unpaid seller’s
rights.
Lesson Round Up- Group Case Discussion –
Sale of Goods Act

Dr. Parul Gupta

 Consumer Protection Act, 1986
8

Session 28, 29 & 30

Consumers rights, Important Definitions –
Consumer of Goods, Consumer of Service, Unfair
Trade Practice

Session 31, 32 & 33

Consumer’s disputes redressal agencies, consumer
protection council, Restrictive Trade Practices,
Lesson Round Up- Group Case Discussion –
Consumer Protection Act
ANNOUNCEMENT GROUP PROJECT
Dr. Parul Gupta
 Companies Act, 2013
9

Session 34, 35 & 36

Legal Status of a company, Types and
incorporation of a company, Memorandum of
Association, Article of Association
QUIZ TEST – II/ SESSION 16 TO 33

Session 37, 38 & 39

Company Management and Reconstruction
(Board of Directors and their meetings),
Company Meetings
Dr. Parul Gupta
 Negotiable Instruments Act, 1881
10

Session 40
Amalgamation and winding up of Company
SUBMISSIONT GROUP PROJECT
Session 41 & 42
Definition and characteristic of Negotiable
instrument, Types of NI, Liabilities of Parties to
Negotiable Instruments, Lesson Round Up- Group
Case Discussion – Companies Act & Negotiable
Instruments Act
QUIZ TEST – III/ SESSION 34 TO 39
TERM END EXAMINATION

Dr. Parul Gupta

 SESSION 1,2 & 3
11

Indian Contract Act, 1872

 Meaning, Sources and Types of Law
 Agreement and their legal
obligations
 Essential Elements of a valid
Contract – Overview
 Legal Insights to Valid Offer

Dr. Parul Gupta

 Law & Legal System
12
 The most important system of a civilised society is the
law and the legal system.

Any rule of human conduct accepted by the society

and enforced by the state for the betterment of
human life is called law.

 Broadly law covers rule of human action for example,

religious, social, political and moral rules of conduct.

 It must be noted here that not all rules of conduct of

persons which are protected and enforced by the society
do really constitute the law of the land in its strict sense.
Dr. Parul Gupta
 Meaning, Sources and Types of Law
13

Meaning of ‘Law’
The word ‘Law’ has its origin from the
Teutonic word ‘Lag, meaning ‘definite’.

A system of rules and regulations

which a country or society recognizes as
binding on its citizens,
which the authorities may enforce, and
 violation of which attracts punitive action.

Dr. Parul Gupta

 Meaning, Sources and Types of Law
14

Types of Law
A. International Law
 International law is the body of rules to direct and guide
the acts of the states in international relations.
 Enforceability of international law depends on the
willingness and consent of the involved states to obey the
rules of International Law.

B. National Law
 National law is the body of rules to regulate the actions of
the people in society.
 It is backed by the coercive power of the State.

Dr. Parul Gupta

 Meaning, Sources and Types of Law
15

Types of Law
B. National Law
1. Constitutional Law
 It is the supreme law of the country written in the
Constitution of the State.
 Because all law-making in the State is done on the basis of
powers granted by the Constitutional Law i.e. the
Constitution.
2. Statute Law or Ordinary Law
 It is enacted by the government (legislature) and to direct
and regulate the conduct and behaviour of the people
(i) Private Laws and (ii) Public Laws
General Law and Administrative laws
Dr. Parul Gupta
 Meaning, Sources and Types of Law
16

Types of Law
Civil and Criminal Law
A. Civil Law
 The law of a particular state as distinct from its external law
such as international law.
 The proceedings before civil courts where civil liability of
individuals for wrongs committed by them and other disputes
of a civil nature among them are adjudicated upon and
decided.
 An action for the recovery of debt, restitution of property,
specific performance of a contract etc.
 He who proceeds civilly is a claimant or plaintiff demanding
the enforcement of some right vested in him and the remedy
he seeks is compensatory or preventive in nature.
Dr. Parul Gupta
 Meaning, Sources and Types of Law
17

Types of Law
B. Criminal Law
It indicates the proceedings before the
criminal courts to decide the criminal
liability of persons who have committed
wrongs against the state and other prohibited
acts.

State v. Alleged Party

Dr. Parul Gupta

 Meaning, Sources and Types of Law
18

Sources of Law
1. Legislation
 The emergence of legislatures was witnessed in 13th century.
 The King, as the sovereign used to give these his approval.
 In modern times, legislation is the most potent, prolific and direct
source of law
2. Custom
 One of the oldest sources of law is custom.
 Most of the laws emerged when the State began converting the
customs into authoritative and binding rules.
3. Religion and morality
 Religious and moral codes served the purpose of required
inputs for the State for regulating the actions of the people.
 The State converted several moral and religious rules into its
laws.
Dr. Parul Gupta
 Meaning, Sources and Types of Law
19

4. Delegated legislation
 When the legislature of a State delegated some of its law-making powers to
the executive and the executive then makes laws/rules.
5. Judicial Decisions
 However it must be noted that not all judicial decisions are laws.

 Only the judicial decisions given by the apex court which stand recognized as
the Courts of Record, (like the Supreme Court and High Courts of India) are
recognized and used as a point of references by lower courts.
6. Equity
 For deciding cases, the judges interpret and apply laws to the specific cases.

 But laws cannot fully fit in each case and these can be silent in some respects.

7. Scientific Commentaries
 The works of eminent jurists include scientific commentaries on the
Constitution and the laws.
 These commentaries are very useful for the courts for determining the
meaning of law, thus helping the courts in interpreting and laws.

Dr. Parul Gupta

 20

Indian Contract Act, 1872

Dr. Parul Gupta

 CONTRACT
21

A contract has been defined in

Section 2(h) as
"an agreement enforceable by
law"
1. An Agreement
2. Enforceability or legal obligation

Dr. Parul Gupta

 Agreement
22

Agreement -Section 2(e),

"Every promise and every set of promises,

forming the consideration for each other, is an
agreement."

Offer + Acceptance = Agreement

1.Plurality of Parties
2.Consensus ad idem

Dr. Parul Gupta

 Legal Obligation
23

A Duty Enforceable by Law

Only that obligations which

are arising out of an
agreement, are concerned
with the law of contract

Dr. Parul Gupta

 Prerequisite for Valid Contract
24

1. Intention to create legal

relations
legal consequences

a) Treatment of Domestic and social

relationships

b) Treatment of Commercial Agreement

Dr. Parul Gupta

 Intention to Create Legal Relations
25

Case 1: S. P. Sharma v P Radhey

Mr. and Mrs. Sharma owned a motel at Pune while their
son in law, Radhey, ran a small store. Radhey drove the
Sharma’s truck to Bombay for repairs. It was agreed
between them that if Radhey could arrange for someone
to drive the truck back to Pune, Radhey could transport
goods for his business back on the truck. The truck was
involved in an accident and the Sharma’s sued Radhey
for the cost of repairs.

Discussion Point
Whether the parties had the necessary intention to form a
contract ?

Dr. Parul Gupta

 Intention to Create Legal Relations
26

Case 1: Judgment & Explanation

It was held that the parties had entered a

binding contract as the setting of the
agreement was commercial and no domestic
or social.

Dr. Parul Gupta

 Prerequisite for a Valid Agreement
27

1. Intention to create legal

relationship

Take Away
a) Treatment of Domestic and social
relationships – Presumed not to have
intention to create legal relationship

b) Treatment of Commercial Agreement –

Presumed to have intention to create
legal relationship

Dr. Parul Gupta

 Prerequisite for Valid Contract
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2. Certainty of Meaning (Sec. 29)

• Wording of the agreement must be clear and not uncertain or
vague.
• Agreements, the meaning of which is not certain or capable of
being made certain, are void.

Case1
Jatin agrees to sell 500 tones of oil to Marium

Case 2
Jatin, the sole trader of coconut oil agrees to sell 500
tones of oil to Marium

Dr. Parul Gupta

 Prerequisite for Valid Contract
29

3. Possibility of Performance (Sec. 56)

 If the act is impossible of performance, physically or
legally, the agreement cannot be enforced by law.
 There must be possibility of performance of the agreement.

Case 1
A agrees with B to put life into B’s dead wife
Case 2
A agrees with B to produce treasure by magic

Dr. Parul Gupta

 Prerequisite for legally binding
agreement
30

4. No Legal Formalities to be observed unless

otherwise required by any other law in force

Oral Agreements are as good as written

agreements provided parties at dispute are
able to prove agreed terms and conditions or
do not dispute them at all.

Dr. Parul Gupta

 Prerequisite for legally binding
31
agreement
5. Lawful Object

 Must not be fraudulent or illegal or

immoral or opposed to public policy or
must not imply injury to the person or
property of another.

 Agreement must not expressly declared

void - Must not be contrary to the
provisions of any other Act in force

Dr. Parul Gupta

 Contract
32

"All contracts are agreements but

all agreements are not
contracts.”

Dr. Parul Gupta

 Contract
33

Acc to Sec. 10 of Indian Contract Act,

"All agreements are contracts if they are

made by the free consent of the parties
competent to contract, for a lawful
consideration and with a lawful object, and
are not hereby expressly declared to be
void."

Dr. Parul Gupta

 Essential Elements of a Valid Contract
34

1. Valid Offer
2. Valid Acceptance
3. Competency of Parties
4. Consideration
5. Free Consent

Dr. Parul Gupta

 35

Legal Insights to Valid Offer

Dr. Parul Gupta

 Legal Insights to Valid Offer
36

Section 2(a) of the Indian Contract Act defines a 'proposal' as,

“When one person signifies to another his willingness to do or

to abstain from doing anything, with a view to obtaining
the assent of that other to such act or abstinence, he is said
to make a proposal".,

This definition reveals the following three essentials of a

'proposal':

(i) expression of the willingness to do or to abstain from doing

something.
(ii) must be to another person.
(iii) with a view to obtaining the assent of the other person to
such act or abstinence.

parulvishalgupta@yahoo.co.in
 Legal Insights to Valid Offer
Group Case Discussion 1
37

Specific and General offer

Case 1: Carlill v. Carbolic Smoke Ball Co

Arguments of the company

 Advertisement are not made with an intention to create legal
relationship.
 It is not possible to make an offer to the whole world.
 If it was an offer, when was the acceptance communicated?
 How to ensure that the medicine was consumed as instructed?

Dr. Parul Gupta

 General Offer
38

Judgment & Explanation

It was held that Mrs Carlill was entitled to the reward as the
advert constituted an offer of a unilateral contract which
she had accepted by performing the conditions stated in the
offer.
 The statement referring to the deposit of 1,000 Pounds
demonstrated intent and therefore it was not a mere sales
puff.
 It is quite possible to make an offer to the world which is
treated as general offer.
 In unilateral contracts there is no requirement that the
offeree communicates an intention to accept, since
acceptance is through full performance.

Dr. Parul Gupta

 Legal Insights to Valid Offer
39

1. X proposes, by letter, to sell a house to Y at a

certain price/ X proposes, by making a call, to sell
a house to Y at a certain price.
2. A husband promises his wife to pay her a sum of
fixed amount for a definite period of time.
Subsequently he denies to pay the agreed amount.
3. A offers to sell his house to B at a certain price/ A
offers to sell his house by publishing an
advertisement in the local newspaper.
4. X offers to sell to Y one of his luxury cars.

Dr. Parul Gupta

 Legal Insights to Valid Offer
40
Case 2: Harris v Nickerson
Discussion Point
Did the advertisement constitute an offer?

Case: Lalman Shukla v. Gauri Dutt

Discussion Point
 Was the acceptance of the offer and an assent to
present in this case to make it a valid contract
between Gauri Dutt and Lalman Shukla?

Dr. Parul Gupta

 Legal Insights to Valid Offer
41

Judgment & Explanation

It was held that the advertisement did not constitute an
offer, but rather was a mere declaration of intent. It
was held in the judgment that it was a"startling
proposition" that "anyone who advertises a sale by
publishing an advertisement [would become]
responsible to everybody who attends the sale for his
cab hire or travelling expenses".
Take Away
There is difference in making an offer and inviting other
party to make an offer. Mere a declaration of intent
does not constitute an offer and does not bind the party.

Dr. Parul Gupta

 Legal Insights to Valid Offer
42

Judgment & Explanation

It was held that the claim made by the Plantiff for the reward
money for tracing the boy was dismissed. The judgment
was based on the ground that a suit like the above
mentioned one can only be founded on a contract. In order
to constitute a contract there must be an acceptance of the
offer and there can be no acceptance unless there is
knowledge of the offer.

Take Away
Motive is not essential in such case but knowledge and
intention are.

Dr. Parul Gupta

 Legal Insights to Valid Offer
43

X tells Y ‘I offer to sell my dog to you for

Rs. 45. If you do not send in your reply, I
shall assume that you have accepted my
offer’.

Dr. Parul Gupta

 Legal Insights to Valid Offer
44

 W offered to sell his farm to H for £1200. H

declined this offer.
 On June 6, 1840 W wrote to H's agent offering to
sell the farm for £1000, stating that it was the final
offer and that he would not alter from it.
 H offered £950 in his letter by June 8. After
examining the offer W refused to accept, and
informed H of this on June 27.
 On the June 29, H agreed to buy the farm for
£1000 without any additional agreement from W.
 W refused to sell the farm to him.

Dr. Parul Gupta

 Legal rules for valid Offer
45

1. An offer may be Express or Implied

2. capable of creating legal relations
3. Terms must be certain
4. Invitation to offer is not an offer
5. May be specific or general
6. Must be communicated to the offeree
7. Should not contain a term the non
compliance of which would amount to
acceptance
8. Can be made subject to any terms and
conditions
9. To identical cross offers do not make a
contract

parulvishalgupta@yahoo.co.in
 46

Dr. Parul Gupta