Introduction to Law

• What is law?
• What is Business law
What is law?

• The word ‘Law’ has been derived from the Teutonic

word ‘lag’ which means ‘definite’. On this basis,
Law can be defined as a definite rule of conduct
and human relations. It also means a uniform rule
of conduct which is applicable equally to all the
people of the State.
Definition of Law….. Austin
• “A law is a rule of conduct imposed and enforced by the sovereign.” 
What is Business Law?

• Business Law is also known as Commercial law or corporate law, is the body of law that
applies to the rights, relations, and conduct of persons and businesses engaged in
commerce, merchandising, trade, and sales.
• It is often considered to be a branch of civil law and deals with issues of both private law
and public law.
 UNIT-I
• CONTRACT ACT,1872
Introduction

• Indian Contract Act of 1872 came into effect from 1st September, 1872. 
• It extends to the whole of India except the  state of Jammu and Kashmir. 
• The law of contract is the branch of law which determines the circumstances in which
promise made by the parties  to a contract shall be legally binding on them. 
• All of us enter into a number of contracts everyday knowingly or  unknowingly. 
• Each contract creates some right and duties upon the contracting parties. 
• Indian Contract Act deals 
with the enforcement of these rights and duties upon the parties.
Let us assume and see what we need to understand in a contract.
Important terms to be remembered…
Proposal (Agreement)
Acceptance
Agreement
Void Agreement
Contract
Enforceable by law
Example

• “A person A agrees to sell his house to a person B for 50 lakh.” This is an example of:
1.A contract
2.An agreement
3.Neither a Contract nor an Agreement
4.It is a contract as soon as A gets the money.
• Section (1-75) general provisions
• Section (76-123) sales of
goods(1930)
• Section (124-147) indemnity &
guarantee
• Section (148-181) bailment &
pledge
• Section (182-238) agency
• Section (239-266)
partnership(1932)
 Significance of Indian Contract Act
Meaning of a Contract
Contract and Agreements

Contents Essentials elements of a Valid Contract

Offer and Acceptance
Free Consent
Capacity of parties to a Contract
 Lawful Consideration
Types of Agreements
Types of Contracts
Contd…. Breach of a Contract
Remedies
Discharge of a Contract
Quasi Contract
• Proposal/Offer

Promise

Consideration

Agreement

Enforceable
Contract
What is a Contract
Agreement
• Agreement has been defined in section 2(e) as “every
promise and every set of promises forming consideration for
each other”.
• To have an insight into the definition of agreement we need
to understand what is a Promise.

According to Sec 2 (b), ‘when the person to whom the proposal

is made signifies his assent thereto, the proposal is said to be
accepted and a proposal when accepted becomes a promise.

Agreement = Offer/Proposal + Acceptance

Enforceability by law
• An agreement to become a contract must give rise
to a legal obligation which means a duly
enforceable by law.
• So thus from the above definitions it can be
concluded that…

Contract = Accepted
Proposal/Agreement + Enforceability
by law
• All contracts are agreements
• All agreements are
not___________
Agreement & Contract
• Agreement = Offer + Acceptance
• Contract = Agreement +Enforceability at Law
Will all agreements give rise to
a contract?

• An agreement to become a contract must give rise to a legal

obligation. Agreement can be social obligation or legal obligation.

• An agreement giving rise to social obligation is not a contract. That is

why it is said that the term agreement is a wide term it includes both
social and legal obligations but only those agreements which the
parties intend to enforce legally culminates into contract.

• An agreement is regarded as a contract when it is enforceable by

law.
• Legal obligations arise to make an agreement, a
contract. It means that an agreement must give rise to
legal obligations. There must be an intention to create
legal obligation. In case of agreement regulating
business relation it is assumed that the parties
intended legal consequences. Thus, There must be an
intention on the part of the parties to create legal
relationship between them. Social or domestic type of
agreements are not enforceable in court of law and
hence they do not result into contracts