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Transcript of Presentation on laws affecting business LAWS GENERAL SPECIFIC APPLICABLE TO ALL APPLICABLE TO...
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Presentation on laws affecting business
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LAWS
GENERAL
SPECIFIC
APPLICABLE TO ALL
APPLICABLE TO SPECIFIC GROUP
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LAWS
GENERAL CONTRACT SALE OF GOODS TRANSFER OF PROPERTIES ACT NEGOTIABLE INSTRUMENTS
ACT INSURANCE STAMPS ACT LABOUR LAWS INCOME TAX IPC CONSTITUTION
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LAWS
SPECIFIC HINDU MARRIAGE ACT
HINDU SUCCESSION ACT
PARTNERSHIP ACT
COMPANIES ACT
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CORPORATE LAWS
COMPANIES ACT
LABOUR LAWS
SEBI
FERA
MRTP
ARBITRATION AND CONCILIATION
MANY OTHERS
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Indian Contract Act
1872
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Interpretation of words and expressions
1. PROPOSAL : 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
2. PROMISE : when the person to whom the proposal is made signifies
his assent thereto, the proposal is said to be accepted .
A proposal,when accepted, becomes a promise
3. PROMISOR : The person making the proposal is called promisor
4. PROMISEE : The person accepting the proposal is called the promisee
CONT.--
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Interpretation of words and expressions
5. CONSIDERATION : When at the desire of the promisor, the promisee
or any other person had done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something,such act
or abstinence or promise is called a consideration
for the promise
6. AGREEMENT : Every promise and every set of promises, forming the consideration for each other are called agreement
7. RECIPROCAL : The promises which form the consideration or part
PROMISES of the consideration for each other are called
reciprocal promises
-- cont
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Route of contract
Making a proposal
Acceptance makes it a promise
Promise becomes consideration
Gives rise to agreement
Enforceability at law
contract
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CONTRACT REQUIRING REGESTRATION
1. A promise made without consideration out of natural love and affection between the parties require registration
2. Documents of which registration is compulsory under Sec. 17 of the Registration Act ,1908.
3. Contracts relating to Transfer of Immoveable Properties Act,1882
4. Memorandum of Association, Article of Association, Debentures, Mortgage and Charges under the Companies Act, 1956
5. To pay time barred debts
6. An Arbitration Agreement
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KINDS OF CONTRACTS
Express Contract
Implied Contracts
Contingent Contracts
Quasi Contracts
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KINDS OF CONTRACTS
Executed Contracts
Executory Contracts
Valid Contracts
Voiadable Contracts
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KINDS OF CONTRACTS
Void Contracts Illegal Contracts
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OFFER AND ACCEPTANCE
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OFFER A proposal when accepted becomes
promise
Agreement is an accepted promise
There should be two parties - one to propose, and - other to accept the proposal
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OFFER Both the parties must agree to the
same thing in the same sense “
consensus ad idem “
Proposal made by a party is called “ offer’
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OFFER
WHATIS ANOFFER
When one person who desires to create a legal obligation, communicates to another, his willingness to do or not to do a thing with a view to obtaining the consent of that other person towards such an act or abstinence,the person is said to be making a proposal or offer
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OFFER Rules regarding a valid offer
1. An offer may be Express or implied
2. An offer must contemplate to give rise to legal consequences and be capable of creating legal relations
( Social agreements vis-à-vis business agreements )
3. The terms of the offer must be certain and not loose or vague
To buy another CAR if the first proves to be lucky . lavish entertainment for doing a job’ .
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OFFER4. An offer may be ‘specific’ or ‘general’
- Carlill vs Carbolic Smoke Ball Co
5. An offer must be communicated to the offeree - no contract untill offer is known to the
offeree, contract - Lalman vs Gauri Datt- Nephew
absconded-servent traced without knowing about the reward.
- x hands a criminal to police -had no knowledge of award- no claim
6. An invitation to offer is not an offer
window display, quotation, catalogues of prices ,advertisement for auction sale ‘self-service system’ tenders
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OFFER
7. An offer must not be ‘negative ‘in terms
` (for example , ‘if the offeree fails to communicate his refusal by a certain date, offer shall be deemed to have been accepted’, is not a valid offer.)
8. Two identical cross offers do not make a contract
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OFFER LAPSE AND REVOCATION OF OFFER
1. By efflux of stipulated or reasonable time
2. By not being accepted in the mode prescribed, or if no mode is prescribed , in some usual and reasonable mode
3. By rejection
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OFFER4. By death or insanity of any of the parties before
acceptance
5. By revocation
6. Revocation by non-fulfillment of a condition precedent to acceptance
7. By subsequent illegality or destruction of subject-matter
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ACCEPTANCE
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ACCEPTANCE
Acceptance is the second stage of completing the contract
Acceptance is an act of conveying the willingness to the terms of offer
It also signifies the offeree’s willingness to be bound by the terms of the offer communicated
Acceptance must be unconditional and absolute And should be communicated to the offeror
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ACCEPTANCE
KINDS OF ACCEPTANCE
Express Acceptance, or
Implied Acceptance
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ACCEPTANCE ESSENTIALS OF A VALID ACCEPTANCE
1. To be made by the offeree
2. Communicated to the offeror
3. Acceptance only after receiving the offer
4. Acceptance before the offer lapses
--cont
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ACCEPTANCE
5. Communication in the prescribed mode
6. Absolute and unqualified
7. Offer once rejected cannot be accepted again unless the offer is renewed by the offeror
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ACCEPTANCE
Mode of Acceptance
1. In the prescribed mode
2. If no prescribed mode, some usual and reasonable mode
3. Acceptance must be expressed externally and may be communicated either by words or by conduct
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ACCEPTANCE
4. Silence is not a good mode of acceptance unless offeree by his conduct indicated that his silence will mean acceptance
5. Communication of acceptance is not necessary where an offer impliedly indicates that acting on its terms will be a sufficient acceptance.
6. Acceptance need not be communicated formally
( Example.- reward for finder of lost child )
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ACCEPTANCE
Revocation of Acceptance
Acceptance can be revoked any time before the communication of the acceptance is complete as against the acceptor, but not afterward
In other words, the offeree (acceptor) may cancel his acceptance by adopting a speedier mode of communication
which will reach the offeror earlier than the acceptance itself
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COMMUNICATION
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Communication by post
Communication of offer is complete :-
when the letter containing the offer reaches to whom it is made ie the offeree
Ex :- A proposes, by letter, to sell a house to B
at a certain price. The communication of the proposal is complete when B receives
the letter
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Communication by post Communication of Acceptance is
complete :-
As against the offeror :-
when letter of acceptance is put in a course of transmission to him
so as to be out of the power of the acceptor.
As against the acceptor :-
when letter of acceptance comes to the knowledge of the proposer
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Communication by post
Communication of Revocation is complete
As against the person making it
when letter of revocation is put into a course of transmission to the person to whom it is made, so as to to be out of the power of the person who makes it
As against the person to whom it is made
when letter of revocation comes to his knowledge .
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Other Contracts
Rules regarding Contracts over :-
Telephone
Telex
Fax
Oral Conversation
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Consideration
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Consideration
Definition
when at the desire of the promisor,the promisee or any other
person has done or abstained from doing, or does or abstains
from doing, or promises to do or to abstain from doing,
something,such act or abstinence or promise is called
consideration for the promise
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Consideration
Definition(ANALYSES )
Components of consideration
1. An act or abstinence or promise which forms the consideration for the promise must be done at the desire of the promisor
2. It must be done by the promisee or any other person
3. It may have been already executed or is in the process of being done or may be still executory
4. It must be something to which the law attaches
a value
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Consideration
)
EXAMPLES
Ram agrees to sell his house to Mohan for Rs. 10000. Mohan’s promise to pay the sum of Rs. 10000
is consideration for Ram’s promise to sell the house, and Ram’s promise to sell the house is the consideration for Mohan’s promise to pay the sum of Rs. 10000.
A promises to maintain B’s child and B promises to pay a Rs.20000 yearly for the purpose. Here the promise of each party is the consideration for the promise of the other party .
Atal promises to pay Behari Rs. 5000 at the end of six month ,if Charan, who owes that sum to Behari, fails to pay it . Behari promises to grant time to Charan accordingly. Here the promise of each party is the consideration for the promise of the other party.
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Consideration
)
EXAMPLES
Anand promises his debtor Bhatia not to file a suit against him for one year on Bhatia’s agreeing to pay him Rs. 2000 towards interest. The abstinence of Anand is the consideration for Bhatia’s promise to pay.
Arvind promises to type the manuscript of Bharat’s book and in return, Bharat promises to teach Arvind’s son for a month. The promise to each other is the consideration for the promise of the other party.
Gopal had a daughter to marry and in order to raise funds for marriage, Gopal intended to sell his house. Vineet , Gopal’s son promised that if gopal would forbear to sell the house ,Vineet would give GOPAL Rs.15 lakhs. Gopal accordingly did not sell the house. The abstinence ie ‘not to sell the house’ by GOPAL is the consideration for Vineet’s promise to pay.
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Consideration
Signification of Consideration
Consideration is one of the essential elements of a valid contract. It is the price for which the promise of the other is bought.
A contract is basically a bargain between two parties, each receiving ‘something ‘of value or benefit to them.This ‘something’ is described in Law as consideration. For instance, in a contract of sale of goods, the consideration underlying is the price paid for goods sold.
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Consideration
ESSENTIAL OF A VALID CONSIDERATION ( four components explained earlier are, in fact, the essentials of valid
consideration )
1. Consideration must move at the desire of the promisor
2. Consideration may move from the promisee or other person
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Consideration
3. Consideration may be Past, Present or Future
a) A, at the request of B, teaches B’s son who was trying for engineering examination in the month of September ,and in the month of December of the same year,B promises to pay A, a sum of Rs. 5000 for A’s services . The service of A will be past consideration.
b) A sells and delivers a book to B upon B’s promise to pay for it at some future date. Consideration moving from A is present since A has delivered the book on the promise of B to pay.
c) A promises to sell and deliver 100 bags of rice to B for Rs.60000 after a week, upon B’s promise to pay the agreed amount at the time of delivery. It is a case of future Consideration. --cont.
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Consideration4. Consideration must be something of value
Consideration need not be adequate
Consideration must be real and competent
- Not physically impossible (marrying a dead man) - Not legally impossible (supplying liquor in a prohibited place)
- Uncertain Consideration ( to pay remuneration ‘as shall be
deemed right’ )
Illusory Consideration ( charging money for appearing as witness not a
proper consideration )
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ConsiderationConsideration regarded as real and valid in the
following cases
a. Forbearance to sue Forbearance to sue, at the instance of the debtor, is sufficient
consideration. Ram, has a right to sue his debtor Amit for Rs. 10000, but infact forbears as Amit agreed to pay Rs. 500 more. Such forbearance is a valuable consideration for the promose, being in the nature of abstinence, and Ram can later on sue Amit for Rs. 10500 . But in order that the forbearance should be a consideration, there must be existing and lawful liability.
b. Compromise of a pending suit The compromise of a disputed or doubtful claim is a good consideration for
the fresh agreement of compromise
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CONSIDERATION - when not necessary
1. AGREEMENT MADE ON ACCOUNT OF
NATURAL LOVE AND AFFECTION
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CONSIDERATION - when not necessary
2. AGREEMENT TO COMPENSATE FOR PAST VOLUNTARY SERVICE
A promise made without consideration is also valid, if it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or done something which the promisor was legally compellable to do
- A finds B’s purse and gives it to B . B promises to A Rs.100. This is a contract.
- A supports B’s minor son. B promises to pay A’s expenses in doing so . This is a contract. ( B was legally bound to support his minor son )
- A rescued B from drowning in the river, and B, promises to pay Rs.1000 to A. This is a contract between A and B. --cont.
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CONSIDERATION - when not necessary
3. AGREEMENT TO PAY A TIME-BARRED DEBT
Where there is an agreement, made in writing and signed by the
debtor or his authorised agent, to pay wholly or in part, a debt
barred by the law of limitation, the agreement is valid even though
it is not supported by any consideration.
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CONSIDERATION - when not necessary
4. GIFTS
5. CONTRACT OF AGENCY
6. CONTRIBUTION TO CHARITY
7. REMISSION BY THE PARTY
( TO ACCEPT LESS AMOUNT IN FINAL SETTLEMENT )