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BUSINESS LAW

ASHISH KUMAR 1226110107

CHETAN SAMEER 1226110110

M.S.P RANI 1226110118

PINNINTI NAGARJUNA 1226110124

SAILESH KUMAR 1226110133

HAVISH SRINIVASULA 1226110139

DEFINITION

What is law?

A set of rules derived by the State to regulate the conduct of its people, recognized by the State and enforced by it on its people termed as Law”

What is Business law?

“Business Law represents all those legal rules which are connected with Trade, Industry & Commerce”

INTRODUCTION TO CONTRACT

What is Contract? An agreement enforceable by law.

Two essential element of contract. An agreement . Enforceable by law(Legal obligation).

What is an Agreement? Every promise and every set of promises forming the

consideration for each other.

Agreement = Offer +Acceptance.

“ Every contract is an agreement, but every agreement is not Contract”

INTRODUCTION TO CONTRACT

Essential element of Valid contract. An agreement . Lawful consideration. Free consent of the parties. Capacity or competency of parties. Object is lawful.

What is Proposal (Offer) '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’.

INTRODUCTION TO CONTRACT

Essential element of proposal: Expression of willingness to do (Intention to contract). To obtain assent from other party.

Proposal = Promisor Promisee

Communication of proposal

Implied Offer – Conduct. Express Offer - words, written or spoken.

Intention to Contract. No legal obligation in terms of moral, religious and social

matters. Business matters (Case: Rose & Frank Co v J R Crompton). General Offer (Case: Carlill v Carbolic Smoke Ball Co).

INTRODUCTION TO CONTRACT

Offer and Invitation to treat. Catalogues and display of goods. Free distribution of articles. Voluntary Retirement scheme(VRS).

Acceptance: When one person to whom the proposal is made signifies his

willingness thereto the proposal is said to be accepted. Communication regarding acceptance.

An offer can be accepted only by the person to whom it is made.

Acceptance by conduct – General offer. Prescribed acceptance.

CASE : BALFOUR VS BALFOUR Facts:

Mr B promised to pay his wife £30 per month. Mr B had to return to Ceylon. Mrs B was to remain in

England for medical reasons. The couple later separated. Mrs B claimed £30 per month pursuant to Mr B’s promise.

Decision: An agreement to pay £30 per month existed. The parties had not intended it to be legally binding. There is a presumption that domestic arrangements are not

intended to finish up in court.

INTRODUCTION TO CONTRACT Absolute and unconditional Acceptance:

Counter proposal Partial Acceptance. Inquiry into terms of proposal. Acceptance of counter - proposal. Acceptance and withdrawal of tender.

Termination of an offer:

Refusal : An offeree can rejects the offer Counter offer. An offer may lapse due to the passing of time.

INTRODUCTION TO CONTRACT Standard form of contract.

It contain a large number of terms and conditions in “fine print” which restrict and often exclude liability under the contract.

Protection of individual from exploitation of such contracts : Reasonable Notice of terms. Notice should be contemporaneous with contract. Theory of fundamental breach. Strict construction.

INTRODUCTION TO CONTRACT

Party BParty A

A want to sell his house

B want to purchase it.

Communication of proposal is completed when it comes to the knowledge of Party B through Party A

(Offer)

Communication of acceptance is completed when it comes to the knowledge of Party A through Party B

(acceptance)

Proposal is Completed

Party BParty A

A do not want to sell his house

B do not want to purchase it.

Communication of revocation is completed when it comes to the knowledge of Party A

through Party B (acceptance)

Communication of proposal is revoked when it comes to the knowledge of Party B through Party A

(Offer)

CONSIDERATION: Whenever a party to an agreement promises to something,

he must get something in return. This something in return is called ‘consideration’.

“When at the desire of the promisor, the promise any other person has done or abstained from during something, such as or promise is called consideration for the promise” – Section 2(d).

Three types of consideration: Executory consideration Executed consideration Past consideration

CONSIDERATION IN A CONTRACT

Essential valid element for consideration: It must move at the desire of the promisor It may move from the promisee or any other person

only at request Promissory estoppels and government agency.

PRIVITY OF CONTRACT Doctrine of Privity of contract holds that “ A contract is a

contract only between the parties and no third person can sue upon it even if it is made for his benefit.

Exceptions to Privity rule: Trust or charge Marriage settlement, Partition or other family

arrangements Acknowledgement or estoppel

CONSIDERATION IN A CONTRACT

CASE – TWEDDLE vs ATKINSON Facts:

John Tweddle (the Plaintiff's father) agreed with William Guy (the Plaintiff's father in law) for the latter to pay money to the Plaintiff upon marriage. Guy died before making payment and the Plaintiff (William Tweddle) sued the estate (Akinson was the executor) for the promised sum.

Decision: No consideration moved from the plaintiff to Guy and

therefore the plaintiff had no right to sue on the contract. Natural love and affection is not good consideration

CASE – Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge & Co. Ltd.

Facts: Dunlop sold its tires to a wholesaler(Dew & co) on the

condition that they were sold to retailers who agreed to sell at the specified prices. Selfridge was one such retailer and they sold at prices below the specified prices

Decision: The doctrine of privity requires that only a party to a

contract can sue. The doctrine of consideration requires a person with whom a

contract not under seal is made is only able to enforce it if there is consideration from the promisee to the promisor.

The doctrine of agency requires that the principal not named in the contract can only be sued if the promisee was contracted as an agent.

CAPACITY TO CONTRACT Capacity to contract.

Capacity means competence of the parties to enter into a valid contract.

Following persons are incompetent to contract: Minor. Mental Disability and intoxication ( But need to prove). Contract by disqualified persons.

Minor: According to the Indian majority Act, 1875 a minor is

one who has not completed his /her 18 years of age. Contracts with minors can be

1.Valid 2.Voidable 3.Void

MINOR Valid contract with minor:

Contracts for Necessaries. Beneficial Contracts of Service.

Voidable Contract: A voidable contract is binding on the minor unless he/she

takes action to declare it void. Apply to contracts to buy shares in companies, leases of

property and partnerships. Doctrine of restitution.

Void Contract: Ratified means that the minor confirms that the contract

is valid when s/he reaches 18. This applies to loans and contracts for non-necessary

goods.

Free consent: Section 13 of the act defines consent as “ two or more

persons are said to consent where they agree upon the thing in the same sense”.

Consent is said to be free when it is not caused by Coercion Undue influence. Fraud. Misrepresentation Mistake.

Consent caused by the coercion: Committing, Compelling and threatening to act. Unlawfully detaining or threatening to detain any property.

FREE CONSENT

Undue influence: Section 13 of the act defines consent as “ two or more

persons are said to consent where they agree upon the thing in the same sense”.

It is also referred to as ‘EQUITABLE FRAUD”. It creates a mental or moral fear as against physical fear created by coercion.

Exemption of undue influence Real or apparent authority. Fiduciary relations.(Parent-child, Guardian - ward,

Doctor-patient, Solicitor-client, Fiancé-fiancée) Mental distress.

FREE CONSENT

Misrepresentation: It means a false statement of fact made by one party to

another party, which has the effect of inducing that party into the contract.

Exemption of undue influence Positive assertion of the fact (Unwarranted statement) Breach of duty Causing mistake about the subject matter.

Suppression of material and vital fact. Change of circumstances. Expression of opinion.

MISREPRESENTATION

Fraud: It is a deception made for personal gain or to damage

another individual. It is a crime

Essential of fraud: Making a false suggestion. The active concealment of a fact by a person who has

knowledge or belief of the fact. A promise made without performing it. The party acting on the representation should have

been deceived and suffered damage. Active concealment of the facts amounts to fraud.

FRAUD

Legality of object Sec 23 declares three important factor

Consideration for the agreement Object for the agreement. Agreement.

Unlawful agreement If it is forbidden by law. If it is of such a nature that, if permitted, it would

defeat the provisions of any law. If it is fraudulent. If it involves or implies injury to the person or property

of another. If the court regards it as immoral. If the agreement opposed to public policy.

LEGALITY OF OBJECT

Discharge of contract A Contract may be discharged either by an act of parties or

by an operation of law. By performance. By impossibility of performance

1. Initial 2. Subsequent By Agreement. By breach.

Discharge by performance: Contingent contracts condition is uncertain in nature. Happening and non happening of event. Time bound contingency.

DISCHARGE OF CONTRACT

Discharge by agreement. Novation: Existing contract for a new contract.

Involving change of parties. Substitution of new agreement .

Discharge by breach. Anticipatory Breach Present breach

Damages for breach It means monetary compensation( General + Special). The two problem are

Remoteness of damage Measure of damage

DISCHARGE OF CONTRACT

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