A PRESENTATION ON BUSINESS
LEGISLATION
Topic: THE INDIAN CONTRACT ACT 1872
&
AGMARK ACT 1937Presented by
SATHYENDRA KUMAR A.D,
M.B.A.(Agri-business),
Presented to
Dr. S. MOKSHAPATHY,
Assistant Professor
M.B.A.(Agri-business),
Institute of Development Studies,
'Leela Vihar', University of Mysore,
Manasagangotri-06
November-2013
LIST OF CONTENT
Introduction About Law
Business Law
Sources Of Business Law In India
The Indian Contract Act 1872
Meaning And Definition
DEFINITIONS (Sec 2)]
Essentials Of A Valid Contract
All Contracts are Agreements, but all Agreements are not Contracts
Distinction between Contract & Agreement
TYPES OF CONTRACT
Rights and duties of indemnifier
Rights and duties of indemnity-holder
THE AGRICULTURAL PRODUCE (GRADING AND MARKING) ACT, 1937
Explanation
Salient features of the Agricultural Produce (Grading & Marking) Act, 1937
Penalty etc.,……
INTRODUCTION ABOUT
LAW
Law means a ‘set of rules’ which governs our behaviors and
relating in a civilized society. So there is no need of Law in a
uncivilized society.
Law is a system of rules and guidelines, usually enforced
through a set of institutions.
It shapes politics, economics and society in numerous ways and
serves as a social mediator of relations between people.
One should know the law to which he is subject because
ignorance of law is no excuse
Law of India refers to the system of law in modern India
BUSINESS LAW
• Broadly speaking, business law refers to the laws that apply to
business entities, such as partnerships and corporations. For the
moment, QuizLaw has focused on the laws relating to setting up
and creating such a business.
• Business law is all so known as Commercial 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
Sources of Business Law in
India
The main sources of business law in India are shown in the table
English Law Judicial
Decisions
or Case Law
Customs and
Usages
Indian Statutes
English Common
Law
Equity Law Merchant or
Maritime Usage
Statutes
Law
Sources of Business Law in India
The Main Sources of Business Law In
India are Discussed
English Law: Indian business law is modeled on the lines of English
mercantile law, as India was under British rule before its independence.
The differences in the laws of India and England are primarily on account
of their different business environment, customs, and trade practices.
Judicial Decisions or Case Law: The judicial decisions, usually referred
to as precedents, are binding on all courts having jurisdiction lower to
that of the court, which gave the judgment. This is also called judge made
law.
Customs and Usages: Customs or usages of a particular trade also guide
the courts in deciding disputes arising out of mercantile transactions.
Indian Statutes: The constitution of India confers power to enact law on
its parliament and legislatures of states.
THE INDIAN CONTRACT
ACT 1872
HISTORY
Commencement and applicability
Short Title Extent commencement
The Indian contract
Act 1872
Applicable to whole Indian
First day of September 1872
Except the state of Jammu & Kashmir
First day of
September 1872
Meaning And Definition
• The word ‘contract’ is derived from the Latin ‘Contractum’ meaning drawing
together. According to the Act, “An Agreement enforceable by law is a contract”.
• “Every agreement and promise enforceable at law is a contract”. — Sir Frederick
Pollock
• “An agreement creating and defining obligations between the parties”. —
Salmond
• An analysis of these definitions would show that a contract must have the
following two elements:
(a) An agreement, and
(b) Its enforceability (legal obligation)
In the form of an equation, it can be shown as under:
• Contract = An agreement + its enforceability
• Now the question arises, what is an agreement? and what is enforceability of an
agreement?
DEFINITIONS (Sec 2)
• Offer(i.e. Proposal) [section 2(a)]:-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 person either to such act or abstinence, he is said to make a proposal.
• Acceptance 2(b):- When the person to whom the proposal is made, signifies his assent
there to , the proposal is said to be accepted.
• Promise 2(b) :- A Proposal when accepted becomes a promise. In simple words, when
an offer is accepted it becomes promise.
• Promisor and promise 2(c) :- When the proposal is accepted, the person making the
proposal is called as promisor and the person accepting the proposal is called as
promisee.
• Consideration 2(d):- When at the desire of the promisor, the promisee or any other
person has done or abstained from doing something or does or abstains from doing
something or promises to do or abstain from doing something, such act or abstinence or
promise is called a consideration for the promise
Con……..
• Agreement 2(e) :- Every promise and set of promises forming the
consideration for each other. In short, agreement = offer + acceptance.
• Contract 2(h) :- An agreement enforceable by Law is a contract.
• Void agreement 2(g):- An agreement not enforceable by law is void.
• Voidable contract 2(i):- An agreement is a voidable contract if it is
enforceable by Law at the option of one or more of the parties there to
(i.e. the aggrieved party), and it is not enforceable by Law at the
option of the other or others.
• Void contract: - A contract which ceases to be enforceable by Law
becomes void when it ceases to be enforceable.
ESSENTIALS OF A VALID
CONTRACT
Proper offer and proper acceptance with intention to create legal
relationship.
Lawful consideration
Capacity of parties to contract -- Competent parties
Free consent
Lawful object
Possibility of performance
The terms of the agreements are certain or are capable of being made
certain [29]:
Not declared Void
Necessary legal formalities
Intention to Create Legal Relation
All Contracts are Agreements, but all
Agreements are not Contracts
An agreement is termed a contract only when it is enforceable by law. All
agreements are not necessarily legally enforceable. It can rightly be said that an
agreement has a much wider scope than a contract. For example that agreements
are not legally binding are an invitation to dinner or to go for a walk and its
acceptance. These are agreements not contracts.
Agreement is the first step of contract. But after making agreement, it may be
enforceable by law or may not be enforceable at law. If that agreement is
enforced by law then it will be treated or turned into contract, But if the
agreement is not enforced by law that will not be treated as a contract but merely
an agreement. So all contracts are agreement, but all agreements are not contract.
Distinction between Contract &
Agreement
Si.
No.
Basis Contract Agreement
1. Section Sec. 2(h) Sec. 2(e)
2. Definition A contract is an agreement
enforceable by law
Every promise or every set
of promises forming
consideration for each other
is an agreements.
3. Enforceability Every contract is enforceable Every promise is not
enforceable
4. Interrelationship A contract includes an
agreement
An agreement does not
include a contract
TYPES OF CONTRACT
On The Basis of the Mode of Formation Express Contract
An express contract is a contract made by the use of words spoken or written.
Example: A says to B ‘Will you purchase my bike for Rs 20,000?’ B says ‘Yes’
to A.
Implied Contract
An implied contract is a contract which is made otherwise than by the words
spoken or written. It came into existence on account of an act or conduct of
the parties
Examples: A stops a taxi by waving his hand and boards it. There is an implied
contract that A will pay the prescribed fare on reaching his destination.
Withdrawal of cash from the ATM of a bank.
Con….
Quasi-contract
• Neither by word spoken
• Nor written
• Nor by the conduct of the parties.
• But these are created by the law.
Example: If Mr. A leaves his goods at Mr. B’s shop by mistake, then it is for
Mr. B to return the goods or to compensate the price. In fact, these contracts
depend on the principle that nobody will be allowed to become rich at the
expenses of the other
E-contract: An e-contract is a contract made through the electronic mode. In
other words An e – contract is one, which is entered into between two parties
via the internet.
On the Basis of Performance
Executed Contract
In an executed contract both the parties have performed their promises under a
contract. It is a contract where, under the terms of contract, nothing remains to be
done by the parties.
Example: A sells his car to B for Rs 1 lakh. A delivered the car and B paid the
price. This is an executed contract.
Executory Contract
In an executory contract both the parties are yet to perform their promises. In
other words, it is a contract where parties have to still perform their obligation in
the future.
Example: A sells his car to B for Rs 1 lakh. If A is still to deliver the car and B is
yet to pay the price, it is an executory contract
Con…..
Partly Executed and Partly Executory Contract
In a partly executed and partly executory contract, one party has already performed his
promise and the other party has yet to execute his promise.
Example: A sells his car to B. Though A has delivered the car, B has yet to pay the price.
For A it is an executed contract, whereas it is an executory contract on the part of B since
the price has yet to be paid.
Unilateral Contract
A unilateral contract is also known as a one-sided contract. It is a contract where only one
party has to perform his promise. In such a contract, the promise on one side is exchanged
for an act on the other side. Aft er the formation of a unilateral contract, only one party
remains liable to perform his obligation because the other party has already performed his
obligation.
Example: Alap promises to pay Rs 1000 to anyone who finds his lost cellphone. Bansi
finds and returns it to Alap. From the time Bansi found the cell phone, the contract came
into existence. Now Alap has to perform his promise, i.e., the payment of Rs 1000.
Con….
Bilateral Contract
In a bilateral contract both the parties have to perform their
respective promises. It is also known as a two-sided contract. Here,
the obligation is outstanding on the part of both the parties.
Example: A promises to sell his car to B for Rs 1 lakh and agrees
to deliver the car on the receipt of the payment by the end of the
week. The contract is bilateral as both the parties have exchanged a
promise to be performed within a stipulated time.
On the Basis of Validity or
Enforceability
Valid Contract
If the contract entered into by the parties and satisfies all the
elements of a valid contract as per the act, it is said to be a valid
contract.
Void Contract
A contract which ceases to be enforceable by law is known as a
void contract. A void contract is not enforceable by the court.
Generally, a valid contract ceases to be enforceable on the change
in circumstances or on the change of provisions of an act.
Con…
Voidable Contract
When the contract is entered into without the free consent of party, it is
considerate as a voidable contract. The definition of the act states that a voidable
contract is enforceable by law at the option of one or more parties but not at
option of the other parties. Voidable contract will be considered as valid if it is
not cancelled by the aggrieved party within a reasonable time.
Illegal Agreement
An illegal agreement is one which is forbidden by law. All illegal agreements are
void ab initio. It cannot be enforced by any court. Not only that any associated or
collateral transaction to an illegal agreement is also void. No action is allowed on
an illegal agreement. No action can be taken for the recovery of the money paid
under illegal agreement or for the breach of the illegal agreement. The parties to
an illegal agreement cannot get help from the court. No suit can be filled or any
action taken in respect of the illegal agreement.
Contracts of Indemnity
Section 124 - A contract by which one party promises to save the
other from loss caused to him by the conduct of the promisor
himself or by the conduct of any other person is a "contract of
Indemnity“
Illustration - A contracts to indemnify B against the consequences
of any proceedings which C may take against B in respect of a
certain sum of Rs 200. This is a contract of indemnity.
For example - A and B go into a shop. B says to the shopkeeper
“Let A have the goods, I will see you paid”. The contract is one of
Indemnity.
Rights and duties of
indemnifier
Rights of the indemnifier
The rights of the indemnity-holder are the duties of indemnifier,
and duties of the indemnity-holder are the rights of the indemnifier.
There are not prescribed any specific rights of the indemnifier
either in Nepalese law or in Indian law. However, he is not liable
for indemnity.
If indemnity-holder acts negligently.
If indemnity-holder is acting with the intention of causing any
loss or damage
If he is acting against the instructions of the other party
(promisor).
Con…
Duties of indemnifier
The duties of an indemnifier arise in the following circumstances:
There must be a loss in accordance with the contract to make the
indemnifier liable.
There must be an occurrence of the anticipated event. Without any
occurrence of the prescribed event, there is no indemnity by the
indemnifier.
Where the right of indemnity is used by the indemnity-holder
prudently and the instruction of the indemnifier is not contravened or
when there is no breach of contract.
If the costs demanded by the indemnifier are not caused by
negligence, haphazard behaviour
Rights and duties of indemnity-
holder
Rights of indemnity-holder [Sec. 22(1) of NCA]
A person whose loss is to be made good is called the indemnity-holder. He has
some rights against the indemnifier in accordance with the legal provisions
incorporated under the Nepalese and Indian Contract Acts. But, the duties of the
indemnity-holder have not been mentioned under the Acts. The indemnity-holder
is entitled to recover any or all of the amounts of compensation under the
contract. They are as follows
All the indemnity amount (damage) prescribed in the contract.
All the damages he may be compelled to pay a third party for the loss.
All the costs spent on the case filed or defended by him in connection with
the contract relating to indemnity.
All the costs of legal actions, if it becomes necessary to initiate such an action
for a failure to pay the amount mentioned in all the above clauses.
Con…
Duties of indemnity-holder
Except otherwise is mentioned in the contract, the indemnifier will not liable for the
loss in the following circumstances. They are called duties of indemnity-holder too.
Duty to work prudently: Except otherwise is mentioned in the contract, the
indemnifier will not liable for the loss caused by the negligence work of the
indemnity-holder. In other words, it is the duty of indemnity-holder to work
prudently.
Duty not to act to cause harm or loss: If the indemnity-holder acting with the
intention of causing any loss or damage, the indemnifier will not liable for such
loss. In other words, it is the duty of indemnity-holder not to act to cause harm or
loss.
Duty to comply with the intention of promisor: If the indemnity-holder acting
against the instruction of the other party or promisor, the indemnifier will not
liable for the loss caused by such against act to his instruction. In other words, it
is the duty of indemnity-holder to comply with the intention of promisor.
THE AGRICULTURAL PRODUCE
(GRADING AND MARKING)
ACT, 1937
An Act to provide for the grading and marking of agricultural
(and other) produce
Where as it is expedient to provide for the grading and marking
of Agricultural (and other) produce, it is hereby enacted as
follows:-
Short title and extent
• This Act may be called the Agricultural Produce (Grading and
Marking) Act, 1937
• It extends to all the provinces and capital of the Federation,
including Baluchistan
Explanation
In this Act, unless the contrary appears from the subject or context-
• “Agricultural Produce” includes all produce of agriculture or horticulture and
all articles of food or drink, wholly or partly manufactured from any such
produce, and fleeces and the skins of animals.
• counterfeit" has the meaning assigned to that word by section 28 of the Indian
Penal Code (45 of 1860 );
• "covering" includes any vessel, box, crate, wrapper, tray or other container
• "grade designation" means a designation prescribed as indicative of the
quality of any scheduled article;
• "grade designation mark" means a mark prescribed as representing a
particular grade designation;
• "quality" in relation to any article includes the state and condition of the
article
Con…
• "prescribed" means prescribed by rules made under this Act;
• "Scheduled article" means an article included in the Schedule
• An article is said to be marked with a grade designation mark, if the article itself
is marked with a grade designation mark or any covering containing or label
attached to such article is so marked.
• An article is said to be misgraded if :-
the article is not of the quality prescribed for the grade designation with which it
is marked;
the composition of the article offered for grading is altered in any way after a
sample has been drawn for analysis and determination of the grade designation of
the article in accordance with the rules made under this Act;
the article is tampered with in any manner, and
any false claim is made for the quality prescribed for its grade designation, upon
the label or through advertisement or in any other manner.
Salient features of the Agricultural
Produce (Grading & Marking) Act,
1937
It is an Act to provide for the grading and marking of the
agricultural and other produce
Agricultural produce has been defined as to include all produce
of agriculture or horticulture and all articles of food or drink
wholly or partly manufactured from any such produce, and
fleeces and the skins of animals.
The Act has provision for making Rules to carry out the
provisions of the Act. General Grading and Marking Rules, 1988
and 105 Specific Commodity Grading and Marking Rules are
notified.
Penalty's
Penalty for unauthorised marking with grade designation mark
Whoever marks any scheduled article with a grade designation
mark, not being authorised to do so by rule made under section 3,
shall be punishable with fine which may extend to five hundred
Penalty for counterfeiting grade designation mark
Whoever counterfeits any grade designation mark or has in his
possession any die, plate or other instrument for the purpose of
counterfeiting a grade designation mark shall be punishable with
imprisonment which may extend to two years, or with fine, or with
both.
GENERAL GRADING AND
MARKING RULES 1937
• These rules may be called General Grading and Marking Rules
1937.
• Any person or a body of persons desirous of being authorized to
mark any article with grade designation mark shall apply to the
Agricultural Marketing Adviser to the Government of India and
Faridabad
• If after due inquiry the Agricultural Marketing Adviser is
satisfied that it is expedient in the interest of better marketing
and authorization be granted and that applicant is a fit and a
proper person to receive a certificate of authorization, he shall
issue such a certificate to the applicant.
Agmark Grades
• CommodityCoverage:181Number.
• Quality Grading and Certification for:
• Export
• Domestic Trade
• Farm Level Grading:
• Grading at Producer's Level.
• Quality Certification Mark:
AGMARK Acts as: Third Party Guarantee to Quality Certified.
Legal Backup: Agricultural Produce (Grading and
Marking)Act,1937asamendedin1986
GROUPWISE LIST OF THE COMMODITIES FOR WHICH
AGMARK GRADE STANDARDS HAVE BEEN FORMULATED
UNDER THE AGRICULTURAL PRODUCE (GRADING AND
MARKING) ACT, 1937
Si No. Name of the Group: No. of commodities notified
1. Food grain and allied products 29
2. Fruits and Vegetables 29
3. Spices and condiments 26
4. Edible Nuts 8
5. Oil Seeds 15
6. Vegetable Oils and Fats 18
7. Oil cakes 8
8. Essential oils 8
9. Fibre crops 5
10. Live stock, Dairy and poultry products 10
11. Other products 25
TOTAL 181
Strengthening of Agricultural
Marketing
Strengthening of
Agricultural
Marketing
Capacity enhancement
in Terminal Markets
Capacity
enhancement in
Grading and
Standardization
Capacity
enhancement in
Quality and
Safety issues
Setting up National
Resource Centre
Capacity
enhancement in
Market News
Capacity
enhancement in
Marketing
Extension