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BUSINESS LAW. I SEM MBA ONE MRKS QUESTIONS: 1. What is void agreement Void means having no legal value and agreement means Arrangement, promise or contract made with somebody. So void agreement means an agreement that has no legal value. “An agreement not enforceable by law is said to be void”. [Sec 2(g)] A void agreement has no legal effect. An agreement which does not satisfy the essential elements of contract is void. Void contract confers no rights on any person and creates no obligation.
2. what is voidable contract
Voidable Contract – An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, 3. Define quasi contract ? It is an obligation imposed by law in the absence of a contract to prevent unjust enrichment. 4. what is offer, acceptance, consideration, consent and capacity to contract offer ; According to sec 2[a] “ When one person signifies to another his willingness to door 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 an offer.
The offer is also known a proposal or it is also caller promise. The person who makes the offer is called an offeror. The person to whom the offer is made is called offeree Acceptance is defined as ” When the person to whom the proposal is made signifies his assent there to the proposal is said to be accepted. Consideration :When at the desire of the promissor, the promisee or any other person has done or abstained from doing, does or abstains from doing, promises to do or abstain from doing something such act or abstains or promise is called the consideration for the promise
Consent of the parties means that there is perfect identify of mind of both parties and there should not be any misunderstanding the subject matter of the contract.
Section 13 of Indian Contract Act says “two or more persons said to consent when they agree upon the same thing in the same sense”. Indian Contract Act “ 5. What is ab initio The term “void ab initio”, which means “to be treated as invalid from the outset [beginning??? ] . For example, in many jurisdictions where a minor person signs a contract under that contract is treated as being “void ab initio”. 6. What are illegal agreements
An illegal agreement, under the common law of contract, is one that the courts will not enforce because the purpose of the agreement is to achieve an illegal end. The illegal end must result from performance of the contract itself. BusinessDictionary. com Contract whose formation, object, or performance is so iniquitous, against the law of the land, or contrary to public policy, that no court will entertain or enforce it. Technically, it is a ‘no contract. ‘ In situations where two wrong doers enter into an illegal contract and one of them takes advantage of the other, law normally will not intercede to rectify the situation 7. hat is agreement opposed to public policy if any agreement is result in doing harm to the public or against public welfare such agreement is opposed to public policy and hence they are void. The idea is that no can do harm to the public welfare or public good. Heads or example of public policy a) Agreement for Trading with enemy b) Trafficking in public office c) Interference with administration of Justice d) Stifling prosecution . e) Maintenance and Champerty f) Champerty means it is the bargain in which a stranger promises to give assistance money or other wise to another person in recovering property and to share it. ) Marriage brokerage contracts h) Agreement to do something opposed to duty i) Agreement in restraint of parental rights j) Agreement restricting personal Liberty J) Agreement to commit a crime k ) Agreement in restraint of legal proceedings it may  l) . Agreement in restraint of Trade . m) Agreements in restraint of marriage. n) Agreement to defraud creditors 8. what is indemnity A CONTRACT OF INDEMNITY is a contract by which one person promises to save the other from the loss caused to him by the conduct of the promissor himself or the conduct of any other person. . what are damages Damages which arise in the ordinary course of events from the breach of contract are called ordinary damages. These damages constitute the direct loss suffered by the aggrieved party. 10. what is quantum meruit [Latin, As much as is deserved or earned] In the law of contracts, a doctrine by which the law infers a promise to pay a reasonable amount for labor and materials furnished, even in the absence of a specific legally enforceable agreement between the parties. 11. hat is injunction Injunction is a court order against a person who has promised not do something, restraining him from doing that thing. 12. define pledge The bailment of goods as security for payment of a debt or performance of a promise is called “pledge”. The bailor is in this case called “pawnor”. The bailee is called “pawnee”. 13. What is hire purchase A hire purchase agreement is a contract whereby the owner of the goods lets them on hire to another person called hirer or hire purchaser on payment of ent to be paid in instalments and upon an agreement that when a certain number of such instalmnets are paid the property in the goods will pass to the hirer. 14. Define goods under sale of goods act According to sale of goods act 1930, sec 2 (7) goods means every kind of moveable property other than actionable claims and money and includes stocks and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale. 5. who are drawer, drawee and payee Drawer, drawee The maker of a bill of exchange or Cheque is called the “drawer”; the person thereby directed to pay is called the “Drawee”. “Drawee in case of need “: When the bill or in any endorsement there on the name of any person is given in addition to the drawee to be resorted to in case of need such person is called a “drawee in case of need”. Acceptor”: After the drawee of a bill has signed his assent upon the bill, or, if there are more parts there of than one, upon one of such part, and delivered the same, or given notice of such signing to the holder or to some person on his behalf, he is called the “acceptor”. Acceptor for honour”: When a bill of exchange has been noted or protested for non-acceptance or for better security], and any person accepts it supra protest for honour of the drawer or of any one of the endorser, such person is called an “acceptor for honour”. Payee”: The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the “payee”. 16. what is a promissory note Promissory note A “promissory note” is an instrument in writing (not being a bank-note or a currency-note) containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument. 17. hat is dishonour of cheque Dishonor of cheque means when a cheque is presented to the banker, if the cheque is not paid by the banker, the chque will be returned or dishonored In simple when cheque could not be en-cashed, or could not get the money for the cheque, it will be returned to the presenter which is dishonoring of the cheque Section 138 of the Negotiable Instruments Act, 1881: “Dishonour of cheque for insufficiency etc. , of funds in the account. Where any cheque drawn by a person on an account maintained by him with the banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an arrangement made with that bank, such person shall be deemed to have committed an offence and shall, be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both: 18. who is a consumer under COPRA Who is a consumer?
Sec 2d of the act gives the definition as Consumer means any person who Buys any goods for consideration which has been paid or promised to be paid Or partially paid and partially promised or Under any system of deferred payment and Includes any user of goods with the consent Of the owner but Does not include a person who buys for resale Or for commercial purpose or In respect of the service ii. Hires or avails of any services for consideration Which has been paid or promised to be paid Or partially paid and partially promised or Under any system of deferred payment and Includes any beneficiary of of such service with the approval of Of the owner 19. what is electronic governance What is electronic Governance? 01. LEGAL RECOGNITION OF ELECTRONIC RECORDS 02. LEGAL RECOGNITION OF DIGITAL SINGATURE 03. RETENTION OF ELECTRONIC RECORDS 04. USE OF ELECTRONIC RECORDS AND DIGITAL SIGNAURES IN GOVT. AND ITS AGENCIES 20. what is digital signature
What is a Digital Signature? Answer: A digital signature authenticates electronic documents in a similar manner a handwritten signature authenticates printed documents. This signature cannot be forged and it asserts that a named person wrote or otherwise agreed to the document to which the signature is attached. The recipient of a digitally signed message can verify that the message originated from the person whose signature is attached to the document and that the message has not been altered either intentionally or accidentally since it was signed. Also, the signer of a document cannot later disown it by claiming that the signature was forged. In other words, digital ignatures enable the “authentication” and “non-repudiation” of digital messages, assuring the recipient of a digital message of both the identity of the sender and the integrity of the message. 21. what is prospectus Prospectus is the document issued to the public in general for raising capital by the issue of shares, or for raising loan by the issue of debentures or inviting deposits, from them. After perusal of this, the investors may decide to subscribe to the share and debentures of the company or putting money as deposits to the company. 22. what is surrender of share and forfeiture of shares Forfeiture of Shares When a shareholder fails to pay calls, the company, if empowered by its articles, may forfeit the shares.
If a shareholder has not paid any call on the day fixed for payment thereof and fails to pay it even after his attention is drawn to it by the secretary by registered notice, the Board of Directors pass a resolution to the effect that such shares be forfeited. Shares once forfeited become the property of the company and may be sold on such terms as directors think fit. Upon forfeiture, the original shareholder ceases to be member and his name be removed from the register of members. Surrender of Shares After the allotment of shares, sometimes a shareholder is not able to pay the further calls and returns his shares to the company for cancellation.
Such voluntary return of shares to the company by the shareholder himself is called surrender of shares. Surrender of shares has no separate accounting treatment but it will be like that of forfeiture if shares. 23. what is a patent A patent is a legal monopoly granted for a limited time to the owner of an invention. It empowers the owner of an invention to prevent others from manufacturing, using, importing or selling the patented invention. FIVE MARKS QUESTIONS 1. what are legal rules relating to Acceptance ESSENTIALS OR LEGAL RULE OF ACCEPTANCE 1. It must be absolute and unqualified. 2. It must be communicated to the offeree. 3. It must be in the prescribed form. 4. It must be given within reasonable time. 5. It must be from the offeree. 6.
It must be in response to an offer. 7. It must be before the offer lapses. 8. It must be given before offer is withdrawn. 9. It must be accepted only when acceptor is aware of it. 10. It may be expressed or may be implied. 2. what are the different mode of terminating of agency Termination of agency by the act of the parties 1. By agreement : by mutual agreement it can be terminated 2. By revocation by principal i. e. cancellation by principal 3. By revocation by agent Termination by the operation of law 3. When the contract is performed 4. Expiry of time 5. Death or insanity of the principal 6. Insolvency of the principal or agent 7. Destruction of the subject matter 8.
Principal becoming an alien enemy – war etc. , 9. Dissolution of the company 10. If there is a sub-agent and on termination of the main agent the sub agent service is also terminated 11. what are the characteristics of a joint stock company 1. A company is a separate entity from the members who formed it. It is not a mere aggregate of the share holders 2. A member may be a creditor of the company also 3. A company is not an agent or trustee of members There need not be any equitable distribution of shares among the members of the company 4. Company may sue and be sued in its name 5. A share holder is not part owner or co owner of the company or its property 6.
A company is an artificial legal person and enjoy almost all the rights and is subjected to the obligations as in the case of a natural person. 7. The shares in the share capital of the company are transferable. Hence the life of the company is independent and has perpetual succession 8. The liability of the share holders may be made limited to the unpaid value of the share held by them 9. A company being a person has nationality and a domicile 10. A company is not a citizen and has not fundamental rights under the constitution. 11. A company being an artificial person can act only through natural persons 12. what are the implied authority of a partner
Implied authorities are those authorities which is not expressly made out but are implied in the conduct of the business. For instance: In Trading Firm the partners will have the following implied authority: 1. To engage a lawyer and defend the action brought against the firm, 2. To purchase goods of the kind that are used in the business of the firm, 3. To engage servants to perform the business of the firm, 4. To receive payment of the debts due to the firm & give receipts for the same, 5. To settle accounts with the persons dealing with the firm, 6. To sell the goods of the firm, and 7. To borrow money for the purpose of the firm 8. To pledge the goods of the firm as security for the repayment of the same. 9.
To make, draw, accept and endorse bills of exchange and other negotiable instruments in the name of the firm. 13. Explain what is Memorandum of Association what are the important clauses MEMORANDUM OF ASSOCIATION It is the charter of the company which contains the fundamental conditions upon which alone the company can be incorporated. IT tells us the objects of the company’s formation and the utmost possible scope of it operation beyond which its action cannot go. Thus it defines the powers of the company with in which the company has to function and in case the company does anything beyond this powers it is called ULTRA VIRUS ie beyond the powers and as such it is void Various clauses are 1. Name clause 2. REGISTER OFFICE CLAUSE 3.
OBJECT CLAUSE 4. LIABILITY CLAUSE 5. CAPITAL CLAUSE 6. ASSOCIATAION OF CLAUSE 14. what are the procedure for amendment of M/A Normally the memorandum will not be allowed to be changed However the dynamics of business calls for the changes to be made in the M/A The company law provided for the amendments of the various clauses of the M/A. The amendments can be made by following the rules and regulations and also by following the procedure prescribed under the provisions of the company law NAME CLAUSE OF THE COMPANY Alteration in the memorandum regarding NAME CLAUSE OF THE COMPANY May be made by passing a SPECIAL RESOLUTION In the general body meeting.
The company has to obtain central Govt. permission In writing for the same. The registrar will enter the new name in the place Of the earlier name of the company and a certificate Will be issued from that date only the name of the Company stands changed. CHANGE IN THE REGISTERED OFFICE OF THE COMPANY [a] If the change of place is in the same town/city company can shift it registered office from place to another place in the same city, but it Must be intimated to the registrar with in 30 days. [b] if the change of place is from one city to another city in the same state company has to pass a special resolution intimate the registrar with in 30 days.
Change in the Registered office of the company from one state to another state For this company has to obtain the confirmation from company law board. A notice must be give to the registrar with in 30 days and the company has to inform the Registrar from which state it is shifted and also to Registrar to which state is shifted. CHANGE IN THE OBJECT CLAUSE OF THE MEMORANDUM On the following grounds the company is allowed To amend the object of the company is to be followed ( To amalgamate with other company By passing a ordinary resolution in the general Body meeting it can be changed, provided There is a clause in the article of association
To this effect. It may be for Increase Consolidate Convert Sub-divide or Cancel shares 15. what are the contents of Article of Association ARTICLE OF ASSOCIATION usually provide for the following ( The use of common seal of the company ( The alteration of capital how and to what extent ( The borrowings of the company the mode & limits Minimum and maximum of directors, names of the first Directors And their duties and removal ( Dividends and reserve funds ( Accounts and audit ( Appointments of secretary, manager etc ( Adoption of contract entered into by the promoters ( Remuneration to promoters ( Special provisions for amalgamating and (Winding up 16. ho can and who cannot enter into a valid contract According to sec 11 “ every person can enter into contract who is of the age of the majority according to the law to which he is subject and who is of sound mind and is not disqualified from contracting by any law to which is subject ” As per this section the following type of persons cannot enter into contract 1. Minor 2. Person of unsound mind 3. Persons disqualified by law 17. what is a quasi contract Under certain circumstances, a person may receive a benefit to which the law regards them as better entitled, or for which the law considers him to pay the other person, even though there is no contract between the parties.
Such relationships are termed as quasi-contracts, because, although there is no agreement or contract between the parties, they are put in the same position as if there were a contract between them. A quasi-contract rests on the ground of equity that a person shall not be allowed to enrich himself unjustly at the expense of other. The principle of unjust enrichment requires: •That the defendant has been ‘enriched’ by the receipt of a ‘benefit’. •That this enrichment is at the expense of the plaintiff: and •That the retention of the enrichment is unjust. 18. what is coercion what are the legal rules? Coercion means forcibly compelling a person to enter into a contract. In such case the consent is obtained by using force or threat it is a voidable contract. Coercion is committing or threatening to commit any act forbidden by Indian Penal code, or unlawful detaining or threatening to detain any property to the prejudice of any person whatever with the intention of causing any person to enter into an agreement. ” 1. The coercion must be committing of any act forbidden by IPC 2. The coercion must be threatening to commit an act forbidden by IPC . 3. The coercion must be unlawful detaining of any property or threatening to detain the property. 4. The act of coercion must be done with an intention of making other party to enter into an agreement. 5. IPC may or may not be in force where the coercion is committed 6. The act of coercion may be initiated by any person 7.
The coercion may be by way to threat to commit suicide. 19. what is a material alteration Material Alteration is nowhere defined, but S. 87 talks about the effect of Material Alteration as “Any material alteration of Negotiable Instrument renders the same void as against anyone who is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties;…….. If for example in a cheque , when the following is altered it amount to material alteration. (a) The date; (b) The sum payable, either for principal or interest; (c) The time or place of payment: d) The number or the relations of the parties; 20. Describe various types of endorsements [pic] Endorsement in blank means the endorser will simply sign on the reverse of the instrument. It is payable to the bearer thereof. Endorsement in full means the endorser sign his name and also adds the name of the person to or to the order of specified person. Restrictive endorsement means the endorser restricts the further negotiations and the transfer. Example: Pay A only Pay to the account of B only Qualified endorsement excludes the liability of the endorser or make it conditional. Example: Pay D or order sans recourse. Pay D or order without recourse to me. Pay D or order at his own risk.
Sans Frais means it indicate the endorser is not liable for expenses incurred on account of the bill. Example: Pay X or order sans frais 21. what is crossing who can do it, what are the types? CROSSING OF CHEQUES Crossing means putting two parallel transverse lines across the face of a cheque, with or without word s. (lines important not words) Crossing applicable for cheques only and not to promissory notes or bill of exchange. Crossing is direction of drawer to paying banker. According crossed cheque can be paid to or through a bank only (in cash or through clearing) and not cross the counter, to payee or holder. Crossing can be done by drawer , banker or holder.
A general crossing can be converted into a special crossing. Crossing is general crossing or special crossing. When two lines are put with or without words, it is general crossing (Sec 123) and when only name of the bank is written, it is special crossing (Sec 124). In general crossing lines are important and in special crossing the words are important. As per Sec 126, specially crossed cheques can be paid to the bank in whose favour crossed. Cheque crossed in favour of 2 banks cannot be paid (Sec 127) unless one of them is agent, to whom it will be paid. Two branches of a bank for this purpose, are only one bank. Not negotiable is a valid crossing (Sec 130). It does not negotiation I. e. assing on better title to the transferee (transferee can not ecome holder in due course). It is direction to collecting bank. Paying bank has to pay such cheques in normal curse. Account payee crossing is not defined and it is result of banking Practices. Such cheques cannot be endorsed and these can be credited to account of the payee only. Crossing can be cancelled by drawer only under his full signatures by writing the words crossing cancelled. Paying bank gets protection on payment of crossed cheques u/s 128 by ensuring that the payment is made in due course. 22. what are the presumption of the NI What are the presumptions of Negotiable Instruments?
Until the contrary is proved, the following presumptions shall be made :— (a) of consideration – that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been $ accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; – – (b) as to date – that every negotiable instrument bearing a date was oide or drawn on such date; – – (c) as to time of acceptance – that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity; – – (d) as to time of transfer – – that every transfer of a negotiable instrument was made before its maturity; – – (e) as to order of indorsements – hat the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; (f) as to stamps – that a lost promissory note, bill of exchange or cheque was duly stamped; – – (g) that holder is a holder in due course – that the holder of a negotiable instrument is a holder in due course : provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder in due course lies upon him. [section 118] (h) as to dishonour- f a suit file upon an instrument which has been dishonored the court shall on proof of protest presume the fact of dishonour. 23. what is noting and protesting of a bill Noting and protesting When a negotiable instrument is dishonoured, in order to create to proof of dishonour the holder may approach a notary public and have the fact of dishonour noted either on the instrument itself or on a separate piece of paper or partly upon both. Noting must made within reasonable time after dishonour. The notary may enquire from the party liable about the dishonour and if still the instrument is not paid the notary may make a note of the fact of dishonour.
The note should contain the following particulars: 1. The fact that the instrument is dishonoured 2. The date on which it is dishonoured 3. The reasons if any for dishonour 4. Why the holder treats it dishonour 5. Payment of notary charges 6. Parties protest : Sec. 100 7. Protest is one step further to noting 8. If the holder gets the fact of dishonour noted he may also have the dishonour and noting certified by the notary public. Thus a holder gets a certificate from the notary public certifying the fact of dishonour. 9. Such certificate is called protest. 10. Protest must be done within a reasonable time. 24. what is hacking under cyber law. Discuss the types of cyber crimes
Hacking means whoever with the intent to cause or knowing that to is likely to cause wrongful loss or damage to the public or any person destroys or deletes or alters any information residing in the computer resource or diminishes its value or utility or affects it injuriously by any means commits hacking Types of crimes: HACKING CRACKING SECURITY RELATED CRIMES NET WORK PACKET SNIFTERS THIRD PARTY ACCESS INTERNET PROTOCOL SPOOFING AN OUTSIDE THE NET WORKER ATTACKS AN IP ADDRESS, USING THE CLIENT SERVER TO GET DATA PASSWORD ATTACKS PASS WORD ATTACH MAY BE MADE BY DIFFERENT METHODS LIKE BRUTE FORCE TROJAN HORSE PROGRAMME IP SPOOFING ATTACK CAN YIELD
USER ACCOUNT AND PASSWORD FRAUD ON INTERNET WHILE COLOR CRIME, COMMON TYPE 25. DISTINGUISH BETWEEN a. VOID AND VOIDABLE AGREEMENTS b. INDEMNITY AND GURANTEE c. SUB AGENT AND SUBSTITUTED AGENT d. FRAUD AND MISREPRESENTATION e. FRAUD AND UNDUE INFLUENCE f. BAILMENT AND PLEDGE g. SALE AND AGREEMENT TO SELL h. BALANCE OF TRADE AND BALANCE OF PAYMENT i. ORDINARY SIGNATURE AND DIGITAL SIGNATURE j. GOVERNMENT COMPANY AND PRIVATE COMPANY k. PRIVATE CO AND PUBLIC COMPANY EIGHT MARKS QUESTIONS 1] What are the essentials of a valid contract? Ans : 1. THERE MUST BE TWO PERSONS 2. CONSENSES AD IDEM 3. SHOULD CREATE LEGAL CONSEQUECES 4. LAW FUL CONSIDERATION 5.
CAPACITY TO CONTRACT MUST BE THERE 6. THERE MUST BE FREE CONSENT 7. THE OBJECT MUST BE LAW FUL 8. IT MSUT NOT HAVE BEEN DECLARED AS VOID 9. IT MUST NOT BE FOR DOING IMPOSSIBLE THINGS 10. LEGAL FORMALITIES MUST BE OBSERVED [ explain each point few lines ] 2] What are the modes of discharge of a contract? Ans : [pic] [explain each one in few lines] 3] What is consideration? state the exception to the rule no consideration no contract? Ans : CONSIDERATION is one of the essentials of a valid contract. It is the price of the promise It is something in return QID PRO QUO ACCORDING TO SECTION 2 d OF INDIAN CONTRACT ACT
When at the desire of the promisor, the promisee or any other person has done or abstained from doing, does or abstains from doing, promises to do or abstain from doing something such act or abstains or promise is called the consideration for the promise [pic] [pic] [pic] [pic] [explain each with few lines] 4] When the consent is said to be not free? Ans : FREE CONSENT Consent of the parties means that there is perfect identify of mind of both parties and there should not be any misunderstanding the subject matter of the contract. Section 13 of Indian Contract Act says “two or more persons said to consent when they agree upon the same thing in the same sense”. It is consensus ad idem i. e meeting of minds.
Mohan has two cars one green and the other Red, he offered to Sohan to sell one of his car for Rs 2,00,000/-Sohan has accepted thinking that he will but red car where as Mohan had green car in his mind to sell. In this case no contract will arise as there is no meeting of mind or there is no consensus ad idem. Definition of a Free Consent Section 14 defines “Consent is said to be free when it is not caused by- 1. Coercion 2. Undue Influence 3. Fraud 4. Mis representation 5. Mistake If the consent of the other party to the agreement is obtained by any of the above is no consent and the contract is VOIDABLE . 5] What are void agreements which are expressly declared by law? Ans: 1. .Agreements by incompetent parties [sec 11] 2. Agreements made under mutual mistake [sec 20] 3.
Agreements where the consideration or objects are unlawful 4. Agreements where the consideration or objects are unlawful in part 5. Agreements made without consideration 6. Agreements in restrain of marriage (sec. 26) 7. Agreements in restrain of trade (sec. 27) 8. Agreements in restrain of legal proceedings (sec. 28) 9. .Agreements the meaning of which is uncertain (sec. 29) 10. .Agreements by way of wager (sec. 30) 11. .Agreements contingent on impossible event (sec. 36) 12. Agreements to do impossible acts (sec. 56 13. In reciprocal promise to do which is unlawful 1. Explain the remedies for breach of contract [pic] Rescission Rescission An action to undo the contract. • Available if there has been: – A material breach of contract – Fraud – Undue influence – Mistake Damages • ordinary damages – loss suffered by the plaintiff as a result of the breach and can be either general or special damages • exemplary damages – punitive and may be awarded for non-economic loss CASE: Jackson v Horizon Holidays  • Awarded where a plaintiff is able to sue for a specified sum, which must be a genuine or bona fide pre-estimate of the actual loss that will flow from the breach. • Unliquidated damages • Awarded where an injured party has no fixed sum in mind and leaves the court to decide the amount. • Penalty A threat to ensure performance and not enforceable because they are not a genuine pre-estimate of the damage that will result from the breach CASE: Dunlop Pneumatic Tyre Co v New Garage and Motor Co Ltd  Quantum meruit is a Latin phrase meaning “what one has earned”. In the context of contract law, it means something along the lines of “reasonable value of services”. When the party to a contract has performed his part and if he contract get discharged due to some reason, then the party who has performed his obligation must receive as much as he earned or entitled even though the contract gets discharged This right is based on quantum meruit.
Specific performance is a remedy sought in civil court, instead of money. It requires a defendant to actually go through with a certain action he promised to do, instead of just paying money for not keeping his promise. Specific performance is referred to under the law as an “equitable” remedy If a person entered into contract to do some thing and when backed out from that performance, the aggrieved party can go to the court seeking specific performance for making the defaulting party to do the performance in term of the contrct. INJUNCTION A court order that orders a party to do or refrain from doing a certain act (or acts) as opposed to a money judgment.
For example: An injunction might be obtained to prevent a copyright infringer from reprinting copyrighted materials; in divorces there are frequently mutual restraining orders (a form of injunction) requiring both parties to leave another alone; A court order which restrains one of the parties to a suit in equity from doing or permitting others who are under his control to do an act which is unjust to the other party; If a party has threatened to remove marital property, or has threatened to kidnap, a court might prohibit the party from touching any marital property or removing the child from the county. 2. Explain the implied conditions &warranties under sale of goods act
Implied conditions There are certain implied conditions and warranties in a contract of sale by operation of law they are said to be implied conditions ;and warranties. There are certain implied conditions and warranties, even though it was not specifically part of the contract, the law implies that such things are there. Example When a representative shows a sample and take the order when he supplies the bulk, the bulk must be of the same quality as of sample shown , there is an implied conditions that the sample and the bulk ordered must be the same if not the buyer can reject the same and cancel the contract Implied conditions 1. Conditions as to the title here is an implied condition that in every sale, the seller has the title to the goods which he is selling and has a right to sell the goods, if the title of the goods is defective eg stolen goods, the buyer can reject it, in case of purchaser has purchased the goods where there is no title he has return to the true owner and recover the money from the seller 2 sale by description There is an implied conditions if the sale is by description, that the goods shall correspond with the description if not buyer can reject it. 3 sale by sample There is an implied conditions in every sale by sample that goods shall correspond to the sample quality – Buyer to have reasonable time to check – goods must be free from defects – 4. Sale by sample and description – There is an implied conditions in case of sale by sample and description that the goods supplied must meet both as per sample and also as per description – 5. Condition as to quality and fitness There is an implied conditions in every sale that the goods sold is what the buyer wanted ;and if the buyer relies upon the sellers judgment and the seller deals with such goods, then the goods must be of reasonable quality and fit for the purpose. – – 6 condition as to merchantability – There is an implied conditions in a sale that the goods or article sold has merchantable quality. – TV, watch, frig, bulp – – 7 condition as to wholesomeness – There is an implied conditions in a sale that goods supplied must be free from defects. – The food articles if supplied it must be fit for consumption – – 8. Conditions implied by the customs and usage – Some time the customs and usage calls for certain quality or fitness, and in such circumstances the goods must match that conditions. – IMPLIED WARRANTIES 1 QUIET POSSESSION – There is an implied warranty in every contract of sale that the buyer shall have quiet possession and enjoyment of the good bought by him, if not buyer can hold seller responsible for breach of warranty. – 2. FREE FROM ENCUMBRANCE – There is an implied conditions that the goods shall be free from any encumbrance or charges in favour of any third party. – 3 Implied warranty annexed by usage of trade – If trade has usage as to fit ness for a particular purpose it must match that. 3. Who is an unpaid seller discuss his rights Section 45 lays down that a seller is unpaid : (1) When the whole of the price has not been paid or tendered. 2) When a negotiable instrument or a bill of exchange has been received as conditional payment and the condition in which it was received has not been fulfilled by reason of the dishonor of the instrument or otherwise. The seller remains as unpaid seller as long as any portion of the price, however small, remain unpaid. Where the whole of price has been tendered, and the seller refused to accept such a tender, seller ceases to be an unpaid seller. In such a case the seller loses all high right against the goods. If there is a period of credit then the seller is not unpaid until the price become due. Against if there is a condition attached to payment it must be fulfilled.
The unpaid seller’s right can be exercised by an agent of the seller to whom the bill of leading has been endorsed, or a consignor or an agent who has himself paid, or is directly responsible for the price. Rights of an unpaid seller The sale of Goods Act has expressly given two kinds of right to an unpaid seller of goods, namely : (1) Against the goods (a) When property in the goods has passed (i) Right of lines (ii) Right of stoppage of goods in transit (iii) Right of re-sale (b) When property in the goods has not passed (i)Right of withholding delivery. (2) Against the buyer personally (i) Right to use for price (ii) Right to sue for damages (iii)Right to sue for interest. 4.
Explain the sale by non owners sale by non-owners The general rule of law is that “ no one can give that which one has not got” a person who is not the owner thereof and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods BUT THERE ARE CERTAIN EXCEPTION TO THIS RULE THAT IS EVEN A PERSON IS NOT THE OWENR HE CAN SELL THE GOODS AND CONVEY GOOD TITLE UNDER CERTAIN CONDITONS: 1 SALE BY MERCANTILE AGENT a mercantile agent is a person who represents the principal, the mercantile agent makes sales of goods which belongs to the principal, but sale by a mercantile agent will give the buyer good title.
Only the following must be satisfied at be time of sale: – He must have possession of goods – Sold in the ordinary course of business – Buyer acted in good faith – No notice of the authority of the seller – 2. SALE BY ONE OF THE JOINT OWNERS – one of the joint owner of the goods can sell it and pass a good title to the buyer provided the seller has possession and the buyer has purchased in good faith – 3. Sale by person having voidable title under contract – he must have possession – the contract has not been cancelled – in good faith without notice of defective title buyer has purchased the goods. – 4 sale by seller in possession of goods after sale he seller in possession of goods already sold can again sell it to another buyer – he must be in possession – Buyer must have given consent to keep the goods – in good faith without notice of defective title buyer has purchased the goods 5. sale by buyer in possession of goods before sale he must be in possession seller must have given consent to keep the goods in good faith without notice of defective title new buyer has purchased the goods 6. Sale by unpaid seller an unpaid seller by exercising his right to resell can sell the goods. 7. Sale by pledgee if the pledgor fails to release the goods pledge, finally the pledgee has a right to sell the goods to third party by auction or private sale. 8. Sale by official receiver
Official receiver or assignee is a person appointed to do the winding up process of the company, he will be appointed the court. In the process of winding up/dissolution , the official receiver can sell off the goods and convert it to money for settlement of the account. The purchaser in such case will get good title. 5. Narrate the modes of creation of Agency There are 4 modes of creation of agency 1. By express agreement 2. By implied agreement 3. By ratification 4. By operation of law 5. Express means either by writing or by oral 6. Implied means arising out of conduct and behavior of the parties. It may be by estoppel means “ where any person by his conduct or by his ords spoken or written leads willfully another person to believe that a certain state of affairs exists and induces him to act on that belief so as to alter his previous position, he is precluded from denying subsequently the fact of that state of affairs. EXAPMLE: Anand tells Babu within the hearing of Ramu that he is the agent of Ramu. Ramu does not object it [actually Anand not his agent] Later Babu supplies certain goods to Anand who pretends to act as agent of Ramu. Ramu is liable to the amount to Babu. By keeping quite he led Babu to believe that Anand is Ramu’s agent. Here Ramu is stopped from denying that Anand is not his agent. AGENCY BY HOLDING OUT
It is a branch of estoppel, here a prior positive act on the part of the principal is required to establish the agency subsequently. Prasad used to send his servant Suresh to a near by shop to purchase various goods for him on credit, Prasad used to pay for the same. This was going on. On one fine Friday, Suresh went to the shop and purchased on credit many items and made huge bill and took away all the goods and escaped. After some time the shop owner demanded the money from Prasad who told that he has not asked his servant to buy anything and he [servant]made it on his own. Matter went to court ,court held that because of the act of Prasad allowing Suresh to buy on credit for him established an agency by Holding out, & he has to pay 3. AGENCY BY NECESSITY
Some time due to necessity one person becomes agent of the other, and in such case the principal is held responsible to pay or compensate the agent created out of necessity. Great northern railways vs swaffield A Horse was sent by train. When it arrived at the destination Station no body took the delivery. The Station Master of the Railway company has to take care of the horse and to feed the horse. Railway company became the agent by necessity and there fore the consignor has to pay. AGENCY BY RATIFICATION Some thing a person may act on behalf of another person without prior knowledge of that person. Williams vs north china insurance co, A insures P’s goods without the authority of P P accepts the same and pays the premium.
Here P ratifies the action of A and he become the agent by ratification. AGENCY BY OPERATION OF LAW Sometime agency arises by operation of law, when a company is formed its promoters are its agents by operation of law. A partner is the agent of the firm. 6. What are the rights and duties of buyer and seller RIGHTS OF BUYER 1. Right to get delivery of the goods as per contract 2. Right to reject the goods if the seller sends different quality or quantity of goods 3. Right to cancel if the seller does not follow terms/condition 4. Right to examine the goods 5. Right against seller for breach of contract DUTIES OF BUYER 1. Duty to apply for the delivery 2. Must accept the goods and pay the price 3.
May refuse to accept the installments 4. If different quality or quantity is delivered and if he accepts he has to pay for the same 5. If seller sends the goods ordered and not ordered also, buyer may accept which are ordered and reject rest RIGHTS OF SELLER • Right to get payment • Right to sue for the price • An unpaid seller has lien, right to stoppage in transit, resale DUTIES OF SELLER 1. Prepare all documents necessary in time 2. Deliver the goods to buyer 3. Deliver at the place fixed or usual place of business 4. Deliver at business hours 5. He has to bear the cost of delivery 7. Who is a director how he is appointed what are their rights and duties Who is a Director?
Since the company is an artificial person and as it cannot act on its own some one has to do the work on behalf of the company This makes it necessary that the company’s business must be entrusted to some natural person hence there is a need for a human being to act as a director of the company. The director is not defined in the co law but Directors are those natural persons who manager the affairs of the company. The are collectively called as board or board of directors. Qualifications Only individual can be appointed as directors and no body corporate , association or firm shall be appointed as a director. This is to hold individual person responsible for the work done by him He should have signed as director and filed with register his consent to become director of a company.
He should hold or purchase qualification shares as mentioned in the A/A, with in 2 months of his appointment The qualification share shall not be more than Rs. 5000=00 Disqualification If a directors does not get qualification share within 2month of his appointment? [ if he acted as director without qualification share then he has to pay Rs. 500=00 per day If he is of unsound mind If he is undercharged insolvent If he is convicted , and 5 years is not completed after jail term If he not paid calls in arrears If there is any court order Appointment of director First directors will be named in A/A of the co If not they shall be determined by the subscriber of the M/A Or All the subscribed of M/A will be directors Appointment of the directors by the company
In the General Body meeting the directors will be appointed While 1/3 of director can be permanent and Remaining 2/3 are liable to retire by rotation They can be reappointed Appointment of directors by Board of Directors BOD can appoint additional director till next annual general body Casual vacancies may be filled if the A/A permits BOD can appoint an alternate directors if authorized by A/A or General body Appointment of directors by third party Some time when bank advances huge advances they nominate a director on the board of the company to ensure the end use of funds Appointment of Director by Central Govt. Central Govt. in order to prevent Mis management or
To take care of minority share holder Will appoint directors for 3 years They need not have qualification or will retire by rotation The powers of the directors can be broadly divided into two 1. Statutory powers 2. Managerial powers Statutory power The law has given all directors statutory powers Board of directors can exercise the following powers by passing board resolution 1. Power to make calls on shares 2. Power to issue debentures 3. Powers to borrow money 4. . Powers to invest the funds of the co 5. 5. Powers to make loans 6. 6. On taking approval from general body they can: 7. sell or lease or dispose the whole or part of the companies undertaking 8. emit or allow time for repayment of debt due by directors 9. appoint a sole selling agent for more than 5 years 10. issue bonus shares 11. reorganize the share capital of the co Other powers 1. To appoint additional director 2. To fill up casual vacancies of director 3. To sanction powers to director to enter into contracts with the co 4. To appoint MD 5. To invest in any share of any other company 6. To declare solvency 8. Describe the different types of company (1) Chartered Companies Those companies which are incorporated under a special charter by the king or sovereign such as East Indian Company. Such companies are rarely formed now-a-days as trading companies. (2) Statutory Companies
These companies are formed by special acts of Legislatures or Parliament. e. g. ; the Reserve Bank of India, the Industrial Finance Corporation, Damodar Valley Corporation. (3) Registered Companies Such Companies which are incorporate under the Companies Act, 1956 or were registered under the previous Companies Act. Form the point of view of liability there are three kinds of Companies (1) Limited Companies In case of such companies, the liability of each member is limited to the extent of a face value of shares held by him. Suppose A takes a share of Rs 10. , he remains liable to the extent of that amount. As soon as that amount in paid, he is no more liable. (2) Guarantee Companies
The liability of the member of such companies is limited to the amount he has undertaken to contribute to the assets of the company in the event of its wound up. This guaranteed amount is limited to fixed sum which is specified in the memorandum. Cambers of commerce, trade associations and sports clubs are usually guarantee concerns. The object of such companies is not to make profit and distribute dividend. (3) Unlimited Companies They are nothing but large partnership registered under the Companies Act and the members just like partners have unlimited liability and both share contribution as well as their property are at stake when the company is to be wound up. Such companies are rare these days. From the point of view of Public investment companies may be of two kinds: (1) Private Companies :
A private company means a company which by its articles (a) restricts the right to transfer its shares, if any (b) limits the number of its members to fifty excluding past or present employees of the company who are also members of the company. (c) Prohibits any invitation to the public to subscribe for any shares in our debentures of the company. (2) Public Companies : Public companies are those companies which are not private companies. All the three restrictions are not imposed on such companies. 9. What are the agencies under consumer protection act to redress the dispute How the consumer disputes are settled? What is the procedure, Discuss CONSUMER DISPUTES REDRESSAL AGENCIES. Establishment of Consumer Disputes Redressal Agencies. There shall be established for the purposes of this Act, the following agencies, namely:— (a) a Consumer Disputes Redressal Forum to be known as the “District Forum” established by the State Government in each district of the State by notification: (a) District Forum in a district. (b) “State Commission” established by the State Government in the State by notification; and c) National Consumer Disputes Redressal Commission established by the Central Government by notification. 10. What is the role of centre and state consumer protection council The State Consumer Protection Council The State Council will be established by the State Government by notification on the date mentioned in it.
The Minister who handles consumer affairs in the State Government will be the Chairman of the council. The State Government can prescribe other members, who share these interests, to be appointed at official or unofficial level. The Central Government may also nominate not more than 10 such members. Procedure for Meetings: At least two meetings of the State Council will take place every year. However, a member of the council may call the meeting whenever they find it necessary. The time and place of the meeting will be decided by the Chairman. The State Government shall, by notification, create a council for every district on the date mentioned in the notification, as provided in clauses (a) to (f) of section 6.
Such a council will be referred to as the District Consumer Protection Council. The Central Consumer Protection Council The Central Government is required to constitute the Central Consumer Protection Council by notification on the date specified in it. The Minister handling consumer affairs in the Central Government will be the chairman of the council. Other members, official or unofficial, who share these interests, can be prescribed. Procedure for Meetings One meeting of the Central Council will be held every year. However, if the members feel the need of the meeting, they can call it. The place and time of the meeting will be decided by the Chairman.
Some of the objects of the Central Council are to protect the following rights of the consumers: • consumer education. • seek redressal against unfair trade practices. • marketing of hazardous goods and services. • access to a variety of goods and services at competitive prices. • information about quality, quantity and purity of goods or services. 11. How a company be formed what are the stages in the formation [pic] 12. When a patent can be revoked? Grounds for revocation of patent >< 1. Patent already granted 2. Person to whom it is granted is not entitled 3. Wrongfully obtained the patent 4. Not a new invention 5. Mis-REPRESENTATION 6.
Not patentable under the act 7. Already in use in India 8. Wrong mentioning of the source or 9. geographical origin If relating to atomic energy the Govt, may ask for revocation 10. In the public interest. 13. What inventions are not patentable According to the patent act the following invention Are not patentable a) An invention which is frivolous which is contrary to well established law b) Invention prejudicial to the public order or environment against public well fare c) Mere scientific principle or discovery etc, of an abstract theory or discovery of any living or non living things occurring in nature d) Discovery of know substance i. new property or new use of a known process etc. , e) Admixture i. e substance obtained by a mixture of some thing f) Arrangement or rearrangement or delicate of a known thing/device or function etc g. Process of treatment of human being or animals that is any process for the medical, surgical, curative of human beings or animals, h. Plants and animal in part of whole other than micro organism but including seeds varieties and species and essentially biological process for production or propagation i. Mathematical programme that is a mathematical or a business method or a computer programme per se or algorithms j. Literary programme i. e. iterary dramatic musical or artistic work or any other aesthetic creation what so ever including cinema. TV. , k. Mental act or method of playing games l. A presentation of information m. Topography of integrated circuits n. Traditional knowledge on invention which in effect or a traditional knowledge or which is an aggregation or duplication of known properties or traditional know components o. Atomic energy p. Those substance which are used in food or drug q. Those inventions related to substance prepared or produced by chemical process. However, methods or processes of manufacture shall be patentable -> now product patent is also coming /*/*/*/*/*/*/*/*/*/*/*/*/*/*/*/*
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