Looking for a Tutor Near You?

Post Learning Requirement »
x

Choose Country Code

x

Direction

x

Ask a Question

x

x
Hire a Tutor
Delhi
DISCOVER

Legal Aspects Of Business

Loading...

Published in: HR/Personnel | Management Subjects | MBA
12,147 Views

This presentation is about Legal Aspects of Business.

Suchismita R / Noida

6 years of teaching experience

Qualification: B.Tech/B.E. (Amity University Noida , Noida - 2017), MBA/PGDM (Amity Business School (ABS Amity), Noida - 2018)

Teaches: All Subjects, English, Mathematics, Science, Biology, Effective Communication, Spoken English

Contact this Tutor
  1. Legal Aspects of Business 1
  2. Purpose of Indian Contract Act The Act was passed by British India and is based on the principles of English Common Law. ' It determines the circumstances in which promise made by the parties to a contract shall be legally binding on them. ' It is applicable to the All States of India except the State of Jammu & Kashmir.
  3. History of Indian Contract Act The Indian Contract Act came into force on 1st September 1872. Before the enactment of the Indian Contract Act, 1872, there was no codified law (Specific law) for contracts in India. The Act originally had 266 Sections. The entire Act was divided into following parts: — General Principles of Law of Contract (Sec 1 to 75) — Contract relating to Sale of Goods (Sec 76 to 129) — Special kinds of Contracts (indemnity, guarantee, bailment & pledge) (Sec 125 to 238) — Contracts relating to Partnership (Sec 239 to 266)
  4. MEANING OF CONTRACT According to Section 2(h) - A contract is an agreement enforceable by law. Agreement CONTRACT Legal Enforceability
  5. MEANING OF AGREEMENT According to Section 2(e) - every and every set Of prornises, forming the consideration for each other, is an agreement. AGREEMENT Promise or set of Valid Consideration Promises PROMISE Sec.2(b) CONSIDERATION A proposal when accepted becomes a promise. Price paid by the one party for the promise of the other. Technical word meaning 'QUID PRO QUO' i.e. something in return
  6. MEANING OF PROMISE ' According to Section 2(b) — 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. Offer/ProposaI PROMISE Acceptance
  7. MEANING OF CONTRACT CONTRACT Legal Enforceability Agreement Promise or set Of Promise Offer Acceptance Lawful Consideration Where Rights and Obligations in a contract are enforceable in the eyes of Court. Means where parties to the contract have rights to file case in the court.
  8. Rights and Obligation »ContractuaI rights and obligations are correlative Agreements which are not contract — Relating to social matter — Domestic arrangement Balfour v. Balfour Agreement Contract Legal Obligation "All the contracts are agreement but all agreements are not contract." 8
  9. ESSENTIAL ELEMENTS OF A VALID CONTRACT (Section 10) According to Section 10, all agreements are contracts if they are made — by the free consent of parties ' competent to contract, — for a lawful consideration, — with a lawful object, and — if they are not expressly declared to be void.
  10. ESSENTIAL ELEMENTS OF A VALID CONTRACT The essential elements of a valid contract are: Offer and Acceptance: There shall be an offer or proposal by one party and acceptance of that offer by another party resulting in an agreement (consensus ad idem). Intention to create legal relations: There shall be an intention between the parties to create legal relations. Lawful consideration: The agreement is supported by a lawful consideration. Consideration means something in return. Capacity of parties: The parties to the contract shall be legally competent to contract. Free consent: The consent of the parties shall be genuine and free. Legal object: The object of the contract shall be legal and shall not be opposed to public policy. Certain terms: The terms of the contract shall be certain and shall not be vague. Possible performance: The agreement is capable of being performed i.e., it is not impossible of being performed.
  11. Offer or Proposal and Acceptance Sec.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 either to such act or abstinence, he is said to make a proposal.
  12. 1. 2. 3. 4. 5. 6. 7. 8. 9. Rules governing offer Offer must be capable of creating the legal relation Offer must be certain, definite and not vague Offer may be express or implied Offer must be distinguished from an invitation to offer Offer may be specific or general Offer must be communicated to the person to whom it is made Offer must be made with a view to obtaining consent of the offeree An offer should not contain a term the non compliance of which amounts to acceptance Communication of Special terms 12
  13. LAPSE (Revocation) OF AN OFFER On expiry of stipulated or reasonable time. By not accepting in mode prescribed. By rejection by the offeree. By death or insanity of the offerer or offeree before acceptance. By revocation by the offeror at any time before acceptance. ' Revocation of standing offer at any time by giving notice to the offeree. ' Revocation by non fulfillment of condition precedent to acceptance. By subsequent illegality or destruction of subject matter. 13
  14. Rules governing acceptance Acceptance must be absolute and unqualified Acceptance must be communicated Mode and time of Acceptance Acceptance by conduct Conditional acceptance operates as rejection of offer
  15. Consideration Sec 2(d) consideration is defined as "when at the desire of the promisor , or 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 an act or absinence or promise is called a consideration for the promise 15
  16. Rules governing consideration ' Consideration must move at the desire of the promisor ' Consideration may move from the promisee or any other person Chinnayya V. Rammayya ' Executed, Executory and past consideration ' Consideration need not be adequate(sec25) ' Consideration should be real, Must not be unlawful, immoral or opposed to the public policy There must be mutuality(eg- charity) Should be more than promisee is already bound 16
  17. When consideration not Out of natural love and affection Rajluckhyv. Bhoothnath Compensating voluntary act In case of gift
  18. Capacity to contract ' Secll: Every person is competent to contract who is of age of majority according to the law to which he is subject, who is of sound mind and is not disqualified from contracting by any law to which he is subject. An agreement entered into by or with a minor is void ab initio ' Sec 12: A person is said to be of sound mind for the purpose of making a contract if at the time when he makes it he is capable of understanding it and of forming a rational judgment so as to its effect upon his interests. 18
  19. Position of Minor's Agreement ' An agreement entered into by or with a minor is void ab initio Minor can be beneficiary Minor can always pleads minority ' Ratification an attaining majority is not allowed ' Contract by minor's guardian Person's disqualified form entering into contract Alien enemy ' Foreign sovereigns and ambassadors 19
  20. Free consent ' Sec 13 : Two or more persons are said to have consented when they agree upon something in the same sense (consensus-ad-idem). ' Sec 14: A consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake. 20
  21. ' Coercion: is committing or threatening to commit any act forbidden by Indian Penal Code, or the 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. ' Undue Influence: when the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage of the other Fraud: Fraud means and includes any of the following acts committed by a party to a contract or with his connivance or by his agent with intent to deceive another party thereto or his agent, or to induce him to enter into the contract 21
  22. Misrepresentation: Mistake: MISTAKE MISTAKE OF ISTAKEOFLA FACT 22
  23. Lawful Consideration Or Object Sec 23: Consideration or object is unlawful if it is ' Forbidden by law ' Defeat the provisions of any law ' Injury to the person or property of another ' Immoral or opposed to the public policy 23
  24. Privity of Contract A stranger to the contract can not sue Dunlop Pneumatic Tyre Co. v. Selfridge Ltd. ' Exceptions 24
  25. On the basis of Enforceability Void Voidable Illegal Types of Contract On the basis of On the basis of Creation Execution Expressed ' Executed Written ' Executory , oral Implied E-Contract 25
  26. On the basis of Enforceability VOID CONTRACT [SEC. 2(j)] A contract which ceases to be enforceable by law becomes void when VOID AGREEMENT [SEC. VOIDABLE CONTRACT [SEC. 2(i)] UNENFORCEABLE CONTRACT ILLEGAL CONTRACT it ceases to be enforceable. An agreement which is not enforceable by law is said to be void. It is an agreement which cannot be enforced from the date when they were made. It is void ab initio. An agreement, which is enforceable by law at the option of one more of the parties, but not at the option of the other (s) is a voidable contract. For example: - Mr. A, at knife - point, asks B to sell his scooter for Rs. 50. Mr. B gives consent. The agreement is voidable at the option of B, whose consent is not free. An unenforceable contract is one which is good in substance but cannot be enforced by law due to some technical defects, such as under stamping, absence of writing, barred by limitation. A contract which is forbidden by law. For example: - Agreement to commit crime. 26
  27. 1. AGREEMENTS EXPRESSLY DECLARED VOID Agreements by incompetent parties (Sec. 11) Agreements with unlawful object or consideration (Sec. 23) Agreement made under mutual mistake of fact (Sec. 20) Agreements without consideration (Sec. 25) Agreements in restraint of marriage, trade or legal proceedings etc. Agreements to do impossible Acts (Sec. 56) Example:- An agreement to discover treasure by magic is void. 27
  28. EXPRESS CONTRACT IMPLIED CONTRACT E-CONTRACT On the basis of Creation A contract which is created either by word spoken or written. The contract which is created otherwise by words spoken or written. Tacit Contract Quasi Contract A contract which is inferred from the conduct of the parties is said to be tacit contract. These are the contracts, which are created neither by word spoken, nor written, nor by the conducts of the parties, but these are created by the law. For example: - If 'A' leaves his goods at 'B"s shop by mistake, then it is 'B"s duty to return the goods or to compensate the price. In fact, these contracts depends principle of doctrine of unjust enrichment. one, which is entered into between two parties via internet. 28
  29. Executed Contract Executory Contract Unilateral Contract On the basis of Execution An executed contract is a contract in which both the parties have performed their obligation. This is a contract which has been completed. For example:- If 'A' agrees to sell his car to 'B' for Rs. 100000. The contract is said to be executed if 'A' delivers car to 'B' and B pays the price to 'A'. An Executory contract is the contract which is to be performed in future. Where obligation is pending on the part of one of the parties. 29
  30. Performance of Contracts: Sec 37 The parties to the contract must either perform or offer to perform their respective promises unless such performance is dispensed with or excused under the Indian Contract Act or any other law. Who must perform: i. ii. iii. iv. v. The promisor himself If not specified, then agent of promisor can perform In case of death of promisor, his legal representatives must perform In case of contracts involving personal skill, promisor himself should perform not the third person Joint promisors
  31. Tender of Performance : Sec 38 If promisor performs his side of the contract and the performance is rejected, the promisor is discharged from further liability and may sue for the breach of contract, if he so wishes. To be valid, a tender of performance must fulfill following conditions: It must be unconditional i. It must be made at a proper place and time. ii. iii. If it relates to delivery of goods, the promisee must have a reasonable opportunity to check the goods.
  32. Effect of the refusal of the party to perform:Sec 39 When a party to a contract has refused to perform or has disabled himself from performing his promise in entirely, the promisor may put an end to the contract, unless he has signified by words or conduct, his acquiescence in its continuance. Rights to the aggrieved party: ' To terminate the contract ' To indicate by words or conduct that he is interested in his continuance Rights to clam damages 32
  33. Discharge of Contracts: A contract is said to be discharged or terminated when the rights and obligations arising out of a contract are extinguished. Modes of discharge of contracts: ' Performance or tender ' Mutual consent or agreement alteration, waiver) ' Lapse of time ' Operation of law ' Impossibility of performance ' Breach of contract (by novation, rescission,
  34. Novation Rescission Alteration Waiver Mutual consent or agreement When parties to a contract substitute a new contract for old. On novation, old contract is discharged and consequently it need not to be performed. There may be change in parties. When parties to a contract agree to rescind it, the contract need not be performed. In this case, only old contract is cancelled no new contract is formed. Where parties to a contract agrees to alter it, the original contract is rescinded, with the remit that it need not be performed. ' No change in parties to the contract. ' Change in terms & conditions of original agreement. Deliberate abandonment or giving up of a right to which a party is entitled to under a contract, 34
  35. Discharge of Contracts by impossibility: A contract is deemed to have become impossible of performance and thus void under the following circumstances: a. Destruction of the subject matter of the contract. b. By the death or disablement of the parties. c. Subsequent illegality. d. Declaration of war.
  36. Breach of contract ANTICIPATORY BREACH OF CONTRACT When the promisor refuses altogether to perform his promise and signifies his unwillingness, even before the time of performance has arrived, it is called Anticipatory Breach. ACTUAL BREACH OF CONTRACT Where the promisor refuses to perform promise on the scheduled date. When one of the parties breaks the contract by refusing to perform the promise when it falls due, it is Actual Breach. 36
  37. Remedies for Breach of Contracts: When a contract is broken, the injured party has several courses of action open to him. The injured party may : i. Rescind the contract and refuse further performance of contract ii. Sue for damages iii.Sue for specific performance iv.Sue for injunction v. Sue on quantum meruit
  38. Damages Ordinary: arises naturally in normal course of business Special: when party to contract receives a notice of special circumstances Vindictive: awarded to punish the defendants ' Nominal: when there is breach of contract but plaintiff didn't suffer real damage 38

Need a Tutor or Coaching Class?

Post an enquiry and get instant responses from qualified and experienced tutors.

Post Requirement

Related PPTs

Upload PPTs

If you have your own PowerPoint Presentations which you think can benefit others, please upload on LearnPick. For each approved PPT you will get 100 Credit Points and 100 Activity Score which will increase your profile visibility.

Upload Now
Home > PowerPoint Slides > Legal Aspects Of Business