Business laws

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Business laws

BUSINESS LAW

Meaning of Law:

Law means the rules of conduct recognized and enforced by the state to controls and regulate the conduct of people, to protect their property and contractual rights to secure justice, peaceful living, and social security.

 Since the value system of society keeps on changing, the law also keeps changing according to the changing requirements of society.

There are several branches of law such as International law, Constitutional law, Criminal law, Civil law, etc. Every branch of law regulates and controls a particular field of activity.




Definition and Scope of Mercantile or Business Law:

The term ‘Mercantile Law’ may be defined as that branch of law that comprises laws concerning trade, industry, and commerce. It is an ever-growing branch of law with the changing circumstances of trade and commerce.

Mercantile law is not a separate branch of law. Basically, it is a part of civil law which deals with the rights and obligations of mercantile persons arising out of mercantile transactions in respect of the mercantile property. It includes laws relating to various contracts, partnerships, companies, negotiable instruments, insurance, carriage of goods, arbitrations etc.

CONTRACT

According to section 2 (h) of the Indian Contract Act: “An agreement enforceable by law is a contract.” A contract, therefore, is an agreement the object of which is to create a legal obligation i.e. a duty enforceable by law.

Two elements of contract are:

  • An agreement
  • Enforceability of an agreement

 CONTRACT = An Agreement + Enforceability of an agreement 

 AGREEMENT

 According to  Section 2 (e): “Every promise and every set of promises, forming the consideration for each other, is an agreement” Thus it is clear from this definition that a ‘promise’ is an agreement.

 Section 2 (b) defines the term promise: “When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. Proposal, when accepted, becomes a promise.”

 AGREEMENT =   Offer + Acceptance of Offer

 Distinction between an Agreement and a Contract:

 An agreement differs from a contract in the following respects:

Basis of distinction

An agreement A contract

A.              Legal obligation

An agreement may or may not create a legal obligation.

A contract necessarily creates a legal obligation.  

B.              Constitute

Offer and its acceptance constitute an agreement.  

Agreement and its enforceability constitute a contract.

C.              Binding

Agreement is not concluded or binding contract.

Contract is concluded and binding on the concerned parties.

D.              One in other Every agreement need not necessarily be a contract.

All contracts are necessarily agreements.

 ESSENTIAL ELEMENTS OF CONTRACT

 According to [Sec. 10], following essential elements are:

  • Offer and acceptance: There must be a ‘lawful offer’ and a ‘lawful acceptance’ of the offer, thus resulting in an agreement. The adjective ‘lawful’ implies that the offer and acceptance must satisfy the requirements of the Contract Act in relation thereto.
  • Legal relationship: When the two parties enter into an agreement. Their intention must be to create legal relationship between them. If there is no such intention on the part of the parties, there is no contract between them.   
  • Lawful consideration: An agreement is legally enforceable only when each of the parties to it gives something and gets something. The something given or obtained is the price for the promise and is called ‘consideration’.
  • Capacity of parties: The parties to the agreement must be capable of entering into a valid contract. Every person is competent to contract if he (a) is of the age of majority, (b) is of sound mind, (c) is not disqualified from contracting by any law to which he is subject (Sec 11 and 12).
  • Free Consent: Consent is said to be free when it is not caused by (a) coercion, (b) undue influence, (c) fraud, (d) misrepresentation, or (v) mistake. If the consent of the parties is not free, then no valid contract comes into existence.
  • Lawful object: The object of the agreement must be lawful. In other words, it means that the object must not be (a) immoral, or (b) opposed to public policy.
  • Agreement not declared void: The agreement must not have been expressly declared void by law in force in the country (Sec 24 to 30 and 56)  .
  • Certainty of Meaning: The terms of the agreement must be certain and unambiguous. According to Section 29, agreement the meaning of which is not certain or capable of being made certain are void.
  • Possibility of performance: Another essential feature of a valid contract is that it must be capable or performance. Section 56 lays downs that “An agreement to do an act impossible in itself is void”. If the act is impossible in itself, physically or legally, the agreement cannot be enforced at law.
  • Legal Formalities: The agreement must comply with the necessary formalities as to writing, registration, stamping etc. if any required in order to make it enforceable by law.   

Detailed Content Covered in the Study Material

Meaning of Law, Definition, and Scope of Mercantile or Business Law,

The Indian Contract Act 1872 –

Contract, Agreement, Distinction between an Agreement and a Contract, Essential Elements Of Contract, Offer And Acceptance, Consideration, Definition of Consideration, Essential Elements of valid consideration, Contract without consideration, Capacities of Parties, Minors, Minors Agreements, FREE CONSENT, Meaning of consent, Meaning of Free consent, Coercion – Meaning of Coercion, Undue Influence – Meaning of undue influence, Effect of Undue Influence Misrepresentation, Fraud, Performance of Contract – Types of performance, Types of Tender, Essentials of valid Tender, Who can demand performance? Who can perform? Terminal of Contract – Meaning of Discharge of a contract, Remedies for breach of contract, Features of a contingent contract, Quasi Contract – Features of a quasi-contract, Kinds of quasi-contract, Indemnity and Guarantee – Contract of indemnity, Contract of guarantee, Kinds of guarantee, Features of a guarantee, Distinction between a contract of indemnity and a contract of guarantee, Rights of a surety, Bailment – Classification of Bailments, Duties, and Rights of bailor and bailee, Lien – Meaning, Types of Lien, Distinction between Particular Lien and General Lien, Pledge – Meaning of pledge, Meaning of Pledger, Meaning Pledgee, Duties & Rights of Pledger, Duties & Rights of Pledgee, Pledge by Non –Owner, Agency – Meaning of Contract of Agency, General Rules of Agency, Meaning of an Agent, Meaning of Principal, Test of Agency, Creation of Agency, Termination of Agency

SALES OF GOODS ACT, 1930 –

Formation of the contract of sale, Definition and Essential of a contract of sale, Sale and ‘agreement to sell’, Difference between Sale and an Agreement to sell, Sale and hire-purchase agreement, Difference between a Sale and Hire-purchase agreement, Meaning of goods, Types of goods, CONDITIONS AND WARRANTIES, Distinction between Condition and Warranty, Caveat Emptor, Ownership of goods and transfer, Rules Regarding the transfer of Property, Transfer of Titles by Non-Owners, PERFORMANCE OF CONTRACT – Delivery Modes of Delivery, Rules as to the delivery of goods, Acceptance of Delivery by Buyer, RIGHTS OF UNPAID SELLER – Who is an unpaid seller?, Rights against goods, Lien on goods, Right of stoppage-in-Transit, Right of Stoppage-in- Transit How Effected, Right of Re-sale, Right against the buyer personally, SALE BY AUCTION




INDIAN PARTNERSHIP ACT,1932 –

Definition of Partnership, Features of Partnership, FORMATION OF PARTNERSHIP – Partnership Deed, Duration of Partnership, REGISTRATION – Meaning of Registration, Procedure for registration, Time of registration, Effect of Non-registration, Dissolution of Firm – Meaning of Dissolution of Firm, Meaning of Dissolution of Partnership, Difference between Dissolution of Partnership and Dissolution of a Firm, Modes of Dissolution of a firm, Types / Kinds of Partners, Rights And Duties Of Partners – Rights of partners, Duties of partners, Admission of Minor – Rights of Minor, Liabilities of Minor, Distinction between Partnership and Company, Difference between Partnership and Hindu undivided Family

NEGOTIABLE INSTRUMENTS, ACT 1881 –

Meaning and Definition, Essential Features of a Negotiable Instrument, Types of Negotiable Instruments, Promissory Note – Essential or Characteristics of a Promissory Note, Bill of Exchange – Features of a Bill of exchange, Cheque – Definition, Distinction between Promissory Note and Bill of Exchange, Bill of Exchange and Cheque Distinguished, Parties to negotiable instruments – Holder and Holder in due course, Privileges of a holder in due course, Endorsement – Meaning, Essential of a valid Endorsement, Effect of Endorsement, Forged Endorsement, Maturity of Negotiable Instruments, Rules for calculating maturity, Crossing of cheques, Types of crossing

INSURANCE ACT 1938 –

Meaning of Insurance, General Principles of insurance – Principles of utmost Good faith, Types of Insurance, Life Insurance, Types of Life Policies

 



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1 Comment

  1. Rahul Sharma says:

    Keep it up Guys, great going!!

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