Maharaja Surajmal Institute Affiliated to GGSIPU Delhi Department of Business Administration Course BBA B I Subject Module on BUSINESS LAWS BBA B I 108 Semester II Credit 4 Module Contributor Dr Anupama Sharma Dr Beena Devi Assistant Professor BBA M Assistant Professor BBA E Notes for Educational purpose only JULY 2021 BUSINESS LAWS BBA B I 108 Module Objectives This module aims at familiarizing students with the basic concepts of Business laws and Company Laws Unit I This unit focuses on the Indian Contract Act 1872 General Principles of Law of Contract It includes the basics of Indian Contract Act its meaning characteristics and kinds It also explain the different essentials of valid contract including offer and acceptance consideration contractual capacity free consent and legality of objects This unit will further stress upon the contract of Indemnity and Guarantee and Contract of Bailment pledge Unit II This unit basically focuses on the Sale of Goods Act 1930 It includes contract of sale its meaning and difference between sale and agreement to sell The topics like conditions and warranties and transfer of ownership in goods including sale by non owners are explained There would be proper explanation of performance of contract of sale and regarding unpaid sellers their rights against goods and buyers Unit III This unit mainly focuses on the Companies Act 2013 with up to date amendments types of companies Memorandum of Association and Article of Association Prospectus and shares its kinds methods of allotment and transfer of shares Managing Directors their appointments remuneration qualifications powers are also covered in this unit Unit IV This Unit basically focuses on The Negotiable Instruments Act 1881 It covers the meaning and characteristics of Negotiable Instruments including Promissory Note Bill of Exchange cheques crossing of cheques and bouncing of cheques It also provides information about Holder and Holder in Due Course and Privileges of Holder in Due Course Further Negotiation and different types of Endorsements are also explained in this unit Unit Name Page Number Contents The Indian Contract Act 1872 General Principle of Law of Contract Lesson1 Contract Meaning Characteristics and Kinds Lesson2 Essentials of Valid Contract Lesson 3 Contract of Indemnity and Guarantee Lesson 4 Contract of Bailment and Pledge The Sale of Goods Act 1930 Lesson1 Contract of Sale meaning and difference between sale and agreement to sell Lesson2 Conditions and warranties Lesson 3 Transfer of ownership in goods including sale by non owners Lesson 4 Performance of contract of sale Lesson 5 Unpaid seller The Companies Act 2013 with up to date amendments Lesson1 Essential Characteristics of a company Lesson2 Types of companies Lesson 3 Memorandum and Articles of Association Lesson 4 Prospectus Lesson 4 Shares Kinds Allotment Transfer Lesson 5 Debentures Lesson 6 Meetings Essentials of a valid meeting Kinds of Meetings and Resolutions Lesson7 Directors Appointment Remuneration and Powers Lesson 8 Prevention of oppression and Mismanagement The Negotiable Instruments Act 1881 Lesson1 Meaning Instruments Lesson2 Promissory Note Bill of Exchange Cheques Crossing of Cheque Bouncing of Cheques Lesson 4 Holder and Holder in due course Privileges of Holder in due course Lesson5 Negotiation Types of Endorsements Long short Questions of Negotiable characteristics and Multiple choice questions References and Further Readings Glossary Key Words 1 28 29 42 43 84 85 104 105 107 108 123 124 Unit No I II III IV UNIT I The Indian Contract Act 1872 Contract Act The Indian Contract Act 1872 defines the term Contract under its section 2 h as An agreement enforceable bylaw In other words we can say that a contract is anything that is an agreement and enforceable by the law of the land Agreement The Indian Contract Act 1872 defines what we mean by Agreement In its section 2 e the Act defines the term agreement as every promise and every set of promises forming the consideration for each other Now that we know how the Act defines the term agreement there may be some ambiguity in the definition of the term promise Promise This ambiguity is removed by the Act itself in its section 2 b which defines the term promise here as 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 An agreement to change into a Contract as per the Act it must give rise to or lead to legal obligations or in other words must be with in the scope of the law Thus we can summarize it as Contract Accepted Proposal Agreement Enforceable by law defined with in the law Essential Elements of a Contract Essential Elements of a Contract as defined in Section10 of the Indian Contract Act 1872 1 Agreement Offer and Acceptance 2 Legal purpose 3 Lawful Consideration 4 Capacity to contract 5 Consent to contract 6 Lawful object 7 Certainty 8 Possibility of Performance 9 Not expressly declared void 10 Legal formalities like Writing Registration etc 1 Agreement Offer and Acceptance The parties to the contract should have a mutual understand regarding the subject matter of the contract There must be a lawful offer and lawful acceptance thus resulting in an agreement The parties must have agreed to the subject matter in the same sense 2 Legal purpose There must be an intention among the parties that the agreement should be attended to by legal consequences and create legal obligation Agreements of social or domestic nature do 1 not contemplate legal relations 3 Lawful Consideration Consideration means something in return In every legal contract there must be something in return An agreement is legally capable to be enforced only when each of the parties to it gives something and gets something The consideration should not be unlawful illegal immoral or opposed to public policy 4 Capacity to contract Every person who enters into a contract must be competent In other words the person should be of the age of majority should have a sound mind and must not be disqualified from any law to which they subject Minors lunatics unsound and intoxicated persons are incompetent to enter into a contract However there are exceptions as defined in Section 68 Incase of an exception the minor or lunatic is not personally liability 5 Lawful object If the object in the agreement is unlawful the agreement is void Eg The landlord can not recover rent
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