Bussiness Law

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MS EDUCONZ PVT. LTD.

LAW& AUDIT

What is Law? Law means a ‘set of rules’ which governs our behaviours and relating in a civilized society. So there is no need of Law in a uncivilized society. Why Should One Know Law? One should know the law to which he is subject because ignorance of law is no excuse. Sources of Mercantile Law in India

English Mercantile

Indian Status Law

Judicial Decisions

Customs and Usages

STUDY NOTE – 1 : INDIAN CONTRACT ACT, 1872
Section 1:Short Title The Indian contract Act 1872 Commencement and applicability:Extent and Applicable to whole Indian except the state of Jammu & Kashmir commencement First day of September 1872(1st Sept. 1872)

Prior to this English law of contract was followed in India. It has XI chapter. Law of contract creates jus in personem and not in jus in rem. The Indian Contract Act consists of the following two parts: (a) General principals of the Law of Contract. (b) Special kinds of contracts. The general principals of the Law of Contract are contained in Sections 1 to 75 of the Indian Contract Act. These principles apply to all kinds of contracts irrespective of their nature. Special contracts are contained in Sections 124 to 238 of the Indian Contract Act. These special contracts are Indemnity, Guarantee, Bailment, pledge and Agency. Note: In our discussion on this part of the book, unless otherwise stated, the sections mentioned are those of the Indian Contract Act, 1872. Contracts as Defined by Eminent Jurists 1. “Every agreement and promise enforceable at law is a contract.” – Pollock 2. “A Contract is an agreement between two or more persons which is intended to be enforceable at law and is contracted by the acceptance by one party of an offer made to him by the other party to do or abstain from doing some act.” – Halsbury 3. “A contract is an agreement creating and defining obligation between the parties” – Salmond SUJEET JHA 1 9213188188

MS EDUCONZ PVT. LTD.

LAW& AUDIT

DEFINITIONS (Sec 2)
1. 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. Price paid by the one party for the promise of the other Technical word meaning QUIDPRO-QUO i.e. something in return. 6. Agreement 2(e) :- Every promise and set of promises forming the consideration for each other. In short, agreement = offer + acceptance.

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7. Contract 2(h) :- An agreement enforceable by Law is a contract. 8. Void agreement 2(g):- An agreement not enforceable by law is void. 9. 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. 10. Void contract :- A contract which ceases to be enforceable by Law becomes void when it ceases to be enforceable.

SUJEET JHA

2

9213188188

MS EDUCONZ PVT. LTD.

LAW& AUDIT

ESSENTIALS OF A VALID CONTRACT
“All agreements are contracts, if they are made – by free consent of the parties, competent to contract, for a...
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