Business laws and contracts are very important for people for their own protection according to David Ford Avon Ct. These laws are related to human rights too.

1. WHAT DO U UNDERSTAND BY BUSINESS
LAW AND CONTRACTS
David Ford Avon CT

2. WHAT IS A CONTRACT?
 An agreement enforceable by law
 (Section 2 (h) contract act 1872.

3. ESSENTIAL ELEMENTS OF A CONTRACT?
 Lawful consideration
 Free consent
 Lawful agreement
 Offer & acceptance
 Contractual Capacity
 Lawful Object
 Possibility of performance
 Certainty of Term
 Legal Formality

4. VALID CONTRACT?
An contract which satisfies all the legal requirement
provided for under sec-10

5. VOID CONTRACT?
 An agreement which ceases to be enforceable
by law.
 An agreement which is valid in beginning but at
later stage it becomes void subsequently due to
impossibility of performance.
 An agreement void from the beginning is known
as ‘void ab in initio’. Then we can not use the
term void contract.
eg. An agreement with a minor.
 Section 2 (j)

6. WHICH ARE VOID CONTRACT?
 Mistake of facts – sec. 20
 Unlawful object sec 23
 Agreement without consideration sec. 25
 Agreement in restraint of marriage sec. 26
 Agreement in restraint of trade sec. 27
 Agreement against legal proceeding: sec 28.

7. VOIDABLE CONTRACT?
 An agreement which is enforceable at the
option of one or more parties but not at the
option of other party is called voidable
contract.
 The right of rescind has to be exercised
within the reasonable time and before the
third party acquire the rights under contract.
 Sec. 2 (i)

8. WHICH ARE VOIDABLE CONTRACTS?
 CONTRACTS MADE UNDER
COERCION, UNDUE INFLUENCE,
FRAUD, MISREPRESENTATION ETC.

9. IS VOID CONTRACT SAME AS ILLEGAL
CONTRACT?
 NO
 ALL ILLEGAL CONTRACTS ARE VOID
CONTRACTS BUT ALL VOID CONTRACTS
ARE NOT ILLEGAL CONTRACTS.

10. ILLEGAL CONTRACT
 An agreement is illegal when it is against the
law of land.
 An agreement to commit the fraud & Crime.

11. UNENFOCEABLE CONTRACT
 A contract which is valid but due to some
technical problem it becomes invalid.
 Technical problems are:
Absence of evidence
Expiry of period

12. OFFER OR PROPOSAL
 When a person signifies to another his
willingness to do with a view to obtaining tha
assent of the other to do such act, he said to
make a proposal or offer.
 One who make an offer is called offeror , to
whom it is made is called oferee

13. ESSENTIAL OF OFFER
 An offer may be general or specific
 It should have intention to create legal
obligation
 It should be definite and certain
 An invitation to offer is not offer
(advertisement for tender for sale of goods by
auction)

15.  Acceptance must be provoked by offer.
 Acceptance must be given before stipulated
period of timer.
 Provisional acceptance is not acceptance
unless final order is not given.

16.  An offer must be communicated.
 Term and Condition of offer must be
communicated.
 Two identical offer(cross offer) do not make a
contract.
 Acceptance should be communicated.
 Acceptance should be as per prescribed
form.

17. HOW MANY TYPES OF OFFERS CAN YOU
MENTION?
 GENERAL OFFER
 SPECIAL OFFER
 CROSS OFFER
 COUNTER OFFER
 STANDING OFFER

18. ESSENTIAL CHARACTERISTICS OF AN OFFER?
 DEFINITE
 EXPRESSED OR IMPLIED
 OFFER IS NOT INVITATION TO OFFER
 CERTAIN
 INTENED TO CREATE LEGAL RELATIONSHIP
 OFFER MUST BE COMMUNICATED
 MUST NOT CONTAIN A TERM – THE NON
COMPLIANCE OF WHICH WILL AMOUNT TO
AGREEMENT

19. I GIVE AN ADVERTISEMENT : “ I HAVE A
COMPUTER TO SELL” IS IT AN OFFER?
 NO
 IT IS AN INVITATION TO OFFER

20. ELEMENTS OF ACCEPTANCE?
 MUST BE ABSOLUTE AND UNQUALIFIED
 MUST BE COMMUNICATED
 MUST BE MADE IN PRESCRIBED
MANNER
 MUST BE WITHIN TIME
 MAY BE DONE BY CONDUCT ALSO

21. I SEND AN OFFER TO JITENDRA BY POST. I
SEND IT ON 1 JULY BUT JITENDRA RECEIVES
IT ON 10 JULY. WHEN DID I MAKE AN OFFER?
 10 JULY

22. IN THE PREVIOUS QUESTION, WHEN CAN I
WITHDRAW MY OFFER AND HOW?
 BEFORE 10 JULY – MY WIDHDRAWAL
MUST REACH BEFORE MY OFFER – BY
ANY MEANS

23. CONTRACT BY POST
 Under English law proposer is legally bound by the
acceptance effected through postal medium when the letter
is prepared, addressed, stamped and mailed even though it
is delayed or lost in transit.
 Indian Law lays down that the communication of an
acceptance is complete as against the proposer when it is
put in the course of transmission to him so as to be out of
power of the acceptor; as against the acceptor when it
comes to the knowledge of the proposer.

24. TERMINATION OF OFFER
 Lapse
a passage of time/reasonable time
death of the proposer
 Failure to fulfill a condition
 Rejection(from offeror, may be expressed or implied)
 Destruction of subject matter
 Revocation(Withdrawal at any time before the letter is communicated,
not in England)

25. WHAT IS CONSIDERATION?
 AT THE DESIRE OF PROMISOR, THE
PROMISEE OR ANY OTHER PERSON HAS
DONE SOMETHING OR ABSTAIN FROM
DOING OR DOES OR ABSTAINS FROM
DOING OR PROMISES TO DO OR
ABSTAIN FROM DOING SOMETHING –
SUCH ACT / ABSTINANCE IS CALLED
CONSIDERATION FOR PROMISE
 SEC. 2 (D)

26. ELEMENTS OF CONSIDERATION?
 Must be at the desire of promisor
 May be present future or past
 Need not be adequate.
 Must be real
 May be for doing something or for not doing something
 Should be valuable
 It should be certain and lawful

27. EXCEPTION TO THE RULE ‘NO CONSIDERATION,
NO CONTRACT’
 Agreement made an account of natural love
and affection
 Promise to compensate voluntary services
 A completed gift
 Agency
 Remission
 Contribution to charity

28. PRIVITY OF CONTRACT
 A person who is not a party to a contract can
not claim any rights under the contract even
though contract may be for his benefit. Such
person is known as a stranger to the
contract.

29. WHICH ARE THE AGREEMENTS, WHICH ARE
VALID WITHOUT CONSIDERATION?
 Based on natural love
 Based on past voluntary services
 Time barred debt
 Gifts
 (In other cases, agreement without
consideration is void as per section 25).

30. WHEN CAN THIRD PARTY SUE FOR
AGREMENT?
 Beneficiary in the case of trust
 A female member in the case of HUF
agremeents for provision of marriange
expenses
 In cse of estoppel by acknowledgement
 Where benefit from contract have been
assigned to some other person

31. CONTRACTUAL CAPACITY
 Age of maturity
 Sound mind
 Not disqualified by law to which they are
subject

32. A MINORS
 Indian Majority Act 1875-the age of majority
is18 yrs
 If a guardian appointed by a court then the
age of majority is 21 yrs

33. EFFECT OF MINORS AGREEMENT
 No estoppels against minor
 No liability in contract
 Doctrine of restitution
 Beneficial contract
 Ratification(can’t be made valid by subsequent
ratification)
 Liability for necessaries
 Person of unsound mind
 Liabilities for necessary

34. THANKS
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