As a Store Manager one should have awareness of the law related to running a purchase department

1. SEMINAR ON LEGAL ASPECTS
IN MATERIAL MANAGEMENT
BY AYSHATHUL FEMITHA
9897

2. As a Store Manager one should have
awareness of the law on
 Contract
 Agency
 Contract of sale
 Arbitration

3.  Any purchase is a contract under the legal
parlance. Each contract will have the following
aspects.
• Two parties i.e. Buyer and seller.
• There should be a ‘subject ’ matter.
• It must be lawful and legal.
• There must be good communication.

4. • There must be consideration (not free).
• There must be an offer from one party.
• There must be an acceptance from the other
party.
• Competency to the parties.
• Subject must be possible to be executed.

5. LAW OF AGENCY
• An agent is a person employed to act on behalf of
another (called the principal) for the purpose of
bringing the principal into contractual relationship
with the third person.
• Under the law of agency there is a relationship of
principal and agent. The agent acts on behalf of the
principal. He enters into contracts on behalf of the
principal. It may either be verbal or in writing.

6. • The rules of agency are one who does through
another, does by himself or acts as an agent subject
to certain conditions on the acts of the principal.
• To act as an agent the following are to be fulfilled.
1. An agreement between the principal and the agent.
2. No consideration is necessary to act as an agent.

7. LAW OF CONTRACT
• An agreement enforceable by law or legally binding
agreement between two or more persons by which
rights are acquired by one or more to act or
forbearance on the part of the other or others.
• Law of contract is an important branch of
commercial law because all commercial transactions
commence from an agreement between two or more
people

8. • The purpose of law of contract is to ensure the
realization of the reasonable expectation of
the parties who enter into a contract
• Main two elements in contract namely:
Agreement
Legal enforceability

9. ESSENTIAL ELEMENTS OF VALID
CONTRACT
Offer and acceptance
Legal relationship
Lawful consideration
Capacity of parties
Free and genuine contract
Lawful objects
Agreement not declared void
Certainty and possibility of performance
Legal formalities

10. CONTRACT OF SALES
• When an offer to sell or buy goods for a price is made,
it becomes a contract of sales
• However, it is binding only when accepted by the buyer
and his acceptance is intimated to the seller on the
terms and conditions on which it is made
• Condition and warranty
 Condition is the stipulation as essence of contract
 Warranty will lead to claim of damages
 A guarantee is something which the promiser
undertakes to be answerable to the promise for the
debt, default etc

11. ARBITRATION
• Arbitration is legal process out of court when there is
a dispute between the parties on executing the
contract. A clause on Arbitration is to be included.
• Courts will not accept a litigation unless the
arbitration process is over as per the terms of the
contract.
• The terms of Arbitration is dealt with in Arbitration
and conciliation Act, 1996.

12. CONCLUSION
• Legal aspects in the material management are
important dimensions
• Operational knowledge of the legal laws, processes
and procedures will aid the hospital administrators in
prevention of legal suits
• It is essential for a holistic stores functions to
undertake proactive steps in implementing legal and
ethical requisites

13. REFERENCE
• Gupta. S., Kant S., Dave P.K., hospital stores management- an integrated
approach, jaypee brothers
• Joseph L. Cavinato; Anna E. Flynn, Ralph G. Kauffman: Supply
Management Handbook, 7th Ed. LEGAL ASPECTS OF PURCHASING AND
SUPPLY, McGraw-Hill Professional, 2006