2. UNIT - I
Indian Contract Act Formation
Nature and Elements of Contract
Classification of Contract
Contract Vs Agreement
3. UNIT-2
Offer - Definition
Forms of offer
Requirements of Valid Offer.
Acceptance - Meaning
Legal Rules as to a valid acceptance.
Consideration - Definition
Essentials - Legal Rules relating to consideration
Contracts without consideration
4. UNIT-3
Capacity of parties. Definition
Persons Competent to contract.
Free consent - Coercion - Undue Influence - Fraud —
Misrepresentation — Mistake.
Legality of object — void agreement
Unlawful agreements
performance of contracts
5. UNIT-4
Company - Definition
Characteristics
Lifting of corporate veil
Advantages of Incorporation
Company Law Administration
NCLT & NCLAT
Classification of companies
Formation of a Company
Memorandum and Articles of Association.
6. UNIT-5
Prospectus - Definition
Registration - Contents
Shelf Prospectus
Misstatement and their consequences
Share capital - Meaning
kinds - alteration of share capital
Dividend - provisions for declaration of dividend
Meetings - Kinds of Company Meetings.
7. SUGGESTED READINGS
Kapoor, N.D. Business Laws, Sultan Chand and Sons.
Sreenivasan, M.R.Business Laws, Margam
Publications.
Dhandapani, M.V.Business Laws, Sultan Chand and
Sons.
BadreAlam,S.&Saravanavel,P.Mercanti!eLaw
Kapoor, N.D. E lements of Company Law, Sultan
Chand and Sons
8. MEANING OF LAW
Law is commonly understood as a system of rules that
are created and enforced through social or
governmental institutions to regulate conduct,
The system of rules which a particular country or
community recognizes as regulating the actions of its
members and which it may enforce by the imposition
of penalties.
9. Four Major Categories of Law
Corporate Law - Lawyers who take care of a business’
legal boundaries.
Criminal Law - Lawyers ensuring every citizen to
abide by the laws.
Civil Law - Lawyers who take care of family affairs.
International Law - Lawyers improving relations of
one nation with the other.
11. Substantive Law
Law that defines the rights, duties, and obligations
of citizens and government.
Your conduct is governed by substantive law
Examples include right to own and protect
property, entering into contracts, and the rules of
the road
12. Procedural Law
Law that prescribes the methods of enforcing the
rights and obligations of substantive law.
Ensures that all citizens are treated fairly
Ensures that neither the police nor courts act
arbitrarily
Examples include proper procedures to gather
evidence, requirements for lawful arrest, and trial
procedures
15. Public Law
Regulates the relationship between government
and its citizens
Three categories of public law:
1) Administrative Law
2) Criminal Law
3) Constitutional Law
16. Types of Public Law
Administrative Law – Law related to the
relationship between people and government
departments, boards, and agencies
Examples: Worker’s Compensation, Social
Assistance, and Health and Safety
17. Types of Public Law
Criminal Law – Law that identifies crimes and
punishments as described in the States OF INDIA
Federal laws prohibit behavior such as bank robbery,
kidnapping and tax evasion.
NC law prohibits behavior that causes harm to others,
such as murder, assault, and robbery
Crimes are against society
18. Types of Public Law
Constitutional Law – Body of law dealing with
the distribution and exercise of government
powers
Overrides all other laws
Limits the powers of government
Divides power between the federal
government and the states
Courts interpret these laws to ensure all
others are ‘constitutional’
19. An unenforced law (also symbolic law) is
a crime which is illegal, but is usually not
penalized by a jurisdiction. It is a law
which is usually ignored by law
enforcement, therefore such laws have no
consequences.
Types of Public Law
21. Private Law (Civil Law)
Law governing the relationships between private
individuals and between individuals and
organizations
Also known as civil or case law
Excludes government organizations
Regulates conduct and compensates who have
been harmed by the wrongful actions of others
Refers to torts (civil injuries), contracts, property
law, and family law
22. Types of Private Law
Tort Law – Branch of civil law that holds persons or
private organizations responsible for damage they
cause another person as a result of an accident or
deliberate action
Example:
automobile accidents; breaking,staining of valuables
Intentional offensive touching of another person without the person’s
consent
23. Types of Private Law
Contract Law – Branch of civil law that provides
rules regarding agreements between people and
businesses
Family Law – Deals with various aspects of family
life including marriage, property division upon
separation, and child custody
24. Types of Private Law
Wills and Estates (Estate Law) – Deals with the
division of property after death including if a
person dies without having a will
Property Law – Governs ownership rights in
property including the buying and selling of real
estate
25. Types of Private Law
Employment Law – Governs employer/employee
relations including minimum age a person can
work, restricting the number of hours required to
work, and specifying the minimum wage
65. MEANING OF RIGHTS
Right has been defined as a capacity to control the
other with the assent and assistance.Rights can be
classified as Right in rem and Right in Personam.
66. CLASSIFICATION OF RIGHTS
Right in Rem – The right that is exercised by a person
against the Whole world (Possession of movable and
immovable property, ‘A’can claim the ownership of his
wrist watch against the whole world)
Right in Personam – The right which an individual
has against a specific determined person or persons (B
has borrowed money from A,here A alone can enforce
the claim)
67. KINDS OF RIGHTS
Rights are legal, social, or ethical principles of
freedom or entitlement.
FUNDAMENTAL RIGHTS
STATUTORY RIGHTS
CONTRACTUAL RIGHTS
68. FUNDAMENTAL RIGHTS
Rights, which are enforced against the Government or
Society.
Right to Equality
Right to Freedom
Cultural and Educational Rights
69. STATUTORY RIGHTS
These rights are granted under the Statute and are
enforceable according to the Statute
Consumer Rights Act 2015
70. CONTRACTUAL RIGHTS
These are rights created among parties strictly in
accordance with the norms prescribed under the
Contract Act
Rights to purchase a particular product or service.
Rights to be sell a product or service
72. SOURCES OF LAW
CUSTOM – Habituated activities in long Run
LEX MERCATORIA – Law Merchant
COMMON LAW OF ENGLAND – King or Queen
(Christmas,Easter,Pentecost)
EQUITY – Presided by Chancellers (exchequers) 3
rules.1.Equity 2.Clean hands.3.Should not infame
ACT OF PARLIAMENT – Superior Power
PRECEDENTS – Judge made Laws
73. CONTRACT ACT
Indian Contract Act, 1872
According to Sec 2 (h), “agreement enforceable by law
becomes a contract”
Agreement: A mutual understanding between two or
more legally competent individuals or entities about
their rights and duties regarding their past or future
performances and consideration.
79. A.1.VALID CONTRACT 2(h)
PROPOSAL OR OFFER
PROMISE
AGREEMENT
CONSENSUS AD IDEM
MUTUAL COMMUNICATION
FREE CONSENT
COMPETENCY
CONSIDERATION
OBJECT (UNLAWFUL OBJECT- NUGATORY CONTRACT)
ENFORCEABILITY
80. A.2.VOID AGREEMENT 2(g)
If an agreement is not supported by
CONSIDERATION
FREE CONSENT
COMPETENT PARTIES
LAWFUL OBJECT
81. A.3.VOIDABLE CONTRACT 2(i)
An agreement, which is enforceable by law at the
option of one or more of the parties thereto, but not at
the option of the other or others.
The consent obtained in a voidable contract is not
genuine
Voidable contract, whether valid or invalid is left to the
option of the other party,who has given the consent
under force.
82. A.4.VOID CONTRACT 2(j)
A Contract, which ceases to be enforceable by law
becomes void when it ceases to be enforceable.
A void contract is said to be valid at the time of
formation, but due to subsequent change in external
circumstances, such contracts cease to be enforceable.
83. A.5.UNENFORCEABLE CONTRACT
A contract which cannot be enforced for want of
procedural formalities.
Example: An agreement drafted on empty unstamped
paper
84. A.6.UNLAWFUL AGREEMENT (Sec
23)
If an agreement has been entered among parties
contrary to the provisions of law.
An unlawful agreement is an agreement to do
something illegal such as charge an excessive interest
rate, purchase illegal drugs, or engage in sex for
money. Such agreements are against public policy
and cannot be enforced in court.
85. A.7.ILLEGAL AGREEMENT
When the purpose or object for which it is formed is
based on commiting a crime.
The classic example of such an agreement is
a contract for murder.
86. CASE 1
Ram finds a 100 rupee note on the road and picks it up,
Later he tells Shyam about this. Shyam claims that it is
his 100 rupee note without telling the currency note
number .Is shyam entitled for it?
87. SOLUTION: 1
No, because the currency note is a bearer document.
Mere possession conveys title,Hence shyam cannot claim
it.
88. CASE:2
Sheela agrees to dine with Mala in a hotel on a
particular day and time, and Mala has arranged
for Sheela’s dinner accordingly. But sheela failed
to turn up as promised .Can Mala file a case
against Sheela.
89. SOLUTION 2
No,Mala cannot succeed,because Social
Obligations cannot be enforced in the court of
Law
90. CASE 3
Ramu and Somu agree to Smuggle diamonds from a
foreign country.They agree to share it with John who
spent money for the foreign trip.But Ram
appropiriates the entire diamond himself.Somu and
John filed a suit,Claiming their share,Will they
Succeed?
91. SOLUTION 3
They cannot succeed as the agreement is said to be
illegal.Smuggling diamonds is an offence or
crime.Agreement itself is void.
92. B.1 EXPRESS CONTRACT
A legally binding agreement between two parties
wherein the terms are clearly defined either orally or in
writing.
An express contract is a contract whose terms the
parties have explicitly set out. This is also termed as
special contract.
Example: Sale of real estate.
93. B.2.TACIT CONTRACT
Tacit contracts are those that are inferred through the
conduct of parties.
Ex: Person who travels in a bus never makes an offer to
be accepted by the conductor
94. B.3. IMPLIED CONTRACT
An implied contract is a legally-binding obligation
that derives from actions, conduct, or circumstances of
one or more parties in an agreement.
This is a contract implied under law. This is also
known as Quasi or Constructive Contract.
Example :Finder of Goods
95. DIFFERENCE BETWEEN TACIT AND IMPLIED CONTRACT
Both Implied and Tacit Contracts are understood to be
the one and the same.
“A Tacit Contract can be Implied Contract but
certainly an Implied Contract cannot be a Tacit
Contract”
Inferred/Implied by Conduct – Tacit Contract
Implied under Law – Implied Contract
96. C.1.EXECUTED CONTRACT
An executed contract is a legal document that has
been signed off by the people necessary for it to
become effective. The contract is often made between
two or more people.
Ex: John has been looking at a car he likes that car a
lot, debating whether to buy it. Finally deciding to
make the purchase, John walks into the dealership,
signs a purchase contract, pays for the car in cash, and
walks out with the keys to the car.
97. C.2.EXECUTORY CONTRACT
An executory contract is a contract made by two parties
in which the terms are set to be fulfilled at a later date.
The contract stipulates that both sides still have duties to
perform before it becomes fully executed.
The contract is often in place between a debtor or
borrower and another party.
Ex:John has been looking at a car he likes the car a lot,
debating whether to buy it. Finally deciding to make the
purchase, John walks into the dealership, signs
a lease contract agreeing to pay a specified amount each
month until the car is paid off, or he returns the car at the
end of the lease. Until the car is either paid off or returned,
the terms of the contract have not been fulfilled.
98. C.3.UNILATERAL CONTRACT
A unilateral contract is a contract agreement in
which an offeror promises to pay after the occurrence
of a specified act.
In a unilateral contract, the offeror is the only party
with a contractual obligation. Unilateral
contracts are primarily one-sided.
Ex: If an individual places an advertisement in the
newspaper to provide an award in the event a missing
item is returned
99. C.4.BILATERAL CONTRACT
A bilateral contract is an agreement between two
parties in which each side agrees to fulfill his or her
side of the bargain.
Ex: A car buyer may agree to pay the seller a certain
amount of money in exchange for the title to the car.
100. CASE 1
Ramu drops a coin(or token) in the Aavin milk booth
for buying 1 litre of milk.The machine fails
function.The Aavin booth manager refuses to give
another token.Ramu desires to enforce the
Contract.Can he succeed?
101. Solution 1
Yes, Ramu will succeed, It is a tacit contract.The booth
manager is liable to fraud also
102. CASE 2
Ramesh agreed to present a golden watch to Vennila,
on her birthday.But Ramesh did not present the wrist
watch as promised by him on her birthday.
Disappointed Vennila want to enforce Ramesh’s
promise. Can Vennila succeed?
103. Solution 2
No, Ramesh’s action is only an empty promise.It is not
supported by consideration. Hence,it is not even an
agreement, much less a contract.
104. CASE 3
A Porter in the Railway Station agrees to keep the
luggage of a passenger inside the train for a sum of Rs
100.The porter accordingly fulfilled his duty.The
passenger refuses to give him coolie charges.Can the
porter succeed if he filed a suit?
105. Solution 3
Yes, the porter can succeed .This is an example of an
executed contract. It is enforceable
